HUD could fund abandoned building conversions with extra housing funds

HUD could award competitive grants to turn eligible abandoned buildings into income-limited housing. Jurisdictions participating in the federal HOME housing program could compete to convert former commercial or industrial buildings. Annual HOME funding would have to exceed $1.35 billion, and HUD could use up to $100 million of that excess. Buildings must meet the bill’s abandonment rules, including an unsafe-building finding with at least 90 days of owner inaction, or a qualifying status under state or local law. The funding authority would apply to fiscal years 2027 through 2031.

Grant-funded housing would have to meet one of two household-income tests. These tests would cover homes made with pilot grants and use the area’s middle household income as the benchmark. Housing could serve households earning up to 100% of area median income if most units are affordable to households earning up to 80%. Alternatively, housing could serve households earning up to 120% if most units are affordable to households earning up to 60%. HOME requirements for renting, selling, and reselling the homes would apply.

HUD could waive or replace certain rules for awarding and using these grants. The authority would cover laws and regulations HUD administers that govern awarding or using pilot grant money. HUD would have to publicly find that a good reason exists for each waiver or alternative requirement. Requirements concerning fair housing, nondiscrimination, labor standards, and the environment could not be waived or replaced.