HOME Program Funding

This section describes funding for the HOME program, including its appropriations history, the formula that HUD uses to distribute funds to PJs, and the distribution of HOME funds in FY2014 (the most recent HOME funding distributed as of the date of this report). It also discusses the concept of leveraging HOME funds to attract other sources of funding for affordable housing activities.

Annual Appropriations

Each year, during the annual appropriations process, Congress appropriates funding to the HOME account within HUD’s overall appropriation. In FY1992, the first year in which HOME was funded, Congress appropriated $1.5 billion to the HOME account. From FY1993-FY1998, annual appropriations to the HOME account fluctuated between $1 billion and $1.5 billion, and from FY1999 through FY2011 appropriations fluctuated between $1.6 billion and $2 billion, reaching a high of just over $2 billion in FY2004. Since FY2012, appropriations to the HOME account have been $1 billion or below. Decreased funding for the HOME program in recent fiscal years reflects the overall fiscal environment, and may also reflect concerns about the oversight of HOME funds. (For more information on oversight issues, see the “Program Oversight” section of this report.)

While most of the funding appropriated to the HOME account is used for formula grants to states and localities, over the years the HOME account has sometimes also included funding that was set aside for related affordable housing programs or activities. For example, in some years HOME account set-asides have included funding for technical assistance or transfers to the Working Capital Fund (which supports the development and maintenance of HUD’s information technology systems). For several years prior to FY2008, two major set-asides funded through the HOME account were housing counseling (which is now funded in its own account) and down payment assistance through the American Dream Downpayment Initiative, or ADDI (which is no longer specifically funded, although down payment assistance is an eligible use of HOME funds). The former HOME account set-asides for housing counseling and ADDI are discussed in more detail in Appendix A. Since FY2012, the only set-asides funded within the HOME account have been HOME formula grants for the insular areas.

Table 1 shows annual appropriations levels for the HOME program from FY1992 to FY2014, including the amounts appropriated for formula grants and for set-asides. The figures are not adjusted for inflation.

Table 1. Appropriations for the HOME Account,

FY1992-FY2014 (dollars in millions)





Fiscal Year

Formula Grants

Set Asides

Account Totalsa





























































































Source: Figures are from HUD’s FY1994-FY2015 Budget Justifications and annual appropriations acts.

  1. Totals may not add due to rounding. All appropriations figures are post-rescission and do not include any supplemental emergency or disaster funding.
  3. The original HOME appropriation for FY2002 was $1,796 million, with $103 million of that amount accounting for HOME set-asides. This included $50 million for a “Downpayment Assistance Initiative,” a precursor to the American Dream Downpayment Initiative (ADDI). However, the appropriation for the down payment assistance program was subject to the program’s being authorized by June 30, 2002. This authorization did not occur in time, and a supplemental FY2002 appropriations bill (P.L. 107-206) rescinded the $50 million appropriation for down payment assistance.
  5. Beginning in FY2009, the appropriation to the HOME account no longer includes set-asides for either the American Dream Downpayment Initiative or housing counseling (housing counseling was funded under its own account). Both programs are discussed in further detail in Appendix A.
  7. Total does not include additional funding for the HOME account appropriated in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5), which was enacted in February 2009. ARRA provided supplemental appropriations to a number of programs with the intention of stimulating the economy. The HOME account received $2.25 billion under ARRA, which was in addition to its regular FY2009 appropriation. However, rather than being used for traditional HOME program activities, Congress specified that the HOME funding appropriated under ARRA was to be used solely for states to provide gap financing to stalled Low-Income Housing Tax Credit (LIHTC) projects. This funding is referred to as the Tax Credit Assistance Program (TCAP). For more information on TCAP, see HUD’s website at http://portal.hud.gov/hudportal/HUD?src=/recovery/programs/tax.
  9. The FY2013 figures include reductions due to sequestration.

The HOME Formula

HUD distributes the funds appropriated to the HOME program to participating jurisdictions using a formula. By law, 40% of the funds are allocated to states and the remaining 60% are allocated to localities. For the purposes of the HOME program, the District of Columbia and Puerto Rico are considered to be states.

