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NCSHA Washington Report | April 10, 2026

Published on April 10, 2026

NCSHA Washington Report - 2025

American homeowners, many of whom don’t think they live in subsidized housing, will receive $730 billion in housing tax breaks over the next five years. Most of the benefits — the subsidy, you might say — result in lower taxes than mostly higher-income households living in generally more expensive homes would otherwise owe: deductions for mortgage interest and property taxes and an exclusion from capital gains taxes on home sales.

There’s nothing wrong with these perks, especially if you’re fortunate enough to take advantage.

Squint at that mountain of foregone federal revenue, and you might see a small expenditure, representing .0075 percent of the total, that makes it possible for more than 90,000 working-class families to realize the America Dream every year. It represents the cost associated with Mortgage Revenue Bonds, a once-obscure corner of the tax-exempt municipal bond market that’s getting overdue attention from policymakers looking for ways to make housing — especially homeownership — more affordable.

The bonds, issued by state and local housing finance agencies, are exempt from federal taxes. That, and the fact they tend to be highly rated and collateralized, attracts capital — from investment funds, financial institutions, and others — that flows back through the agencies and mortgage lenders to borrowers at significantly lower rates than other mortgages. In today’s market, up to 75 – 100 basis points less.

For the typical family eligible for a bond-backed mortgage, who earns around $75,000, the annual savings, compared to the alternatives, can add up to $1,500 a year or more, money that can go into savings, child care, and other spending. That family is also newly able to build wealth through homeownership; MRB-backed loans serve only first-time buyers.

President Trump, congressional Republicans, and Democrats are all looking for ways to lower the cost of homeownership. Mortgage Revenue Bonds are a proven vehicle for accomplishing that and can be expanded to help more families through several routes we recommend.

One is legislative. Congress should allow HFAs to issue more bonds without regard to the annual limit that applies to them and bonds for various other purposes, for a temporary period, which would help tens of thousands more families almost immediately. Congress also should tweak some outdated statutory rules that limit the bonds from funding home repairs and mortgage refinances, as proposed in the bipartisan Affordable Housing Bond Enhancement Act.

Another opportunity is through White House action that doesn’t require Congress’s approval. President Trump should direct the Federal Housing Finance Agency to instruct Fannie Mae and Freddie Mac to ramp up purchases of Mortgage Revenue Bonds, as outlined in an investment proposal we put forward last year. The companies have the systems in place to implement it in short order. Hundreds of thousands of first-time home buyers stand to benefit over the next few years. It wouldn’t cost taxpayers a dime.

Mortgage Revenue Bonds are made for this moment in housing policy. If you’d be interested in learning more about how they work and why they are successful, NCSHA is hosting an online info session next month.

Stockton-Williams-Washington-ReportStockton Williams | Executive Director

In This Issue

Testman Appointed to Lead West Virginia Housing Development Fund
On Monday, Governor Patrick Morrisey announced the appointment of Nathan Testman as executive director of the West Virginia Housing Development Fund (WVHDF). Testman joined the fund in 2016 as the division manager of multifamily programs and later served as senior division manager of multifamily and deputy director of production. In January 2025, upon the retirement of Erica Boggess, he was made interim executive director. Before joining WVHDF, Testman worked in commercial banking and served in the Army National Guard.

White House Releases FY27 Budget
On April 3, the Trump Administration released its Fiscal Year 2027 Budget Request, signaling its appropriations priorities for the fiscal year beginning October 1. The budget calls for $1.5 trillion in defense spending, a 44 percent increase over enacted FY26 levels, and $660 billion for non-defense spending, a reduction of $73 billion (10 percent). The budget requests $73.5 billion for the U.S. Department of Housing and Urban Development (HUD), representing a $10.7 billion (13 percent) reduction from FY26 enacted levels. The U.S. Department of Agriculture would receive $20.8 billion, a $4.9 billion (19 percent) decrease from FY26. The budget proposes to eliminate many of the same affordable housing programs that were targeted for elimination in last year’s budget proposal, including the HOME Investment Partnerships Program and Community Development Block Grant program, but does not include the proposal from the previous year’s budget request to consolidate, block grant, and cut funds for rental assistance.

