Yes. Under § 92.206(a) in the HOME rule, HOME funds may be used for the actual costs of constructing or rehabilitating (development hard costs) single family or multifamily housing, including the costs to wire the property for broadband internet. The costs to make utility connections, including off-site connections from the property line to the adjacent street, are also eligible under HOME at § 92.206(a)(3)(ii). HUD includes internet connectivi...
↓ Read More. Broadband Infrastructure

Yes. Under § 92.206(a) in the HOME rule, HOME funds may be used for the actual costs of constructing or rehabilitating (development hard costs) single family or multifamily housing, including the costs to wire the property for broadband internet. The costs to make utility connections, including off-site connections from the property line to the adjacent street, are also eligible under HOME at § 92.206(a)(3)(ii). HUD includes internet connectivity in the regulatory definition of “utility connections.”

For both new construction and rehabilitation of multifamily rental projects, HOME funds may be used for costs to construct or rehabilitate community facilities that are located within the same building as the housing and which are for the use of the project residents. However, HOME funds cannot pay for a computer room located in a separate building from the assisted housing. HOME funds also may not pay for equipment or furniture in the computer room.

If a multi-unit project does not contain 100 percent HOME-assisted units, only a portion of the cost of providing broadband internet access in the project or the cost to construct a computer room may be charged to the HOME program because only the actual HOME eligible development costs of the assisted units may be charged to the program in accordance with the HOME rule at § 92.205(d)(1).

All HOME-assisted housing must meet the minimum property standards at § 92.251 upon completion, so efforts to provide broadband internet access in existing housing must be undertaken as part of rehabilitation that brings the housing up to the property standards.

↑ Hide Broadband Infrastructure

Yes. As part of new construction and rehabilitation costs of multifamily rental projects, the HOME rule at § 92.206(a)(4) states that HOME funds may be used for costs to construct or rehabilitate community facilities that are located within the same building as the housing, and which are for the use of the project residents. HOME funds cannot be used to pay for a computer room located in a separate building from the assisted housing. While HOME ...
↓ Read More. Broadband Infrastructure

Yes. As part of new construction and rehabilitation costs of multifamily rental projects, the HOME rule at § 92.206(a)(4) states that HOME funds may be used for costs to construct or rehabilitate community facilities that are located within the same building as the housing, and which are for the use of the project residents. HOME funds cannot be used to pay for a computer room located in a separate building from the assisted housing.

While HOME funds may be used to construct a multi-purpose room that could serve as a computer room, HOME funds may not be used for the purchase of furniture or equipment.

If a multi-unit project does not contain 100 percent HOME-assisted units, then only a portion of the cost of a computer room may be charged to the HOME program because only the actual HOME eligible development costs of the assisted units may be charged to the program in accordance with the HOME rule at § 92.205(d)(1).

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Yes. As part of a new construction or rehabilitation activity, the HOME rule at § 92.206(a)(3)(ii) states that HOME may pay for the development costs to make utility connections, including connections from the property line to the adjacent street. This includes broadband internet connections. However, HOME funds cannot be used for any off-site improvements, including running broadband internet cable or wires to the project site. Use of HOME fund...
↓ Read More. Broadband Infrastructure

Yes. As part of a new construction or rehabilitation activity, the HOME rule at § 92.206(a)(3)(ii) states that HOME may pay for the development costs to make utility connections, including connections from the property line to the adjacent street. This includes broadband internet connections.

However, HOME funds cannot be used for any off-site improvements, including running broadband internet cable or wires to the project site. Use of HOME funds is limited to the improvements on the project site, i.e., the land, owned by the project owner, upon which the HOME-assisted project is located.

Further, the HOME rule at § 92.205(d)(1) specifies that only the actual HOME development costs of the assisted units may be charged to the program. If a multi-unit project does not contain 100 percent HOME-assisted units, then only a portion of the cost of the utility connections may be charged to the HOME program. 

↑ Hide Broadband Infrastructure

No. HOME funds may not be used to pay for furniture or equipment for a computer room, even as part of a multifamily assisted rental property.

Broadband Infrastructure

Yes, HOME funds can be used to pay for counseling that directly assists someone who purchases a home with HOME assistance. If the family receiving counseling successfully purchases a home with HOME funds, the counseling can be charged as a project related soft cost. However, this cost must be included within the total HOME subsidy limit for that home. If the family is unable to purchase a home with HOME funds, the cost of...
↓ Read More. Administration

Yes, HOME funds can be used to pay for counseling that directly assists someone who purchases a home with HOME assistance. If the family receiving counseling successfully purchases a home with HOME funds, the counseling can be charged as a project related soft cost. However, this cost must be included within the total HOME subsidy limit for that home. If the family is unable to purchase a home with HOME funds, the cost of providing counseling must be paid for with administrative funds. Keep in mind that the amount of HOME funds that can be used for administrative costs is capped at 10% of each year’s HOME grant.

Alternatively, PJs may choose to:

• use other money (from a different grant or local source) to pay for the counseling, or
• charge a reasonable fee to the homebuyer for the counseling service. This fee must not be so high that it prevents a low-income family from getting the help they need.

