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NCSHA Washington Report | August 15, 2025

Published on August 15, 2025

NCSHA Washington Report - 2025

The remarkable increase in states’ efforts to address housing affordability challenges includes new financial incentives to build homes for the mounting numbers of people who earn too much to qualify for conventional construction subsidy programs but still pay unsustainable amounts in rent, if they can find a decent apartment at all.

While households with $30,000 of income or less have by far the most serious housing needs as a group, Harvard’s Joint Center for Housing Studies reports that two-thirds of renters earning between $30,000 and $50,000 are housing “cost burdened,” which is up “an astounding 15.1 percentage points since 2001.” Among renters earning between $45,000 and $75,000, 41 percent face the same challenge.

That explains why at least a dozen states have launched or expanded financing for “middle-income” or “moderate-income” housing development over the last several years.

In Kansas, a small program in place since 2012 received $20 million in funding from the state legislature and $40 million in federal fiscal recovery funds in 2023, which will result in more than 1,000 homes. In Florida, a tax exemption for “missing-middle” apartment construction has generated more than 3,100 units since 2023, even as some local jurisdictions have pushed back on construction.

In August of 2024, The New York Times reported that in Michigan “[o]ver the past two years, both the State Legislature and state housing agency have expanded developer subsidies for housing at all price levels and tacked on extra incentives for workforce housing for the middle class.” In December, Connecticut authorized a $50 million expansion of a middle-income program that had funded 1,900 apartments in its first year of operation.

Last month, Colorado announced initial allocations of its state tax credit for middle-income projects — said to be the nation’s first — which augments a loan program that has driven development of more than 1,000 apartments already. Last week saw the first groundbreaking of a property financed through a $50 million program Massachusetts officials call the “first-in-the-nation state revolving fund to support mixed-income housing production.”

The trend reflects creative new thinking by state leaders but not a new mission for state housing finance agencies. Most are directed explicitly under state laws to address moderate- as well as low-income housing needs. None are charged with serving only the neediest households. The first state law authorizing an HFA, Pennsylvania’s in 1960, which set a foundation other states built on, envisioned “a need for both state financing and creation of incentives for private industry to enter the low- and moderate-income housing field.”

Concerns that housing initiatives for cost-burdened, moderate-income families will result in less support for the neediest need not play out that way. The rising tide of state funding for the former has been accompanied by an unprecedented wave of investment in state resources for the latter. HFAs are, uniquely, able to reach both groups effectively.

For governors and state legislatures now seeing housing affordability challenges through a wider lens, the fact that their housing finance agencies have always viewed their role, and executed their mission, broadly is a major asset.

Stockton-Williams-Washington-ReportStockton Williams | Executive Director

In This Issue

EPA Cancels Solar for All Program
On August 7, Environmental Protection Agency (EPA) Administrator Lee Zeldin announced the EPA was ending the Solar for All Program, a $7 billion pool of funding created by the Inflation Reduction Act to provide solar projects for low-income households. Shortly thereafter, state and nonprofit grantees began receiving letters cancelling their grants, citing a provision in the recent reconciliation legislation that eliminated the Greenhouse Gas Reduction Fund, which included the Solar for All Program. Several state HFAs had established partnerships with their state energy offices or other entities to deploy Solar for All resources in affordable housing projects; the status of those partnerships and projects is now in question, as the funding cancellation is likely to be subject to litigation.

Trump Administration Considering Potential IPOs for Fannie, Freddie; FHFA Reviewing LLPAs
The Trump Administration is exploring whether to sell shares of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac later this year, according to an article published in The Wall Street Journal last week. The article reports the administration is considering selling five to 15 percent of the companies in an initial public offering (IPO) and possibly could combine the GSEs and offer shares in them as a single entity. It is not yet known when the administration will decide on whether to pursue an IPO and if it will be able to do so by the end of the year.

Speaking on a webinar Wednesday, Federal Housing Finance Agency (FHFA) Director Bill Pulte confirmed the administration was considering selling a small share of the GSEs publicly but suggested such a sale would have minimal impact on the GSEs. He also said he expects the GSEs to remain in conservatorship, consistent with social media messages he and President Trump posted earlier this year.

Pulte also acknowledged FHFA is considering changes to the loan-level price adjustments the GSEs charge for single-family mortgages, saying he wants to reduce costs for home buyers.

NCSHA in the News
Scotsman Guide, 8.14.25, Deadline Nearing for FHA’s Buy Now, Pay Later RFI
BisNow, 8.10.25, LIHTC Changes Bring Hope for Affordability Advocates, But HUD Cuts Loom

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