Before distributing funds to states and localities, HUD sets aside the greater of $750,000 or 0.2% of the total HOME appropriation for insular areas. In FY2014, the amount set aside for the insular areas was $2 million. Insular areas eligible for HOME funds are Guam, the Northern Mariana Islands, the United States Virgin Islands, and American Samoa.

The HOME formula takes into account six factors. Four of these factors are weighted 20%:

  • The number of occupied rental units in a jurisdiction that have at least one of four problems: (1) overcrowding, defined as more than one occupant per room; (2) incomplete kitchen facilities, defined as the lack of a sink with running water, a range, or a refrigerator; (3) incomplete plumbing, defined as the lack of hot and cold piped water, a flush toilet, or a bathtub or shower that is inside the unit and used solely by the unit’s occupants; or (4) high rent costs, defined as rent that costs more than 30% of the household’s income.
  • The number of rental units in a jurisdiction that were built before 1950 and are occupied by poor households.
  • The number of occupied rental units in a jurisdiction that have at least one of the four problems discussed above (overcrowding, incomplete kitchen facilities, incomplete plumbing, or high rent costs) multiplied by the ratio of the cost of producing housing within the jurisdiction to the cost of producing housing nationally.
  • The number of families at or below the poverty level in a jurisdiction.

The remaining two factors are weighted 10%:

  • The number of rental units in a jurisdiction, adjusted for vacancies, where the head of household’s income is at or below the poverty line. This number is multiplied by the ratio of the national rental unit vacancy rate over the jurisdiction’s rental unit vacancy rate.
  • The jurisdiction’s population multiplied by its net per capita income.

Once a participating jurisdiction receives its formula allocation, it has to meet several deadlines. The PJ has 24 months to commit HOME funds to specific projects (such as by signing a written agreement with a developer), and five years to expend the funds. If a PJ does not commit its funds within the time allotted, the funds will revert to HUD and be reallocated to other PJs. Furthermore, the 2013 final rule that made changes to the HOME program regulations specified that the PJ must repay any HOME funds provided to projects that are not completed within four years of the date that the funds are committed.

Grants to States in FY2014

In FY2014, every state received a HOME formula grant. (This includes Washington, D.C. and Puerto Rico, which are considered states for the purposes of the HOME program.) The median state grant amount was about $6 million, and the mean grant was close to $8 million. The mean is pulled upward by a few states that received especially large formula grant allocations; for example, California received the largest state allocation at nearly $31 million. As shown in Figure 1, nearly half of the states received less than $5 million in funding, and all but twelve states received less than $10 million.

Figure 1. HOME Grants to States in FY2014


Source: Figure created by CRS based on HUD data.

Note: Figure only includes formula grants to states, not grants to PJs within states.

Given the lower amount of funding appropriated to the HOME program in recent years compared to earlier years, the median and mean grant amounts are also lower than in some previous years. In FY2010, for example, the median state grant amount was almost $11 million and the mean was almost $14 million. Furthermore, in FY2010, ten states received grants of $5 million or less, and ten states received grants of $20 million or more (including five states with grants over $25 million). The largest state grant in FY2010 was $62 million, compared to $31 million in FY2014 (in both years, the largest state grant was to California). New York and Texas also received grants in FY2010 that exceeded the maximum grant amount awarded in FY2014.

Grants to Localities and Consortia in FY2014

In FY2014, 587 localities or consortia also received their own HOME formula grant allocations. The median grant to localities was almost $580,000 and the mean grant was just over $1 million. Again, the mean grant amount is higher than the median because some localities received especially large grants. In particular, New York City received a grant of close to $60 million, nearly three times the size of the next largest formula grant to a locality (Los Angeles was the locality with the next-largest formula grant, at almost $21 million), and nearly twice the next highest formula grant amount awarded (the grant to the state of California of nearly $31 million). Most localities (about 450) received formula grants of less than $1 million. The smallest formula grant amount to a locality was less than $72,000 and was awarded to East Orange, NJ.