For more information on the administration’s budget proposal, see NCSHA’s blog, preliminary analysis memo, and budget chart.

IRS Issues 2026 Population Figures for Housing Credit, PAB Volume Caps
On April 6, the Internal Revenue Service issued Notice 2026-22 providing the resident population figures needed to determine the 2026 private activity bond (PAB) volume cap and the population-based component of the Housing Credit ceiling. Last October, the IRS issued Revenue Procedure 2025-32, which establishes the PAB volume cap at the greater of $135 per capita or $397,625,000 and the population component of the Housing Credit ceiling at the greater of $3.416 per capita or $3,953,600.

Treasury, IRS Issue Guidance to States for Nominating Census Tracts as Opportunity Zones
On April 6, the U.S. Department of the Treasury and the Internal Revenue Service issued guidance to states, the District of Columbia, and U.S. territories regarding the procedure for nominating census tracts for designation as Qualified Opportunity Zones (QOZs). Revenue Procedure 2026-14 also identifies the census tracts eligible for designation as QOZs.

Governors may nominate up to 25 percent of the eligible census tracts within their states during the 90-day period beginning July 1 of this year. If a state encompasses 25 – 99 eligible census tracts, a total of 25 may be designated. If a state has fewer than 25 eligible census tracts, then all may be designated. Treasury will certify and designate the nominated census tracts as QOZs for 10 years effective January 1, 2027.

Treasury also announced the department and the IRS intend to issue additional guidance implementing the Opportunity Zone incentive, including proposed rules on information reporting and transition guidance for investors and funds.

HUD Makes Quarter One Continuum of Care Awards; Appeals Court Denies HUD Request to Lift Lower Court Order
On March 31, HUD authorized the release of nearly $350 million for Continuum of Care (CoC) project renewals that expired in the first quarter of 2026 as required by the Fiscal Year 2026 Consolidated Appropriations Act. As NCSHA has previously reported, HUD issued a notice of funding opportunity (NOFO) last year seeking to reshape how CoC homeless assistance is used by limiting FY25 funding for project renewals, including renewals of CoC rental assistance for permanent supportive housing (PSH), to no more than 30 percent of total FY25 funds and devoting the remaining dollars to a competitive process that favored temporary housing and programs incorporating work requirements and/or requiring participants to accept services as a condition of assistance.

Because renewals have accounted for between 80 – 90 percent of CoC funds in recent years, HUD’s NOFO would have resulted in a loss of housing for people living in PSH that relies on renewal funding. As a result, various nonprofit organizations, local governments, and the attorneys general and governors of 21 states filed a yet-to-be-resolved lawsuit to prevent HUD’s NOFO from going into effect. The FY26 Consolidated Appropriations Act established a phased-in process by which HUD must fund CoC renewal contracts expiring in 2026 while the litigation is pending.

Earlier this year, in response to the lawsuit, a federal district court judge temporarily blocked HUD’s implementation of its plan while the lawsuit plays out. HUD sought to appeal the district court order, but the U.S. First Circuit Court of Appeals on April 1 denied HUD’s bid to stay the district court judge’s order. HUD will need to comply with the district court order until the litigation is resolved.

HUD Withdraws Fair Housing Guidance
On April 6, HUD published in the Federal Register a notice announcing the Fair Housing and Equal Opportunity (FHEO) office has withdrawn a number of fair housing guidance documents. These include guidance related to the application of the Fair Housing Act to the advertising of housing, credit, and other real estate-related transactions through digital platforms; source-of-income testing activities under the Fair Housing Assistance Program; assessment of requests to have an animal as a reasonable accommodation; service animals for people with disabilities; the prohibition against national origin discrimination affecting people with limited English proficiency; and application of Fair Housing Act standards to the use of criminal records. The notice also announces the withdrawal of a Fair Housing and Equal Opportunity statement on special purpose credit programs.

