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NCSHA Washington Report | January 09, 2026

Published on January 9, 2026

NCSHA Washington Report - 2025President Trump, House Republicans, and Senate Democrats are scrambling to find ways Washington can help make housing more affordable. Yesterday, the president made news by directing Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities with the aim of driving down home mortgage loan rates.

The companies should include in their purchases the highly rated housing securities state and local housing finance agencies issue, which are targeted to the aspiring home buyers who are hurt most by high housing costs.

A three-year commitment as we envision from Fannie and Freddie could fund 330,000 home mortgage loans at a rate as low as 5.4 percent, well below the recent prevailing rate of well above six percent. That would translate into an annual savings of roughly $2,000 for each household and a savings for them of about $58,000 over the life of the mortgage.

These affordable mortgages would be available to home buyers quickly. No congressional authorization would be required. And no federal taxpayer funds would be spent.

State and local housing finance agencies throughout the country have issued these kinds of highly rated, highly liquid bonds for decades. These agencies are in the market every day and could deliver mortgage financing through this initiative immediately.

Fannie and Freddie have bought housing finance agency bonds in the past and are still authorized to do so for more limited purposes. Here, the companies would receive a modest return on their bond investments; they would not need to subsidize them. And their investment would be leveraged 2.5 times by market purchasers of shorter maturities of these same bonds.

The initiative we envision would be a pilot, for three years. And it would be targeted: Only middle-class home buyers purchasing modestly priced homes would be eligible for the mortgages. By way of reference, the median housing finance agency home buyer today earns $75,000 and buys a $275,000 home on average.

These features, plus an annual cap on the amount of bonds Fannie and Freddie could buy, will ensure this initiative delivers meaningful relief to the families who need it, without pushing prices up any further in the markets where they live.

This idea has proof of concept. During the Great Recession, a similar short-term program of federal purchases of state and local housing bonds financed 100,000 first-time home buyers plus 24,000 affordable apartments.

To be clear, the root of America’s housing affordability challenge is an insufficient supply of homes relative to demand. As efforts to speed up construction approvals, reduce unnecessary red tape, and free up more land for building continue — all of which housing finance agencies are involved in, too — it’s essential to use readily available tools and approaches to lower housing costs now for Americans in need.

Stockton-Williams-Washington-ReportStockton Williams | Executive Director

This op-ed, by Stockton Williams and Gene Slater, appeared in a slightly different form in The Mortgage Note on December 23.

Washington Report will return January 23.

In This Issue

Trump, Pulte Announce Fannie Mae, Freddie Mac Will Purchase $200 Billion in Mortgage Bonds
As referenced above, President Trump announced via his Truth Social network yesterday that he would be instructing his “representatives” to buy $200 billion in mortgage bonds. In interviews last night and on X, Federal Housing Finance Agency Director Bill Pulte said Fannie Mae and Freddie Mac would purchase more mortgage-backed securities to drive down mortgage lending rates. In his post, the president argued his decision not to privatize Fannie Mae and Freddie Mac during his first term allowed both firms to amass $200 billion in cash. Trump contended purchasing the housing bonds will help lower mortgage rates and make homeownership more affordable.

Trump Pledges to Ban Institutional Investor Home Purchases, Discuss Housing in Davos Speech
On Wednesday, President Trump posted on Truth Social a message saying he will ban large investors from buying single-family homes. Trump’s message said, in part, “I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations.” Trump’s post did not provide details on what specific policies the administration would enact but said he would discuss housing and affordability in more detail in two weeks at the World Economic Forum in Davos, Switzerland. Senator Bernie Moreno (R-OH) has said he will introduce legislation to codify Trump’s proposal.

Litigation Ongoing in Continuum of Care Lawsuit
On December 23, a U.S. District Court judge issued a written order in the pending lawsuit related to implementation of FY25 Continuum of Care (CoC) grants on which NCSHA previously has reported. The order requires the Department of Housing and Urban Development (HUD) to take the administrative steps necessary to prepare to process renewals for permanent supportive housing (PSH) under the original FY24 – 25 notice of funding opportunity (NOFO) but stops short of requiring HUD to obligate those funds. Per our previous reports, HUD announced last summer it would not use the 2024 – 25 NOFO to distribute FY25 funds and instead issued a 2025 NOFO in November with strict limits on funding for renewals and permanent housing. HUD later withdrew the NOFO because of the litigation and on December 19 reissued it with modest changes. Action on the December 19 NOFO is on hold for now due to the December 23 court order.

