NCSHA Washington Report | February 21, 2025

So much is moving so fast inside the Beltway with such wide-ranging implications for housing that NCSHA would be organizing an urgent Capitol Hill fly-in for state housing finance agency leaders and their partners if we hadn’t, with more luck than foresight, long ago scheduled our annual Legislative Conference for March 10 – 12.

Based on the past four weeks, it’s a fool’s errand to forecast all that will be happening after two more. Still, we should expect:

An imminent federal shutdown and budget crunch. The former will happen March 14 unless both parties and the White House can agree on terms to keep it operating for the rest of the fiscal year. Strategist Bruce Mehlman points out a bipartisan deal to keep government going will require common ground among six factions that “fundamentally don’t agree,” at a time when the White House may actually welcome a shutdown “as a chance to accelerate its efforts to transform government.”

Even if a shutdown is averted or only short term, and appropriations are available and largely sufficient for the rest of FY 2025 (that’s multiple ifs), larger challenges for FY 2026 funding are already clear. Essential programs like the HOME block grant, rental assistance, and single- and multifamily mortgage insurance, from HUD as well as USDA, may face deep cuts.

A mission-critical objective of LegCon is to ensure Congress preserves these effective resources, which states through their HFAs leverage with their own investments multiple times over, to respond to the country’s core housing affordability issues.

Continuing movement on tax legislation. While the House and Senate are taking different approaches to laying the foundation for a big tax bill, “the arguably more consequential fight on the substance of the legislation” is already playing out in intense member jockeying and industry lobbying.

That’s because there’s not nearly enough revenue for Congress to work with (or additional federal debt it’s willing to incur) to accommodate all the priorities of the president without also finding “offsets” by clipping popular tax expenditures, curtailing popular entitlements, and cutting popular programs (see above) — the last of which, while technically not part of the “reconciliation” legislative process, will still be targeted as tax cut “pay fors.”

Because we believe the best defense is a good offense, we’re pushing hard for more Housing Credits and Housing Bonds in the tax bill. Our LegCon message is built on the hard evidence of the direct benefit they deliver as part of a broader municipal bond and affordable housing finance infrastructure that sustains the economies of every state and congressional district.

Remaining uncertainty about the impacts of shock and awe. It’s impossible to know exactly where we’ll be two weeks from now on the administration’s efforts to freeze funds appropriated by Congress, restrict activities of federal agencies, and initiate large-scale layoffs at HUD and elsewhere. Or whether early moves on trade and immigration will still “squeeze every market in this country” as they are now, according to home builders. Or whether uncertainty in and of itself will be hurting housing affordability in a major way.

What we do know is there’s a lot to do and still time for you to be part of it.

Stockton Williams | Executive Director

In This Issue

• Senate Passes “Skinny” Budget; Trump Endorses House Budget Approach
• Stakeholders Consider DOGE-Promoted Workforce Reduction Plans
• Flood Lays Out Housing Subcommittee Agenda
• Trump Orders Sweeping Review of Federal Regulations
• Looking Ahead

Senate Passes “Skinny” Budget; Trump Endorses House Budget Approach
Early this morning, the Senate passed its version of the FY25 budget resolution after President Trump, in a post on social media earlier in the week, announced his endorsement of the House’s broader approach. As NCSHA has reported previously, the Senate budget resolution paves the way for energy, border security, and defense policies to pass through the filibuster-proof reconciliation process but does not include instructions to tax writers that would allow them to advance legislation to extend provisions of the Tax Cuts and Jobs Act and make other tax changes. The Senate envisions passing another budget resolution later in the year to set up a second reconciliation bill to accomplish that.

The House FY25 budget resolution has a broader scope, teeing up a reconciliation bill that also includes tax legislation. Senate leaders have said their budget resolution is a “Plan B” in case the House is unable to pass its more comprehensive bill. House Speaker Mike Johnson (R-LA) could bring the House budget resolution to the House floor as early as next week. If it passes, Republican leaders in the House and Senate will need to agree on a single approach.

Stakeholders Consider DOGE-Promoted Workforce Reduction Plans
Amid reports of significant staffing cuts planned by the Trump Administration at the U.S. Department of Housing and Urban Development (HUD), U.S. Department of Agriculture (USDA), and other agencies, elected officials and stakeholders are trying to learn more and have begun to sound the alarm about potential effects of such workforce reductions.

