21st Century ROAD to Housing Act Creates New Pilot Programs to Accelerate Housing Development

This is the second in a daily, weeklong series analyzing in-depth the 21st Century ROAD to Housing Act, the most consequential federal housing law in years.

Monday: Policy reforms
Today: New pilot programs
Wednesday: HOME program revisions
Thursday: Environmental regulatory relief
Friday: Federal studies, reports, and technical guidance

Stay tuned for a webinar series starting later this summer.

The 21st Century ROAD to Housing Act (the Act) authorizes a plethora of temporary pilot programs to help the federal government test out new approaches to housing policy, including some which have been funded in previous legislation but lacked underlying authorization. Whether these programs become operational in practice will largely depend on whether congressional appropriators dedicate funding to them in the annual spending process.

Today’s blog post covers what these new programs are intended to accomplish, who is eligible to receive funding and who the eligible end beneficiaries are, what to expect regarding the timeframe for these individual pilot programs, next steps for funding, and where there are opportunities for state housing finance agencies to engage.

Pilot Program for Projects That Evaluate Point-Access Block Residential Buildings (Section 102): In addition to requiring the U.S. Department of Housing and Urban Development (HUD) to issue guidelines to facilitate the permitting of point-access block residential buildings, this provision allows HUD to award competitive grants for pilot programs to assess the feasibility of point-access block buildings. Point-access block buildings are generally single-staircase apartment buildings with three or more stories.

• Eligible Grantees: States, local governments, tribal governments, public housing agencies (PHAs), nonprofit housing organizations, community development organizations, developers, construction firms, qualified design firms, engineering firms, academic institutions, research institutions, or any partnership or consortium composed of two or more such types
• Program Timeframe: Program to terminate seven years after enactment
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Appropriators would need to provide funding to facilitate competitive grants for this purpose.

FHA Small-Dollar Mortgage Pilot Program (Section 105): Authorizes a HUD pilot program to increase access to small-dollar mortgages with original principal balances of $100,000 or less. This can include providing down payment assistance or other closing costs assistance to home buyers with small mortgages; direct payments to lenders to incentivize the origination of small-dollar mortgages; adjustments to terms and costs imposed by the Federal Housing Administration (FHA); outreach to potential mortgagors about the availability of such mortgages; and technical assistance for mortgagees that originate small-dollar mortgages.

• Program Timeframe: Program will terminate four years after the date it is established.
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Appropriators would need to provide funding to facilitate payments associated with this program.

Temperature Sensor Pilot Program (Section 106): Establishes a HUD pilot program to award grants to public housing agencies (PHAs) and owners of federally assisted rental housing to install temperature sensors in dwelling units, with the written permission of tenants, to ensure compliance with temperature-related housing quality standards.

• Eligible Grantees: PHAs and owners of federally assisted housing, which includes public housing, Project-Based Rental Assistance (PBRA), Section 202, and Section 811
• Program Timeframe: HUD must establish eligibility criteria within 180 days of enactment. Program to sunset three years after the enactment.
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Appropriators would need to provide funding for grants associated with this program.

Whole Home Repair Pilot Program (Section 202): Authorizes a pilot program to offer grants and forgivable loans to address home repair needs and health hazards to stabilize aging housing stock. The pilot program is available for both homeownership and rental properties. Repairs may address physical and sensory accessibility, habitability and safety concerns, energy/water efficiency, resilience, and weatherization. Assistance may be in the form of grants or loans. Each year, grants may be made to at least two but not more than 10 organizations and not more than one organization per state.

• Rental Property Eligibility: Small landlords of fewer than 10 eligible rental properties with a majority of affordable units and no more than 25 units total. Affordable units are those for which the monthly rental payment is no more than 30 percent of the gross income of an individual at or below 80 percent of area median income (AMI). Landlords must agree to cap annual rent increases at the lesser of five percent of base rate or at the rate of inflation for at least three years after the completion of repairs.
• Homeowner Eligibility: No more than 80 percent of AMI or meets eligibility of a specified program (Medicaid, S-CHIP, SSI, SNAP, or TANF)
• Eligible Grantees: States or local governments. Grantees may administer the program through an agency, department, or other entity of the state or local government or through an agreement with local governments, tribes, municipal authorities, other governmental authorities, tribally designated housing entities, or qualified nonprofits.
• Program Timeframe: Terminates on October 1, 2031
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Appropriators would need to provide funding for grants associated with this program.

Affordable Housing Planning and Implementation Grants (Section 207): Authorizes a pilot program to offer competitive grants for regional housing planning and community development activities. Grants may not be used for construction, alteration, or repair work.

• Eligible Grantees: States, local governments, regional planning agencies, and consortia
• Program Timeframe: HUD must establish the program within one year of the enactment date of the act. Terminates five years after enactment.
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Appropriators would need to provide funding for grants associated with this program.

Innovation Fund (Section 208): Authorizes a program to offer flexible funding for local communities to improve community infrastructure and build housing. HUD must provide at least 25 grants annually unless appropriations are insufficient. Grants must be no more than $10 million and no less than $250,000.

• Eligibility: Housing must serve households earning no more than 120 percent of AMI, and the majority of the housing units must be affordable to households earning no more than 60 percent of AMI.
• Eligible Grantees: Metropolitan cities or urban counties and other local governments or tribes. HUD is tasked with making a list of eligible entities publicly available on its website.
• Program Timeframe: HUD must establish the program within one year of the bill’s enactment. Terminates seven years after enactment of the act.
• Funding: The Act authorizes $200 million each year for FY 2027 – 2031. Appropriators would need to provide funding for grants associated with this program.

