NCSHA Washington Report | September 12, 2025

The issue of “housing finance reform,” meaning how the federal government’s conservatorship of Fannie Mae and Freddie Mac, which marked 17 years Monday, might end, or at least evolve, is a hot topic in Washington again.

Following comments over the summer by President Trump and Federal Housing Finance Agency Director Bill Pulte that suggested the federal government, which via the Treasury Department effectively owns 80 percent of the companies, might as soon as this Fall try to sell some of their stock to the public, FHFA and Treasury this week formally began to take the pulse of the myriad industry and advocacy groups on some of the key issues.

An interest many share is enabling and encouraging Fannie and Freddie to more directly help solve the root cause of America’s housing affordability problem: the country’s insufficient supply of homes. The shortfall — conservatively estimated to exceed 1.5 million homes nationwide — has only occasionally been a priority in the fits and starts of previous reform efforts by Congress and federal officials. This time around it should be a central focus.

The fact that Fannie and Freddie’s primary purpose isn’t direct financing but rather to create a liquid secondary market for residential mortgages, and thereby lower their costs and widen their availability, suggests to some that supporting construction is out of their lane. In fact, there are several opportunities for the companies to stimulate home building and apartment construction within their charters and core competencies — as they already do in some ways.

One would be to facilitate more affordable acquisition, development, and construction (AD&C) financing for starter home construction, capital for which has tightened for 14 straight quarters according to the National Association of Home Builders (NAHB). A 2021 analysis by Mark Zandi and Jim Parrott identified land availability as “the most critical factor explaining the [housing] shortage followed closely by the availability of financing” and suggested a GSE-supported secondary market for AD&C loans “would allow more capital to flow to the smaller businesses engaged in land development and construction.”

Some years ago, NCSHA and NAHB developed and discussed with FHFA officials a proposal for housing finance agencies to fund and service such loans, with Fannie and Freddie providing liquidity and lower pricing through their secondary market capabilities. Mortgage finance thought leader Dorothy Sheppick has a similar idea and sees another opportunity for the GSEs to finance “a mortgage loan carried by a home buyer that pays for construction in stages as the home is completed and relieves the builder of the long-term financing costs.”

Fannie and Freddie, already active in financing multifamily housing generally and important sources of equity investment in affordable properties through their purchases of Low-Income Housing Tax Credits, also could provide additional liquidity for lower-cost “mezzanine loans” covering up to 20 percent of project costs, suggests Guggenheim Securities co-chairman James Millstein. He estimates that a temporary $20 billion loan facility could spur 250,000 – 400,000 new apartments per year.

Over Labor Day weekend, Treasury Secretary Scott Bessent hinted at imminent action by the federal government to address housing costs, including steps to boost construction. The administration’s efforts on housing finance reform, in whatever forms they take, won’t come to fruition imminently but should still include the same commitment.

Stockton Williams | Executive Director

In This Issue

• Ventura, Natarajan Recognized for Leadership
• NCSHA Urges Senate Passage of ROAD to Housing Act
• Congress, White House Working on CR Extending Government Funding into FY26
• HUD Withdraws and Reissues CoC Builds NOFO with Conditions
• House Appropriators Pass Labor-HHS Bill with LIHEAP Increase
• NHC Report: Rising Costs Put Housing Out of Reach
• Looking Ahead

Ventura, Natarajan Recognized for Leadership
On August 21, Providence Business News honored RIHousing Executive Director Carol Ventura with its 2025 Leaders & Achievers Award, which recognizes professionals over the age of 50 for their sustained success and leadership both in their fields and in the community. On September 8, Hartford Business Journal named Nandini Natarajan, CEO and executive director of the Connecticut Housing Finance Authority and an NCSHA Board member, among the recipients of its 2025 C-Suite Awards honoring top-performing C-level executives in Connecticut.

NCSHA Urges Senate Passage of ROAD to Housing Act
NCSHA last week joined more than two dozen housing industry and advocacy organizations in sending a letter to Senate Majority Leader John Thune (R-SD) urging him to move the ROAD to Housing Act (S. 2651) to the Senate floor for consideration. Specifically, the letter, which was spearheaded by the National Housing Conference, urges Thune to support including ROAD to Housing as an amendment to the National Defense Authorization Act (NDAA). The NDAA is legislation Congress passes almost annually authorizing spending levels for defense and national security. Given its critical nature, the NDAA is considered “must pass” and often serves as a vehicle to advance unrelated bills with strong bipartisan support (the ROAD to Housing Act passed unanimously out of committee). Senate Banking Committee Chair Tim Scott (R-SC), the lead sponsor of the ROAD to Housing Act, has introduced an amendment to add the bill to the NDAA and is reported to be negotiating with Senate leadership about its possible inclusion.