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Yes, a PJ may allow a lending institution that is a contractor or nonprofit lending institution that is a subrecipient to provide both HOME homebuyer assistance and other mortgage assistance to a homebuyer as long as the PJ has implemented the following safeguards required by 24 CFR 92.254(f): The assistance is provided only as specified in a written agreement between the PJ and the lender. This agreement must specify the...
↓ Read More. Administration

Yes, a PJ may allow a lending institution that is a contractor or nonprofit lending institution that is a subrecipient to provide both HOME homebuyer assistance and other mortgage assistance to a homebuyer as long as the PJ has implemented the following safeguards required by 24 CFR 92.254(f):

1. The assistance is provided only as specified in a written agreement between the PJ and the lender. This agreement must specify the forms, amounts, and any conditions of homeownership assistance that the lender is authorized to provide.
2. Before any HOME assistance is provided, the PJ must either determine the family’s income-eligibility for HOME assistance itself, or must verify the income determination done by the lender or another party. The PJ also must inspect the housing for compliance with applicable property standards in 24 CFR 92.251.
3. The for-profit or nonprofit organizations are not permitted to charge fees (such as origination fees or points) to the family for the HOME homeownership assistance that the organization provides. (Reasonable administrative costs may be charged to the HOME program as a project cost.) If the lender charges fees for the first mortgage (non-HOME funds), then the PJ must review these costs and deem them to be reasonable. These requirements are effective August 23, 2013.

These safeguards ensure that there is not a conflict of interest, as the lender may have a financial incentive to provide HOME assistance to homebuyers potentially jeopardizing the lender’s objectivity in assessing the qualifications of the buyer or the eligibility of a property for HOME assistance.

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Any homebuyer that enters into a written agreement for HOME assistance (e.g., downpayment or closing cost assistance) or enters into a sales contract for the purchase of a HOME-assisted unit must receive housing counseling. See §92.254(a)(3). While the HOME regulation does not specify the type or duration of counseling that the homebuyer must receive, HUD recommends that participating jurisdictions (PJs) review and ado...
↓ Read More. Administration

Any homebuyer that enters into a written agreement for HOME assistance (e.g., downpayment or closing cost assistance) or enters into a sales contract for the purchase of a HOME-assisted unit must receive housing counseling. See §92.254(a)(3).

While the HOME regulation does not specify the type or duration of counseling that the homebuyer must receive, HUD recommends that participating jurisdictions (PJs) review and adopt the benchmarks for counseling established by the National Industry Standards for Homeownership Education and Counseling.

When implementing this requirement, PJs should consider:

• Duration of the housing counseling (minimum number of hours)
• Educational content of the counseling (pre or post purchase, credit counseling, introduction to homeownership, how to maintain a house, etc.)
• Form of counseling (one-on-one, small group, classroom setting)
• Who will provide the counseling (PJ staff, subrecipient, contractor, developer)
• How the PJ will ensure the counselors are qualified

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The PJ is required to repay only the HOME funds that were invested in the unsold units. In this situation, the PJ must amend the project in the Integrated Disbursement and Information System (IDIS) and in its local records to remove the unsold units from the project. The PJ must repay the costs associated with the unsold units based on the original cost allocation used for the project (e.g., actual cost per unit or pro-rata cost allocation). In I...
↓ Read More. Deadlines

The PJ is required to repay only the HOME funds that were invested in the unsold units. In this situation, the PJ must amend the project in the Integrated Disbursement and Information System (IDIS) and in its local records to remove the unsold units from the project. The PJ must repay the costs associated with the unsold units based on the original cost allocation used for the project (e.g., actual cost per unit or pro-rata cost allocation). In IDIS, the repaid funds are used to reduce the draws and activity funding associated with the unsold units. Instructions for repaying funds can be found in HOME FACTS Vol.1, No.1.

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For projects to which HOME funds are committed under the 2025 Final Rule (on or after April 20, 2025), a sales contract must be ratified* with an eligible homebuyer within 12 months of the date of completion of construction or rehabilitation. If a HOME-assisted homebuyer unit is not under a contract for sale within this timeframe, the unit must be converted to a rental housing unit and rented to an income-eligible tenant, or...
↓ Read More. Deadlines

For projects to which HOME funds are committed under the 2025 Final Rule (on or after April 20, 2025), a sales contract must be ratified* with an eligible homebuyer within 12 months of the date of completion of construction or rehabilitation. If a HOME-assisted homebuyer unit is not under a contract for sale within this timeframe, the unit must be converted to a rental housing unit and rented to an income-eligible tenant, or the HOME funds invested in the unit must be repaid.

Once converted to rental, the unit is subject to the HOME rental housing requirements in accordance with §92.252.

*If the PJ has an established lease-purchase program and executes a lease-purchase agreement with an income-eligible tenant/homebuyer within the 12-month deadline, the property is considered under contract and in compliance with this requirement.

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Yes. Generally, Community Land Trusts (CLTs) may charge ground lease fees to HOME-assisted homeowners. However, HOME funds may not be used to pay for these fees because the ongoing costs of homeownership are not eligible HOME program costs. Ownership in fee simple title of a dwelling with a ground or land lease of 50 years or longer from a CLT meets the definition of Homeownership in §92.2 of the HOME rule. CLTs commonly charge monthly ground le...
↓ Read More. Lease-Purchase

Yes. Generally, Community Land Trusts (CLTs) may charge ground lease fees to HOME-assisted homeowners. However, HOME funds may not be used to pay for these fees because the ongoing costs of homeownership are not eligible HOME program costs.

Ownership in fee simple title of a dwelling with a ground or land lease of 50 years or longer from a CLT meets the definition of Homeownership in §92.2 of the HOME rule. CLTs commonly charge monthly ground lease fees to homeowners who lease from the CLT the land on which their homes are situated. The definition and structure of a CLT inherently require that there be ground lease payments, and this monthly fee is expected to be paid by HOME-assisted homeowners who purchase their homes through a CLT. 

Pursuant to the requirements of 24 CFR 92.254(f), each Participating Jurisdiction (PJ) must have and follow homebuyer underwriting policies that support sustainable homeownership for HOME-assisted homebuyers. As a recurring monthly cost of maintaining housing, the CLT ground lease fee must be considered a housing cost to be included in the underwriting of the homebuyer. Greater monthly ground lease fees also typically reduce the borrowing power of homeowners for a mortgage, or could increase the cost burden for borrowers, thereby requiring a greater initial HOME subsidy. Depending on the PJ’s homebuyer underwriting policies and its standards for evaluating the appropriateness of the amount of the HOME assistance, there may be situations in which the lease fee, in combination with other monthly debt obligations, would be considered by a PJ to be too expensive for a particular homebuyer.