In a January 8 statement on its website, HUD says it will comply with the judge’s order to reinstate the 2024 – 25 NOFO while it’s in effect. HUD began accepting applications pursuant to the 2024 – 25 NOFO on January 9, with applications due by February 9. The court order is intended to ensure HUD could move forward quickly should the plaintiffs in the case succeed. Should the outcome in District Court favor the plaintiffs, HUD could appeal the decision, leaving the ultimate path forward unresolved.

Meanwhile, NCSHA and other homelessness and housing advocates are continuing to press congressional appropriators to require HUD to renew all existing PSH grants. Some PSH contracts expire this month and more will expire in the coming months; thus, a swift resolution is necessary to prevent more households in PSH from losing their housing.

HUD Identifies More Than $5 Billion in Improper Payments in Rental Assistance Programs
HUD Secretary Scott Turner announced December 30 that HUD had identified potential payment errors totaling more than $5 billion in its rental assistance programs. HUD’s FY25 Agency Financial Report to Congress said the potential improper payments were due to nonconforming Social Security numbers, possible deceased tenants, and overpayments. Turner said HUD will continue to investigate the results and take appropriate action to hold bad actors accountable.

CMS Announces $50 Billion in Awards to Strengthen Rural Health in All 50 States
The Centers for Medicare & Medicaid Services December 29 announced awards under the Rural Health Transformation Program, a $50 billion initiative to strengthen and modernize health care in rural communities in every state. The funds will be allocated to approved states over five years, with $10 billion available each year from 2026 through 2030.

Half the funding is distributed equally among all approved states and half is allocated based on a variety of factors, including current or proposed state policy actions that enhance access and quality of care in rural communities and application initiatives or activities that reflect the greatest potential for, and scale of, impact on the health of rural communities. Descriptions of state plans for using the funds, including some housing activities and partnerships with state HFAs, are available here.

House Passes Three-Bill Appropriations “Minibus” That May Augur Action Soon on HUD, Other Funding Bills
The House of Representatives passed Wednesday a three-bill “minibus” containing FY26 appropriations for federal agencies and programs under the jurisdictions of the Commerce, Justice, Science, and Related Agencies; Interior, Environment, and Related Agencies; and Energy and Water Development and Related Agencies subcommittees. Congressional leaders expect the Senate to approve the House-passed bill. The Energy and Water component contains $329 million for the Weatherization Assistance Program, slightly more than provided last year.

Appropriations Committee leaders said they are hopeful Congress will pass bills to fund all federal agencies and programs before the current continuing resolution expires January 30. The Transportation, Housing and Urban Development, and Related Agencies bill is likely to be combined with the Defense and Labor-HHS bills in another minibus Congress hopes to pass before January 30. If a minibus with these bills does not pass, a full-year continuing resolution at FY25 funding levels is a possibility.

FHFA Adjusts Fannie Mae, Freddie Mac Affordable Housing Goals
On December 23, the Federal Housing Finance Agency (FHFA) issued new affordable housing goals for the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The goals require both firms to purchase a percentage of the total number of single-family and multifamily mortgages they finance in specific underserved markets. FHFA last year published the goals for years 2025 – 27. The new goals supersede the goals previously put in place for 2026 and 2027.

The final goals are largely similar to the changes FHFA first proposed in October. The low-income home purchase goal for loans made to borrowers earning at or below 80 percent of area median income (AMI) will be set at 21 percent of all single-family loan purchases, down from 25 percent. FHFA also lowered the very low-income home purchase goal (households earning at or below 50 percent of AMI) from six to 3.5 percent and consolidated previously separate subgoals for homes located in low-income census tracts and homes located in minority census tracts.

The GSEs’ multifamily goals will remain at their previous levels: at least 61 percent of the rental units financed by loans each firm purchases must be affordable to low-income renters and at least 14 percent must be affordable to very low-income renters.

NCSHA expressed opposition to the lower single-family goals in our comments on the proposed rule, urging the agency to adjust them upwards to reflect the GSEs’ role as market leaders. We also suggested FHFA increase the multifamily goals.

