HUD issues proposed rule to modernize the HOME program

Key Takeaways

On May 29, the U.S. Department of Housing and Urban Development (HUD) issued a Notice of Proposed Rulemaking (NPRM) to modernize the HOME Investment Partnership Program (HOME) and enable counties to implement funding more efficiently. The HOME program provides formula grants to counties and states (collectively, participating jurisdictions or PJs) and is used, often in partnership with local nonprofit groups, to build, buy, or rehabilitate affordable housing for rent or homeownership, as well as fund direct rental assistance to low-income individuals.

Highlights of the proposed rule include:

• Expands access to community housing development organization (CHDO) set-aside funds by neighborhood-based nonprofit organizations.
• Clarifies homeownership requirements to improve compliance, program outcomes and implements new provisions for community land trusts to exercise preemptive purchase rights.
• Better aligns HOME rental housing with other Federal rental assistance programs.
• Simplifies rental housing requirements to align with Low Income Housing Tax Credit (LIHTC) and other HUD programs likely to be layered into a project.
• Reduces administrative burden on counties by allowing them to accept NSPIRE inspections already performed for other funding sources.
• Makes HOME tenant-based rental assistance work better for vulnerable populations by permitting exceptions for tenants to make a minimum contribution toward rent, aligning with existing Section 8 rental assistance programs.
• Strengthens tenant rights and protections consistent with the White House’s Blueprint for a Renters’ Bill of Rights, including requiring counties to adopt written standards for termination or refusal to renew.
• Establishes new method for determining maximum per-unit subsidy limits.
• Provides incentives to incorporate green building technologies.

The deadline to submit comments in response to the proposed rule is July 29, 2024. NACo will continue to track when the final rule will be released and when compliance will begin to be enforced.