↑ Hide Lease-Purchase

Yes. Under the 2025 HOME Rule, if the participating jurisdiction (PJ) has an established lease-purchase program and an income-eligible tenant/homebuyer executes a lease-purchase agreement for a homebuyer unit by the 12-month sales deadline, the property is considered to be under contract and in compliance with the requirement. The agreement must comply with the HOME lease-purchase requirements specified at §92.254(a)(7). The...
↓ Read More. Lease-Purchase

Yes. Under the 2025 HOME Rule, if the participating jurisdiction (PJ) has an established lease-purchase program and an income-eligible tenant/homebuyer executes a lease-purchase agreement for a homebuyer unit by the 12-month sales deadline, the property is considered to be under contract and in compliance with the requirement. The agreement must comply with the HOME lease-purchase requirements specified at §92.254(a)(7). The unit must be purchased by the tenant/homebuyer within 36 months of signing the lease-purchase agreement with the PJ, with an additional 12 months if the original homebuyer fails to purchase the housing. The owner is prohibited from selling the unit through another lease-purchase agreement. The PJ has 48 months after project completion to transfer the property to a homebuyer, or it must convert the unit to rental housing and follow the HOME rental housing rules under §92.252.

Note that while the execution of a lease-purchase agreement meets the sales deadline requirement, it does not meet the project completion requirement.

↑ Hide Lease-Purchase

Yes. In addition to traditional forms of ownership interest (defined under “homeownership” at §92.2), the 2013 Rule identified four additional forms of ownership interest under which an owner can qualify for assistance for homeowner rehabilitation programs only, effective August 23, 2013. These include: Life estates Inherited property Inter vivos trust (i.e., a “living trust”) Beneficiary deeds For each of these new forms of ownership ...
↓ Read More. Eligible Applicants

Yes. In addition to traditional forms of ownership interest (defined under “homeownership” at §92.2), the 2013 Rule identified four additional forms of ownership interest under which an owner can qualify for assistance for homeowner rehabilitation programs only, effective August 23, 2013. These include:

• Life estates
• Inherited property
• Inter vivos trust (i.e., a “living trust”)
• Beneficiary deeds

For each of these new forms of ownership interest, the beneficiary must (1) be low-income and (2) use the property as his/her principal residence at the time of receiving HOME assistance. Homeowner rehabilitation activities are not subject to long-term affordability requirements under HOME; however, PJs may choose to require continued occupancy for some specified period of time when providing this type of assistance. For more information on these types of legal mechanisms and the requirements for each, refer to §92.254(d).

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Yes. HOME funds may be used for HOPE VI-funded public housing units developed under section 24 of the 1937 Act, provided there is no Capital Fund assistance used. Units developed with both HOME and HOPE VI funds may receive Operating Funds under section 9 of the 1937 Act. These units may receive Capital Funds for rehabilitation or modernization only if the 20-year period of affordability required by the HOME regulations has expired. HOME rent lim...
↓ Read More. HOME and Public Housing

Yes. HOME funds may be used for HOPE VI-funded public housing units developed under section 24 of the 1937 Act, provided there is no Capital Fund assistance used. Units developed with both HOME and HOPE VI funds may receive Operating Funds under section 9 of the 1937 Act. These units may receive Capital Funds for rehabilitation or modernization only if the 20-year period of affordability required by the HOME regulations has expired. HOME rent limits apply. [Note, this exception is clarified at §92.213(b).]

For example, consider a HOME-assisted rental project with 100 units of housing that involves acquisition and rehabilitation. The entire project can be funded with HOME and HOPE VI and all 100 units can be restricted by both programs (i.e., all the units are combined HOME/HOPE VI). However, no Capital Funds [under section 9(d)] may be provided in the development of the HOME-assisted units. After the 20-year HOME period of affordability has expired, Capital Funds may be invested for modernization or rehabilitation. 

↑ Hide HOME and Public Housing

Yes. HOME funds can be used in an affordable housing project that also contains public housing units assisted under section 9 of the 1937 Act provided that the units are separately designated and HOME funds are not used in the public housing units. No HOME funds can be used in a unit that receives public housing Capital and Operating Funds. Therefore, all development costs must be allocated to maintain the separation of units. This also means tha...
↓ Read More. HOME and Public Housing

Yes. HOME funds can be used in an affordable housing project that also contains public housing units assisted under section 9 of the 1937 Act provided that the units are separately designated and HOME funds are not used in the public housing units. No HOME funds can be used in a unit that receives public housing Capital and Operating Funds. Therefore, all development costs must be allocated to maintain the separation of units. This also means that the project must have fixed HOME units, and must have separate waiting lists and rent structures for the HOME and public housing units.

For example, in a 100-unit rental housing project funded with both HOME-assisted units and public housing units under section 9 of the 1937 Act, the PJ can designate 10 units as HOME-assisted and the remaining units as public housing. HOME can pay only for the costs of developing the 10 HOME-assisted units. The units must be designated as fixed units. HOME rents limits apply to the HOME units. Public housing rents apply to the remaining units. A separate waiting list must be maintained for the two types of unit.

