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The largest federal block grant available to state and local governments, the Home Investment Partnership (HOME) program is designed exclusively to create affordable housing for low-income households. Each year, approximately $2 billion is allocated nationwide. The program reinforces several important values and principles of community development by empowering people and communities to design and implement strategies tailored to their own needs and priorities, as well as emphasizing the consolidated planning process to expand and strengthen partnerships between all levels of government and the private sector in the development of affordable housing.

Households eligible for HOME assistance vary with the nature of the funded activity. For rental housing and rental assistance programs, at least 90 percent of benefiting families must have incomes that are no more than 60 percent of the median family income for the area (MFI). In rental projects with five or more assisted units, at least 20 percent of the units must be occupied by families with incomes no greater than 50 percent of the MFI. The incomes of households receiving HUD assistance must not exceed 80 percent of the area median. HOME income limits are published each annually by HUD.

Eligible activities for HOME funds include:

  • Home purchase or rehabilitation financing assistance to eligible homeowners and new homebuyers;
  • Building or rehabilitating housing for rent or ownership;
  • "Other reasonable and necessary expenses related to the development of non-luxury housing," including site acquisition or improvement, demolition of dilapidated housing to make way for HOME-assisted development and payment of relocation expenses; and
  • Tenant-based rental assistance

The American Dream Downpayment Initiative

Administered as a component of the HOME program, the American Dream Downpayment Initiative (ADDI) aims to increase the rate of homeownership, particularly among lower income and minority households. The program will help first-time homebuyers overcome the two greatest hurdles to homeownership: downpayment and closing costs.

Created to assist low-income first-time homebuyers in purchasing single-family homes, ADDI provides funds for:

  • Downpayment,
  • Closing costs and;
  • Rehabilitation carried out in conjunction with the assisted home purchase.

In order to be eligible for ADDI assistance, individuals must be first-time homebuyers seeking single family housing. A "first-time homebuyer" is defined as an individual and his or her spouse who have not owned a home during the three years prior to the purchase of a home with ADDI assistance. Funding may be used to purchase one to four-family housing, condominium unit, cooperative unit, or manufactured housing. Additionally, individuals who qualify for ADDI assistance must have incomes not exceeding 80 percent of the area median income.