HR5878-119

What This Bill Does

The HOME Reform Act of 2025 is a broad operational rewrite of the HOME Investment Partnerships program. It defines infill housing projects as residential projects inside a municipality, served by existing utilities and services, on previously disturbed sites of not more than five acres, and surrounded by residential or commercial development. It changes multiple HOME income references from low-income families or low-income homebuyers to families or homebuyers with household income up to 100 percent of area median income, adjusted for family size. It prevents HUD from restricting a participating jurisdiction's choice among rehabilitation, substantial rehabilitation, new construction, reconstruction, acquisition, or other eligible housing uses unless section 223(2) expressly authorizes the restriction. In nonentitlement jurisdictions, HOME funds may pay for water and sewer lines, sidewalks, roads, and utility connections directly related to or adjacent to HOME-assisted housing or Low-Income Housing Tax Credit housing, subject to labor standards and HUD regulations. The bill raises the homeownership purchase-price limit from 95 percent to 110 percent, adds shared equity ownership, community land trusts, limited equity cooperatives, community development corporations, and similar mechanisms as long-term affordability tools, and lets participating jurisdictions suspend or waive income qualifications for deployed servicemembers or permanent-change-of-station owners. It also preserves affordable status after an owner's death when an heir or beneficiary assumes the duties, removes the expiration of the right to draw HOME trust funds, releases uninvested CHDO set-aside funds after 24 months for broader eligible use, exempts infill, acquisition, rehabilitation, and new construction projects of 15 units or fewer from NEPA review, directs HUD to avoid duplicative environmental reviews, limits Build America Buy America to HOME-funded infrastructure improvements, and exempts small projects of 50 or fewer units from Section 3 when assistance goes to State recipients or small participating jurisdictions with under $3 million allocations.

Who Benefits and How

Households earning up to 100 percent of area median income benefit because HOME rental and homebuyer assistance eligibility is broadened beyond older low-income wording. Participating jurisdictions benefit because HUD may not restrict their eligible housing-use choices unless the statute expressly authorizes it. Nonentitlement communities benefit because HOME funds can support water, sewer, sidewalk, road, and utility infrastructure tied to HOME or LIHTC housing. Shared equity organizations, community land trusts, limited equity cooperatives, and community development corporations benefit because the bill recognizes their affordability-preservation models. Military homeowners benefit because deployed servicemembers and permanent-change-of-station owners may receive income-qualification waivers. Small affordable housing projects benefit from NEPA exemptions, prior-review recognition, Build America Buy America limits, and Section 3 exemptions.

Who Bears the Burden and How

HUD HOME program staff must issue regulations, update income and affordability guidance, administer environmental review exemptions, and coordinate review responsibilities with other Federal agencies. Participating jurisdictions must apply new income thresholds, infrastructure rules, shared-equity mechanisms, military exceptions, heir rules, and recapture procedures. Community housing development organizations may lose exclusive access to reserved funds that remain uninvested for 24 months. Construction labor compliance staff must apply labor standards to HOME-funded infrastructure improvements in nonentitlement areas. Environmental review advocates and agencies lose some project-by-project NEPA review opportunities for statutorily exempt HOME activities.

Key Provisions

• Defines infill housing projects and expands several HOME income references to households earning up to 100 percent of area median income.
• Prohibits HUD from restricting participating-jurisdiction choices among rehabilitation, new construction, reconstruction, acquisition, and other eligible uses unless expressly authorized.
• Authorizes HOME funds for specified infrastructure improvements in nonentitlement areas when tied to HOME-assisted or LIHTC housing.
• Raises the affordable homeownership price threshold from 95 percent to 110 percent and adds shared equity, community land trust, limited equity cooperative, and similar affordability mechanisms.
• Provides military deployment, permanent-change-of-station, and heir exceptions for affordable homeownership qualification rules.
• Removes the expiration of HOME trust fund draw rights and allows uninvested CHDO set-aside funds to be reused after 24 months for broader eligible activities.
• Creates statutory NEPA exemptions, requires anti-duplication environmental review rules, narrows Build America Buy America, and exempts specified small projects from Section 3.