↑ Hide HOME and Public Housing

No. HOME funds cannot be used in public housing units that receive Public Housing Capital and Operating Funds under section 9 of the 1937 Act. The HOME authorizing statute specifies that HOME cannot be used to provide assistance to units that receive funds authorized under section 9 of the 1937 Act (Public Housing Capital and Operating Funds). For example, a participating jurisdiction (PJ) cannot provide HOME funds to a local public housing agenc...
↓ Read More. HOME and Public Housing

No. HOME funds cannot be used in public housing units that receive Public Housing Capital and Operating Funds under section 9 of the 1937 Act. The HOME authorizing statute specifies that HOME cannot be used to provide assistance to units that receive funds authorized under section 9 of the 1937 Act (Public Housing Capital and Operating Funds). For example, a participating jurisdiction (PJ) cannot provide HOME funds to a local public housing agency to rehabilitate a public housing project that it owns and operates with HUD Operating Funds.

↑ Hide HOME and Public Housing

The HOME Rule requires two specific deadlines for the initial lease-up/occupancy of HOME rental units: Within 6 months of the date of project completion, every HOME-assisted rental housing unit must be occupied by income-eligible tenants. If a unit is not leased up, the participating jurisdiction (PJ) must revise its marketing plan to enable the project to reach required occupancy. Within 18 months of the date of project...
↓ Read More. Leases and Occupancy

The HOME Rule requires two specific deadlines for the initial lease-up/occupancy of HOME rental units:

• Within 6 months of the date of project completion, every HOME-assisted rental housing unit must be occupied by income-eligible tenants. If a unit is not leased up, the participating jurisdiction (PJ) must revise its marketing plan to enable the project to reach required occupancy.
• Within 18 months of the date of project completion, if any housing unit is not yet rented to an income-eligible tenant the PJ must repay HOME funds invested in the unoccupied HOME unit(s).

Project completion, defined at §92.2, means that title transfer requirements and construction work have been performed, the project complies with all HOME requirements, and the final drawdown of HOME funds has been disbursed. For purposes of implementing this definition, HUD will track deadlines using the date that a project is completed in the Integrated Disbursement and Information System (IDIS).

For example, consider a project with 20 HOME-assisted rental units. The project is completed and a Certificate of Occupancy is issued on April 1, 2025. On September 1, 2025 (six months later), 5 of the units remain vacant. The PJ will need to work with the owner to revise its marketing plan to ensure the units are occupied as soon as possible. The PJ may wish to impose a schedule on the owner for undertaking these steps. In the event any of these 5 units have not been leased a year later (by September 1, 2026), the PJ must repay the HOME funds invested in those units.

These occupancy deadlines and marketing requirements apply to projects to which HOME funds are committed on or after August 23, 2013.

↑ Hide Leases and Occupancy

Yes, PJs may use the utility allowance established by the local PHA in its TBRA program. PJs administering a TBRA program must establish a rent standard which represents the rent plus utility cost of moderately priced units that meet the PJ’s property standards under §92.251. Therefore, when tenants pay their own utilities, the PJ must establish a utility allowance amount that is deducted from the tenants’ rent payment to the...
↓ Read More. Tenant-Based Rental Assistance

Yes, PJs may use the utility allowance established by the local PHA in its TBRA program. PJs administering a TBRA program must establish a rent standard which represents the rent plus utility cost of moderately priced units that meet the PJ’s property standards under §92.251. Therefore, when tenants pay their own utilities, the PJ must establish a utility allowance amount that is deducted from the tenants’ rent payment to the owner. HUD recognizes that PHAs often administer a PJ’s TBRA program and in the interest of reducing the administrative costs to TBRA administrators, the HOME Program permits the PJ to use the PHA’s utility allowance schedule for its HOME TBRA program. The PJ may also use other HUD-approved methodologies to establish utility allowances for its HOME TBRA program.

↑ Hide Tenant-Based Rental Assistance

HOME funds cannot be used to pay ongoing operating costs for transitional or permanent housing projects to enable these projects to continue their operation. However, HOME can be used to assist tenants who are at risk of losing their housing, where the participating jurisdiction (PJ) has identified using HOME Tenant-Based Rental Assistance (TBRA) assistance to meet this unmet housing need to be consistent with the priorities and criteria establis...
↓ Read More. Tenant-Based Rental Assistance

HOME funds cannot be used to pay ongoing operating costs for transitional or permanent housing projects to enable these projects to continue their operation. However, HOME can be used to assist tenants who are at risk of losing their housing, where the participating jurisdiction (PJ) has identified using HOME Tenant-Based Rental Assistance (TBRA) assistance to meet this unmet housing need to be consistent with the priorities and criteria established in the PJ’s Consolidated Plan.

Specifically, HOME TBRA programs can provide security deposit assistance or contracts for monthly rental assistance payments for up to 24 months that are renewable beyond the initial 24-month term, and may include security deposit grants or loans. When providing security deposit assistance or tenant-based rental assistance, HOME TBRA programs can also provide utility deposit assistance.

A PJ can use its HOME funds to establish a TBRA program that serves any income-eligible household in its jurisdiction (generally, households with incomes at or below 60% of area median income). The PJ also may establish a tenant preference that targets TBRA assistance to persons with special needs (e.g., homeless persons, victims of domestic violence, elderly households, etc.) or to persons with disabilities.

If a PJ wishes to provide assistance to persons who are at risk of losing their housing, it may design a TBRA program that is limited to or includes a preference for households at risk of being displaced from their housing units. A PJ that operates an existing HOME TBRA program can establish an additional tenant preference for households at risk of displacement. However, TBRA recipients must be free to use the rental assistance to lease any unit that meets the PJ’s standard for rent reasonableness and unit condition (See 92.209(f) and 92.209(i)). Award of TBRA cannot be conditioned on the recipient remaining in the unit from which they are at risk of being displaced. As with any HOME tenant preference, the provision of TBRA to this sub-population must be identified in the PJ’s 5-year Consolidated Plan and its Annual Action Plan. A PJ seeking to establish a new HOME TBRA program must take the following steps, in addition to complying with all applicable HOME regulations:

1. Amend the affordable housing section of its strategic plan to include a discussion of the specific local market conditions that led to the choice to use HOME funds for TBRA. (24 CFR 91.215(b)(1); 24 CFR 91.315(b)(1)).
    
