NCSHA Washington Report | April 25, 2025

Running for president in 2016, candidate Trump suggested, if elected, he would get rid of up to 70 percent of federal regulations. His first administration didn’t come close to achieving that, and analysts across the ideological spectrum generally agree Trump 1.0 presided over “a plateau in the growth of formal federal regulation, not deregulation.”

Trump 1.0 did, however, break new deregulatory ground with its “emphasis on reducing regulatory costs,” which reflected “a dramatic departure from the focus on net benefits that has prevailed for social regulations.” Trump 2.0 is building on that idea, in the more aggressive and ambitious manner it’s moving in so many other areas.

So, where the first Trump Administration issued an executive order requiring repeal of two existing rules for every new one an agency issued, this past January the White House raised that ratio to 10 to one, and ordered that “the total incremental cost of all new regulations, including repealed regulations, be significantly less than zero.”

The administration also has suggested some regulations could be repealed without public comment and reportedly is planning to “simply stop enforcing the rules while going through the legal notice-and-comment process to roll them back.” It has invited the public to submit ideas by May 12 on “any and all regulations currently in effect” that should be rescinded.

This week, NCSHA formally transmitted our first set of deregulation recommendations to this Trump Administration, focusing on programs administered by HUD. They reflect the deep, decades-old experience housing finance agencies have in delivering federal housing aid, often along with substantial resources of their own, to the residents and businesses of every state.

NCSHA’s recommendations identify actionable areas for HUD to operate more efficiently and effectively — at a lower cost to the department and its partners — in virtually every area: apartment financing and construction, mortgage lending and servicing, rental assistance, planning, and technology.

It’s dense, technical stuff, but it could translate, pretty quickly, into lower costs to build and buy homes.

Our recommendations also raise broader questions, which are relevant to HUD as well as other agencies (where we soon will be sending additional sets of recommendations).

• Why should federal agencies perform environmental or financial reviews that have substantively already been done at the state level?
• At a time of high construction costs and constrained housing supply, shouldn’t the most economically challenging projects be spared onerous federal labor standards and materials-sourcing mandates?
• Do we really need duplicative planning, reporting, and underwriting requirements among multiple federal programs when they are delivered together by a single agency on the ground?

Of course, some regulations are essential to retain, with improvements, in no small part because they contribute to cost saving and other efficiencies; without them, uncertainty and inconsistency could create as many problems as excessive red tape.

Under Secretary Turner’s leadership, HUD seems to have recognized that by retaining most of the HOME program rule that was recently revised after years of effort, with improvements NCSHA had long advocated. That’s smart regulatory reform.

Stockton Williams | Executive Director

In This Issue

• NCSHA Welcomes New Members
• NCSHA Sends HUD Recommendations for Regulatory Relief
• House Republicans Ready for Reconciliation Bill Sprint
• IRS Publishes New MRB/MCC Safe Harbors, Will Maintain Current Formula
• Most HOME Final Rule Changes Go Into Effect
• FHA Modifies Loan Servicing Requirements
• Reports Highlight Substantial Number of HUD Retirements, Possible HUD HQ Move
• Court Orders Release of GGRF Funds; Appeal Stays Order Temporarily
• Looking Ahead

NCSHA Welcomes New Members
NCSHA welcomed Attorney’s Title Group and Balsam Green as Affiliate members in April. If you work with a partner interested in becoming a member, please contact membership@ncsha.org.

NCSHA Sends HUD Recommendations for Regulatory Relief
This week, NCSHA sent Secretary Scott Turner recommendations on how the Department of Housing and Urban Development (HUD) could reform program and cross-cutting regulations to mitigate housing development delays, lower costs, and allow state housing finance agencies to optimize the administration of HUD programs. The letter provides specific suggestions to help the administration take substantive actions to reduce red tape by streamlining Davis-Bacon, Build America Buy America, environmental review, and Section 3 requirements and removing regulatory barriers to improve HUD programs, including HOME, Housing Trust Fund, rental assistance, Section 811, single-family and multifamily mortgage insurance, Ginnie Mae, and HUD information technology systems. NCSHA’s proposals in this letter will feature in our upcoming comments to the Office of Management and Budget in response to the request for information on deregulation on which we reported in an earlier Washington Report.

House Republicans Ready for Reconciliation Bill Sprint
Congress returns from its Easter/Passover recess next week with a packed agenda, including action to advance President Trump’s agenda through a reconciliation bill now that Congress has passed a final fiscal year 2025 budget resolution. House committees will mark up legislation responding to the budget resolution’s instructions over the coming weeks, with the goal of bringing the package to the House floor the week of May 19.

The Ways and Means Committee has not yet scheduled its mark-up of what will become the tax title in that bill — the best and likely only chance to advance expanded Housing Credit resources this year — but we expect it to be on the calendar soon. NCSHA and its HFA members are committed to pushing for expanded 9 percent Housing Credit resources, a lower bond-financing threshold, basis boosts to make key properties financially feasible, and protecting the tax exemption for private activity bonds.

IRS Publishes New MRB/MCC Safe Harbors, Will Maintain Current Formula
The Internal Revenue Service (IRS) on April 16 published Revenue Procedure 2025-18 updating the nationwide average purchase price limits and the average area purchase price safe harbors for the Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate (MCC) programs. The new safe harbors took effect April 16, with an exception allowed for loans and certificates an HFA commits to finance before June 15 and that are financed by bond sales occurring before May 16.