Besides indications that HUD employees are bracing for a nearly 50 percent reduction in staff at the agency, the administration, through the Elon Musk-linked Department of Government Efficiency (DOGE), reportedly has plans to cut up to 84 percent of the Office of Community Planning and Development staff, which oversees the HOME Investment Partnerships program, disaster recovery, Community Development Block Grants, and homeless assistance programs, as well as up to half the staff at the Federal Housing Administration, which insures single-family and multifamily mortgages, operates project-based rental assistance, and handles asset and lender management.

In response to these and other reports, Senate Appropriations Committee Vice Chair Patty Murray (D-WA) and Senate Banking Committee Ranking Member Elizabeth Warren (D-MA) sent a letter to newly-confirmed HUD Secretary Scott Turner expressing alarm and requesting additional details on the range and scope of planned staffing cuts. A group of Senators led by Angela Alsobrooks (D-MD) also sent Secretary Turner a letter highlighting similar concerns. The National Association of Affordable Housing Lenders, Housing Assistance Council, and National Low Income Housing Coalition have issued statements on the reports.

Flood Lays Out Housing Subcommittee Agenda
In an interview published Tuesday, House Housing and Insurance Subcommittee Chair Mike Flood (R-NE) outlined his housing agenda for the subcommittee this Congress. Flood said he expects the subcommittee to focus on housing programs, insurance reform, and releasing the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac from conservatorship.

With respect to housing programs, Flood said the subcommittee would look to reform and reauthorize several HUD programs that have not been reauthorized for some time. He also suggested the subcommittee advance a larger housing package combining several different bills introduced by Hill Republicans. Regarding the GSEs, Flood said the Federal Housing Finance Agency should take the first step on releasing the firms from conservatorship and the GSEs should potentially be privatized by January 2026. Flood also pledged to advance a long-term reauthorization of the National Flood Insurance Program.

Flood expressed a desire to work together with congressional Democrats on housing issues, noting that Democrats care deeply about housing issues and citing his previous experience working with both parties as head of the Nebraska State Legislature.

Trump Orders Sweeping Review of Federal Regulations
President Trump on Wednesday issued an executive order directing all federal agencies to conduct a comprehensive review of their regulations and identify those rules that could be eliminated. Agencies will have 60 days to work with their DOGE task forces to identify regulations they believe run counter to Trump’s priorities and send them to the Office of Management and Budget (OMB). OMB will then decide whether to review or rescind the regulations.

Relatedly, according to media reports, former FHFA Director Mark Calabria has joined the Trump Administration as program associate director for housing, treasury, and commerce at OMB and has been detailed to the Consumer Financial Protection Bureau to run it until the Senate has confirmed a new director. President Trump nominated Jonathan McKernan for the position last week.

Looking Ahead

Legislative and Regulatory Activities

• February 21 | Comments Due to NCSHA | Establishment of the Optional Reimbursement Claim Alternative
• February 21 | Comments Due to NCSHA | Partial Claim Document Recording and Payoff Statements
• February 27 | Senate Banking Committee | Nominations Hearing: William Pulte for Director, Federal Housing Finance Agency, and Jonathan McKernan for Director, Consumer Financial Protection Bureau, among others
• February 28 | Comments Due | HUD Request for Information on Resilience Measures and Insurance Coverage
• March 3 | Comments Due | Establishment of the Optional Reimbursement Claim Alternative
• March 4 | House Financial Services Subcommittee on Housing and Insurance | Hearing: “Building Our Future: Increasing Housing Supply in America”
• March 10 | Comments Due | Partial Claim Document Recording and Payoff Statements
• March 10 | Comments Due to NCSHA | Equity Saver Sale Home Disposition Option
• March 17 | Comments Due | Equity Saver Sale Home Disposition Option

NCSHA, State HFA, and Industry Events

• February 24 | ULI Terwilliger Center for Housing: 2025 Building the Future Policy Forum | Atlanta, GA
  Stockton Williams will participate in this event.
• March 3 | American Wood Council Annual Meeting | Washington, DC
  Jennifer Schwartz will speak at this event.
• March 10 – 12 | NCSHA’s 2025 Legislative Conference | Washington, DC
• March 18 – 21 | National Affordable Housing Management Association: Top Issues in Affordable Housing Conference | Washington, DC
  Jennifer Schwartz will speak at this event.
• March 19 | National Housing Supply Summit | Washington, DC
  Stockton Williams will participate in this event.
• March 26, 1:00 – 3:00 pm ET | NCSHA Webinar: Empowering Women in Housing Finance Careers | Virtual