S-3901-119
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sponsored by Ted Budd (R-NC)
What it does
This bill would expand the HOME Investment Partnerships Program in two main ways. First, it would allow smaller jurisdictions that do not receive Community Development Block Grant (CDBG) funding to use HOME funds for infrastructure improvements — such as water and sewer lines, sidewalks, roads, and utility connections — as long as those improvements are directly tied to nearby HOME- or Low-Income Housing Tax Credit (LIHTC)-assisted housing. Second, it would raise the income ceiling for eligible homebuyers from 95% to 110% of area median income, add shared equity and community land trust models as approved affordability mechanisms, and create exceptions to income qualification rules for active-duty military members who are deployed or receive permanent change-of-station orders, and for heirs or beneficiaries who inherit HOME-assisted homes.
Who benefits
Low- and moderate-income homebuyers in smaller, rural, and suburban jurisdictions that lack CDBG funding. Households earning between 95% and 110% of area median income who were previously ineligible. Active-duty military members deployed away from their HOME-assisted homes, who would no longer risk losing program compliance. Heirs and beneficiaries who inherit HOME-assisted homes and use them as a primary residence. Community land trusts, limited equity cooperatives, and community development corporations that would gain formal recognition as affordability mechanisms. Local governments in non-entitlement areas that could use HOME funds for infrastructure. Construction and utility contractors in those areas who would perform the infrastructure work.
Who is hurt
Households at the lowest income levels may face increased competition for HOME-assisted homeownership units if the eligible pool expands to include higher-income buyers. Jurisdictions that already receive CDBG funding are excluded from the new infrastructure flexibility, creating an uneven playing field. Neighboring property owners near HOME-assisted housing could face indirect effects if infrastructure improvements alter local development patterns. Taxpayers broadly bear the cost if expanded eligibility increases program demand without a corresponding increase in appropriations, potentially stretching existing funds thinner.
Supporters argue
Supporters argue that the current 95% area median income cap excludes working families who are too financially stable to qualify but still cannot afford market-rate homeownership, particularly in high-cost areas. They contend that allowing infrastructure spending in non-entitlement areas addresses a real gap: smaller communities lack CDBG access and often cannot connect affordable housing to basic utilities, rendering units uninhabitable or unsellable. The military and heir exceptions, they argue, correct documented hardships where service members face program violations through no fault of their own, and where families lose generational wealth because inherited homes fall out of compliance upon the owner's death.
Opponents argue
Opponents argue that raising the income ceiling to 110% of area median income dilutes the program's core mission of serving the lowest-income households, diverting limited federal housing dollars toward families who have more market options. They contend that allowing HOME funds to be spent on infrastructure — even when tied to affordable housing — blurs the program's purpose and could open the door to broader mission creep, since the connection between an infrastructure improvement and a specific housing unit may be difficult to enforce. Critics may also note that the bill does not authorize new appropriations, meaning expanded eligibility could reduce per-household resources for the most vulnerable beneficiaries already in the program.
Constitutional context
The HOME Investment Partnerships Program is authorized under Congress's spending power (Art. I, §8) and operates through conditional grants to state and local governments. No significant constitutional tension is raised by this bill; the Tenth Amendment's reservation of land use authority to states is respected because participation remains voluntary, and the bill does not mandate local action. The Fair Housing Act's disparate impact framework (Texas Dept. of Housing v. Inclusive Communities, 2015) could be relevant if expanded eligibility criteria produce racially disparate outcomes, but no direct constitutional challenge is apparent on the bill's face.
Checks and balances
Congress expands the program's permitted uses and eligibility rules; HUD gains rulemaking authority to implement the changes within one year, subject to standard notice-and-comment requirements under the Administrative Procedure Act; participating jurisdictions retain discretion over whether to use the new flexibilities.
Historical precedent
The HOME Investment Partnerships Program was established by the Cranston-Gonzalez National Affordable Housing Act of 1990 and has been amended multiple times to adjust income thresholds and eligible uses; prior expansions of LIHTC-linked spending flexibility offer a direct analogue.