Accelerating Home Building (Section 209): Authorizes a HUD grant program to help communities establish pre-approved housing designs or pattern books to streamline and expedite local construction processes. The total monthly housing payment must not be more than 30 percent of the monthly household income for a household earning no more than 80 percent of AMI.

• Eligible Grantees: Local governments, municipal membership organizations, and tribes
• Program Timeline: Not specified in statute
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Appropriators would need to provide funding for grants associated with this program.

Revitalizing Empty Structures into Desirable Environments (RESIDE) Program (Section 210): Authorizes a competitive pilot program within the HOME Investment Partnerships Program (HOME) to convert vacant and abandoned buildings into housing. While adaptive reuse projects are already eligible under HOME, projects funded under this set-aside have more income eligibility flexibility. Unlike other HOME funds, which are distributed by formula, these funds would be distributed through a competition. Later this week, NCSHA will publish a blog post with more details on this and other reforms to HOME in the Act.

• Eligibility: Housing must serve households earning no more than 120 percent of AMI, and the majority of such housing must serve households earning no more than 60 percent of AMI.
• Eligible Grantees: HOME participating jurisdictions (PJs)
• Program Timeframe: Authorized for FY 2027 – 2031
• Funding: This pilot program would be funded as a set-aside within the HOME program. Appropriators would need to provide funding within the HOME account for grants associated with this program.

Build Now Act (Section 213): Creates a pilot program to incentivize housing development of all types in certain Community Development Block Grant (CDBG) entitlement jurisdictions. While characterized as a pilot program, this is really a policy change to adjust localities’ CDBG grant amounts up or down based on their “housing growth improvement rate” as a mechanism for incentivizing certain policy actions.

• Eligible Grantees: Localities administering CDBG (does not apply to state agencies administering CDBG)
• Program Timeframe: Implementation takes effect at the third full fiscal year after the date of enactment and remains in effect through FY 2043.
• Funding: This is a policy change impacting formula allocations to grantees but does not require additional appropriations for implementation.

PRICE Act (Section 304): Temporarily authorizes HUD’s Preservation and Reinvestment Initiative for Community Enhancement (PRICE) Program to provide grants to communities to maintain, protect, and stabilize manufactured housing and manufactured housing communities. The PRICE Program was initially established and funded in the FY 2023 omnibus appropriations bill (and received supplementary funding in FY 2024) but had not been previously authorized. Eligible uses of funds include the financing of community infrastructure, facilities, utilities, and other land improvements; reconstruction/repair of existing manufactured housing; replacement of homes; planning; resident health and safety activities; land and site acquisition for expansion of a manufactured housing community; resident and community services; and other activities approved by the Secretary.

• Eligible Grantees: States, eligible manufactured housing communities, units of local government, PHAs, resident-owned communities, resident-owned cooperatives, nonprofits, Community Development Financial Institutions, tribes, tribally designated housing entities, the Department of Hawaiian Home Lands, and any entity that is an owner-operator of manufactured housing and works with an eligible manufactured housing community
• Program Timeframe: Program terminates seven years after the date of enactment.
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Appropriators would need to provide funding for grants associated with this program.

Helping More Families Save Act (Section 404): Authorizes a pilot program under HUD’s Family Self-Sufficiency (FSS) initiative to promote economic mobility and homeownership by enabling more families to grow their household savings. Families are eligible if they receive assistance under Sections 8 or 9. HUD may award grants to no more than 25 eligible entities, which may be used to assist up to 5,000 families. More information is available in yesterday’s blog post detailing changes to existing housing programs.

• Eligible Grantees: PHAs and owners of multifamily housing that receive PBRA
• Program Timeframe: HUD must select eligible grantees within one year of establishing the pilot program. The program terminates 10 years after enactment.
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Appropriators would need to provide funding for grants associated with this program.

Rural Community Development Initiative (Section 502): Authorizes the Rural Community Development Initiative at the U.S. Department of Agriculture, designed to provide grants to eligible intermediaries to provide financial and technical assistance to eligible entities to develop the capacity to carry out projects to improve housing, community facilities, and community and economic development projects in rural areas.

• Eligible Entities: Private nonprofit housing or community development organizations, rural communities, and tribes
• Eligible Intermediaries: Private nonprofit or public organizations
• Program Timeframe: The initiative is permanent, and the Act does not specify the time by which the Secretary must create the program.
• Funding: The Act does not authorize a specific dollar amount for the initiative and would be subject to appropriations. Maximum individual grants would be capped at $500,000, and intermediaries receiving grants would be required to provide matching funds.

Community Development Block Grant – Disaster Recovery Program (Section 504): Temporarily authorizes the Community Development Block Grant – Disaster Recovery (CDBG-DR) Program and establishes the Office of Disaster Management and Resiliency within HUD to administer the program.

• Eligible Grantees: States, units of local government, and tribes
• Program Timeframe: HUD must issue a final rule within one year of the Act’s enactment. The program will terminate three years after the date of enactment.
• Funding: The Act does not authorize a specific dollar amount for the pilot program. Presumably, funding would be provided as needed in response to natural disasters.