HUD Publishes HOME Program Final Rule
The Department of Housing and Urban Development (HUD) published a final rule for the HOME Investment Partnerships (HOME) Program on January 6, 2025. The rule takes effect on February 5, 2025. Participating jurisdictions (PJs) must comply with most of the rule changes by February 5, 2026. The final rule follows the publication of a proposed HOME rule released in May 2024.
The HOME program provides affordable housing funds to 670 state and local governments. Since 1992, the program has developed nearly 1.4 million affordable housing units and provided tenant-based rental assistance to nearly 418,000 households.
HUD received hundreds of comments on the proposed rule from NCDA, other national organizations, state and local organizations, and grantees and program subrecipients, many of which were incorporated into the final HOME program rule. The final rule changes make important improvements to the HOME program that will ease administrative burden for PJs and increase program flexibility.
Key changes:
- Reduces the frequency of income determinations for HOME-assisted rental units.
- Broadens the CHDO board composition to make it easier to meet the one-third minimum low-income board representation.
- Permits the expertise of volunteers to count toward CHDO capacity.
- Expands the definition of “develop” and “sponsor” for CHDO-funded projects.
- Better aligns HOME rental housing requirements with LIHTC and other HUD programs.
- Permits higher gross rents without affecting tenant contribution amounts.
- Adds PHA-established utility allowance to list of acceptable utility allowances for HOME rental projects.
- Makes it easier to use HOME for small rental developments (1-4 units) by reducing frequency of income determinations, easing of physical inspection protocols, and eliminating the waiting list requirement.
- Permits PJs to adopt hardship policies that provide exceptions to the minimum tenant contribution requirement.
- Eliminates the requirement that income be determined annually for TBRA recipients.
- Extends the deadline for sale of HOME-assisted homebuyer units from 9 months to 12 months after construction completion.
- Eliminates the requirement that homebuyer acquisition projects (e.g., downpayment assistance) meet HOME property standards before property transfer. The rule maintains the 6-month period for acquisition-only homeownership projects to meet applicable property standards but provides PJs the ability to grant extensions up to six months if needed.
- HUD is working on developing a method of determining maximum per unit subsidy limits. For now, the limit is set at 270% of the Section 234 mortgage insurance limits – an increase of approximately 12.5% over the current limit.
- Permits PJs to reimburse the cost of environmental studies, assessments, or reviews incurred up to 24-months before commitment of HOME funds as an eligible pre-development cost.
In addition, the list of eligible pre-development costs is expanded to include lender origination fees, title fees, legal fees, appraisal fees, costs to process and settle financing for the project, accounting fees, filing fees for zoning or planning review or approval, and other lender-required third-party reporting fees.
Please go here to review further analysis of the final rule.
HOTMA Compliance Deadline Extended
HUD has extended the compliance date for the Housing Opportunity Through Modernization Act (HOTMA) final rule until January 1, 2026, for all HUD CPD programs, including CDBG and HOME. HOTMA is aimed at aligning federal program income requirements.
HUD Releases CDBG-DR Universal Notice
HUD published a Universal Notice for the CDBG-DR program on January 8, 2025, to streamline the CDBG-DR process. The Notice describes the grant award process, pre-award certification submission requirements, criteria for action plan approval, and eligible disaster recovery activities.
Because Congress has not permanently authorized the CDBG-DR program, HUD must issue a notice for each Presidentially declared disaster. The Universal Notice will govern future allocations of disaster funding and will provide consistent guidance for communities recovering from disasters until the CDBG-DR program receives permanent authorization. It aims to make disaster recovery funding faster and more efficient for grantees.
The publication of the Notice follows the announcement of $12 billion in CDBG-DR funding for communities impacted by Hurricanes Helene and Milton and the Lahaina wildfires.
Please go here for more resource information about the Notice.
HUD Releases Point in Time Homelessness Assessment Report
Late last month, HUD released the 2024 Annual Homelessness Assessment Report: Part 1: Point in Time (PIT) Estimates which provides an annual snapshot of the number of people experiencing homelessness. The report found that more than 770,000 people experienced homelessness on a single night in January 2024 – representing a 18% increase from 2023, the highest on record. The report notes that veteran homelessness has decreased by 8% – the lowest level on record. New immigrants, natural disasters, the affordable housing crisis, inflation, stagnating wages, and the discontinuation of homelessness prevention programs put in place during the COVID epidemic were cited as reasons for the increase in homelessness.
The Biden Administration recently awarded $40 million in homelessness assistance through the HUD-Veterans Supportive Housing (HUD-VASH) program and finalized a joint rule among the General Services Administration, Department of Health and Human Services, and HUD intended to streamline the repurposing of unused federal properties to address homelessness.
Senate Banking Committee Holds Nomination Hearing for HUD Secretary
The Senate Banking Committee held a hearing yesterday on the nomination of Scott Turner to be HUD Secretary. Turner is a former Texas state legislator and head of the White House Office of Opportunity and Revitalization Council in the first Trump administration.
In his testimony, Scott told the Committee that HUD is failing in its mission, pointing to the affordable housing crisis and the increase in homelessness. During questioning, Senator Angela Alsobrooks (D-MD) asked Mr. Turner whether he would oppose cuts to the CDBG and HOME programs. Turner responded, “As you know, Congress holds the purse strings to the budget. My job, if confirmed as secretary, is to maximize that budget to meet the needs of our country to serve those we’ve been served to call.”
The Committee hasn’t set a date to vote on his nomination, but it is expected to happen very soon, and he is expected to be confirmed.
Upcoming NCDA Training
CDBG Basics (Certificate) – Virtual Course
February 18-March 13
Tuesdays/Thursday – 2:00-4:30 pm ET
NCDA Member Fee: $375
Register here
This training will feature expanded coverage of the fundamentals of the CDBG program including national objectives and eligible activities, eligible costs and regulation, limitations on expenditures, program administration, financial management, monitoring, cross cutting Federal requirements overview, conflict of interest, and resources.
CDBG Subrecipient Management Basics (Certificate) – Virtual Course
March 18-April 10
Tuesdays/Thursdays – 2:00-4:30 pm ET
NCDA Member Fee: $375
Register here
The course follows the CDBG subrecipient management process linearly, starting with establishing priorities in the Consolidated Plan and concluding with HUD’s role in overseeing the grantee’s relationship with its subrecipients. Participants will discuss various approaches to selecting subrecipients; developing and evaluating applications; and delivering effective subrecipient training and technical assistance. Participants will work through the process of building fully compliant files, setting up subrecipient activities in IDIS, tracking subrecipient progress, then implementing the jurisdiction’s monitoring plan.
IDIS Basics (Certificate) – Virtual Course
April 29-May 22
Tuesdays/Thursdays – 2:00-4:30 pm ET
NCDA Member Fee: $375
Register here
This course provides a detailed overview of IDIS for CDBG grantees and HOME participating jursdictions. It covers the set-up of plans, projects, activities, and reports; receipting and drawing entitlement and program income funds; tracking and reporting financial and beneficiary data; and addressing problems that arise throughout the year. Most importantly, it ties the electronic environment of IDIS to the real world of files, public meetings, and beneficiaries. If you have one year or less of working with IDIS, we strongly encourage you to take the NCDA IDIS primer course.
NCDA Webinar: Connecting with your Congressional Members in 2025
Last week, NCDA held a special webinar for members on Connecting with Congressional Members in 2025 to broaden and increase support for the CDBG and HOME programs through education of Congress. 2025 is expected to be a tough budget year for HUD programs. The webinar recording is available here.
