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NCSHA Washington Report | July 11, 2025

Published on July 11, 2025

NCSHA Washington Report - 2025Republican and Democratic governors, federal officials, and even the U.S. Supreme Court are moving in a similar direction on a problem they all agree needs fixing: well-intentioned but poorly functioning environmental laws that have stalled and stopped necessary infrastructure and housing development across the country for years.

California Governor Gavin Newsom (D) made big news last week when he insisted the state’s annual budget bill include reforms to its main environmental review statute, the California Environmental Quality Act (CEQA), ensuring that “most new apartment buildings will no longer face the open threat of environmental litigation” and therefore should be able to come online more quickly and less expensively.

Hawaii Governor Josh Green (D) for the past two years has attempted to use his emergency powers to rein in environmental and land-use procedures that are part of the reason Hawaii’s housing costs are the highest in the nation. Challenges to his policy are now before the state’s supreme court.

Nevertheless, the Western Governors Association, representing 11 Republican and seven Democratic state chief executives, issued a report last month that suggested the Hawaii policy “could serve as a model for federal reforms to provide categorical exemptions for affordable housing projects from NEPA,” the National Environmental Policy Act.

NEPA, like CEQA, doesn’t “directly protect the environment,” writes former mayor and longtime land-use analyst Bill Fulton in his excellent newsletter. “The problem is these laws favor the status quo. They are forever comparing something new to no change and focusing on the bad things that happen when you build something new.”

As it happens, the same day Newsom’s budget revamped the latter, the Trump Administration took action on the former, announcing seven federal agencies had “updated their respective NEPA implementing procedures to simplify this overly burdensome process and ensure efficient and timely environmental reviews.”

HUD was not among them, but it’s hopefully only a matter of time. NCSHA has provided Secretary Scott Turner with detailed recommendations for simplifying HUD’s NEPA rules to free up faster, more cost-effective construction. They include allowing builders to get started on projects at their own risk during the review process and empowering states to certify environmental law compliance.

Aaron Shroyer, a former Biden Administration HUD and White House official, lays out an even more expansive reform agenda in a new paper, with suggestions for both HUD and Congress to significantly shrink NEPA’s regulatory footprint and accelerate approvals under wherever it applies.

“[A]s America grapples with an increasingly severe affordable housing crisis,” Shroyer writes, “it is not only hard to justify subjecting every federally-supported housing project to this level of scrutiny, but it is actually making it harder to use what federal funding we have to build more housing to address the shortage.”

Or as Supreme Court Justice Brett Kavanaugh observed, delivering the court’s unanimous opinion in May in a case that narrowed the scope of NEPA reviews, “The goal of the law is to inform agency decision-making, not to paralyze it.”

Stockton-Williams-Washington-ReportStockton Williams | Executive Director

In This Issue

President Signs Bill with Housing Credit Expansion
On July 4, President Trump signed into law the One Big Beautiful Bill Act (H.R. 1), which includes a permanent 12 percent increase in Housing Credit authority and a new permanent 25 percent test — replacing the 50 percent test — for bond-financed Housing Credit properties. According to Novogradac estimates, these two enhancements to the Housing Credit program could finance the production and rehabilitation of as many as 1.22 million additional affordable rental homes over the next decade. NCSHA and our partners in the ACTION Campaign have long advocated for this expansion of the program to address the need for more affordable housing for low-income Americans. Both provisions stem from the Affordable Housing Credit Improvement Act, the standalone comprehensive Housing Credit bill that NCSHA champions, the remaining provisions of which remain top NCSHA advocacy priorities.

New CFPB Funding Reduction in Budget Reconciliation Law
The One Big Beautiful Bill Act contains updated language pertaining to funding for the Consumer Financial Protection Bureau (CFPB). The new provision would reduce the amount of funding CFPB may receive from the Federal Reserve each year from 12 percent of the Federal Reserve’s operating revenue to 6.5 percent. The initial language the Senate Banking Committee included early in June would have reduced the cap to zero, eliminating CFPB’s independent funding source and subjecting its funding to the congressional appropriations process. Senate Parliamentarian Elizabeth MacDonough ruled the initial proposal was not eligible for inclusion in a bill being advanced through reconciliation without securing 60 votes in support.

House, Senate Appropriations Committees Act on FY26 Rural Housing Funding Bill
The House Appropriations Committee on June 23 voted to advance the FY26 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies bill. The bill provides $25.23 billion for USDA’s discretionary spending programs, $1.16 billion (4.2 percent) less than current FY25 funding levels and a $2 billion increase compared to the President’s Budget Request released earlier this year. Despite the decrease in overall funding for USDA, many rural housing programs funded under the bill would retain similar funding to current FY25 levels. The bill has been sent to the House for a full floor vote, which has not yet been scheduled, as the House Appropriations Committee works to advance the rest of its FY26 appropriations bills. For more information on funding for rural housing programs in the House version of the bill, see NCSHA’s blog.