2. Amend the Action Plan to describe the eligible applicants for its TBRA program. The PJ may limit the beneficiaries or give preferences to a particular segment of the low-income population only if described in the action plan. If the PJ is limiting its TBRA program to or establishing a preference for these households, the PJ must determine that the limitation or preference does not violate HOME Program nondiscrimination requirements at 24 CFR 92.350. (24 CFR 91.220(1)(2)(v) & (vi); 24 CFR 91.320(k)(2)(v) & (vi)).
    
3. Make appropriate amendments to the following sections of the Consolidated Plan and Action Plan:
    
   • Priority Needs (§ 91.215(a)(2); § 91.315(a)(2); § 91.415)
      
   • Goals (§ 91.215(a)(4); § 91.315(a)(4); § 91.415)
      
   • Annual Goals and Objectives (§ 91.220(c)(3) and (e); § 91.320(c)(3) and (e); § 91.420)
      
   • Projects and allocation priorities, (§ 91.220(d); § 91.320(d); § 91.415§ 91.420).
      
4. Submit a signed certification to HUD that the use of HOME funds for TBRA is an essential element of its Consolidated Plan (24 CFR 91.225(d)(1); 91.325(d)(1); §91.425(a)(2)(i)).

The creation of a TBRA program or reprogramming of significant HOME funds to TBRA from another use likely constitutes a substantial amendment to the Consolidated Plan under 24 CFR 91.505(b). If this is the case, the PJ must conduct citizen participation in accordance with its Citizen Participation Plan.

The HOME regulations at 24 CFR 92.351 establish affirmative marketing requirements for HOME-funded projects and programs, including TBRA programs. PJs that establish a TBRA program limited to or providing a preference for persons being displaced or at risk of displacement are required to market the program in a manner consistent with its affirmative marketing procedures and requirements to all potentially eligible persons in the housing market area (including persons not likely to apply without special outreach) who would be likely to benefit from the HOME assistance. As a practical matter, PJs can limit the number of TBRA households assisted based on the availability of HOME funds. However, a preference cannot be so narrowly defined that it limits the availability of assistance to households displaced from or at risk of displacement only from specific projects. (A preference may be provided for households displaced or at risk of displacement from units losing operating or rental assistance, but the preference may not be limited to households from specific, named projects.)

While the PJ may require HOME TBRA to be used within the PJ’s jurisdiction, a household selected to receive HOME TBRA must otherwise be permitted to use the TBRA in any unit that meets the Housing Quality Standards in 24 CFR 982.401, the rent reasonableness standards in 24 CFR 92.209(f), and the lease requirements in 24 CFR 92.253 (a) and (b).

For additional information on the use of HOME TBRA assistance, please consult the following resources:

• Building HOME Manual, Chapter 7
   
• HOME TBRA Fact Sheet

↑ Hide Tenant-Based Rental Assistance

The HOME Rule requires that prior to committing HOME funds, the participating jurisdiction (PJ) must evaluate the feasibility of all rental or homebuyer development projects regardless of size (number of units) or activity type (i.e., acquisition only, acquisition/rehabilitation, rehabilitation, or new construction). One component of this evaluation is an assessment of the current market demand in the neighborhood in which the project will be loc...
↓ Read More. Real Estate Market Analysis

The HOME Rule requires that prior to committing HOME funds, the participating jurisdiction (PJ) must evaluate the feasibility of all rental or homebuyer development projects regardless of size (number of units) or activity type (i.e., acquisition only, acquisition/rehabilitation, rehabilitation, or new construction). One component of this evaluation is an assessment of the current market demand in the neighborhood in which the project will be located. The Rule makes two exceptions to this requirement - homebuyer downpayment assistance only projects (i.e., homebuyer projects that do not also include rehabilitation or new construction) and owner-occupied rehabilitation projects.

Small development projects are not exempt from this requirement because the purpose of the requirement is to ensure that every unit in which the PJ invests HOME funds results in housing that will be rented or sold as quickly as possible, in order to provide affordable housing for low- and very low-income families. HUD recognizes that the PJ may approach the market assessment of a small rental or homebuyer development project differently than the assessment of a large project. HUD will issue additional guidance for PJs on market assessment in the near future.

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Participating jurisdictions (PJs) are required to undertake a subsidy layering and underwriting analysis of all development projects to which they provide HOME funds, rental and homeownership alike, with some exceptions described below. Subsidy layering and underwriting requirements for rental and homebuyer development projects (§92.250). The PJ must adopt subsidy layering and underwriting guidelines to ensure that it does...
↓ Read More. Subsidy Layering

Participating jurisdictions (PJs) are required to undertake a subsidy layering and underwriting analysis of all development projects to which they provide HOME funds, rental and homeownership alike, with some exceptions described below.

Subsidy layering and underwriting requirements for rental and homebuyer development projects (§92.250). The PJ must adopt subsidy layering and underwriting guidelines to ensure that it does not invest any more HOME funds (alone or in combination with other funds) than are necessary to the project and to ensure that the owner’s/developer’s profit or return on his/her investment is appropriate and reasonable, given the size, type and complexity of the project. See Notice CPD-15-11: Requirements for the Development and Implementation of HOME Underwriting and Subsidy Layering Guidelines.

