HOME Reform Act Expands Housing Eligibility to 100% AMI, Cuts Environmental Review for Small Projects

The HOME Reform Act of 2025 is taking a serious swing at the rules governing federal housing assistance, specifically the HOME Investment Partnerships program. The main takeaway for anyone trying to buy or rent affordably is a major shift in who qualifies for help. The bill changes the definition of “low-income” for several key housing assistance programs, raising the income ceiling from the traditional lower thresholds (often 80% of Area Median Income, or AMI) up to 100% of the Area Median Income (Sec. 2). This means if you’ve been making decent money but still can’t afford the rent or a down payment in your area—maybe you’re a teacher or a mid-level manager—you might suddenly qualify for programs that were previously out of reach.

The New Income Ceiling: Who Gets a Seat at the Table?

This income expansion is a double-edged sword. On one hand, it’s a huge win for those families earning $60,000 to $90,000 in a high-cost city who are perpetually priced out of the market. They now qualify for assistance aimed at low-income homebuyers and renters (Sec. 2). On the other hand, this expansion could mean that the very lowest-income families—the ones who need the deepest subsidies to survive—will face much stiffer competition for limited housing units. When you widen the pool of eligible people without necessarily increasing the number of units, the people with the least income often lose out.

The bill also makes it easier for people using Section 8 Housing Choice Vouchers. Under the new rules, a rental unit can qualify as affordable housing even if it doesn't meet all the standard program requirements, provided the tenant is using a Section 8 voucher and the rent is approved by the local housing agency (Sec. 5). This is a practical fix that should open up more rental options for voucher holders.

Cutting the Red Tape for Developers (and the Public)

If you’re a developer or a local housing agency, this bill offers some serious regulatory relief aimed at speeding up construction. The legislation creates automatic exemptions from the National Environmental Policy Act (NEPA) review for several types of projects (Sec. 10). This includes new construction infill housing projects (building on previously used land in developed areas) and new construction projects involving 15 units or less.

For a small developer trying to build a duplex or a row of townhouses, skipping the lengthy NEPA review could shave months, even years, off the timeline. While this is great for speed, it removes a key layer of community and environmental oversight. NEPA reviews are often the only chance the public gets to weigh in on the potential environmental and quality-of-life impacts of a new development, even small ones. This streamlining might get houses built faster, but it also means less transparency for the neighbors.

Flexibility and Labor Standards: A Trade-Off

The HOME Reform Act gives local jurisdictions a lot more power. It explicitly prevents the Secretary from restricting a jurisdiction’s choice between using funds for rehabilitation, new construction, or acquisition (Sec. 3). This is a nod to local control, allowing cities to decide whether they need to fix up old buildings or start fresh.

Crucially, the bill also allows HOME funds to be used for infrastructure improvements—think water lines, sewer hookups, sidewalks, and roads—in areas that don't receive other major federal community development grants (Sec. 4). This could be a game-changer for rural areas, allowing them to finally connect affordable housing projects to necessary utilities. However, the bill introduces a significant carve-out regarding labor standards (Sec. 11). It exempts housing activities with 50 dwelling units or fewer from Section 3 requirements of the HUD Act of 1968. Section 3 mandates that federally funded projects provide job training, employment, and contracting opportunities to low-income persons in the area. Removing this requirement for small projects means construction workers, especially those from low-income communities, could lose out on mandated work opportunities on these smaller, faster-tracked developments.

Help for Military Families and Long-Term Affordability

Finally, the bill includes targeted relief for military personnel. A participating jurisdiction can waive the income qualifications for military members who receive temporary duty orders to deploy for at least 90 days, or who receive orders for a permanent change of station (Sec. 6). This is a practical acknowledgment of the financial instability that frequent moves and deployments can impose on service members.

It also promotes long-term affordability by officially recognizing models like Community Land Trusts (CLTs) and shared equity ownership as approved mechanisms for preserving housing affordability for future generations of buyers (Sec. 6). This is a smart move that helps ensure that public investment in affordable housing doesn't just benefit the first buyer, but continues to serve the community for decades.