Treasury Announces New Markets Tax Credit Awards, Program Reforms
On December 23, the Community Development Financial Institutions (CDFI) Fund within the Treasury Department announced New Markets Tax Credit (NMTC) awards for 2024 and 2025 to 142 community development entities (CDEs) coupled with modifications to NMTC allocation agreements in ways Treasury maintains will ensure compliance with federal anti-discrimination laws. Treasury also announced the CDFI Fund will enhance its monitoring of how CDEs use NMTCs.

Treasury said it will pursue additional reforms of the NMTC in future years to further affordable housing development, small business growth and expansion, domestic manufacturing and job-producing projects, and rural hospitals and community health infrastructure. The NMTC program was made a permanent part of the tax code in 2025 after a quarter century of temporary authorizations.

HUD Extends HOTMA Deadline for CPD Programs
On December 30, HUD further extended the deadline for compliance with new Housing Opportunity Through Modernization Act (HOTMA) requirements to include its Community Planning and Development (CPD) programs. The HOME Investment Partnerships Program, HOME-American Rescue Plan Program, Housing Trust Fund, Housing Opportunities for Persons With AIDS, Community Development Block Grant program, Emergency Solution Grants, Continuum of Care programs, and CPD programs funded through competitive processes will be required to comply with HOTMA requirements by January 1, 2027, aligning the HOTMA compliance deadline for CPD programs with other HUD multifamily programs. This extension follows an earlier extension of the HOTMA compliance date to January 1, 2026.

House Passes Bill on Manufactured Housing Energy Standards
The House of Representatives passed today the Affordable HOMES Act (H.R. 5184), which would rescind a 2022 Department of Energy (DoE) rule that established new energy conservation standards for manufactured homes and prevent DoE from setting any standards for manufactured homes. Critics of the 2022 standards, which have never been implemented, argue they would contribute to the housing shortage by increasing costs for manufactured homes. They also argue the 2022 rule increases regulatory complexity by overlapping with standards established by HUD. DoE has noted Congress directed it to implement energy efficiency standards in legislation passed in 2007.

H.R. 5184 was introduced by Representative Erin Houchin (R-IN) and cosponsored by Representatives Mike Flood (R-NE), Jefferson Shreve (R-IN), Chuck Edwards (R-NC), Craig Goldman (R-TX), and Jake Auchincloss (D-MA). While most of the bill’s supporters are Republicans, it drew significant Democratic support as well, passing by a vote of 263–147. Five Democrats supported the bill during an Energy and Commerce Committee mark-up in early December.

FHA Reports Mortgage Insurance Fund Capital Ratio Remains Strong
The Federal Housing Administration (FHA) last week released its 2025 Annual Report to Congress. The report finds the financial health of FHA’s Mutual Mortgage Insurance Fund (MMIF), which funds FHA’s single-family forward and reverse mortgage programs, remains in good position. The capital ratio for the MMIF in FY25 was 11.47 percent, nearly unchanged from FY24. A slight increase in the capital ratio of FHA’s forward mortgage portfolio was offset by a small decline in the capital ratio for its reverse mortgage portfolio. The MMIF now holds $188.9 billion in MMI Capital, a $16.1 billion increase from FY24.

The report highlights FHA’s role in supporting home financing for first-time home buyers. Eighty-three percent of the home purchase mortgages FHA endorsed in FY25 went to first-time home buyers. The number of FHA home buyers receiving down payment assistance continues to increase, the report also notes. More than 42 percent of FHA home buyers utilized down payment assistance in FY25, the highest level in 16 years. This trend has been driven largely by an increase in the number of borrowers receiving down payment assistance through HFAs and other government programs, which increased from five percent in FY10 to nearly 18 percent in FY25.

NCSHA in the News
The San Diego Voice & Viewpoint, 12.30.25, Harvard Report: Black Homeownership Gains Have Halted
Inman, 12.24.25, Fannie and Freddie’s Low-Income Home Buyer Goals Dialed Back
The Mortgage Note, 12.23.25, Op-Ed: Here’s How to Make Mortgages Affordable Again for Middle-Class Families
Notes from Novogradac, 12.18.25, JCT Estimates of Federal Tax Expenditures, 2025 – 2029: What’s at Stake for Housing, Community Development, Clean Energy

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