(OAHP) administers three separate programs designed to address the nationwide shortage in affordable housing. The HOME Investment Partnerships, Self-Help Homeownership (SHOP), and Homeownership Zone programs bring federal resources directly to the state and local level for use in the development of affordable housing units, or to assist income-eligible households in purchasing, rehabilitating, or renting safe and decent housing.

More people than you might realize. The economic expansion of the 1990s obscured certain trends and statistics that point to an increased, not decreased, need for affordable housing. The generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more then 50 percent of their annual incomes for housing, and a family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States. The lack of affordable housing is a significant hardship for low-income households preventing them from meeting their other basic needs, such as nutrition and healthcare, or saving for their future and that of their families.

HUD's Response

The expansion of the supply of affordable housing for low-income families is at the very core of HUD's mission. The Office of Community Planning and Development, the Office of Housing, and the Office of Public and Indian Housing all administer programs designed to increase the stock of housing affordable to low-income households.

The HOME Program helps to expand the supply of decent, affordable housing for low- and very low-income families by providing grants to States and local governments called participating jurisdictions or "PJs". PJs use their HOME grants to fund housing programs that meet local needs and priorities. PJs have a great deal of flexibility in designing their local HOME programs within the guidelines established by the HOME program statute and final rule. PJs may use their HOME funds to help renters, new homebuyers, or existing homeowners. Since 1990 when the HOME Program was signed into law as Title II of the Cranston-Gonzalez National Affordable Housing Act (the HOME Investment Partnerships Act), over 450,000 affordable housing units have been acquired, constructed or rehabilitated, and nearly 84,000 tenants have received direct rental assistance.

SHOP provides funds for non-profit organizations to purchase home sites and develop or improve the infrastructure needed to set the stage for sweat equity and volunteer-based homeownership programs for low-income families. SHOP is authorized under Section 11 of the Housing Opportunity Program Extension Act of 1996, as amended, and is subject to other Federal crosscutting requirements. National and regional nonprofit organizations or consortia with experience in using volunteer labor to build housing may apply.

The Homeownership Zone program allows communities to reclaim vacant and blighted properties, increase homeownership, and promote economic revitalization by creating entire neighborhoods of new, single-family homes, called Homeownership Zones. Communities that apply for HOZ funds are encouraged to use New Urbanist design principles by providing for a pedestrian-friendly environment, a mix of incomes and compatible uses, defined neighborhood boundaries and access to jobs and mass transit. There have been two competitive funding rounds, one in 1996 and one in 1997. No further funding has yet been made available for this program.