The House Financial Services Committee (FSC) introduced bipartisan legislation aimed at addressing housing affordability challenges affecting all segments of the real estate marketplace. The move comes shortly after the House excluded language from its version of the National Defense Authorization Act (NDAA) meant to enact similar housing reforms.
If enacted, the “Housing for the 21st Century Act” (H.R. 6644) would update Federal Housing Administration (FHA) multifamily loan limits, provide targeted support for construction and rehabilitation efforts and aim to streamline federal housing program offerings and improve financing options for the U.S. Department of Agriculture (USDA) loans issued by the agency’s Rural Housing Service (RHS), among other provisions.
The bill was brought to the committee floor by FSC Chair French Hill (R-Ark.) and Ranking Member Maxine Waters (D-Calif.), among others, within days of the House’s vote to strike widely supported provisions of the Renewing Opportunity in the American Dream (ROAD) to Housing Act from the NDAA.
“Our committee is dedicated to finding new ways to foster a home building and buying environment where achieving the American Dream is in reach for our families across the nation,” Hill said in a statement. “Our goal is to chart a path forward toward greater development capacity and a simplified regulatory framework.”
Waters expressed support for the bill and praised Hill for working to advance meaningful legislation focused on housing reform.
“Through our partnership on this legislation, we are showing that housing is truly a bipartisan issue and that we can all come together to bring down costs and expand access to housing for all Americans,” Waters said. “I also appreciate the work of my Senate colleagues in passing the ROAD to Housing Act, some of which is included in the House bill. While I was disappointed ROAD was not included in the NDAA, there is clearly broad bipartisan support in both chambers to advance housing legislation.”
Numerous organizations representing mortgage and real estate professionals expressed support for H.R. 6644. The bill includes several initiatives put forth in previous legislative proposals highly regarded by these trade groups, such as the ROAD to Housing Act and the Housing Affordability Act.
“Housing affordability is a bipartisan issue that demands federal, state, and local solutions,” Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit said in a statement. “MBA welcomes the heightened focus on this important issue from both the Trump administration and Congress.”
Broeksmit reiterated that “MBA is a strong advocate for policies that boost housing supply and improve affordability,” adding that his organization intends to work with congressional leaders “on both sides of the aisle to reconcile differences and to build momentum toward pushing meaningful legislation across the finish line as soon as possible.”
FHA loan limit updates
The legislation recognizes that FHA multifamily loan limits have not kept pace with rising construction costs, leading to most jurisdictions being treated as “high-cost areas,” requiring exceptions for financing. This has restricted access to FHA’s multifamily mortgage insurance for multifamily housing developers. Legislators are aiming to address these restrictions by amending Sec. 206A of the National Housing Act to reset statutory multifamily loan limits and requiring future adjustments to be tied to an index reflective of actual construction cost changes to align loan eligibility with current market conditions.
Streamlining federal housing offerings
The legislation proposes to streamline federal housing program offerings by taking steps to reduce redundancy, accelerate project approvals and simplify federal agency involvement to help drive increases in housing supply. Sec. 104 of the bill would require the U.S. Department of Housing and Urban Development (HUD) to expand the use of categorical exclusions under National Environmental Policy Act for certain housing-related activities. By doing so, the bill’s authors are aiming to shorten the timeline for environmental compliance protocols, which often delay financing and construction. The bill also mandates interagency coordination between HUD and USDA to adopt mutually recognized environmental reviews and to explore joint inspection processes.
The bill would seek to modernize the HOME Investment Partnerships Program to reduce administrative barriers and expand eligible uses (including for workforce housing) and eliminate duplicative reviews where feasible. The bill’s Community Development Block Grant amendments would expand eligible grant uses to include new housing construction and require local jurisdictions to report on zoning reforms.
Rural housing service loans
The bill would amend Sec. 504 of the Housing Act of 1949 to increase the maximum loan amount available under the RHS, which administers various homeownership and rehabilitation loan programs for rural residents. Additionally, it would raise the share of funds reserved for very low-income applicants and direct the USDA to provide annual, publicly available reports on rural housing loan performance and risk. The bill also calls for a Government Accountability Office report on USDA technology systems, which could identify barriers to efficient processing and inform future modernization. Legislators hope these changes will address outdated loan limits, slow processing times and limited data transparency while enhancing financing options in rural areas.
Targeted support for construction, rehabilitation
The bill contains several provisions intended to address issues inhibiting housing shortages. Specifically, the bill would seek to streamline upfront regulatory requirements, zoning constraints and financing challenges through targeted initiatives designed to encourage construction and rehabilitation of affordable and mixed-income housing.
Sec. 102 and Sec. 103 of the legislation would allow HUD to award grants to local governments and other entities for pre-approved building designs that could be used to speed up the permitting process and the construction of small to mid-sized residential structures, with a priority on jurisdictions with high needs, and require coordination with state and regional authorities. HUD would be directed to issue model code language and guidance for point-access block buildings to reduce regulatory impediments to certain housing types.
A common theme among the bill’s provisions is the facilitation of interagency coordination, particularly with respect to HUD, USDA and the VA, to reduce redundancies in compliance regulations and program offerings. Such improvements could benefit lenders and appraisers in terms of time and cost savings, leading to increased efficiency.