Financial Services Committee Approves Affordable Housing Package; HOME Reform Act Included

The House Financial Services Committee earlier today overwhelmingly passed an affordable housing package containing more than 20 different bills introduced by committee members from both parties. The bill — titled the Housing for the 21^st Century Act — was negotiated by Committee Chair French Hill (R-AR), Ranking Member Maxine Waters (D-CA), Housing Subcommittee Chair Mike Flood (R-NE), and Ranking Member Emanuel Cleaver (D-MO).

The legislation includes several bills supported by NCSHA, most notably the HOME Reform Act of 2025 (H.R. 5798), which would improve the HOME Investment Partnerships Program, and the Community Investment and Prosperity Act raising the cap on banks’ public welfare investments, a category that includes investments in the Low-Income Housing Tax Credit program. NCSHA thanks Representatives Hill, Waters, Flood, Cleaver, and all the other committee members for their tireless efforts to boost housing production and foster affordability. NCSHA released a statement supporting the bill earlier this week.

Several of the bill’s provisions are identical or similar to provisions included in the ROAD to Housing Act, which the Senate passed in its version of the National Defense Authorization Act (NDAA) earlier this year. However, congressional leaders ultimately dropped those housing provisions from the final version of the NDAA, despite vigorous efforts from numerous housing advocates, including NCSHA and many HFAs, due to concerns raised by Hill about Republican support and a desire to move housing legislation through regular order.

The Housing for the 21^st Century Act will now be reported to the full House. Hill and Waters indicated the committee could continue to consider early in the new year additional housing legislation that was left out of the Housing in the 21^st Century Act. It is not yet known when or if the package will be brought to the floor for consideration. Moreover, if the House passes the bill, the House and Senate will attempt to negotiate a compromise between it and the ROAD to Housing Act.

A section-by-section summary of the Housing for the 21^st Century Act is available here. Below is a summary of some of the bill’s more significant provisions. NCSHA will publish a more detailed summary soon.

HOME Reform Act

Introduced by Flood and Cleaver, this legislation would make several significant changes to the HOME Investment Partnerships Program, including streamlining the application of Section 3 and environmental review requirements as they apply to HOME and exempting HOME from Build America, Buy America (BABA).

Labor organizations had expressed opposition to adjusting a change to the Davis-Bacon threshold under HOME, and that provision was ultimately left out of the HOME Reform Act. Other unions, in particular United Steelworkers, also pushed back on the BABA exemption. In response, NCSHA and other members of the HOME Coalition sent a letter earlier this week to committee members underscoring the importance of exempting HOME from BABA. The BABA exemption for HOME remains in the bill as included in the Housing for the 21^st Century Act.

NCSHA summarized the HOME Reform Act in more detail in our blog.

During the markup, the committee adopted an amendment to the bill to expand the HOME Reform Act provisions by incorporating a limited version of the HOME Investment Partnerships Program Reauthorization and Improvement Act (S. 948/H.R. 2031), sponsored by Senator Catherine Cortez Masto (D-NV) and Representative Joyce Beatty (D-OH) and endorsed by NCSHA. The amendment adjusts the eligibility rules for qualification as a HOME participating jurisdiction (PJ) for localities seeking to become PJs, creates greater flexibility when HOME is used to fund small properties, establishes a new definition of community land trusts for purposes of participation in HOME, and makes other technical changes. More information on the Cortez Masto and Beatty bill is available here.

Community Investment and Prosperity Act

Introduced by Financial Services Committee members Mike Lawler (R-NY), Joyce Beatty (D-OH), and Young Kim (R-CA), the bill would increase the cap on banks’ “public welfare investments,” a category that includes Housing Credits and Housing Bonds, from 15 percent of a bank’s capital and surplus to 20 percent. This could facilitate more bank Housing Credit investments, which is particularly important given the recent expansion of the Housing Credit in the One Big Beautiful Bill Act earlier this year. It applies to banks regulated by the Federal Reserve and Office of the Comptroller of the Currency.

This legislation was not included in the original version of the Housing for the 21^st Century Act released last week. Following advocacy by NCSHA and other affordable housing advocates, Chair Hill agreed to include the Community Investment and Prosperity Act in a manager’s amendment the committee approved during the markup. The ROAD to Housing Act includes similar legislation introduced by Banking Committee Chair Tim Scott (R-SC) and Senator Lisa Blunt Rochester (D-DE).

Other Provisions

The Housing for the 21^st Century Act includes several bills designed to boost affordable single-family and rental housing supply and expand access to homeownership. They include bills to:

• Update the federal definition of manufactured housing to include modular and prefabricated units not built on a permanent chassis. This will make financing for more manufactured homes available under federal mortgage insurance programs.
• Direct the Federal Housing Administration (FHA) to conduct a study on incentivizing small-dollar mortgage loans under $100,000.
• Direct the U.S. Department of Housing and Urban Development (HUD) to develop best practices for zoning and land-use policies, helping communities identify and overcome barriers to housing development.
• Increase the loan limits for FHA-insured multifamily loans.
• Require HUD to exclude a veteran’s disability benefits from its calculation of income to determine eligibility for its HUD-Veterans Affairs Supportive Housing program.
• Allow for Community Development Block Grant (CDBG) funds to be used for affordable housing construction. Also mandates that certain CDBG recipients include a non-binding plan in their statutorily required use-of-funds reports to review any overly burdensome local land-use policies and ideas to improve those policies.
• Harmonize HUD and the U.S. Department of Agriculture’s (USDA) housing standards under the National Environmental Policy Act.
• Provide HUD with additional authority to review the performance of housing counseling agencies and housing counselors.

Notable Legislation from ROAD to Housing Not Included

While the Housing for the 21^st Century Act includes many impactful provisions, several bills that were part of the ROAD to Housing Act that NCSHA supported were not included in the Financial Services Committee bill. These include:

• The Whole Home Loan Repair Act, which establishes a five-year HUD pilot program to provide grants to nonprofits, state and local governments, and American Indian tribes to offer grants and forgivable loans to low- and moderate-income homeowners and qualifying small landlords to fund needed home repairs for single-family homes.
• The Rural Housing Service Reform Act. Among other reforms, this bill would codify a pilot program that allows decoupling of rental assistance from maturing Section 515 mortgages. The Housing for the 21^st Century Act includes minor changes to rural housing programs and directs USDA and the Government Accountability Office to undertake certain studies of rural housing programs but not the proposal NCSHA supports to decouple rural rental assistance from expiring mortgages.
• The PRICE Act, which would permanently reauthorize the Preservation and Reinvestment Initiative for Community Enhancement program, which provides funding to preserve, maintain, and stabilize manufactured housing communities.

The package also does not include a more far-reaching draft bill Flood is spearheading to exempt additional HUD and USDA housing programs from BABA (beyond HOME, which, as noted above, would be made exempt). NCSHA is working with Flood’s office to find a Democrat to co-lead on this legislation.

NCSHA intends to continue working with allies and congressional housing champions to explore other opportunities to advance these policies.

During the same markup, the committee also approved 20 additional bills regarding housing and banking. This includes bipartisan legislation to reauthorize the National Flood Insurance Program through September 30, 2026, and a bill to rescind the COVID-era requirement that landlords in federally backed properties give tenants 30-days’ notice before eviction.