When selecting projects to receive HOME funds, the PJ must then use these guidelines to evaluate all proposed HOME-assisted projects prior to committing its HOME funds. See Notice CPD-15-09: Requirements for Committing HOME Funds. These guidelines must state how the PJ will:

• Examine the sources and uses of funds for the project to determine that the costs are reasonable to provide quality affordable housing throughout the period of affordability. This is often referred to as “sustainable underwriting.”
• Assess, at minimum, the current market demand in the neighborhood in which the project will be located. The level of review in the market assessment may vary, depending on project scale and complexity.
• Evaluate the qualifications of the developer, including experience and financial capacity.
• Verify that there are firm written financial commitments for the project.

Exceptions to the above. The subsidy layering and underwriting requirements do not apply as follows:

• For owner-occupied housing rehabilitation projects, PJs are not required to conduct an underwriting review unless the HOME funds are provided in the form of an amortizing loan. Further, a market analysis and evaluation of developer capacity is not required. An assessment that the anticipated project costs are reasonable is required.
• For downpayment assistance projects that do not involve development activity, a market analysis or evaluation of developer capacity is not required. Note, there are additional requirements in §92.254(f) for PJs to establish underwriting criteria for the purpose of determining a buyer’s financial qualifications prior to providing HOME assistance to a buyer.

The PJ must conduct project underwriting before committing HOME funds to a project.

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The 2013 HOME rule defines a CHDO developer by requiring that the CHDO that serves as a developer of rental housing must be in sole charge of all aspects of the development of the property and must own the property during development and throughout the period of affordability. Previously, a CHDO could develop a property that it did not own, under contract with the property owner. This was changed in the developer definition in 24 CFR 92.300 under the 2013 Rule.

However, additional changes were made to the definition of CHDO developer in the 2025 HOME rule. Effective April 20, 2025, a CHDO is permitted to share developer responsibilities with another entity but must be in charge of all aspects of the development process, including selecting the site, obtaining permit approvals and all project financing, selecting architects, engineers and general contractors, overseeing project progress, and determining the reasonableness of costs. The CHDO must own the housing, meaning they are the owner in fee simple absolute or has a long-term ground lease running for the full period of affordability in 24 CFR 92.252.

Set-Aside Funds

Yes. When a CHDO provides downpayment assistance to a buyer of a property that it developed with CHDO set-aside funds, it can use additional CHDO set-aside funds to provide downpayment assistance to that buyer. The Rule limits this assistance to no more than 10 percent of the total amount of HOME development funds. The 10 percent limitation only applies when additional CHDO set-aside funds are used to provide the homebuyer assistance and to ...
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Yes. When a CHDO provides downpayment assistance to a buyer of a property that it developed with CHDO set-aside funds, it can use additional CHDO set-aside funds to provide downpayment assistance to that buyer. The Rule limits this assistance to no more than 10 percent of the total amount of HOME development funds. The 10 percent limitation only applies when additional CHDO set-aside funds are used to provide the homebuyer assistance and to projects for which funds were committed on or after August 23, 2013. When a CHDO administers a downpayment assistance program, it is acting as a subrecipient, not a developer of affordable housing; this is not an eligible use of set-aside funds per §92.300(a)(6)(i).

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Yes. The Rule codifies the definition of “owner” of rental housing to clarify that a CHDO may own and manage affordable housing in this way. The change to the definition of CHDO in 92.2 requires the PJ to determine and certify that the CHDO has the capacity to own and manage the rental housing. As an owner, a CHDO without development capacity can acquire an existing property that meets the HOME property standards (see §92.251) and then ...
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Yes. The Rule codifies the definition of “owner” of rental housing to clarify that a CHDO may own and manage affordable housing in this way. The change to the definition of CHDO in 92.2 requires the PJ to determine and certify that the CHDO has the capacity to own and manage the rental housing. As an owner, a CHDO without development capacity can acquire an existing property that meets the HOME property standards (see §92.251) and then own and manage that property. Prior to the 2013 amendment, a CHDO could use set-aside funds to purchase a developed property that did not require rehabilitation however, that CHDO was nevertheless required to have capacity to develop affordable housing.

Alternately, in a sponsorship situation, a CHDO (or any other nonprofit) could be the ultimate owner and manager of a property that is developed by another CHDO that serves as “sponsor” of the project. The CHDO sponsor develops the property, and once development is completed, conveys the property to a pre-determined private nonprofit entity that will own and manage the property during the period of affordability. In this situation, the entity that develops the property as the project sponsor must be a qualified CHDO with development capacity: however, the entity that ultimately owns and manages the property could be any nonprofit, including another CHDO that has the capacity to own and manage the project. Project sponsorship in this form has been a permissible use of CHDO set-aside funds, and this has not changed with the 2013 or 2025 rules. 

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CHDO set-aside finds may be used for projects that are owned, developed, or sponsored by a nonprofit that qualifies as a CHDO as defined at 24 CFR §92.2. Previously, these roles were limited to development activities—that is, projects that involved acquisition, rehabilitation, and/or new construction of housing for sale or rent to low-income families. However, the 2013 HOME Final Rule amended the definitions of these roles and now nonprofits c...
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CHDO set-aside finds may be used for projects that are owned, developed, or sponsored by a nonprofit that qualifies as a CHDO as defined at 24 CFR §92.2. Previously, these roles were limited to development activities—that is, projects that involved acquisition, rehabilitation, and/or new construction of housing for sale or rent to low-income families. However, the 2013 HOME Final Rule amended the definitions of these roles and now nonprofits can also own and manage HOME-assisted housing that it does not develop. CHDO set-aside funds may not be used for administering tenant-based rental assistance or downpayment assistance programs (except in combination with a development project in certain circumstances). HUD provides a detailed definition of the roles of owner, developer, and sponsor for rental and homebuyer projects in the HOME regulation §92.300(a).

