SB 3901 amends the HOME Investment Partnerships Program to let participating jurisdictions that are not CDBG entitlements use HOME funds for infrastructure projects (water/sewer, sidewalks, roads, utility connections) when those improvements are directly related to, and located within or immediately adjacent to, HOME-assisted housing or housing financed under Section 42 (LIHTC). The bill also requires HUD to issue implementing rules within one year and applies the labor standards in section 110 of the Housing and Community Development Act of 1974 to those infrastructure projects.
The bill revises affordable-homeownership eligibility and durability. It increases two numeric thresholds in the statute from 95 percent to 110 percent, adds long-term affordability models (shared-equity, community land trusts, limited-equity cooperatives, community development corporations, and other Secretary-approved mechanisms), and creates narrow exceptions for deployed military members and heirs who assume obligations after an owner's death.
These changes expand program flexibility but shift compliance and cost dynamics for jurisdictions, HUD, and contractors.
At a Glance
What It Does
Authorizes HOME funds to pay for infrastructure in nonentitlement jurisdictions when the work is directly tied to HOME-assisted or Section 42 housing, makes those projects subject to section 110 labor rules, requires HUD to issue rules within one year, raises two statutory numeric thresholds from 95% to 110%, and explicitly accepts shared-equity and similar long-term affordability mechanisms.
Who It Affects
Nonentitlement participating jurisdictions (those not receiving CDBG entitlement funding), local housing finance agencies and nonprofits developing or preserving HOME- or LIHTC-assisted housing, contractors performing infrastructure work subject to section 110 labor standards, HUD as the implementing agency, and homebuyers/owners under HOME programs including military members and heirs.
Why It Matters
The bill reallocates HOME’s scope to include infrastructure in places previously excluded, while embedding prevailing-labor rules that increase project costs. It also shifts homeownership preservation from simple resale rules toward shared-equity and community ownership models and loosens certain income/threshold limits, changing who qualifies and how long affordability is enforced.
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What This Bill Actually Does
The bill inserts a new paragraph into section 212(a) of the Cranston-Gonzalez Act to permit participating jurisdictions that do not receive CDBG entitlement grants to use HOME funds for infrastructure work. The authorized activities are explicit — installation or repair of water and sewer lines, sidewalks, roads, and utility hookups — but are limited: the infrastructure must be directly related to, and located within or immediately adjacent to, housing either assisted by HOME or financed under Section 42 of the Internal Revenue Code (the LIHTC).
That limitation ties the new infrastructure authority to discrete housing projects rather than broad neighborhood investments.
To constrain how that authority is exercised, the bill makes any such infrastructure project subject to the labor standards in section 110 of the Housing and Community Development Act of 1974 (the prevailing-wage and related requirements codified at 42 U.S.C. 5310). The bill also instructs HUD to publish rules to implement these changes within one year of enactment, which will be the vehicle to define key terms (for example, what counts as “immediately adjacent” and the procedures jurisdictions must follow).On affordable homeownership, the bill amends section 215 to broaden qualifying approaches and to change numeric thresholds.
It raises two statutory numeric limits from 95 percent to 110 percent (one in section 215(b)(1) and another in section 245(b)(2)); the statute does not itself elaborate what those percentages gate but the effect is to expand eligibility/limits where those numerics apply. The bill also requires participating jurisdictions to accept long-term affordability models beyond simple resale restrictions — shared-equity ownership, community land trusts, limited-equity cooperatives, community development corporations, or other Secretary-approved mechanisms — and explicitly allows those models to preserve affordability through purchase options, rights of first refusal, or similar preemptive rights.Finally, the bill creates two narrow qualification exceptions: one allowing jurisdictions to suspend or waive certain income requirements for homeownership assistance when an owner is a member of the armed forces who receives deployment or permanent change-of-station orders; the other preserving eligibility where affordable housing already met the statute’s criteria before an owner’s death, provided an heir or beneficiary continues to occupy the unit and assumes the deceased owner’s HOME obligations under HUD-established terms.
Those exceptions add flexibility for specific life events but will require jurisdictions to adopt procedures to verify deployments and to document heirs’ assumption of obligations.
The Five Things You Need to Know
The bill adds a new allowance so participating jurisdictions that do not receive CDBG entitlement funding may use HOME dollars for infrastructure (water/sewer, sidewalks, roads, utility connections) when the work is directly related to HOME- or Section 42-assisted housing.
Any infrastructure paid for with HOME funds under the new authority must comply with the labor standards in section 110 of the Housing and Community Development Act of 1974 (42 U.S.C. 5310), effectively applying prevailing-wage and related requirements.
HUD must issue implementing rules to carry out the infrastructure authority and related provisions within one year of the bill’s enactment.
The bill expands acceptable long-term affordability models for HOME homeownership to include shared-equity, community land trusts, limited-equity cooperatives, community development corporations, and other Secretary-approved mechanisms, and allows tools like rights of first refusal to preserve affordability.
Two statutory numeric thresholds are raised from 95 percent to 110 percent (in section 215(b)(1) and section 245(b)(2)), and the bill creates special exemptions for deployed military members and for heirs/beneficiaries who assume a deceased owner’s HOME obligations.
Section-by-Section Breakdown
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Short title
Names the measure the 'HOME Investment Partnerships Program Expansion Act' or 'HOME Expansion Act.' This is a technical provision establishing how the statute will be cited and has no programmatic effect beyond labeling.
