NCSHA Washington Report | April 4, 2025

There’s not much enthusiasm for President Trump’s tariffs in the housing industry.

“While the complexity of these reciprocal tariffs makes it hard to estimate the overall impact on housing, they will undoubtedly raise some construction costs,” the National Association of Home Builders said.

Roughly seven percent of residential construction materials are imported, according to NAHB, and various estimates suggest the tariffs could add between $7,500 to $25,000 to the cost to build a home, “putting a question mark on whether they can be built at the lower price points that are most undersupplied,” according to Realtor.com Senior Economist Joel Berner.

“This is going to make it harder for the home buyer,” figures Mike Fratantoni, chief economist for the Mortgage Bankers Association. “And you would expect that a builder is going to pass those costs through to the buyer. So that impact is pretty clear.”

Many hold out hope that the Trump Administration’s moves to reduce spending, taxes, and regulations will more than offset the cost increases from tariffs for housing’s ecosystem of builders, buyers, and borrowers. Eventually.

In the near term, one response could be — should be — a greater sense of urgency to build the manufacturing capacity and market demand for new types of housing that can be delivered for significantly lower costs than conventional methods.

Like the new 80,000-square-foot factory opening in Colorado, financed in part by the Colorado HFA, where prefabrication will produce a variety of lower-cost components “for duplexes, multi-family housing projects, single-family detached housing developments and cottages.” And Kentucky’s partnership with a major manufactured home provider to create a new neighborhood and overcome outdated zoning.

Shortly before joining the Trump Administration as Secretary of the Interior, North Dakota Governor Burgum put forward a comprehensive housing strategy for his state that he said recognized, “There’s a way to lower the cost of homebuilding with modular, manufactured housing as a key part of that.”

Oregon HCS believes “investing in the production capacity of modular homes is vital to increasing housing options, particularly in rural communities” and has backed that up with financing. In Maine, “state housing leaders are taking a new interest in what modular can do” based on seeing an apartment project come on line in half the time conventional construction would take.

Industry surveys “confirm that modular production saves money and time, allowing for the construction of more affordable units,” yet while multifamily completions have surged dramatically in recent years, “nearly all U.S. homes are built the old-fashioned way one at a time, by hand.”

But affordable homes “can’t all be stick built” says Amy Hovey, executive director of Michigan SHDA, because her state, like most, needs “a lot of housing quickly.” And as Maura Collins, executive director of Vermont HFA points out, “Innovating the building process is one way to slow the growth in the cost of housing development.”

Congenital optimists (present company included) have “been wrong about modular’s rise before.” And tariffs will probably raise some costs for innovators as well as traditional players. Still, for any industry inclined to try thinking differently, this week wouldn’t be a bad time to start.

Stockton Williams | Executive Director

In This Issue

• Senate Republicans Unveil New Budget Resolution, Begin Debate Heading for Weekend Votes
• White House Imposes New Tariffs on Imported Goods
• Banking Committee Republicans Call on Pulte to End Waste, Fraud, Abuse at FHFA, Fannie Mae, Freddie Mac, FHLBs
• Banking Committee Advances Nominee to Lead OCC
• HUD Publishes Eligibility Income Limits for Various Housing Programs
• USDA Eliminates DEI Points from Scoring for Multifamily Preservation, Technical Assistance Applications
• Looking Ahead

Senate Republicans Unveil New Budget Resolution, Begin Debate Heading for Weekend Votes
U.S. Senate Republicans introduced a new budget resolution Wednesday and began to debate it after voting mostly along party lines Thursday to do so. Votes on amendments and final passage are likely to occur later today and into the weekend. The new resolution adds tax cuts, additional spending cuts, and an increase in the federal debt limit to the resolution the Senate passed earlier this year, bringing it into closer alignment with the resolution the House of Representatives passed in February. To get around ongoing disagreements between the chambers about the details, the new Senate resolution provides instructions to Senate committees that do not align with the instructions it provides to corresponding House committees, thus punting on ironing out the details until Congress takes up the ensuing reconciliation bill after the budget resolution is finalized. Major differences between the instructions to Senate and House committees include:

• Funding cuts: The Senate directs its committees to cut at least $4 billion, while House committees would need to cut at least $1.5 trillion.
• Tax cuts: The Senate Finance Committee would need to report tax legislation costing no more than $1.5 trillion but uses a “current policy baseline” allowing approximately $3.8 trillion in extensions to the Tax Cuts and Jobs Act (TCJA) not to count toward that amount. The instructions for the House Ways and Means Committee would allow up to $4.5 trillion in tax cuts, but that number would include the true cost of TCJA extensions and is contingent on Congress enacting spending cuts of at least $2 trillion.
• Debt ceiling: Instructions to Senate committees allow a debt ceiling hike of $5 trillion, but instructions to House committees would allow an increase of only $4 trillion.

Both chambers ultimately must pass identical budget resolutions in order to unlock the budget reconciliation process, which would allow Republicans to pass a reconciliation bill with a simple majority in the Senate. House Republican leaders intend to bring up the Senate resolution next week, assuming the Senate passes it, hoping to complete action on the resolution before going into recess for two weeks and moving to developing the reconciliation bill, which House Speaker Mike Johnson (R-LA) hopes to pass by Memorial Day.