Following the House committee mark-up, the Senate Appropriations Committee met Thursday to consider its version of the FY26 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies bill. The committee voted unanimously, 27 – 0, to favorably report this bill to the Senate. The Senate bill provides $27.1 billion in discretionary funding, a roughly 1.5 percent increase from FY25 enacted funding levels, more than six percent higher than the House Appropriations Committee-reported FY26 appropriations bill. The U.S. Department of Agriculture’s rural housing programs would largely be funded at current levels, with increases to the Section 502 Single-Family Direct Loan Program ($880 million in FY25 to $1 billion in FY26) and the Section 521 Rental Assistance Program ($1.608 billion in FY25 to $1.715 billion in FY26) and a decrease in the Section 515 Multifamily Direct Loan Program ($60 million in FY25 to $50 million in FY26). The bill also increases from 1,000 to 5,000 the number of units USDA is authorized to process under its rental assistance decoupling preservation program.

FHFA Director Announces New GSE Credit Scoring Option
On Tuesday, Federal Housing Finance Agency (FHFA) Director Bill Pulte announced via X that, “Effective today, to increase competition to the Credit Score Ecosystem and consistent with President Trump’s landslide mandate to lower costs, Fannie and Freddie will ALLOW lenders to use Vantage 4.0 Score with no current requirement to build new infrastructure (stays Tri Merge).” VantageScore takes rent payment history into account if those payments are reported to Equifax, Experian, or TransUnion, thereby expanding access to credit. Pulte also posted several additional messages touting the advantages of using rent payment history as part of the credit evaluation process. While many questions exist on how to implement this new policy, neither Fannie Mae nor Freddie Mac has provided additional guidance as of this writing.

HUD Cuts Multifamily Mortgage Insurance Premium for Most Programs; Risk-Sharing Premium Unchanged
The U.S. Department of Housing and Urban Development’s Federal Housing Administration (FHA) Office of Multifamily Housing recently announced a reduction in multifamily mortgage insurance premiums (MIPs) to 25 basis points for most programs, citing low utilization of HUD multifamily loan products. In addition, HUD is proposing to eliminate lower premium incentives under several distinct MIP categories, including one for Green and Energy-Efficient Housing created in 2016 to stimulate production of energy-efficient affordable multifamily housing. Under the new notice, which is open for comment until July 28, loans originated by housing finance agencies under the Section 542(c) Risk-Sharing program will remain unchanged, subject to a 25 basis-point MIP, multiplied by the percentage risk assumed by FHA.

HUD Announces Rescissions of Single-Family Loan Origination Policies
HUD Secretary Scott Turner recently announced FHA is rescinding more than 12 sub-regulatory policies under its single-family mortgage insurance program to “cut red tape, help reduce the cost of homeownership, and eliminate financial and regulatory burdens.” The same day, FHA issued five mortgagee letters (MLs) designed to reduce loan origination requirements and create a more efficient FHA lending process: ML 2025-15, Rescission of the Supplemental Consumer Information Form Requirement; ML 2025-16, Rescission of Full-Time Direct Endorsement Underwriter Requirements; ML 2025-17, Rescission of Federal Flood Risk Management Standard for New Construction Eligibility; ML 2025-18, Rescission of Outdated and Costly FHA Appraisal Protocols; and ML 2025-19, Rescission of Mandatory Pre-endorsement Inspection Requirements for Properties Located in Presidentially-Declared Major Disaster Areas.

RHS Announces HOTMA Implementation Deadlines
On June 24, USDA’s Rural Housing Service (RHS) issued a stakeholder announcement that the effective date for the Housing Opportunity Through Modernization Act (HOTMA) would be July 1, 2025. All USDA multifamily housing tenant certifications effective on or after July 1 must comply with HOTMA requirements. USDA updated Chapter 6 of Handbook 2-3650 earlier in June to reflect the updated HOTMA requirements. RHS also announced a grace period between July 1, 2025, and January 1, 2026, in which owners of USDA multifamily properties would not be penalized for HOTMA-related tenant filing errors. RHS’ announcement comes after HUD’s May decision to delay the implementation of HOTMA requirements for HUD multifamily housing programs until January 1, 2026.

