Massive Housing Bill Reups $6B Program, Adds $2B Loan Guarantee, and Hikes Admin Funds to 15%

The HOME Investment Partnerships Reauthorization and Improvement Act of 2025 is poised to inject a massive amount of cash and significant structural changes into the federal affordable housing landscape. This bill reauthorizes the critical HOME program for the next five years, starting with $5 billion in 2025 and climbing to over $6 billion by 2029. But this isn't just about more money; it’s a major administrative overhaul that affects everything from how local governments operate to who gets to buy an affordable home.

The Administrative Shift: More Funds, More Flexibility (and More Risk)

One of the most immediate changes for local housing agencies is the increase in the administrative cost cap, which jumps from 10 percent to 15 percent of program funds (SEC. 102). For the people actually running these programs—the folks who process applications, manage compliance, and coordinate projects—this is a big deal. It means more flexibility to cover rising operational costs, hire staff, or invest in better technology. However, it also means that up to 15 cents of every dollar is now authorized for overhead instead of direct housing subsidies, which is a trade-off that needs careful oversight to ensure the extra funds don't just disappear into bureaucracy.

Another huge financial change is the creation of a brand-new Home Loan Guarantee Program (SEC. 207). This program allows the Secretary of HUD to guarantee up to $2 billion in loans (with a total outstanding cap of $4.5 billion) that local jurisdictions use to finance affordable housing construction or preservation. This is designed to leverage private capital for projects that might otherwise struggle to get funding. The catch? The full faith and credit of the United States is pledged to cover 100 percent of the principal and interest if a local government defaults. This is a powerful tool for accelerating development, but it also creates a significant, multi-billion-dollar liability for taxpayers should the program run into trouble.

Inspections, Penalties, and the End of the Deadline Clock

This bill tightens the screws on compliance in a few key ways. First, it requires mandatory physical, on-site property inspections (SEC. 204). If your city or state gets HOME funds, they now have to physically check the housing to ensure it meets local building codes or, if the state runs the program, federal standards. For tenants, this is a clear win: better maintenance and safer living conditions should result from this mandatory oversight.

Second, the bill gives the government a bigger stick to enforce the rules. It renames the penalty section to focus on “Program Enforcement” and introduces a new consequence for jurisdictions that fail to spend money correctly: the Secretary can now reduce their future grant payments by the amount they misused (SEC. 205). If your local housing authority is known for letting funds sit idle or misdirecting them, they’re going to feel this immediately.

Finally, the bill eliminates the specific commitment deadline for using HOME funds (SEC. 202). This may sound minor, but it gives local governments more breathing room to plan complex projects without the pressure of an artificial federal clock forcing rushed decisions.

Real Estate Rules Get a Rewrite

If you own a home purchased through an affordable housing program, the rules around selling it just got an upgrade (SEC. 203). The bill reforms resale restrictions to ensure that when you sell, you get a “fair return on their investment,” which can include recouping money spent on improvements. This is a practical recognition that people who buy these homes should still be able to build some equity.

There are also specific carve-outs for military families and heirs. If you’re an active-duty service member who needs to move due to deployment or a permanent change of station, the local jurisdiction can now waive or suspend those resale requirements. This prevents a service member from being trapped by affordability rules when their job requires them to relocate. Similarly, if you inherit a HOME-assisted property, you can keep it as affordable housing, provided you agree to take over all the original obligations.

The Small Housing Exemption

The bill creates a special category for “small-scale housing”—defined as properties with four or fewer rental units (SEC. 201). While these small properties must still meet affordability standards, the bill exempts them from certain standard tenant selection rules (SEC. 206). The stated goal is likely to make it easier for small landlords to participate, but critics will note that removing these tenant protections could reduce safeguards for low-income renters in these smaller buildings, giving landlords more discretion in who they choose to house.

For Community Housing Development Organizations (CHDOs)—the non-profits that play a vital role in local housing—the rules are also changing (SEC. 301). While the involvement requirements are simplified to focus on “material participation,” the clock is ticking faster on their set-aside funds. If the money reserved for a CHDO isn't invested within 24 months, the funds are released back to the local government to be used for any eligible activity. This puts pressure on non-profits to execute projects quickly or lose their reserved funding, but it also ensures that scarce housing dollars don't sit on the sidelines.