This week, Chairman Mike Flood (R-NE) and Ranking Member Emanuel Cleaver (D-MO) of the House Financial Services Committee’s Housing and Insurance Subcommittee introduced the HOME Reform Act of 2025 (H.R. 5798), which proposes numerous modifications to the management of the HOME Investment Partnerships Program. Below is an outline of the most notable proposed changes.
Build America, Buy America Exemption
The Infrastructure Investment and Jobs Act of 2021 included a clause requiring infrastructure-supported products financed with federal dollars to be domestically produced whenever possible. Despite objections from several advocacy and stakeholder groups who argued that affordable housing should not be categorized as infrastructure for the Build America, Buy America (BABA) rule, HUD ultimately decided that BABA would be applicable to all projects utilizing HOME funds starting with the 2024 funding cycle.
The proposed HOME Reform Act of 2025 aims to explicitly exclude all future HOME projects from BABA requirements, regardless of project size or cost. It’s important to note that this exemption would be limited to HOME funds alone and would not extend to other programs like the Community Development Block Grant (CDBG) or Housing Trust Fund.
Higher Davis-Bacon Threshold
Currently, Davis-Bacon prevailing wage rules apply to developments containing 12 or more HOME units. An earlier draft proposed by Chairman Flood suggested raising this threshold to 50 units. However, the introduced bill would set the threshold at 24 HOME units, meaning Davis-Bacon wages would be required only for developments with 24 or more HOME units.
NEPA Review Process Exemptions
The bill would significantly simplify environmental reviews for specific types of HOME projects by creating categorical exceptions from the National Environmental Policy Act (NEPA) review for new infill housing, certain rehabilitation projects, and new developments of 15 or fewer units. However, NEPA review could still be triggered if other federal funding sources are involved. Furthermore, HUD would be instructed to ensure that if a project has already undergone environmental review, an additional review would not be necessary if subsequent federal assistance, such as Project-Based Rental Assistance, is added later.
In addition to these key provisions, the bill proposes several other significant enhancements to the HOME program, including:
- Raising the threshold at which Section 3 requirements apply across all statewide and local participating jurisdictions that receive less than $3 million in HOME funds;
- Permitting HOME funds to be allocated toward infrastructure improvements, such as water and sewer lines, sidewalks, roads, and utility hookups, in non-entitlement areas—local jurisdictions within a state that do not receive direct CDBG grants; and
- Removing the 24-month deadline for committing HOME funds.