NCSHA Washington Report | July 10, 2026

Remarking on the renaming, in 1971, of the U.S. Bureau of the Budget to the Office of Management and Budget (OMB) under his boss, President Richard Nixon, White House aide John Ehrlichman said, “I’m for more management of the bureaucracy, not less,” provided it’s “management in the get-the-Secretary-to-do-what-the-President-needs-and-wants-him-to-do-whether-he-likes-it-or-not sense.”

Since then, as the federal government’s reach has expanded ever more into most aspects of American life ― an expansion to which “Democrats and Republicans alike contributed” ― every White House “has reshaped OMB to ensure government actions and messages remain in alignment with the President.”

President Trump’s OMB, led by director Russell Vought ― who in his Senate confirmation hearing pointedly refused to commit to following the law “designed to prevent presidents from withholding federal dollars Congress has previously passed through the appropriations process” – has sought unprecedented control over how and how much the government spends.

Its first, and to date boldest, foray, asserting the authority, in January of 2025, to freeze trillions in federal financial assistance, was quickly blocked by the courts.

But OMB has won on other fronts, using budgetary “recissions” to cancel appropriated funds, delaying their release for some programs, and imposing new requirements on others, collectively to the tune of hundreds of billions of dollars. (The budget office has also been the tip of the spear in the Trump Administration’s drive to shrink the federal workforce.)

In May, OMB issued a 400-page proposal to drastically expand executive branch involvement in federal grant programs. Its goals are to “improve transparency, accountability, and oversight” while ensuring “tax dollars are not wasted or misused, activities performed under Federal awards are consistent with law and policy, and recipients are held accountable when they fail to meet relevant standards.”

Under the proposal, “discretionary” grants ― those awarded to statutorily specified recipients or by statutory formula, totaling perhaps $200 billion annually across the government, such as Continuum of Care and Section 202/811 funding ― would be subject to review by political appointees before they are issued. Federal agencies would have wide latitude to terminate or suspend them at any point after.

“Formula” and “block” grants, representing roughly $900 billion annually, including HOME, CDBG, and Housing Trust Fund dollars, would be subject to federal agency directives that could change the terms and conditions of their funding awards, even after they have executed their grant agreements. Similar rules would apply to “subrecipients” such as builders, developers, and community groups that access federal funds administered by state HFAs.

In addition to an extraordinary intrusion into state and local decision-making, OMB’s proposal would impose substantial uncertainty and compliance costs on the uses of federal funds, much of which would ultimately be borne by consumers and businesses. If you like federally centralized command and control and politically minded micro-management from Washington, DC, you’ll love it.

We don’t. NCSHA joined with other leading state and local government organizations in expressing support for the goals of the White House’s proposal but insisting on “sufficient transition time, clear federal guidance, and administrable compliance expectations” before it would take effect. We provided more detailed, housing-focused recommendations in our own comment letter.

Stockton Williams | Executive Director

Washington Report will return July 24.

In This Issue

• 21st Century ROAD to Housing Act Likely to Become Law Sans President’s Signature
  
• NCSHA Comments on OMB’s Proposed Rule Rewriting Federal Financial Assistance Guidance
• HUD Publishes Updated FAQs on BABA Implementation
• Federal Judge Strikes Down HUD Continuum of Care Changes
• HUD Tenant Data Shows Housing Credit Continues to Serve Lowest-Income Households
• NCSHA in the News
• Looking Ahead

21st Century ROAD to Housing Act Likely to Become Law Sans President’s Signature
President Trump made the surprise decision last month to cancel the signing ceremony for the 21st Century ROAD to Housing Act, which passed both chambers of Congress with wide bipartisan support (85 – 5 in the Senate and 358 – 32 in the House), citing his insistence that Congress first pass election reform legislation he has championed but which lacks enough votes for Senate passage. He reiterated this sentiment today, posting on social media, “I will not sign the Housing Bill, which has been fully approved by Congress and sent to the White House, in PROTEST over the fact that the United States Senate is not capable of passing the SAVE AMERICA Act.” However, the bill is still set to become law at midnight tonight even without his signature, absent a veto. This is because Article 1, Section 7 of the U.S. Constitution allows bills passed by Congress to become law 10 days (excluding Sundays) after Congress transmits legislation to the president if he or she does not take a formal action and Congress has not adjourned in that time period. The Speaker of the House officially sent the bill to the president’s desk on Monday, June 29, starting the 10-day countdown. The president has made no indication he would veto the legislation, and Speaker Mike Johnson (R-LA) said publicly he does not expect a veto.

Assuming the bill is enacted as expected, next week NCSHA will publish in our blog a series of posts unpacking the policy changes, new programs established, and other directives of the legislation.

NCSHA Comments on OMB’s Proposed Rule Rewriting Federal Financial Assistance Guidance
As referred to above, NCSHA earlier today expressed concerns with and asked the U.S. Office of Management and Budget to modify its proposed rule rewriting the regulations known as the Uniform Guidance setting out the policies and procedures governing grants, cooperative agreements, and other forms of federal financial assistance, including U.S. Department of Housing and Urban Development (HUD) and Department of Agriculture (USDA) programs. NCSHA’s letter says the proposed rule’s broad authority for federal agencies to terminate or suspend funds, impose new and potentially politicized pre-issuance reviews, and require that financial assistance align with the administration’s policies and priorities could create significant disruption, financial risk, and instability for federal grantees and their partners. Our submission recommends OMB amend the proposed guidance to minimize additional administrative burden on recipients; maintain clear, objective, and consistent compliance standards; provide due process protections before suspension or termination of awards; clarify and expand exemptions and exclusions for formula grant programs; and ensure regulatory changes promote accountability without compromising continuity of services for eligible households.

