HOME Reform Act of 2025
- Sponsor
- Rep. Flood, Mike [R-NE-1]
- Committees
- Financial Services Committee (primary)
- Last action
- Oct 21, 2025
Bottom line
This bill aims to streamline and expand the reach of federal affordable housing programs by reducing regulatory burdens and broadening income eligibility and permissible uses of funds.
What it actually does
The bill, titled the "HOME Reform Act of 2025," amends the Cranston-Gonzalez National Affordable Housing Act to modify several aspects of the HOME Investment Partnerships program. It expands eligibility for housing assistance to families earning up to 100% of the area median income, increases the maximum home purchase price for affordable homeownership, and introduces new categorical exemptions from environmental review for certain housing projects. It also allows the use of HOME funds for infrastructure improvements in nonentitlement areas, expands the small-project exemption for labor requirements, and exempts HOME activities from "Build America, Buy America" requirements and Section 3 labor requirements for small projects.
Proponents argue
Proponents argue that the bill will significantly increase the supply of affordable housing by cutting red tape, reducing construction costs, and making it easier for communities to develop housing. They contend that expanding income eligibility will help a broader range of working families access homeownership and rental assistance, while environmental review exemptions and infrastructure funding will accelerate development, especially in underserved areas.
Opponents contend
Critics might argue that expanding income eligibility to 100% of the median family income could dilute resources intended for the lowest-income families, potentially making housing less affordable for those most in need. Concerns could also be raised about the environmental review exemptions, suggesting they might lead to inadequate environmental protections in new housing developments. Additionally, exempting projects from "Build America, Buy America" and Section 3 requirements could be seen as undermining efforts to promote domestic manufacturing and local hiring.
The bill is relatively concise and its provisions are clearly laid out, making it accessible for an informed reader to evaluate within a reasonable timeframe.
Section 2(a) and 2(b)
Expansion of "Low-Income Family" Definition and Infill Housing Definition
This section redefines "low-income families" for certain HOME program purposes to include families with household incomes up to 100% of the area median income, up from the previous "low-income" standard (typically 80% or less). It also introduces a new definition for "infill housing project" as residential projects on previously disturbed land of not more than 5 acres, substantially surrounded by existing development within a municipality, and served by existing utilities.
Supporters argue
Supporters argue that expanding the income definition will allow a broader segment of the working class to access affordable housing, including essential workers who often struggle to afford housing in high-cost areas but may not meet traditional "low-income" thresholds. The infill definition promotes efficient land use and urban revitalization.
Critics contend
Critics might contend that expanding eligibility to 100% of AMI could divert limited HOME funds from families with the greatest need (those below 50% or 30% AMI), potentially exacerbating housing insecurity for the poorest households.
Tradeoffs
Balances the goal of serving the lowest-income populations with the desire to assist a wider range of working families who also face affordability challenges.
Section 3
Removal of Restrictions on Housing Development Types
This amendment prevents the Secretary of HUD from restricting a participating jurisdiction's choice of housing activities (rehabilitation, new construction, acquisition, etc.) unless explicitly authorized by a specific section (223(2)). This aims to give local jurisdictions more flexibility in how they use HOME funds.
Section 4(a) and 4(b)
HOME Funds for Infrastructure in Nonentitlement Areas; Removal of Per Unit Investment Limits
This section allows HOME funds to be used for infrastructure improvements (e.g., water, sewer, roads) in jurisdictions that do not receive Community Development Block Grant (CDBG) assistance, provided these improvements are directly related to HOME-assisted housing or Low-Income Housing Tax Credit (LIHTC) housing. It also strikes the second sentence of Section 212(e)(1), which previously limited the per-unit investment of HOME funds to 95% of the FHA Section 203(b) mortgage limit for the area.
Section 5
Exception for Housing Choice Vouchers in Rental Housing Qualifications
This amendment clarifies that a rental unit occupied by a tenant receiving Section 8 Housing Choice Voucher assistance qualifies as affordable housing under the HOME program, provided the tenant's contribution and total rent meet Section 8 program standards. This streamlines the process for units serving voucher holders to also count as HOME-assisted.
Section 6
Expansion of Homeownership Price Limits and Affordability Mechanisms; Exceptions for Military and Heirs
This section increases the maximum purchase price for affordable homeownership from 95% to 110% of the median purchase price for the area. It also adds shared equity ownership models (like community land trusts) as a mechanism for maintaining long-term affordability. Furthermore, it creates exceptions to income qualifications for military members with deployment or permanent change of station orders, and allows heirs or beneficiaries of deceased owners to continue qualifying for affordable housing if they assume the original owner's obligations.
Section 10
Expansion of Small-Project Labor Requirement Exemption
This amendment increases the threshold for the small-project exemption from labor requirements (likely prevailing wage requirements, such as Davis-Bacon Act) from "12 or more units" to "24 or more units." This means projects with fewer than 24 units would be exempt from these requirements.
Section 11
Categorical Exemptions and Streamlined Environmental Reviews
This section introduces several categorical exemptions from environmental review under the National Environmental Policy Act (NEPA) for HOME-assisted activities, including new construction infill housing projects, acquisition of real property for affordable housing, rehabilitation projects, and new construction projects of 15 units or less. It also mandates the Secretary to streamline reviews, avoid duplication with other federal agencies, and recognize prior reviews by responsible entities.
Section 12
Exemptions from "Build America, Buy America" and Section 3 Requirements for Small Projects
This section explicitly states that the "Build America, Buy America Act" (requiring use of domestic materials) shall not apply to HOME-assisted activities. It also exempts activities involving 50 or fewer dwelling units from Section 3 of the Housing and Urban Development Act of 1968 (requiring economic opportunities for low-income persons) if assistance is provided to a State recipient or a participating jurisdiction receiving less than $3,000,000 in the most recent fiscal year.
Removes subsection (g) of Section 218 of the Cranston-Gonzalez National Affordable Housing Act, thereby eliminating the expiration date for a participating jurisdiction's right to draw HOME Investment Trust Funds.
Section 7
Why it matters:This is a standard legislative practice for technical corrections or streamlining, rather than an attempt to obscure. The impact is administrative but significant for long-term planning.
Case for: Proponents argue that removing the expiration date allows jurisdictions to undertake more complex, long-term projects without fear of losing funds, leading to better planned and executed affordable housing initiatives.
Case against: Some might argue that removing expiration dates could reduce accountability and lead to funds sitting idle for too long, rather than being deployed to address urgent housing needs.
Estimated impact: Increased administrative flexibility for participating jurisdictions in managing HOME funds, potentially enabling larger or more complex projects.
Amends Section 245(b)(2) of the Cranston-Gonzalez National Affordable Housing Act by striking "95 percent" and inserting "110 percent," thereby expanding the income threshold for families benefiting from asset recycling programs.
Section 9
Why it matters:This is a technical alignment with other income eligibility changes in the bill, rather than an attempt to hide a provision. Its impact is consistent with the bill's broader goals.
Case for: Consistent with the bill's overall goal of expanding eligibility for housing assistance to a broader range of working families, ensuring more households can benefit from asset recycling programs.
Case against: Similar to the general income expansion, critics might argue this diverts resources from lower-income families who may have greater need for housing assistance.
Estimated impact: Expands eligibility for asset recycling programs to families earning up to 110% of the area median income.