The notice says FHEO is continuing to review its need for existing guidance and, if new guidance is determined to be necessary, HUD will issue it. HUD maintains the withdrawal of these documents is part of the department’s ongoing regulatory reform efforts and any actions that do not comply with the text of the Fair Housing Act will continue to be subject to enforcement.

Treasury Announces Pending Additional Guidance on Use of CDFI Fund Programs
The Treasury Department announced Thursday it will issue a notice of proposed rulemaking to clarify that the benefits of certain Community Development Financial Institutions (CDFI) Fund programs are “federal public benefits” within the meaning of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Accordingly, “illegal and other non-qualified aliens would not be eligible to receive these benefits.” In addition, Treasury said it will add a new provision to relevant CDFI Fund agreements to ensure certified CDFIs do not engage in practices that violate federal anti-discrimination laws, including providing employment, financial preferences, or set-asides based on race, ethnicity, or sex in a manner inconsistent with federal laws.

Certified CDFIs will be required to adopt, implement, and maintain policies and procedures reasonably designed to ensure compliance with these requirements, certify annually as to the existence and administration of those policies and procedures, and make them available for review upon request by the CDFI Fund. Treasury added that, in the event of noncompliance with CDFI Fund agreements, the CDFI Fund intends to vigorously exercise its remedies, to the extent permitted by law, including potential decertification of CDFI status, termination of any unused funds, and recapture of past award funds.

HUD Publishes Methodology for Determining HOME Maximum Per-Unit Subsidy
HUD published a notice today establishing the annual methodology for determining maximum per-unit subsidy limits for the HOME Investment Partnerships Program. In May 2024, HUD proposed a maximum per-unit HOME subsidy limit of 270 percent of the basic mortgage limitations for Section 234 of the National Housing Act, which would have been an increase over the existing 240 percent factor. HUD has since determined increasing the allowed maximum per-unit subsidy limit for HOME would result in fewer affordable housing units. Today’s notice establishes the maximum per-unit HOME subsidy limit as 240 percent of the Section 234 limits.

The limits described in the notice are in effect and applicable to projects with HOME funds committed on or after May 11, 2026. HUD believes maintaining its existing policy is consistent with the statute and will not negatively impact the production of affordable housing.

HUD is requesting public comments on the limits established in the notice and is especially interested in comments concerning ongoing changes in costs due to building codes and industry practices and opinions on whether different eligible HOME activities (i.e., homeownership versus rental) should have different methodologies for determining maximum per-unit subsidies for the program. Comments are due by May 11. To help inform NCSHA’s comments, please send your input to Glenn Gallo by May 4.

NCSHA in the News
Construction Owners, 4.1.26, BABA Housing Rule Slows Affordable Projects

Looking Ahead

Legislative and Regulatory Activities

State and Industry Events

  • April 14 – 16 | NIFA Innovation Expo 2026 | Lincoln, NE
    Jennifer Schwartz will speak at this event.
  • April 15 – 16 | South Carolina’s Statewide Affordable Housing Summit | Columbia, SC
  • April 21 – 23 | Affordable Housing Investors Council Spring Meeting | Scottsdale, AZ
    Jim Tassos will speak at this event.
  • April 29 – May 1 | 2026 Mississippi Annual Housing Conference | Biloxi, MS
  • May 3 – 6 | 2026 Women’s Affordable Housing Network Summit | San Diego, CA
    Jennifer Schwartz will speak at this event.
  • May 4 – 6 | Mountain Plains Housing Summit 2026 | Boise, ID
    Garth Rieman will speak at this event.
  • May 6 – 7 | 2026 PHFA Housing Forum | Harrisburg, PA
    Garth Rieman will speak at this event.
  • May 7 – 8 | Novogradac 2026 Affordable Housing Conference | San Diego, CA
    Jennifer Schwartz will speak at this event.
  • May 18 – 20 | Montana Housing Partnership Conference | Anaconda, MT
    Jennifer Schwartz will speak at this event.

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