This paper presents an optimal scheduling model for Demand Response (DR) based Home Energy Management System (HEMS) that schedules residential electrical appliances and Distributed Energy Resource (DER) units for active residential consumers. The scheduling problem is formulated using Mixed-Integer Linear Programing (MILP). The primary objective of the proposed model is to minimize the electricity expenditure of the consumer while maintaining an optimal comfort level. Grid reliability criteria have also been incorporated into the optimization constraints to address the issue of rebound peaks and voltage-level violation in distribution grids which may arise due to large-scale adoption of DR-based HEMS. The proposed HEMS model is simulated and verified with a case study for a typical house, and the simulation showed positive results with up to 18% energy expenditure savings for the consumer.