NCSHA Washington Report | July 24, 2026

The White House’s proposal, through its Office of Management and Budget, to impose intrusive bureaucratic and political controls over trillions of dollars of annual federal funding, which we wrote about two weeks ago, has generated an extraordinary amount of opposition. How much that may impact the Trump Administration’s next steps remains to be seen.

An analysis of 55,000 of the nearly 500,000 public comments submitted in response to OMB’s proposal finds that 94 percent oppose it. Only 16 percent of the volume against can be attributed to generic form letters, while 90 percent of support seems auto-generated, according to the analysis.

Unlike other cases of federal overreach, objections aren’t coming from a single industry or advocacy cause — they are coming from all over.

“Academic scientists, biotech executives and investors, and patient advocacy groups are sounding alarms,” according to Axios. “The National Sheriffs’ Association and other law enforcement groups said they did not have the resources to incorporate all of the changes the White House had envisioned,” the New York Times reported. “A national network of civil engineers said the plan would impinge on its ability to collaborate with foreign counterparts on infrastructure research.”

Representatives of the more than 35,000 state and local government finance officers, who are responsible for “trillions of dollars’ worth of federal funds each fiscal year,” say the new rules will be “nearly impossible to comply with” on the tight timetable the White House envisions.

Every Senate Democrat opposes OMB’s effort. Just as important may be one very powerful Republican: Susan Collins of Maine, the Senate’s top appropriator, who wrote it would “impose new, burdensome requirements on award recipients that would harm small and rural communities, undermine scientific and biomedical research, and conflict with Congress’ control over the federal funding process.”

Russell Vought, the White House budget director, seems unbothered by his production’s five percent Rotten Tomatoes score and has assured members of Congress his office “will assess each one of those comments” before producing a final set of rules, in time for them to take effect October 1.

Partly because few commenters seem to believe OMB will make substantive changes to its draft, some who represent state and local governments and agencies, including NCSHA, are urging the office to at least provide a reasonable transition period and process. Partly because few believe OMB will do so, many expect the final version to be greeted by a wave of litigation.

Plaintiffs may challenge OMB’s new regime on the basis that it violates the First Amendment and other constitutional rights and that it exceeds the office’s statutory authorities, among other grounds, according to one legal analysis. If that were to happen, it’s not clear how the White House might proceed regarding funding Congress could approve before October 1 to fund the federal government for part of the new fiscal year that starts then.

In any event, a better use of the budget office’s energies would be ensuring timely and effective implementation of the 21st Century ROAD to Housing Act and President Trump’s executive orders on housing.

Stockton Williams | Executive Director

In This Issue

• Housing Bill Enacted; NCSHA Publishes Policy Brief Series on New Law
  
• NCSHA Urges HUD to Overhaul BABA Implementation Process
• NCSHA Comments on FHFA Duty to Serve Proposed Rule
• House Advances Budget Resolution, Omits Housing and Tax Items
• House, Senate Work on CRs to Keep Government Running After September 30
• Moore, Yakym Introduce Bill to Expand MRB, MCC Benefits for Veterans’ Surviving Spouses
• DHS Posts Final Public Charge Rule
• HUD Solicits Feedback on Reinstatement Advance Payment Demonstration for Draft Partial Claim
• Federal Regulators Warn Financial Institutions About Risks of Lending to Undocumented Immigrants
• NLIHC Report Finds Rental Housing Remains Out of Reach for Low-Wage Workers
• Looking Ahead

Housing Bill Enacted; NCSHA Publishes Policy Brief Series on New Law
The 21st Century ROAD to Housing Act officially became Public Law 119-101 just hours after we published the June 10 edition of Washington Report. The most consequential federal housing law in years, it was enacted at 12:00 a.m. on July 11, 10 days after House Speaker Mike Johnson (R-LA) sent the bill to President Trump following its passage in both chambers of Congress. Under the Constitution, the president has up to 10 days (excluding Sundays) to sign or veto a bill; if Congress remains in session and neither happens, the bill becomes law automatically. President Trump chose not to sign the housing bill, in protest of Congress not passing the election reform legislation he wants.

On the heels of last week’s blog series analyzing the law in depth, NCSHA this week published these policy briefs providing details on its housing provisions, including changes to existing programs, new pilot programs, HOME program reforms, environmental review changes, and the studies, reports, and best practices the U.S. Department of Housing and Urban Development and other federal agencies are tasked to conduct to inform future policy development.

NCSHA Urges HUD to Overhaul BABA Implementation Process
On Monday, NCSHA submitted comments to HUD in response to its Request for Information (RFI) on the availability of domestically sourced products needed for production of affordable housing for purposes of implementation of Build America, Buy America Act (BABA) requirements. NCSHA urged HUD to go beyond the scope of the RFI, which sought information about the availability of specific manufactured products and other construction materials, to consider a more wholistic approach to fully overhauling the BABA implementation system. NCSHA argued the overhaul should include a thorough analysis of existing domestic manufacturing capacity, including the establishment of a federally maintained database of BABA-compliant materials and products and general waivers for products research shows are not available from domestic sources; an increase to the de minimis waiver percentage; more timely and transparent reviews of waiver requests; and additional research into streamlining federal purchasing requirements. Until it has implemented a more effective system for BABA compliance, NCSHA recommends HUD suspend BABA implementation so it does not continue to delay housing production.