HUD Publishes Updated FAQs on BABA Implementation
HUD has added 37 new entries to its frequently asked questions (FAQs) designed to help with implementation of its Build America, Buy America Act (BABA) requirements. The FAQs added this month join a list originally created in March 2024 and address a wide range of topics concerning BABA implementation, from basic questions such as What is BABA to more complex subjects such as Does the Buy America Preference apply to single-family housing projects. The FAQs are available here.

Federal Judge Strikes Down HUD Continuum of Care Changes
On June 29, a U.S. District Court judge issued a consolidated decision in two related legal challenges to HUD’s notice of funding opportunity (NOFO) for the distribution of 2025 Continuum of Care (CoC) homelessness funding, finding HUD violated the Administrative Procedure Act (APA) and concluding that HUD “failed to consider the impact that its decision to eliminate the Housing First approach would have on the existing system created by Congress and HUD itself” and that “the administrative record demonstrates HUD’s failure to consider the harm caused by the funding gaps it created when attempting to eliminate the Housing First approach on an accelerated timeline.”

As NCSHA has reported previously, in November 2025 HUD issued a NOFO that departed from its previous policy of fully funding CoC renewal needs, most of which are for permanent supportive housing that often employs so-called Housing First policies prioritizing provision of shelter to individuals experiencing homelessness without preconditions or barriers and before addressing other factors that may cause them instability, such as substance abuse or mental illness. HUD later withdrew the November 2025 NOFO and replaced it with a mostly similar NOFO for 2025 funding published the following month. The court found both NOFOs to violate the APA. HUD had sought in those NOFOs to limit CoC renewal funding to no more than 30 percent of the funds provided for that year (renewals generally require 80 to 90 percent of CoC annual funding) and instead to direct a greater proportion of funds to a competitive process prioritizing temporary housing and other projects that impose sobriety and treatment requirements as a condition of shelter.

Despite determining HUD must vacate its implementation of the November and December 2025 NOFOs, the court rejected the plaintiffs’ request for a permanent injunction on HUD’s future implementation of the policy outlined in those NOFOs.

HUD Tenant Data Shows Housing Credit Continues to Serve Lowest-Income Households
New tenant-level data released recently by HUD continues to demonstrate the Housing Credit primarily serves extremely low-income households. According to HUD’s 2023 Low-Income Housing Tax Credit Tenant Tables, 57.2 percent of households with reported incomes earned at or below 30 percent of area median income (AMI), up from 52.2 percent in the 2021 tenant data. Nearly 72 percent of households had incomes at or below 40 percent of AMI, while fewer than eight percent had incomes above 60 percent of AMI.

The data also shows Housing Credit residents include many households with significant housing needs. More than one-third of households included at least one elderly member, nearly one-third included a person with a disability, and more than one-third included children. The median annual household income was approximately $21,700, while median annual gross rent was about $8,200.

HUD annually collects tenant data from state Housing Credit allocating agencies and other administrators. The latest release covers more than 2.8 million households living in Housing Credit properties during 2023.

NCSHA in the News
Notes from Novogradac, 7.2.26, Congress Introduces the HOPE Act: What Policymakers and Advocates Should Know About the Proposed Rental Housing Preservation Tax Incentive
Notes from Novogradac, 6.30.26, Harvard JCHS State of the Nation’s 2026 Housing Report Highlights Ongoing Housing Affordability Pressures
Smart Cities Dive, 6.26.26, This low-cost housing option is expensive to build. New law, regulatory tweaks could change that.

Looking Ahead

Legislative and Regulatory Activities

• July 13 | Comments Due | OMB Proposed Rule: Guidance Related to Federal Financial Assistance
• July 13 | Applications Due | HUD Funding Opportunity: Automated Building Code Permitting
• July 15 | Comments Due to NCSHA | FHFA Proposed Amendment: Enterprise Duty to Serve Rule
• July 20 | Comments Due | HUD Request for Information: Build America, Buy America Act
• July 24 | Comments Due | FHFA Proposed Amendment: Enterprise Duty to Serve Rule
• July 31 | Comments Due to NCSHA | HUD Proposed Rule: Elimination of Chassis Rule for Multi-Story Manufactured Homes
• August 12 | Comments Due | HUD Proposed Rule: Elimination of Chassis Rule for Multi-Story Manufactured Homes

State and Industry Events

• August 5 – 6 | Kentucky Affordable Housing Conference | Lexington, KY
• August 24 – 26 | Kansas Housing Conference | Overland Park, KS
• August 26 – 28 | Arizona Housing Forum | Phoenix, AZ
• September 2 | Indiana Housing Conference | Indianapolis, IN
• September 9 – 10 | HousingIowa Conference | Des Moines, IA
• September 9 – 10, 1:00 – 4:30 pm ET | NCSHA Webinar: Housing Credit Administration | Virtual
• October 3 – 6 | NCSHA’s Annual Conference & Showplace | Detroit, MI