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The following HUD programs are those that include “housing counseling” as an eligible funding activity or project cost. Where “housing counseling,” as defined by this rule, is funded by the programs listed below, the housing counseling must be provided through an agency approved to participate in HUD’s Housing Counseling program and a HUD certified housing counselor. The Community Development Block Grant Program (42 U.S.C. 5301, et seq...
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The following HUD programs are those that include “housing counseling” as an eligible funding activity or project cost. Where “housing counseling,” as defined by this rule, is funded by the programs listed below, the housing counseling must be provided through an agency approved to participate in HUD’s Housing Counseling program and a HUD certified housing counselor.

1. The Community Development Block Grant Program (42 U.S.C. 5301, et seq.), including Disaster Recovery;
2. Displacement Due to Demolition and Disposition of Public Housing (42 U.S.C. 1437p(a)(4)(D));
3. Conversion of Distressed Public Housing to Tenant-Based Assistance (42 U.S.C 1437z-5(d)(2)(B));
4. HOME Investment Partnership Program (42 U.S.C. 12701 et seq.);
5. Housing Trust Fund (12 U.S.C. 4568(c));
6. Housing Opportunities for Persons With AIDS (42 U.S.C. 12906);
7. Emergency Solutions Grant (42 U.S.C. 11371, et seq.);
8. The Continuum of Care program (42 U.S.C. 11381, et. seq.);
9. Indian Housing Block Grants* and Native Hawaiian Housing Block Grants (25 U.S.C. 4132(3), 25 U.S.C. 4229(b)(2)(A));
10. Indian Community Development Block Grant Program* (42 U.S.C. 5301, et seq.);
11. Rural Housing Stability Assistance Program (P.L. 111-22);
12. Housing Choice Voucher program (42 U.S.C. 1437f(o));
13. Public Housing Operating Fund (42 U.S.C. 1437g(e); and
14. Family Self-Sufficiency Program (FSS)

*Please note that application of the Housing Counseling Certification Rule requirements to the Native American housing programs will undergo tribal consultation before applying.

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The following HUD programs are those where housing counseling is required by statute, regulation, Notice of Funding Availability, or otherwise required by HUD: Housing Counseling Program (12 U.S.C. 1701x);   Housing Choice Voucher Homeownership Option (42 U.S.C. 1437f(y));   HOME Investment Partnership – Homeownership only (42 U.S.C. 12701 et seq.);   Housing Trust Fund – Homeownership only (12 U.S.C. 4568(c));   FHA Sing...
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The following HUD programs are those where housing counseling is required by statute, regulation, Notice of Funding Availability, or otherwise required by HUD:

1. Housing Counseling Program (12 U.S.C. 1701x);
    
2. Housing Choice Voucher Homeownership Option (42 U.S.C. 1437f(y));
    
3. HOME Investment Partnership – Homeownership only (42 U.S.C. 12701 et seq.);
    
4. Housing Trust Fund – Homeownership only (12 U.S.C. 4568(c));
    
5. FHA Single Family Mortgage Insurance Program (12 U.S.C. 1707 et seq.). [See the FAQ regarding the inclusion of the FHA Single Family Mortgage Insurance Program on the list only for situations where housing counseling is required in connection with a specific FHA product, such as the Back to Work Extenuating Circumstances Initiative];
    
6. Home Equity Conversion Mortgage Program (12 U.S.C. 1715z-20).

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HOME as a HUD program where housing counseling is required by regulation: The HOME program regulations require that all homebuyers assisted with HOME funds must receive housing counseling. The housing counseling requirement applies to all HOME-assisted homebuyers, including homebuyers receiving HOME-funded direct homebuyer assistance (i.e., downpayment assistance) and homebuyers purchasing units developed with HOME funds. In all instances, rega...
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1. HOME as a HUD program where housing counseling is required by regulation:
   
   The HOME program regulations require that all homebuyers assisted with HOME funds must receive housing counseling. The housing counseling requirement applies to all HOME-assisted homebuyers, including homebuyers receiving HOME-funded direct homebuyer assistance (i.e., downpayment assistance) and homebuyers purchasing units developed with HOME funds. In all instances, regardless of whether the housing counseling is funded with HOME or another source, this required housing counseling must be provided by HUD certified housing counselors working for an agency approved to participate in HUD’s Housing Counseling program, by the Final Compliance Date.
    
2. HOME as a HUD Program where housing counseling is funded under the HUD program: 
   
   While housing counseling is required for all HOME-assisted homebuyers, other types of housing counseling that are not required by HOME regulation, such as counseling to potential tenants, are eligible HOME-funded costs. Regardless of whether the housing counseling is required by regulation or optional, if the Participating Jurisdiction funds housing counseling with HOME funds, either directly or through a Community Housing Development Organization (CHDO) or subrecipient, such housing counseling must be provided by a HUD certified housing counselor working for an agency approved to participate in HUD’s Housing Counseling program, as of the Final Compliance Date.

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HUD’s Part 5 definition of annual income includes income assets. When the value of net family assets, as defined in 24 CFR 5.603, exceeds $50,000 (which HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and the actual returns from a given asset cannot be calculated, PJs must impute returns on the asset based on the current passbook savings rate, as determined by...
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HUD’s Part 5 definition of annual income includes income assets. When the value of net family assets, as defined in 24 CFR 5.603, exceeds $50,000 (which HUD will adjust annually in accordance with the Consumer Price Index for Urban Wage Earners and Clerical Workers) and the actual returns from a given asset cannot be calculated, PJs must impute returns on the asset based on the current passbook savings rate, as determined by HUD.

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The HOME Rule gives HUD the authority to establish its methodology for determining the maximum per-unit subsidy limits through Federal Register notice, allowing for periodic changes or adjustments. After publication of this Federal Register notice, HUD will post the limits annually on the HUD.gov website....
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The HOME Rule gives HUD the authority to establish its methodology for determining the maximum per-unit subsidy limits through Federal Register notice, allowing for periodic changes or adjustments. After publication of this Federal Register notice, HUD will post the limits annually on the HUD.gov website.

