I've done interviews in my home and in the candidate's home. I know there are very divergent views on this subject, but here is my view.
(1) It is better to dress up than dress down. That said, if you've never worn a suit, don't try it for the first time at your BGO interview.
(2) Pressed khakis, a collared shirt (long or short sleeves, depending on the weather), socks and shoes will be fine. For women, the above or a skirt/blouse/sweater combo is fine. While some men wear jackets and/or ties, I don't expect it.
(3) I know that, in some homes, people don't wear shoes for various reasons (cultural, new carpet, etc.). My suggestion is that, if the interview is in your home and it is NOT a cultural issue (i.e., it is a clean carpet issue), wear shoes. If it is a cultural issue, then wear whatever footwear you would wear in your home if you were entertaining a VIP.
(4) In my view, jeans and workout/warmup gear are generally not appropriate. I admit that my view may be based on the area of the country in which I live. I know others disagree with this view and would note that, in certain areas of the country, a candidate may consider nice jeans to be "dressing up." If you live in such an area and your jeans are your nicest attire, do NOT go out and buy new clothes; no one expects that. Your BGO lives where you live and he/she will understand if that attire is appropriate for your area.
(5) There is no place on the form for "dress" and I have never marked down an otherwise strong candidate because of what he/she wears.
(6) I make an effort to dress appropriately for interviews and I generally expect the candidates to do the same.`