White House Imposes New Tariffs on Imported Goods
This week, President Trump signed an executive order imposing a 10 percent baseline tariff on goods imported from nearly all countries and tariff rates as high as 49 percent on 57 specific countries. The 10 percent tariffs take effect April 5, while the country-specific elevated rates take effect April 9. Canadian and Mexican imports are exempt from this new executive order as they are subject to country-specific tariffs imposed in February and March. The National Association of Home Builders (NAHB) estimates that approximately 7.3 percent of all goods used in residential construction in 2024 were imported from other countries. The new tariffs are likely to further exacerbate the trend of elevated construction and development costs and likely cause additional disruption in the construction material supply chain.

Banking Committee Republicans Call on Pulte to End Waste, Fraud, Abuse at FHFA, Fannie Mae, Freddie Mac, FHLBs
Senate Banking Committee Chair Tim Scott (R-SC) and all Republican committee members yesterday sent a letter to Director Bill Pulte urging him to “return the Federal Housing Finance Agency (FHFA) to its core mission while aggressively and prudently rooting out waste, fraud, and abuse at FHFA as well as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.” The letter also commends Pulte for his work to this end since becoming director in March and requests that such efforts continue. The Senators pledge to work together with Pulte on these efforts and ask for an update.

Banking Committee Advances Nominee to Lead OCC
The Senate Banking Committee yesterday voted to favorably report to the full Senate the nomination of Jonathan Gould to serve as Comptroller of the Currency. The nomination advanced via a 13 – 11 party-line vote, with all Republicans voting in support and all Democrats opposed. Currently a partner at the law firm Jones Day, Gould was the chief counsel for the Office of the Comptroller of the Currency (OCC) during the first Trump Administration. He previously worked as chief counsel for the Senate Banking Committee, the blockchain technology company Bitfury, and asset manager BlackRock. The OCC is one of three agencies that regulate banks’ obligations under the Community Reinvestment Act. It is not known when the full Senate will consider the nomination.

The committee also approved the nomination of Luke Pettit to be the Treasury Department’s assistant secretary for financial institutions.

HUD Publishes Eligibility Income Limits for Various Housing Programs
On April 1, the U.S. Department of Housing and Urban Development (HUD) issued 2025 income limits to determine eligibility for the Mortgage Revenue Bond and Mortgage Credit Certificate programs as well as various HUD-assisted multifamily housing programs. HUD issued separate Multifamily Tax Subsidy Project income limits to determine eligibility for the Housing Credit and tax-exempt bond programs and updated income limits for the Homeowner Assistance Fund. These income limits are effective immediately. HUD likely will publish separate income limits for the HOME program soon.

The 2025 income limits incorporate geographic area definition changes as determined by the Office of Management and Budget. Please see the Area Definition Report for a revised listing of counties and towns associated with designated metropolitan areas or designated as nonmetropolitan.

USDA Eliminates DEI Points from Scoring for Multifamily Preservation, Technical Assistance Applications
The U.S. Department of Agriculture on Wednesday announced it has amended the FY 2024 program funding opportunities for the Multifamily Housing Preservation and Revitalization Program and the Multifamily Housing Technical Assistance Grant Program to remove three priorities the Biden Administration added to the application scoring process. The scoring criteria removed from the application process are: (1) creating more and better market opportunities, which gave points to projects assisting rural communities to recover economically through more and better market opportunities and through improved infrastructure; (2) advancing racial justice, place-based equity, and opportunity, which evaluated efforts to ensure all rural residents have equitable access to Rural Development (RD) programs and benefits from RD-funded projects; and (3) addressing climate change and environmental justice, which provided points for reducing climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities.

The announcement states these changes will bring the programs into compliance with President Trump’s executive order, Ending Radical and Wasteful Government DEI Programs and Preferencing, issued on January 20. Applicants to either of these grant programs will not need to resubmit applications based on the announcement; however, application scoring will reflect the announcement, and points will not be awarded for meeting the criteria that have been removed.

Looking Ahead

Legislative and Regulatory Activities

• April 8, 10 am ET | House Financial Services Subcommittee on Oversight and Investigations Hearing: Decades of Dysfunction: Restoring Accountability at HUD
• April 10, 10 am ET | Senate Banking Committee Nomination Hearing for nominees including Andrew Hughes and David Woll for HUD Deputy Secretary and General Counsel, respectively

NCSHA, State HFA, and Industry Events

• April 15 – 16 | Council of Development Finance Agencies: Federal Policy Conference | Washington, DC
  Garth Rieman will speak at this event.
• April 22 – 24 | Affordable Housing Investors Council Spring Meeting | Pittsburgh, PA
  Jennifer Schwartz will speak at this event.
• April 23 – 24, 1:00 – 4:30 pm ET | NCSHA Virtual Event: Housing Credit 101: Development
• April 28 – 30 | Nebraska Investment Finance Authority 2025 Innovation Expo | Lincoln, NE
  Jennifer Schwartz will speak at this event.
• May 1 | Minnesota Affordable Housing Summit | Minneapolis, MN
  Stockton Williams will speak at this event.
• May 4 – 7 | 2025 Women’s Affordable Housing Network Summit | Denver, CO
  Jennifer Schwartz will speak at this event.
• May 8 – 9 | Novogradac 2025 Affordable Housing Conference | San Francisco, CA
  Jennifer Schwartz will speak at this event.
• May 12 – 15 | NALHFA Annual Conference | Minneapolis, MN
  Robert Henson will speak at this event.
• May 13 – 14 | Michigan State Housing Conference | Lansing, MI
  Jennifer Schwartz will speak at this event.