For five years, soaring rents in eastern Tennessee forced Heather Colley and her two children to move four times. A gift of land in 2021 offered a path to homeownership, but as a single mother and manicurist earning $18.50 an hour, the 45-year-old could not afford to build.
Her circumstances changed after she qualified for a $272,000 grant from a nonprofit, allowing her to build a three-bedroom house. The funding was made possible by the HOME Investment Partnerships Program, a federal grant initiative that has supported affordable housing in rural areas for decades. “Every time I pull into my garage, I pinch myself,” said Colley, who moved in last June.
Now, that same grant program is targeted for elimination in a budget proposal from House Republicans, a move championed by former President Donald Trump. Housing experts and state agencies warn that cutting the program would derail tens of thousands of affordable housing developments nationwide, with a disproportionate impact on Appalachian towns and rural counties where government aid is limited and private investors are scarce.
Since its inception three decades ago, the HOME program has helped build or repair over 1.3 million affordable homes. An Associated Press analysis of federal data shows that at least 540,000 of these were in rural or significantly rural congressional districts.
“Maybe they don’t realize how far-reaching these programs are,” said Colley, a past Trump voter. The AP analysis found that 84% of the rural homes supported by HOME are in districts that voted for Trump in the last presidential election. “I understand we don’t want excessive spending and wasting taxpayer dollars, but these proposed budget cuts make me rethink the next time I go to the polls.”
Established under President George H.W. Bush, the HOME program has survived numerous budget battles but has been strained by rising construction costs and stagnant funding, resulting in fewer new units. This is particularly challenging in some rural areas where home prices have recently grown faster than in cities. Since it began, the program has disbursed over $38 billion to fill funding gaps and attract investment for acquiring, building, and repairing affordable homes, as well as providing some rental assistance.
To offset the proposed cut, House Republicans suggest drawing from a nearly $5 billion pandemic-era fund intended to support people experiencing homelessness. However, state housing agencies argue the available amount in that fund is likely far lower, as many committed projects are not yet reflected in the federal tracking system.
A spokesperson for the Department of Housing and Urban Development, which administers the program, suggested HOME is less effective than other programs. In contrast, Senate Republicans have included funding for HOME in their draft budget, setting the stage for negotiations that could result in reduced funding rather than complete elimination. A spokesperson for the White House did not respond to specific questions, stating only that Trump’s commitment to cutting red tape is making housing more affordable.
In Owsley County, Kentucky, one of the nation’s poorest regions, the need for affordable housing is acute. Cassie Hudson of Partnership Housing, a local nonprofit, said her organization has relied on the HOME program to build most of its affordable homes for over a decade. She noted that stagnant funding has already forced them to build only a quarter of the single-family homes they once did.
“Particularly for deeply rural places and persistent poverty counties, local housing developers are the only way new homes and rental housing get built,” said Joshua Stewart of Fahe, a coalition of Appalachian nonprofits. He explained that HOME is critical in areas where construction costs exceed a home’s market value, a common barrier in Appalachia.
The program’s impact is personal for Tiffany Mullins, a single mother of four in Hazard, Kentucky, who purchased a home in August with assistance from HOME funds. Mullins, who earns $14.30 an hour, sees the program as vital to preserving a rural way of life.
Experts say the effects of eliminating HOME would be felt over time. “The impact would be a fizzling of new affordable housing supply,” said Tess Hembree, executive director of the Council of State Community Development Agencies. “When HOME funding was temporarily reduced in 2015, we’re seeing the ramifications 10 to 15 years later.”
The cut would also undermine the nation’s largest affordable rental housing initiative, the Low Income Housing Tax Credit (LIHTC). According to upcoming research from the Urban Institute, HOME grants are used in 12% of LIHTC projects, accounting for 324,000 individual units. While a recent Republican-backed bill increased LIHTC, experts warn that cutting HOME would make those tax credits harder to use. “It’s LIHTC plus HOME, usually,” said Tim Thrasher, CEO of a nonprofit that builds affordable apartments in North Alabama.
In eastern West Virginia, Dave Clark, executive director of Woodlands Development Group, said HOME is “one of the only programs available to us that allows us to develop true workforce housing” for essential workers like nurses, first responders, and teachers.
Sarah Halcott, a grant administrator for a nonprofit in eastern Tennessee, fears for her clients as they face rising housing costs with the program in jeopardy. “This is just another nail in the coffin for rural areas,” she said.
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