%HOMEPATH% is a Windows alias.

It comes in very handy because is resolves in reference to the user login and the install location of the folder in question. If I am logged in as John and Windows was installed to the C: drive, then %HOMEPATH%\Documents is C:\Users\John\Documents. The additional value of using the alias really shines when an administrator does use the default install paths and Microsoft also moved the default location between OS versions.