House Financial Services subcommittee hears proposals to modernize HUD’s HOME program

The House Financial Services Subcommittee on Housing and Insurance convened a public hearing on a discussion draft to modernize the Department of Housing and Urban Development’s HOME Investment Partnerships Program, titled the Home Reform Act, with members and witnesses emphasizing the program’s role as gap financing for affordable housing and proposing changes to reduce delays and costs.

The HOME program, created in 1990 under the Cranston‑Gonzales National Affordable Housing Act, provides block grant funding to states and local jurisdictions to build and rehabilitate affordable housing. Chair Michael Flood (R‑chair, Subcommittee on Housing and Insurance) opened the hearing by stressing supply as the core problem: "We need to build more housing in this country and that's the only solution that will move the needle." Ranking Member Rep. Emanuel Cleaver (D‑MO) and several members said the program requires reauthorization and more funding to meet current needs.

Why it matters: witnesses and members said HOME commonly fills financing gaps for projects layered with Low Income Housing Tax Credits and other funding; delays and overlapping federal requirements can make otherwise viable projects infeasible. Allison Leisenbee George, board president of the Council of State Community Development Agencies (CASDA) and director of the Colorado Division of Housing, said in Colorado HOME is often both "the first funding source in and the last piece that keeps a project together." She described a $2.6 million HOME award for Harvest Hill in Broomfield that supports 152 affordable homes targeted between roughly 30% and 70% of area median income. Colorado received about $16 million in HOME funding in fiscal year 2025, George said, with roughly $5 million to the state housing division and $11 million to local governments.

Key proposals discussed

- Environmental reviews: Multiple witnesses urged reducing duplicative reviews and shortening timelines. NARHO and other practitioners asked that only one environmental review be required per project, and several witnesses supported categorical exclusions for small new‑construction projects and for certain repair activities.

- Build America, Buy America (BABA): Witnesses urged either exemptions for HOME or clearer, practicable guidance, saying supply chain constraints and documentation burdens add cost and delay. Eric Oberdorfer, director of policy and legislative affairs at the National Association of Housing and Redevelopment Officials (NAHRO), testified that "exempting HOME and other housing and community development programs from BABA would ensure funding could be used quickly and efficiently to address our current housing supply crisis."

- Davis‑Bacon: Witnesses described administrative burdens tied to prevailing‑wage rules. NAHRO and Habitat for Humanity recommended raising the unit threshold that triggers Davis‑Bacon from the current 12 units to 50 units; NAHRO also recommended increasing the contract dollar threshold to $250,000 indexed for inflation to preserve smaller projects' viability.

What witnesses told the committee

- Allison George (CASDA/Colorado Division of Housing) described how HOME funds operate as gap financing and urged preserving program flexibility while easing administrative burdens, increasing the administrative cap, eliminating the 24‑month commitment deadline, and revisiting the CHDO set‑aside.

- Eric Oberdorfer (NAHRO) said HOME has produced and preserved large numbers of units but that Davis‑Bacon, BABA, and duplicative environmental reviews can push smaller projects out of reach; he recommended raising Davis‑Bacon triggers to help rural and small projects.

- Ellen Woodward Potts (Habitat for Humanity of Tuscaloosa) described field impacts of delays. "It took more than 2 years, nearly 3 years to complete the environmental reviews and build homes for homeownership for Tuscaloosans who had lost everything they owned," she said, citing a post‑tornado redevelopment as an example of how review timelines can hinder recovery and homeownership projects.

- Tiffany Bohe (Mercy Housing California) cited examples where HOME dollars catalyzed larger investments: "We leveraged a HOME award of $700,000 to recapitalize Timber Creek Apartments in Omaha, Nebraska, renovating the homes of 180 working families and ensuring that the apartment homes remain affordable for the long term." She urged streamlining to align HOME rules with other funding sources used in the same projects.

Debate and concerns

Members broadly expressed bipartisan agreement that building more housing is necessary, but they differed on tradeoffs between cost reductions and protections. Representative Tiffany Garcia (D‑TX) voiced concern about loosening requirements, saying she opposed removing safeguards and tools that protect quality and workers; other members pressed witnesses to clarify whether proposed changes would reduce worker pay, environmental protections, or Buy‑American goals. Several witnesses said they support fair wages and American manufacturing but described practical implementation problems—supply constraints, documentation difficulty, and added timelines—that reduce HOME's effectiveness.

Funding and program risk

Witnesses warned that proposed cuts in the presidential budget would significantly reduce the program’s impact. Multiple witnesses and members urged robust annual appropriations in addition to statutory modernization, noting HOME frequently leverages several dollars of private investment for each federal dollar.

Next steps and administrative directions

At the hearing close, members were allowed to submit extraneous materials within five legislative days for the record. Chair Flood said witnesses should respond to follow‑up questions by August 21, 2025. No formal markup or votes occurred at the hearing; members indicated intent to continue bipartisan negotiations on statutory language and appropriations.

The House Financial Services Subcommittee on Housing and Insurance scheduled no immediate vote; staff follow‑up and written responses from witnesses are due by 08/21/2025, and members reserved further questions and potential revisions before any bill markup.