House Financial Services Subcommittee Holds Hearing Titled, “HOME 2.0: Modern Solutions to the Housing Shortage”

By Libby O’Neill, NLIHC Senior Policy Analyst and San Kwon, NLIHC Policy Intern 

The House Financial Services Subcommittee held a hearing on July 16 to discuss the “Home Reform Act of 2025” and ways to “modernize” the HOME Investment Partnerships (HOME) Program. The HOME program is the largest federal block grant specifically designed to create affordable housing. The hearing took place in the backdrop of the House Appropriations Committee’s draft Transportation, Housing and Urban Development (THUD) spending bill, which, like President Trump’s fiscal year (FY) 2026 budget request, proposes to eliminate all funding for the HOME program. 

In April, Chair Mike Flood (R-NE) and Ranking Member Emanuel Cleaver (D-MO) released a video requesting comments from states, cities, non-profits, and developers on the HOME program. In his opening statement, Chair Flood highlighted four key themes that were common in the public comments—namely the limitations and burdens placed by the following regulatory requirements: (1) the “Davis-Bacon Act,” which requires contractors working on federally funded or assisted construction projects to pay their laborers the prevailing wage and benefits for the geographic area; (2) the “Build America Buy America Act” (BABA), which requires the use of domestically produced materials to manufacture homes; (3) Section 3 requirements, which ensure that employment and other economic opportunities generated by federally funded projects are directed towards low- and very low-income individuals and businesses that employ them; and (4) environmental review processes. Chair Flood acknowledged that these requirements have noble goals, but argued that together, they make the construction of new affordable housing more difficult. Chair Flood emphasized that the root of the country’s housing affordability crisis cannot be addressed without increasing the supply of affordable housing—a point which Ranking Member Cleaver echoed in his opening statement. 

Four witnesses participated in the hearing—Allison George, Director of the Colorado Division of Housing, Department of Local Affairs and Board President of the Council of State Community Development Agencies (COSCDA); Eric Oberdorfer, Director of Policy and Legislative Affairs of the National Association of Housing and Redevelopment Officials (NAHRO); Ellen Woodward Potts, Executive Director of Habitat for Humanity of Tuscaloosa, on behalf of Habitat for Humanity International; and Tiffany Bohee, President of Mercy Housing California. 

In their testimonies, the four witnesses highlighted many of the same recurring points. They all called for the easing of administrative burdens, particularly with regard to the four requirements that Chair Flood outlined in his opening statement. They explained that such requirements are often overlapping, overly burdensome, and make it more difficult to find contractors to work with, especially in rural areas. To address these issues, Ms. Bohee suggested making “sensible streamline reforms,” so that regulatory requirements are aligned with the primary source of funding given that HOME funds are almost always used to cover critical gaps left by other funding streams. All four witnesses made the same recommendation of increasing the threshold that triggers Davis-Bacon requirements from 12 to 50 units. Mr. Oberdorfer explained that the current threshold makes it difficult for smaller development projects to occur due to added costs and administrative complexity. Mr. Oberdorfer also made the additional recommendation of limiting the number of environmental reviews to one per construction project. 

All four witnesses highlighted the HOME program’s success in helping to build affordable homes within each of their respective organizations. The witnesses also praised the HOME program’s flexibility and adaptability to local needs and emphasized the critical need for continued robust funding. 

Representatives Rashida Tlaib (D-MI) and Sam Liccardo (D-CA) pointed out that the new HOME program proposes increasing the eligible income threshold from 80% to 100% of Area Median Income (AMI). Both expressed concerns that this move would deter HOME funds from being allocated to communities that need them most. Mr. Oberdorfer added that the increase in income threshold only makes sense if it is accompanied by an increase in overall funding for the HOME program. 

Many Democratic members of the subcommittee, including Ranking Member Cleaver and Representatives Nikema Williams (D-GA), Rashida Tlaib (D-MI), and Brittany Pettersen (D-CO), expressed concern and frustration over the proposed elimination of funding for the HOME program. Representative Williams pointed out the inconsistency in her Republican colleagues’ support for improving the HOME program whilst “saying nothing while the president continues to push an anti-affordable housing agenda, including eliminating the HOME program in his FY26 budget proposal... Before expanding the HOME program, we need to make sure there’s a HOME program left to even expand,” she stated. 

Watch the full hearing here. 

Read the bill draft of “Home Reform Act of 2025” here.