H.R. 2031 — HOME Investment Partnerships Reauthorization and Improvement Act of 2025

This section reauthorizes appropriations for the HOME Investment Partnerships Program (i.e., formula grants to states and localities for affordable housing development, rehabilitation, and tenant-based rental assistance) by authorizing $5 billion for FY2025, $5.25 billion for FY2026, $5.5125 billion for FY2027, $5.788 billion for FY2028, and $6.078 billion for FY2029 (replacing prior authorizations of $2.086 billion for FY1993 and $2.174 billion for FY1994, including specified set-asides for partnerships and housing strategies).

This section amends the HOME Investment Partnerships Program (i.e., formula grants to states and localities for affordable housing development and rehabilitation) by (1) increasing from 10% to 15% the portion of funds that participating jurisdictions may use for administration and planning costs; and (2) revising the recognition of contributions toward the program's matching requirements in section 220(b) by streamlining subsection (b)(1) and striking subsection (b)(2).

This section revises the eligibility threshold for designation as a participating jurisdiction under the HOME Investment Partnerships Program (i.e., formula grants to states and units of general local government for affordable housing and tenant-based rental assistance). Specifically, it (1) eliminates the alternative eligibility for jurisdictions with formula allocations below $750,000 that demonstrate administrative capacity and receive state transfers or own-source funds to reach that amount, leaving only jurisdictions with allocations of $750,000 or greater; (2) requires the Secretary to adjust the $750,000 threshold annually for inflation in fiscal years after 2025; (3) makes minor clarifying changes to the performance requirements in paragraph (6) that a jurisdiction must meet or comply with to avoid reallocation of its funds; and (4) strikes paragraph (10).

This section modifies jurisdictions eligible for reallocations of funds under the HOME Investment Partnerships Program by (1) specifying that such jurisdictions include participating jurisdictions and those meeting requirements of the program, including paragraphs (3), (4), and (5) of section 216, subject to paragraph (3)(A); and (2) authorizing the Secretary to remove participating jurisdictions that fail to meet or comply with program requirements from reallocation eligibility.

This section revises qualification standards for affordable rental housing under the HOME Investment Partnerships Program by (1) adding to the affordability commitment requirement in 42 U.S.C. 12745(a)(1)(E) an exception, beyond foreclosure, for cases where existing affordable housing is no longer financially viable due to unforeseen acts or occurrences beyond the reasonable contemplation or control of the participating jurisdiction or owner that significantly impact the housing's financial or physical condition, as determined by the Secretary; and (2) establishing alternative requirements for small-scale housing (i.e., not more than 4 rental units) that omit the 20% very-low-income occupancy mandate, provided the housing meets specified rent limits, is occupied only by low-income families, accepts section 8 voucher holders, maintains the affordability commitment period, and is monitored for compliance consistent with program purposes, as determined by the Secretary. The section also increases the maximum home purchase price limit to 110 percent of the area median purchase price or a higher percentage established by the Secretary through notice, whichever is greater (from 95 percent).

This section eliminates the 24-month deadline for committing HOME Investment Trust Fund amounts to affordable housing, under which participating jurisdictions previously lost the right to draw such funds if not placed under binding commitment within 24 months after deposit. (Thus, jurisdictions retain their line of credit for HOME funds—formula allocations from HUD for rental housing development, homebuyer assistance, and homeowner rehabilitation—indefinitely.) It also makes conforming changes to line of credit reductions by removing the reference to expired funds and corrects a cross-reference in the penalties provision from "section 224" to "section 223."

This section revises the qualification standards and resale restrictions for homeownership housing under the HOME Investment Partnerships Program (HOME), which provides federal grants to states and localities for developing affordable homeownership opportunities for low-income households. Specifically, it restructures subsection (b), strikes paragraph (3), and makes the following substantive changes: (1) requires such housing to be subject to resale restrictions established by the participating jurisdiction and approved by HUD as appropriate to the property's useful life, which must either (i) limit any subsequent purchase to a buyer meeting HOME low-income qualifications at a price determined by a participating jurisdiction formula or method that provides the owner a reasonable return on investment (which may include a percentage of improvement costs), or (ii) recapture the HOME assistance to reinvest in other HOME units (except if no net proceeds or insufficient to repay the full amount); (2) permits a participating jurisdiction to allow a community land trust that used HOME assistance for qualifying housing to acquire the unit under the trust's preemptive option, lease, covenant, or similar instrument—for purposes including entering the chain of title, resale to a waitlisted qualified low-income buyer, rehabilitation, adding subsidies, or other HUD-approved uses—provided the unit is sold to a qualified low-income buyer within a reasonable period; (3) authorizes a participating jurisdiction to suspend or waive the low-income buyer requirement if the owner is a regular armed forces or National Guard member receiving orders for deployment (at least 90 days, outside reasonable distance from the housing) or permanent change of station; and (4) permits the housing to continue qualifying upon the owner's death if it is the principal residence of an heir or beneficiary who assumes the HOME obligations, as defined and per terms set by HUD.

