Housing Reform Bill Expands 'Low-Income' Definition to 100% AMI, Waives Labor Rules for Projects Up to 24 Units

The HOME Reform Act of 2025 is a big package of changes aimed at speeding up affordable housing construction and giving local governments more flexibility. At its core, the bill overhauls several rules under the Cranston-Gonzalez National Affordable Housing Act, primarily by broadening who qualifies for assistance, streamlining regulations for developers, and allowing new ways for local jurisdictions to spend federal housing money.

Who Gets to Be 'Low-Income' Now?

One of the most significant shifts is how the bill redefines eligibility for housing assistance. Currently, many programs target families earning up to 80% of the Area Median Income (AMI). This bill raises that bar, changing the standard for several assistance programs so that families earning up to 100% of the AMI are now considered eligible for assistance (Sec. 2). For a family of four in a high-cost city, this could mean tens of thousands of dollars more in annual income while still qualifying for help. This change expands the pool of eligible recipients, which is great news for the middle-class families struggling with housing costs, but it also means the same pot of money will be stretched to cover a much larger group. Resources intended for the most vulnerable families—those earning 30% or 50% AMI—could become even harder to access as the competition widens.

The Infrastructure Upgrade Loophole

For local governments that don't usually get direct federal funding for community development, this bill hands them a new tool: the ability to use federal housing funds for infrastructure improvements (Sec. 4). Think new water lines, sidewalks, or roads. The catch is that these upgrades must be "immediately adjacent" to housing that is already receiving assistance. This is a practical move. If a town wants to build affordable homes but the nearest road is falling apart, they can now use the housing funds to fix the road, too. However, the term "immediately adjacent" is vague enough that we’ll need to see the Secretary’s rules to know if this money will truly benefit the housing projects directly or if it could be diverted to more general municipal improvements.

Fewer Rules, Faster Construction, Lower Wages?

Developers and local housing authorities are getting a massive break from federal red tape. The bill creates new exemptions from environmental reviews under NEPA for several types of projects, including new construction on small sites (15 units or less) and infill housing projects (Sec. 11). If you’ve ever seen a housing project stalled for years waiting on paperwork, this could speed things up significantly. The bill also explicitly exempts these housing activities from the Build America, Buy America Act domestic sourcing requirements (Sec. 12), meaning developers won't be mandated to use U.S.-made materials.

The most controversial regulatory change, however, involves labor standards. The bill significantly expands the small-project exemption from labor requirements—like prevailing wage rules—from projects of 12 units or fewer to projects of 24 units or more (Sec. 10). For construction workers, this is a major hit. It means that moderately sized apartment complexes (up to 24 units) can now skip paying prevailing wages, potentially lowering pay and benefits for the construction teams building these publicly assisted homes. While this lowers development costs, it does so directly on the backs of the workers.

Flexibility for Homeowners and the Military

On the homeownership side, the bill raises the income cap used to calculate affordability from 95% to 110% of AMI (Sec. 6). This makes it easier to finance and sell homes that qualify as 'affordable.' It also adds crucial flexibility for military families: local housing authorities can now waive standard income rules for service members facing deployment (90 days or more) or a permanent change of station (PCS). This is a smart, necessary fix that recognizes the unique financial strain and instability that frequent military moves place on service members trying to own a home.