The revenue procedure also states IRS will not change the methodology or data set used to calculate the MRB/MCC safe harbors. Last April, when updating the safe harbors for 2024, the IRS sought comment on whether it should use the Federal Housing Administration’s median house price data to calculate the MRB/MCC income limits instead of FHA’s single-family loan limits. NCSHA strongly opposed this proposal in our comments to IRS, noting it would cause significant widespread reductions in the MRB/MCC safe harbors and, consequently, the MRB/MCC purchase price limits and access to homeownership for most areas of the country.

Most HOME Final Rule Changes Go Into Effect
On April 17, HUD published an update in the Federal Register allowing most of the provisions in its earlier final HOME rule to go into effect beginning on April 20. The administration initially had delayed implementation of the rule, first published on January 6, and it was unclear if HUD eventually would allow it to go into effect or pull it back. Provisions of the rule that are now in effect include aligning HOME rent rules with HUD rental assistance programs and the Low-Income Housing Tax Credit, adjustments to the maximum per unit subsidy limit determinations, simplification of Community Housing Development Organization (CHDO) rules to allow more high-capacity nonprofits to qualify for CHDO status, streamlining certain onerous requirements for using HOME for homeownership activities, and other changes. HOME participating jurisdictions have until April 20, 2026, to comply with the rule.

Exceptions include new tenant protections regarding the ability of owners to terminate tenancy in HOME-assisted rental housing and a bonus 10 percent increase in the maximum per-unit HOME subsidy limit for properties that meet certain energy-efficiency standards, which are further delayed until October 30 and may be subject to further rulemaking.

FHA Modifies Loan Servicing Requirements
On April 15, the Federal Housing Administration released Mortgagee Letter (ML) 2025-12, Tightening and Expediting Implementation of the New Permanent Loss Mitigation Options. This ML modifies and replaces certain provisions in ML 2025-06, Updates to Servicing Loss Mitigation and Claims, which was published on January 16. The key changes made by ML 2025-12 include permanently sunsetting HUD’s Covid-19 Loss Mitigation Options on September 30, 2025 (vs. through February 1, 2026); moving up the effective date of the new permanent loss mitigation options to October 1, 2025 (from February 2, 2026); sunsetting the FHA-HAMP program effective September 30, 2025; and extending the time a borrower is eligible for a subsequent permanent loss mitigation option to once every 24 months (from 18 months).

The new ML also cancels the scheduled increases in borrower compensation under FHA’s Pre-Foreclosure Sale Program, Deed-in-Lieu of Foreclosure disposition options, and Cash for Keys incentives, thereby keeping in place the current amounts. Finally, the administration announced it will continue to review the entire FHA permanent loss mitigation waterfall, including the Payment Supplement tool.

Reports Highlight Substantial Number of HUD Retirements, Possible HUD HQ Move
As many as 2,300 HUD employees have accepted an offer of “deferred resignation” to leave the agency, according to a recent report by The New York Times, which also describes changes to federal housing voucher programs, including Housing Choice Vouchers. Meanwhile, HUD and the General Services Administration announced they have added the Robert C. Weaver Federal Building, which currently serves as HUD headquarters, to a list of federal properties targeted for accelerated disposition, potentially paving the way for a significantly smaller footprint or even relocation for HUD HQ.

Court Orders Release of GGRF Funds; Appeal Stays Order Temporarily
The U.S. Court of Appeals for the D.C. Circuit recently granted a stay requested by the Environmental Protection Agency of an earlier order directing the agency to release previously awarded Greenhouse Gas Reduction Fund (GGRF) funding, which the Trump Administration has sought to rescind. The GGRF, established under the Biden Administration, would provide seed funding for green banks and other entities to finance major investments to improve energy efficiency and climate resilience in a variety of sectors, including affordable housing.

Looking Ahead

Legislative and Regulatory Activities

• April 25 | Comments Due | House Financial Services Subcommittee on Housing and Insurance’s Request for Information: HOME and CDBG Program Reauthorization
• May 2 | Comments Due to NCSHA | OMB Request for Information: Deregulation
• May 12 | Comments Due | OMB Request for Information: Deregulation

NCSHA, State HFA, and Industry Events

• April 28 – 30 | Nebraska Investment Finance Authority 2025 Innovation Expo | Lincoln, NE
  Jennifer Schwartz will speak at this event.
• May 1 | Minnesota Affordable Housing Summit | Minneapolis, MN?
  Stockton Williams will speak at this event.
• May 4 – 7 | 2025 Women’s Affordable Housing Network Summit | Denver, CO
  Jennifer Schwartz will speak at this event.
• May 8 – 9 | Novogradac 2025 Affordable Housing Conference | San Francisco, CA
  Jennifer Schwartz will speak at this event.
• May 12 – 15 | NALHFA Annual Conference | Minneapolis, MN
  Robert Henson will speak at this event.
• May 13 – 14 | Michigan State Housing Conference | Lansing, MI
  Jennifer Schwartz will speak at this event.
• May 15 | American Institute of Servicing and Legal Executives Institute Meeting | Washington, DC
  Garth Rieman will speak at this event.
• May 22 | Early-Bird Registration Ends | NCSHA’s Housing Credit Connect & Marketplace | Chicago