WASHINGTON - The Senate approved legislation this week that would give the HOME housing affordability program $1.5 billion in 1993, $600 million more than lawmakers envisioned when they began drafting the housing appropriations bill this summer.

In a separate development, housing lobbyists said there is renewed hope that Congress will pass a bill to permit the use of private-activity bonds in conjunction with the HOME program. That bill has been bogged down in the Senate, but Senate leaders are now saying they hope to approve it before the end of the month.

Last year, Congress kicked off the HOME program by appropriating $1.5 billion for 1992. The program requires the federal government to match contribution, that state and local governments make to low-income rental and homeownership projects. Earlier this year, Congress seemed on track to scale down the amount it allocated.

In July, a Senate Appropriations subcommittee approved legislation that would have earmarked $900 million for the HOME program, but the full appropriations panel increased that to $1.2 billion. The full Senate then approved an amendment raising the level to $1.5 billion.

Although lobbyists called the Senate vote a victory, they acknowledged that their fight for HOME funding is not over yet. The Senate bill must now be reconciled with the House's appropriations measure, which would allocate only $600 million for the program in 1993.

Industry officials attributed the Senate's willingness to increase the appropriation for HOME to the lobbying efforts of two top housing lawmakers, Senate Banking Committee Chairman Donald Riegle, D-Mich., and Sen. Alan Cranston, D-Calif., who chairs the committee's subcommittee on housing and urban affairs.

The senators argued that Congress would be sending the wrong signal to the housing community if it began to scale back a program it approved with so much fanfare.

In addition to the appropriations bill, Congress is struggling to complete legislation to reauthorize HOME and various other federal housing programs. The Senate and House bills contain a different version of the private-activity bond provision.

The provision is designed to expand on Housing and Urban Development Department rules that allow only public-purpose debt to count toward state and local contributions that are eligible for matching federal funds.

Only last week, housing lobbyists were saying the chances of moving the authorization bill through the Senate were slim. But in a surprise development on Tuesday, Senate Majority Leader George Mitchell, D-Maine, told the Senate that the housing bill was one of his top legislative priorities for the rest of the session, and he hoped to move it through the Senate as soon as possible. Congress is scheduled to adjourn for the year on Oct. 3.

As passed by the Senate Banking Committee, the bill would allow state and local governments to count 25% of the value of their multifamily housing bond issuances toward the HOME contributions they make that are eligible for federal matching funds. Lobbyists have said, however, that they expect the full Senate to approve an amendment lowering that amount to 10%.

The House, meanwhile, approved an authorization bill in August that would allow states and localities to count the full value of both their multifamily and mortgage revenue bonds issuances as part of their eligible contributions.

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