Background and Context

Background and Context

In the late 1980s, some members of Congress expressed concern about the state of the nation’s housing. This concern stemmed from an increasing awareness of a variety of problems related to housing, including homelessness, families living in sub-standard housing, and decreasing opportunities for homeownership. The concern over these issues led to a number of efforts to focus attention on housing policy, including the creation of a National Housing Task Force that included housing policy experts and industry leaders. In March 1988, the task force produced a report on its findings. Among the housing issues that the task force report identified was a diminishing supply of rental and homeownership housing that was affordable to low-income households.

In a 1988 hearing on the task force report, some members of the Senate Committee on Banking, Housing, and Urban Affairs suggested that federal funding for housing programs was inadequate to meet the affordable housing needs identified in the report. Most federal housing assistance distributed to states and localities at the time was restricted to specific uses, such as Section 8 vouchers or Public Housing projects. Furthermore, programs that did give communities flexibility to choose how to use their funds, such as the Community Development Block Grant (CDBG) program, were primarily meant to fund economic development and community revitalization activities and restricted the ways in which funding could be used for affordable housing (for example, CDBG funds could be used for some housing rehabilitation but could not generally be used to construct new housing units). Concerned that existing programs were not meeting the nation’s affordable housing needs, members of the Housing Task Force argued to the committee that the level of federal funding specifically dedicated to affordable housing should be increased in order to fully address affordable housing issues. At the same time, task force members argued that local jurisdictions should be allowed more control over the ways in which they used any such federal affordable housing funding.

In 1990, Congress passed a major housing bill that responded to some of the issues raised by the Housing Task Force and other experts. The Cranston-Gonzalez National Affordable Housing Act (P.L. 101-625), or NAHA, stated that the nation’s housing policy was not meeting the goal of providing “decent, safe, sanitary, and affordable living environments for all Americans” that was first set out in the Housing Act of 1949. The law revised, amended, or repealed several existing housing programs and authorized some new programs, including the HOME Investment Partnerships Program (often just referred to as HOME).

HOME is the largest federal block grant program that provides funding dedicated exclusively to increasing the availability of adequate, affordable housing for low-and very low-income households. The program places a particular emphasis on giving states and localities flexibility in how they achieve their affordable housing goals, and funds can be used for a variety of activities related to both rental and owner-occupied housing. HOME is also designed to expand the capacity of states and localities to meet their long-term affordable housing needs by leveraging federal funding to attract state, local, and private investment in affordable housing and by strengthening the ability of government and nonprofit organizations to meet local housing needs.

HOME is authorized by Title II of NAHA. HUD promulgated regulations governing the program in September 1996. In July 2013, HUD issued a final rule making significant revisions to certain program requirements, representing the first substantive changes to the regulations since they were first finalized in 1996.