Pulte Directs Fannie Mae, Freddie Mac to Consider Crypto as Asset in Mortgage Financing
On June 25, FHFA Director Bill Pulte announced, via a post on social media site X, he is directing Fannie Mae and Freddie Mac to develop proposals to start including a borrower’s cryptocurrency holdings as assets when underwriting single-family loans. Currently, crypto must be converted to dollars before the loan closes to be considered part of a borrower’s assets. The new directive orders Fannie Mae and Freddie Mac to develop a plan to allow for cryptocurrency to be considered an asset without being converted into dollars. Only cryptocurrency stored on a U.S.-based centralized exchange that is subject to all applicable laws would be eligible. Both firms must submit their plans to FHFA and their Boards of Directors for review before implementation.

Turner Proposes Moving HUD HQ to Northern Virginia
HUD Secretary Scott Turner recently announced plans to relocate HUD headquarters from the Robert C. Weaver federal building, where the agency has been located since 1968, to a new location in Alexandria, VA, that is currently home to the National Science Foundation. According to the announcement, HUD will implement a staggered employee relocation plan in coordination with the General Services Administration, which placed the Weaver building on an accelerated disposition list back in April due to maintenance and repair costs.

House Subcommittee Discusses CFPB’s Enforcement Actions
On June 26, the House Financial Services Subcommittee on Oversight and Investigations held a hearing to investigate the Consumer Financial Protection Bureau’s investigative and enforcement actions during the Biden Administration. In his opening statement, Subcommittee Chair Dan Meuser (R-PA) contended that, under its previous director, Rohit Chopra, CFPB strayed far afield from its mission to protect consumers from wrongdoing and instead used its authority to coerce firms to adopt the administration’s political goals. He praised the Trump Administration for substantially cutting back on these activities and announced he had sent the CFPB’s inspector general a letter asking for an investigation into whether Chopra had exceeded his authority. Ranking Member Al Green (D-TX) countered that the more concerning development is that Acting CFPB Director Russell Vought has taken steps to curtail CFPB activity, which Green said leaves consumers vulnerable to scams and other abuse. Full Committee Ranking Member Maxine Waters (D-CA) concurred with Green, arguing that CFPB under Trump has abandoned American consumers.

JCHS Report Finds Housing Affordability Challenges Persist; Issues Strong Call for Action
Harvard’s Joint Center for Housing Studies (JCHS) on June 24 released its 2025 report on the State of the Nation’s Housing. The report, of which NCSHA is a sponsor, states clearly that housing affordability in the United States “remains in crisis.” The report documents how, despite slight increases in inventories of for-ownership and rental housing, housing costs still increased and remained unaffordable for many working families. Observing that the affordable housing shortage “can no longer be left unaddressed,” JCHS calls on federal, state, and local government leaders, as well as the private sector, to explore solutions to address the issue. For more information, see NCSHA’s blog and this JCHS fact sheet summarizing the report.

National Housing Crisis Task Force Releases State and Local Housing Action Plan
On June 26, the National Housing Crisis Task Force released its State and Local Housing Action Plan, a comprehensive roadmap spotlighting 15 innovative tools designed to empower state and local leaders to rapidly increase and preserve affordable housing. The report organizes strategies across five pillars — land, construction, capital, regulation/policy, and governance — and features nationally scalable models such as public asset corporations, modular construction procurement, property tax incentive frameworks, and housing strike forces. Drawing from proven efforts in cities like Atlanta, Chattanooga, and San Francisco as well as Montgomery County in Maryland, the action plan aims to enable community-specific implementation of complementary tools, maximizing impact in both high-growth and legacy jurisdictions.

Looking Ahead

Legislative and Regulatory Activities

NCSHA, State HFA, and Industry Events

  • August 11 | National Women’s Affordable Housing Network: Quarterly Policy Update | Virtual
    Jennifer Schwartz will speak at this event.
  • August 13 – 15 | 2025 Arizona Housing Forum | Tucson, AZ
  • August 20 – 21 | Kentucky Affordable Housing Conference | Covington, KY
  • September 3 – 4 | 2025 HousingIowa Conference | Cedar Rapids, IA
    Jennifer Schwartz will speak at this event.
  • September 7 – 9 | PHADA 2025 Legislative Forum | Washington, DC
    Jennifer Schwartz will speak at this event.
  • September 9 | 2025 Maine Affordable Housing Conference | Bangor, ME
    Stockton Williams will speak at this event.
  • September 17 – 19 | New Mexico Housing Summit | Albuquerque, NM
    Stockton Williams and Jennifer Schwartz will speak at this event.
  • September 25 – 26 | Novogradac 2025 Housing Tax Credit and Bonds Conference | Nashville, TN
    Jennifer Schwartz will speak at this event.
  • October 4 – 7 | NCSHA Annual Conference & Showplace | New Orleans

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