Bill Proposes $26.6 Billion Boost and Key Reforms for Federal Affordable Housing Program Over Next 5 Years

Congress is looking at a significant overhaul and re-funding of the HOME Investment Partnerships Program, a key federal tool for creating affordable housing across the country. The proposed HOME Investment Partnerships Reauthorization and Improvement Act of 2025 sets aside nearly $26.63 billion over five years (FY 2025-2029) to support state and local efforts in building, buying, or rehabilitating housing for low-income residents. The main goal is to update the program's rules to make it more effective and ensure continued investment in affordable places to live.

More Funding, Smarter Rules

First off, the bill locks in substantial funding for the next half-decade, providing a predictable stream of money for affordable housing projects. It also bumps up the amount local program administrators can use for running things – from 10% to 15% of their grant. This could mean better oversight and smoother operations on the ground. The legislation tweaks how cities and states qualify for funds, adjusting requirements for inflation to keep pace with rising costs. It also gives the government more flexibility to redirect funds if an area isn't using them effectively or complying with the rules, aiming to get dollars where they're most needed.

Updating the Playbook for Affordable Housing

This act digs into the details of how the HOME program works day-to-day. It broadens what counts as affordable housing to include "small-scale housing" – properties with up to four rental units – potentially opening the door for more duplexes or triplexes to qualify under certain conditions. It also removes deadlines for committing funds, which could cut red tape and speed up project timelines.

For homeowners using the program, the bill changes resale rules. Instead of rigid federal mandates, local jurisdictions could set their own restrictions, aiming for a balance where sellers get a fair return on their investment, but the home remains affordable for the next buyer. To ensure quality, the bill requires on-site inspections of properties. It also beefs up enforcement, adding teeth to penalties for non-compliance to safeguard taxpayer money.

New Tools and Streamlined Support

Recognizing the challenges in financing affordable projects, the bill introduces a home loan guarantee program. This would allow the federal government to back loans issued by participating jurisdictions, potentially lowering borrowing costs and encouraging more private investment in affordable rental and homeownership housing.

It also refines rules for Community Housing Development Organizations (CHDOs) and nonprofits. The bill clearly defines "community land trusts," emphasizing their role in providing long-term affordability (at least 30 years). It adjusts how funds are set aside for CHDOs, tying money more directly to active development work, and allows unused funds reserved for these groups to be repurposed after 24 months, keeping resources flowing. Finally, several technical corrections are included to clean up outdated language and fix referencing errors in the original law, making it easier to understand and apply.