Permits HOME funds for infrastructure in nonentitlement jurisdictions and applies labor standards
Adds paragraph (4) to section 212(a) to let participating jurisdictions that do not receive title I CDBG entitlement grants use HOME funds for certain infrastructure improvements when those improvements are directly related to, and within or immediately adjacent to, HOME-assisted housing or housing financed under Section 42. The provision enumerates eligible infrastructure types (water/sewer, sidewalks, roads, utility connections) and then makes the projects subject to section 110 labor standards from the HCDA of 1974 (42 U.S.C. 5310). A rule-of-construction clause prevents imposing HOME program requirements onto housing that merely benefits from an infrastructure project but was not otherwise HOME-assisted. Practically, this creates a new permitted use for HOME funds limited by physical proximity and the nexus to HOME- or LIHTC-assisted units, while adding prevailing-wage compliance obligations.
HUD rulemaking timeline
Directs the Secretary of HUD to issue rules implementing the new infrastructure authority within one year. Those regulations will need to define critical terms left vague in the statute (for example, 'immediately adjacent' and 'directly related'), set documentation and reporting requirements, and align HOME program compliance systems with the section 110 labor rules for covered projects.
Expands affordable-homeownership models, creates exceptions, and raises numeric thresholds
Modifies section 215 by (1) replacing a 95 percent numeric threshold with 110 percent in subsection (b)(1), (2) adding explicit authorization for a set of long-term affordability mechanisms (shared-equity, community land trusts, limited-equity cooperatives, community development corporations, and Secretary-approved alternatives) and tools (purchase options, rights of first refusal), and (3) adding subsection (c) to allow jurisdictions to suspend or waive certain income qualifications for owners who are deployed or transferred in military service and to permit heirs/beneficiaries to retain qualifying status when they occupy the former owner's principal residence and assume the HOME obligations. The bill separately amends section 245(b)(2) to increase another 95 percent threshold to 110 percent. Together these changes expand the statutory menu of acceptable affordability-preservation approaches and enlarge certain numeric eligibility bounds while creating narrowly tailored humane exceptions.
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Explore Housing in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Residents and potential homebuyers in nonentitlement jurisdictions: Communities previously excluded from using HOME for infrastructure can receive water, sewer, sidewalk, road, and utility connections tied to HOME- or LIHTC-assisted housing, improving livability and making projects feasible in lower-capacity markets.
- Community land trusts, shared-equity programs, and limited-equity cooperatives: The statute explicitly recognizes these models, clearing a pathway for jurisdictions to fund projects that use resale-limiting mechanisms and preemptive purchase rights to preserve long-term affordability.
- LIHTC projects adjacent to HOME-assisted units: Projects financed under Section 42 may now benefit from nearby HOME-funded infrastructure if the jurisdiction demonstrates the required nexus, enabling coordination between HOME and LIHTC financing strategies.
- Deployed military members and heirs/beneficiaries occupying a deceased owner’s principal residence: The bill creates tailored exceptions so deployment or succession does not automatically disqualify households from affordable-homeownership status.
- Nonentitlement local governments and rural jurisdictions: These jurisdictions gain a new lever to make housing projects viable through infrastructure funding tied directly to assisted units.
Who Bears the Cost
- Participating jurisdictions implementing infrastructure projects: Localities will face added administrative duties to document the nexus to HOME- or Section 42-assisted housing, to comply with HUD’s forthcoming rules, and to integrate HOME fund accounting with infrastructure project delivery.
- Contractors and construction employers on HOME-funded infrastructure: Section 110 labor standards impose prevailing-wage-like obligations that increase labor costs and create payroll- and compliance-related administrative burdens.
- HUD and program administrators: HUD must complete rulemaking within a year and monitor compliance; state and local participating jurisdictions will need to update policies, monitor affordability mechanisms (shared-equity, CLTs, co-ops), and track heirs’ assumption of obligations.
- Other HOME activities and beneficiaries: Using limited HOME dollars for infrastructure—especially when coupled with higher labor costs—may divert resources from direct production, rehabilitation, or tenant-based assistance, weakening pipeline capacity for those activities.
Key Issues
The Core Tension
The bill trades greater flexibility to make housing projects feasible—by funding infrastructure and recognizing community-based long-term affordability models—against the risk of diluting HOME’s income targeting and stretching limited funds, while simultaneously imposing labor rules that raise costs and administrative complexity; choosing where to balance readiness, affordability, and cost containment is the central dilemma.
The bill purposefully expands permissible uses of HOME, but it does so with strings attached that create trade-offs in practice. Applying section 110 labor standards raises the cost of infrastructure projects and can disadvantage smaller local contractors, potentially requiring higher match funds or reducing the number of projects a jurisdiction can fund with the same allocation.
Because HOME funding is limited, directing dollars to infrastructure—especially in conjunction with higher labor-cost requirements—creates a zero-sum choice between physical site readiness and direct housing production or rehabilitation.
The statutory language leaves important operational details to HUD’s rulemaking. Terms like 'directly related' and 'immediately adjacent' are fact-dependent and prone to dispute; HUD’s definitions and documentation requirements will determine how broadly jurisdictions may treat cluster or corridor infrastructure investments.
Expanding acceptable long-term affordability models and raising thresholds to 110 percent broaden eligibility and tools, but they also complicate monitoring and enforcement: shared-equity and CLT arrangements require different compliance systems than simple resale-price restrictions, and heir-assumption rules introduce succession tracking obligations. Finally, raising numeric thresholds can dilute targeting to the lowest-income households if jurisdictions use the increased cap broadly rather than narrowly to close development gaps.
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