The House Financial Services Committee has indicated it intends to mark up its own housing bill in October.

Congress, White House Working on CR Extending Government Funding into FY26
With fiscal year (FY) 2025 winding to an end, Congress will need to pass a continuing resolution (CR) to extend government funding beyond September 30 to provide each chamber more time to consider appropriations legislation and negotiate final funding levels for FY26. Various proposals have been floated, ranging from a relatively short CR into November, favored by senior members of the appropriations committees, to a longer CR into January, favored by the White House. In addition, there are discussions ongoing about potentially including in a short-term funding measure one or more appropriations bills, including potentially the Agriculture and Related Agencies bill, which funds the Rural Housing Service and has been approved by both the House Appropriations Committee and full Senate.

Meanwhile, the White House this week sent Congress a so-called anomalies list of various deviations from flat funding in a CR and programmatic changes, including additional flexibilities for the tenant-based rental assistance program, without which the White House says there would be insufficient funds to maintain rental assistance for up to 40,000 households.

HUD Withdraws and Reissues CoC Builds NOFO with Conditions
The U.S. Department of Housing and Urban Development (HUD) recently withdrew a notice of funding opportunity (NOFO) for a Continuum of Care (CoC) Builds program under which a number of states previously had received preliminary notification of grants and replaced it with a new CoC Builds NOFO with a number of new conditions and required certifications related to various executive orders previously issued by the White House. The new CoC Builds NOFO, published on September 5, has a closing date just one week after posting, on September 12. $75 million is available for CoC Builds, which provides funding for construction, acquisition, or rehabilitation of new units of permanent supportive housing. The National Alliance to End Homelessness announced Thursday it filed a lawsuit and motion for a temporary restraining order against HUD and HUD Secretary Scott Turner to challenge the new funding restrictions.

House Appropriators Pass Labor-HHS Bill with LIHEAP Increase
On Tuesday, the House Appropriations Committee passed Labor, Health, and Human Services (Labor-HHS) appropriations legislation that would, among other changes, increase the amount of funding available for the Low-Income Home Energy Assistance Program (LIHEAP), which helps low-income families afford to heat and cool their homes, from $4.025 billion in FY25 to $4.035 billion in FY26. The Senate Appropriations Committee previously passed its own Labor-HHS bill that would increase LIHEAP to $4.045 billion in FY26. A number of HFAs administer LIHEAP on behalf of their states; others are subgrantees or otherwise partner with their administrating agency.

NHC Report: Rising Costs Put Housing Out of Reach
Last week, the National Housing Conference released a new report, Priced Out: When a Good Job Isn’t Enough. The report reveals that, for many Americans, even solid middle‐class incomes no longer guarantee housing security. Since 2019, 32 percent of metropolitan areas require double the salary once needed to buy a home, and in nearly half of metros, a six‐figure income is now essential to purchase what used to be considered a typical home. The rent side of the crisis is similarly stark: Nearly half of tracked occupations can’t afford a standard two-bedroom apartment, while dozens of metros require 50 percent higher salaries than five years ago just to keep up. The findings show that housing unaffordability is not limited to low‐income households as it is now squeezing workers across many industries and regions.

Looking Ahead

Legislative and Regulatory Activities

• September 19 | Comments Due to NCSHA | FHFA Notice on Repealing the Fair Lending, Fair Housing, and Equitable Housing Finance Plans Regulation
• September 26 | Comments Due | FHFA Notice on Repealing the Fair Lending, Fair Housing, and Equitable Housing Finance Plans Regulation
• October 15 | Comments Due to NCSHA | Federal Banking Regulators’ Request for Comment on Simplifying and Updating Community Reinvestment Act Regulations
• October 23 | Comments Due | Federal Banking Regulators’ Request for Comment on Simplifying and Updating Community Reinvestment Act Regulations

NCSHA, State HFA, and Industry Events

• September 17 – 19 | New Mexico Housing Summit | Albuquerque, NM
  Stockton Williams and Jennifer Schwartz will speak at this event.
• September 17 – 19 | 2025 Southeastern States Conference | Richmond, VA
  Garth Rieman will speak at this event.
• September 18 | New York State Association for Affordable Housing’s Upstate New York Affordable Housing Conference | Rochester, NY
  Robert Henson 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