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The 2025 HOME Rule and NSPIRE applied several changes to all HOME projects, effective April 14, 2027. They are as follows: PJs must establish and implement standards which ensure correction of the minimum deficiencies established by HUD in the Federal Register Notice and based on NSPIRE. Requires PJs to establish written property standards for housing occupied by tenants receiving HOME TBRA. Rule aligns property standards...
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The 2025 HOME Rule and NSPIRE applied several changes to all HOME projects, effective April 14, 2027. They are as follows:

• PJs must establish and implement standards which ensure correction of the minimum deficiencies established by HUD in the Federal Register Notice and based on NSPIRE.
• Requires PJs to establish written property standards for housing occupied by tenants receiving HOME TBRA.
• Rule aligns property standards requirements for TBRA with ongoing property condition standards of HOME-assisted rental housing.
• Strengthens property standards for ongoing inspections of rental housing.
• PJs need to update their internal processes to reflect these new requirements.

Further, the Rule clarifies and simplifies property standards and ongoing on-site inspection requirements, as follows:

• Requires the installation of carbon monoxide and smoke detection;
• Clarifies that statutory minimum energy standards apply to new construction projects;
• Establishes the sample size for ongoing periodic inspections of HOME-assisted rental units.

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Due to a March 5, 2026, Court decision vacating the 2024 Final Determination, all HOME-assisted new construction projects must meet the 2015 Final Determination standards upon completion: 

• Single-family and low-rise buildings: 2009 International Energy Conservation Code (IECC). 
• Mid- or high-rise multifamily buildings (4+ stories): American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) 90.1-2007.
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Due to a March 5, 2026, Court decision vacating the 2024 Final Determination, all HOME-assisted new construction projects must meet the 2015 Final Determination standards upon completion:

• Single-family and low-rise buildings: 2009 International Energy Conservation Code (IECC).
• Mid- or high-rise multifamily buildings (4+ stories): American Society of Heating, Refrigerating and Air-conditioning Engineers (ASHRAE) 90.1-2007.

State Requirements:

Building energy codes are generally adopted at the state level. In states where the adopted energy code meets or exceeds the standard established by HUD and USDA, compliance with the applicable state code is sufficient to satisfy HUD and USDA program requirements. Information on the currently effective energy code in each state is available at Energy Codes State Portal.

Background:

Section 215 (a)(1)(F) and (b)(4) of the Cranston-Gonzalez Affordable Housing Act of 1990 (Cranston-Gonzalez), the HOME statute, require that newly constructed rental and homeowner housing must meet the energy efficiency standards promulgated by the Secretary in accordance with Section 109 of the Act (42 U.S.C. 12709). In addition, the 2025 HOME final rule codified the statutory energy efficiency requirements in the new construction property standards at §92.251(a)(3)(ii).

Section 481 of the Energy Independence and Security Act of 2007 (EISA) amended the energy code provisions contained in Section 109 of Cranston-Gonzalez to require the 2006 edition of IECC and ASHRAE 90.1-2004 for all covered programs. The EISA also established procedures for HUD and USDA to consider adopting periodic revisions to the IECC and ASHRAE codes, typically every three years. Specifically, EISA provides that the revisions to the IECC or ASHRAE 90.1 codes will apply if:

1. The agencies [HUD and USDA] “make a determination that the revised codes do not negatively affect the availability or affordability” of housing covered by the Act, and
2. The Secretary of the Department of Energy has made a determination under section 304 of the Energy Conservation and Production Act (42 U.S.C. 6833) that the revised codes would improve energy efficiency.

Since EISA, HUD and USDA have adopted revised energy codes twice:

Following a September 26, 2014, Final Determination published by DOE that the revised IECC and ASHRAE 90.1 standards would improve energy efficiency, HUD and USDA published a May 6, 2015, Final Determination to adopt the 2009 IECC and ASHRAE 90.1-2007 (80 FR 25901).

Subsequently, on July 28, 2021, DOE published a Final Determination that the most recent editions of IECC and ASHRAE 90.1 would improve energy efficiency. In accordance with the procedures established by EISA, HUD and USDA issued a Final Determination on May 26, 2024, that such codes would not negatively affect the affordability and availability of housing and, therefore, adopted the 2021 IECC and ASHRAE 90.1-2019 (89 FR 33112). The Department’s 2024 Final Determination became effective on May 28, 2024. In Section VI of the Final Determination, the Department provided Table 32, which lists compliance dates for the updated energy efficiency standards. Compliance with the updated energy efficiency standards was required for projects with HOME commitments starting 180 days after the Effective Date, November 24, 2024.

The 2024 Final Determination was subject to legal challenges and on March 5, 2026, the District Court for the Eastern District of Texas granted a summary judgement for the Plaintiffs vacating the Final Determination under the Administrative Procedures Act. The Court’s decision restored the 2015 Final Determination, in effect requiring all newly constructed HOME-assisted rental and homebuyer housing to meet 2009 IECC and ASHRAE 90.1-2007 upon completion. In addition, on May 1, 2026, HUD published Rescission of Final Determination: Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA Financed Housing (91 FR 23450) to announce the immediate recission of the 2024 Final Determination.

On May 1, 2026, the Department of Housing and Urban Development (HUD) and the Department of Agriculture (USDA) published a Federal Register notice rescinding the previous Federal Register notice, “Final Determination: Adoption of Energy Efficiency for New Construction of HUD- and USDA Financed Housing,” published on April 26, 2024, as well as subsequent notices extending the effective dates for the rescinded standards.

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