HOME Reform Act of 2025
- Bill Number
- H.R. 5798
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Housing and Community Development
- Status
- Introduced
- Latest Action
- 2025-10-21: Referred to the House Committee on Financial Services.
- Last Updated
- 2026-06-11T23:26:31Z
AI-Generated Summary
Purpose of the Legislation
The HOME Reform Act of 2025 aims to amend the Cranston-Gonzalez National Affordable Housing Act (a federal law that funds affordable housing programs) to promote the growth of decent, safe, clean, and affordable housing options across the U.S. It places special emphasis on rental housing while providing more flexibility for local governments and developers to build or improve housing for families earning up to 100% of their area's median income (a measure of typical household earnings in a region, adjusted for family size).
Key Provisions
- Expanded Definitions and Eligibility:
- Introduces "infill housing project" as small-scale development (up to 5 acres) on previously used land within cities or towns, connected to existing utilities and surrounded by homes or businesses.
- Broadens assistance eligibility from "low-income" families (typically up to 80% of median income) to those with incomes up to 100% of median income.
- Flexibility for Local Governments (Participating Jurisdictions):
- Limits federal restrictions on how funds can be used for housing rehabilitation, new builds, or acquisitions, except where explicitly required by law.
- Allows funds for infrastructure improvements (e.g., water/sewer lines, sidewalks, roads) in rural or smaller areas not receiving other federal community development aid, if tied to affordable housing projects.
- Removes caps on per-unit investment amounts and eliminates expiration dates for drawing allocated funds.
- Rental and Homeownership Qualifications:
- Rental units qualify as affordable if occupied by tenants using federal Housing Choice Vouchers (a program providing rent subsidies), even if rents slightly exceed standard limits, as long as approved by local housing agencies.
- For homeownership, raises affordability thresholds from 95% to 110% of median income; adds options like shared equity models (where ownership is partially retained by nonprofits to keep prices low for future buyers) or community land trusts.
- Provides exceptions: Waives income rules for active-duty military members facing deployment or relocation; allows heirs of deceased owners to inherit and maintain affordability status.
- Support for Community Organizations:
- If funds set aside for community housing development organizations (nonprofits focused on affordable housing) go unused for 24 months, they can be reallocated for any eligible project without requiring nonprofit involvement.
- Streamlined Requirements:
- Expands exemptions from labor standards (e.g., hiring local low-income workers) for smaller projects (from 12 to 24 units).
- Exempts certain activities from environmental reviews under the National Environmental Policy Act (a law requiring assessment of project impacts on the environment), including small infill projects, property acquisitions, rehabilitations, and builds of 15 units or fewer.
- Prevents duplicate environmental reviews when adding other federal funding to unchanged projects and promotes coordination between agencies.
- Exempts HOME-funded projects from "Build America, Buy America" rules (requiring U.S.-made materials for infrastructure) and from Section 3 labor requirements (prioritizing local hiring) for small-scale activities (50 units or fewer) in smaller jurisdictions.
- Other Adjustments:
- Increases asset recycling limits (reinvesting repaid funds) from 95% to 110% of median income.
- Makes technical updates, such as updating references to related laws and congressional committees.
Significant Changes to Existing Law
- Broadened Access: Shifts eligibility from strictly low-income (under 80% median) to moderate-income (up to 100-110% median), potentially including more working families.
- Reduced Federal Oversight: Removes or loosens restrictions on fund uses, investment caps, and review processes, giving local entities more decision-making power.
- New Flexibilities: Adds provisions for infrastructure in underserved areas, military exceptions, heir protections, and shared equity models not previously emphasized; expands exemptions for environmental, labor, and domestic sourcing rules to speed up smaller projects.
- Technical Fixes: Updates outdated names (e.g., "Stewart B. McKinney" to "McKinney-Vento" Homeless Assistance Act) and committee references for accuracy.
Potential Impacts
- On Government Agencies: The U.S. Department of Housing and Urban Development (HUD, the agency overseeing these programs) will face less administrative burden from reviews and restrictions, but must issue new rules within one year for infrastructure and environmental changes. This could accelerate project approvals but require better inter-agency coordination.
- On Citizens: Low- and moderate-income renters and homebuyers (especially in urban infill areas or rural spots) may gain faster access to affordable options, including voucher-supported rentals and military-friendly homeownership. Heirs of affordable housing owners benefit from continuity, reducing displacement risks.
- On International Relations: No direct impacts, as the bill focuses on domestic housing policy without foreign aid or trade elements.
- Broader Effects: Could increase housing supply in high-need areas by simplifying development, potentially lowering costs and wait times, though it might reduce emphasis on local hiring or U.S. materials in small projects.
Main Stakeholders Affected
- Participating Jurisdictions: Local governments and states receiving HOME funds, who gain flexibility in spending and reduced red tape for housing and infrastructure.
- Low- and Moderate-Income Families: Primary beneficiaries, including renters using vouchers, first-time homebuyers, military personnel, and heirs, with expanded eligibility reaching more households.
- Developers and Nonprofits: Builders, community housing development organizations, and groups using shared equity or land trusts, who can pursue small projects with fewer labor and environmental hurdles.
- Rural and Non-Entitlement Areas: Smaller communities outside major cities, now eligible for infrastructure aid tied to affordable housing.
- Federal Agencies: HUD for implementation; environmental and labor agencies for streamlined reviews.
Notable Legal, Constitutional, or Political Implications
- Legal: Enhances compliance efficiency by exempting projects from overlapping federal requirements (e.g., NEPA, Build America Buy America), potentially reducing litigation over delays but requiring HUD regulations to ensure environmental protections aren't undermined. No conflicts with core affordable housing mandates.
- Constitutional: Aligns with federal spending powers under the Constitution; no apparent free speech, due process, or equal protection issues, as changes promote equitable access without discrimination.
- Political: Supports bipartisan goals of housing affordability amid shortages, emphasizing local control and military support, which could appeal across parties. May spark debate on reduced labor protections or environmental safeguards, but focuses on practical reforms without major ideological shifts.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Rep. Cleaver, Emanuel [D-MO-5]
Recent Actions
- 2025-10-21: Referred to the House Committee on Financial Services.
- 2025-10-21: Introduced in House
- 2025-10-21: Introduced in House
Bill Versions
- HOME Reform Act of 2025 — issued 2025-10-21 — PDF (14 pages)