An increasing number of participating jurisdictions and a decreasing amount of funding have meant that many cities and counties qualify for a relatively small grant amount. In FY2014, over 250 local jurisdictions received formula grants of $500,000 or less, including over 100 local jurisdictions with grants of less than $335,000. In its FY2014 and FY2015 budget submissions, the Obama Administration proposed legislative changes to the requirements for becoming and remaining a PJ that could affect the number of localities that would continue to qualify for their own formula allocations. Namely, the Administration has proposed removing the lower funding threshold to become a participating jurisdiction that applies in years when less than $1.5 billion is appropriated to the program (described in the “Participating Jurisdictions” section of this report) and ending the practice of allowing localities to remain PJs indefinitely after they first qualify. Instead, under the Administration’s proposal, a locality that becomes a PJ would remain one for five years before having to qualify again.

Appendix B at the end of this report shows the number of participating jurisdictions (localities and consortia) in each state in FY2014. It also shows the total combined formula grant funding that each state and its participating jurisdictions received that year, and the percentage of total HOME funding for formula grants that each state’s combined allocation represents.

Matching Requirement

Two stated goals of the HOME program are to leverage federal affordable housing funds by encouraging state, local, and private investment in affordable housing activities, and to increase the capacity of states and localities to meet their affordable housing needs. Accordingly, the HOME statute requires participating jurisdictions to match the HOME funds that they spend in a fiscal year with their own 25% permanent contribution to affordable housing activities.

A PJ’s matching funds can come from a wide variety of non-federal sources, including state or local governments, charitable organizations, and the private sector. The matching funds must be devoted to affordable housing activities that are eligible under the HOME guidelines, but they do not necessarily have to support projects that use HOME funds. The match can also take many forms, including in-kind contributions such as labor, construction materials, and land for HOME-eligible projects. Other contributions, such as foregone taxes, other foregone fees, and infrastructure improvements, may also count toward the matching requirement if they are used specifically for projects funded by HOME dollars. The matching requirement may not be met using federal funds.

The matching requirement must be met in the same fiscal year that HOME funds are used, but if a jurisdiction provides more matching funds than are required in a given year, it can carry those funds forward to meet the matching requirement in subsequent years. The statute directs the Secretary to reduce or eliminate a participating jurisdiction’s match requirement if the PJ certifies that it is under a condition of fiscal distress. The Secretary can choose to reduce or eliminate the match requirement if the President declares the jurisdiction to be a major disaster area.

Although nearly all HOME funds are subject to the matching requirement, certain uses of funds are not required to be matched by the PJ. Funds that do not have to be matched include forgiven loans to Community Housing Development Organizations (CHDOs), funds used for administrative purposes (up to an allowable limit), and funds used to fill the threshold gap between a locality’s formula allocation and its required $750,000 contribution to affordable housing activities, unless the locality obtains the latter from state HOME funds.


Leveraging refers to a program’s ability to use its own program dollars to attract additional funding from other sources, including non-federal sources of funds. Leveraging can be an important concept for affordable housing because attracting multiple funding sources makes projects more feasible, and because the ability to attract other sources of funds could reduce the amount of federal funding that needs to be invested in a project. Attracting other types of funding for affordable housing can also help to build the capacity of organizations that might not be able to undertake projects without the assistance of HOME funds. HOME does not have a specific leveraging requirement, although PJs do have to meet the matching requirement described previously.

HUD reports leveraging statistics for HOME. According to HUD, every dollar of HOME funds used for housing units that were completed between FY1992 (the first year in which the program was first funded) and July 31, 2014, attracted $4.16 in non-HOME funds. This amount includes other federal funding sources as well as funding from other sources (such as states, local governments, and private entities).

In 2008, the Government Accountability Office (GAO) released a report analyzing the leveraging statistics that HUD and the Department of the Treasury report for various programs and calculating alternative leverage measures. It found that alternative measures of a program’s leverage ratio may provide a more complete picture of how effective a program is at leveraging specific types of funds. For example, according to the GAO report, for HOME-assisted units completed in FY2006, HUD’s reported leverage ratio was $4 of non-HOME funding for every dollar of HOME funding. Using the same data, GAO found that for every dollar of HOME funding used in units that were completed in FY2006, HOME-assisted units used $1.92 of private spending, $1.33 of other federal spending, and $0.76 of state or local spending. Therefore, a leverage ratio that only took into account other non-federal sources of funding for HOME-assisted projects completed in 2006 would be $2.68 for every dollar of HOME funding ($1.92 of private funding and $0.76 of state and local funding).

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