This section revises periodic monitoring requirements for owners of HOME Investment Partnerships Program (HOME)-assisted rental housing by restructuring subsection (b) to (1) retain annual reviews by all participating jurisdictions, (2) require units of general local government to include on-site inspections for compliance with housing codes and other regulations while requiring states to include on-site inspections for compliance with a national standard determined by the Secretary (previously, all jurisdictions conducted on-site inspections for housing codes and regulations), and (3) require inclusion of review results in performance reports submitted to the Secretary under section 108(a) and made public.

This section revises enforcement remedies under the HOME Investment Partnerships Program (HOME)—which provides formula block grants to states and localities for affordable housing development and rehabilitation—by (1) updating the section heading to "Program Enforcement and Penalties for Noncompliance" (from "Penalties for Misuse of Funds"); (2) expanding the scope of substantial noncompliance to include provisions applicable throughout the affordability period required by section 215(a)(1)(E) (i.e., long-term affordability requirements for HOME-assisted units) and applicable regulations; and (3) authorizing the Secretary, in addition to existing remedies, to reduce payments to a participating jurisdiction by the amount of such payments not expended in accordance with the HOME statute.

This section exempts owners of small-scale housing (as defined in section 215(a)) from paragraphs (2) through (4) of the tenant selection requirements applicable to rental housing assisted under the HOME Investment Partnerships Program. (Thus, such owners need not adopt tenant selection criteria reasonably related to program eligibility and an applicant's ability to perform lease obligations, give reasonable consideration to the housing needs of families eligible for preferences under section 1437d(c)(4)(A), or select tenants from a chronological waiting list with written rejection notices.)

This section establishes a HOME loan guarantee program authorizing the Secretary of Housing and Urban Development (HUD) to guarantee notes or obligations issued by HOME participating jurisdictions (PJs)—states and localities receiving formula grants under the HOME Investment Partnerships Program (42 U.S.C. 12741 et seq.) for affordable housing activities—for financing the development or preservation of affordable rental and homeownership housing through acquisition, new construction, reconstruction, or rehabilitation. Guarantees, available only to the extent provided in appropriations and limited to PJs unable to obtain comparable private financing, cover up to an aggregate principal amount of $2 billion for FY2025 and inflation-adjusted amounts thereafter, with per-issuer limits of five times the issuer's most recent HOME allocation and no repayment term exceeding 20 years unless it poses unacceptable risk. The full faith and credit of the United States backs 100% of unpaid principal and interest on guaranteed obligations, which PJs may repay using HOME grants or program income; issuers must pledge future HOME grants and other security as required by HUD.

This section revises the definition of community housing development organization (CHDO) under the HOME Investment Partnerships Program by reducing the required accountability to low-income residents from "significant representation on the organization's governing board and otherwise" to "representation on the organization's governing board or as otherwise determined acceptable by the Secretary"; adds a definition of community land trust as a nonprofit entity (or state or local government or instrumentality) not sponsored by a for-profit organization that provides long-term affordable housing to low- and moderate-income persons using ground leases or similar measures for at least 30 years, enables homeownership purchase, and maintains preemptive purchase options; and eliminates the prior statutory definition of community land trust. This section further modifies the HOME program's required 15% set-aside of funds for CHDOs by changing the condition from housing "to be developed, sponsored, or owned by" CHDOs to housing where "a CHDO materially participates in the ownership or development...as determined by the Secretary"; establishes a new 24-month period after which uninvested set-aside funds revert for any eligible HOME activities without CHDO participation; and eliminates prior recapture and reuse provisions.

This section makes technical corrections to multiple sections of the Cranston-Gonzalez National Affordable Housing Act, including (1) redesignating paragraphs (23) and (24) in the definitions section (42 U.S.C. 12704); (2) in section 105(b), updating "Stewart B. McKinney Homeless Assistance Act" to "McKinney-Vento Homeless Assistance Act" and correcting "subparagraphs" to "paragraphs"; (3) in section 106, making the same act name update; (4) in section 108(a)(1), correcting a cross-reference from "section 105(b)(15)" to "section 105(b)(18)"; (5) in section 212, inserting "United States" before "Housing Act," redesignating a paragraph, updating a cross-reference from "section 221(d)(3)(ii)" to "section 221(d)(4)," and replacing "not to exceed 140 percent" with "as determined by the Secretary"; (6) in section 215(a)(6)(B), correcting "grand children" to "grandchildren"; (7) in section 217, correcting paragraph numbering, striking an obsolete paragraph, increasing dollar thresholds to $750,000 (from $500,000) in subsections (b)(2)(B) and (b)(3), striking a reference to paragraph (4) and that paragraph itself, and updating committee and subcommittee names to current designations; (8) in section 220(c), making grammatical changes and redesignating paragraphs; (9) in section 225(d)(4)(B), striking a superfluous "for"; and (10) in section 283, updating "Banking, Finance and Urban Affairs" to "Financial Services" and "General Accounting Office" to "Government Accountability Office."