In addition to submitting comments on behalf of its members, NCSHA signed onto a similar letter spearheaded by the National Housing & Rehabilitation Association.

NCSHA Comments on FHFA Duty to Serve Proposed Rule
NCSHA earlier today submitted comments in response to a Federal Housing Finance Agency (FHFA) proposed rule to amend its Enterprise Duty to Serve Underserved Markets regulations. The Duty to Serve Rule, which is statutorily obligated, requires the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to take steps to support manufactured housing, affordable housing preservation, and rural housing. In the letter, NCSHA expressed strong support for FHFA’s proposal to allow the GSEs to receive credit under the Duty to Serve Rule for Housing Credit investments that support housing in all the underserved markets covered by the rule; currently, only Housing Credit investments for homes in eligible rural areas may receive credit. NCSHA also recommended FHFA expand the Duty to Serve eligibility for GSE purchases and credit enhancements of tax-exempt Housing Bonds. Lastly, NCSHA commended FHFA for its efforts to streamline the Duty to Serve regulations but urged the agency to make sure any new requirements put in place continue to incentivize the GSEs to pursue activities in challenging sectors of the housing market.

House Advances Budget Resolution, Omits Housing and Tax Items
The House voted 216 – 214 Wednesday to approve a budget resolution, representing a significant step toward passing a $95 billion spending package that ultimately could be approved through the reconciliation process, avoiding the Senate filibuster. The budget resolution would provide approximately $60 million for defense spending, $13 billion for intelligence programs, $12 billion in agriculture and farm aid, and $10 billion for election integrity and security. Notably, the budget resolution does not include provisions or instructions related to tax or housing policy, despite members of Congress expressing a desire for additional tax changes beyond the One Big Beautiful Bill Act, the tax legislation that culminated from the reconciliation process last year.

The Senate will need to approve the same budget resolution to begin the process of drafting and passing a third reconciliation bill this Congress. Several Senate Republicans have already voiced reservations about the House measure, with some advocating for more funding to be included and others wary of the lack of spending offsets for the $95 billion package. Senate Majority Leader John Thune (R-SD) has stated the Senate’s focus will be ensuring the government is funded beyond the September 30 shutdown deadline before it breaks for August recess. The Senate is scheduled to leave Washington on August 7; the House began its August recess yesterday.

Despite the vote on Wednesday, Congress’ schedule and differing priorities in the House and Senate have raised questions about whether it can approve a budget resolution before the elections in November.

House, Senate Work on CRs to Keep Government Running After September 30
On Tuesday evening, the House voted 220 – 205 to approve a short-term funding bill, known as a continuing resolution (CR), that would extend federal agency funding at current fiscal year 2026 levels through December 4. House leadership has expressed a strong desire to take away the possibility of a government shutdown during an election year, with House Speaker Mike Johnson (R-LA) saying the CR is “as clean as they come” in a bid to secure bipartisan support. However, House Democrats largely voted against the bill, with only six Democrats voting to advance the measure. House Appropriations Committee Ranking Member Rosa DeLauro (D-CT) acknowledged the funding measure excluded any controversial additions but said she could not support the CR because it does not carry over a provision that zeroed out funding for the Border Patrol.

Democrats have also objected because the CR does not include so-called “anomalies,” which allow increased short-term funding for specific programs to keep them operational until final year-long funding is approved. The administration sent over its anomalies request list after the House leaders had already drafted the CR and begun moving to pass the measure, leaving no time to evaluate the proposals. Notably, HUD’s Tenant-Based Rental Assistance program is included on that list. The administration says tens of thousands of current voucher holders could lose rental assistance without a short-term funding increase.

The Senate is not expected to vote on the House’s short-term funding measure. Earlier this week, Senate Majority Leader John Thune (R-SD) said he plans to bring a different CR that would include anomalies to the Senate floor for a vote prior to the August recess. If the Senate were to take up its own version of a CR, the House and Senate would need to reconcile their differing versions before sending a final bill to the president. The House began its August recess yesterday and thus will not be able to vote again on a CR until after it returns.

Moore, Yakym Introduce Bill to Expand MRB, MCC Benefits for Veterans’ Surviving Spouses
Representatives Gwen Moore (D-WI) and Rudy Yakym (R-IN) yesterday introduced the Veterans Surviving Spouse Parity Act. This legislation would expand eligibility for the Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate (MCC) programs to surviving spouses of members of the armed forces. Since 2008, military veterans have benefited from a one-time exemption to the first-time home buyer requirement for MRB loans and MCCs. This bill would extend the exemption to the surviving spouses of armed service members killed or seriously disabled in combat. Yakym and Moore are strong supporters of the MRB and MCC programs, having introduced the Affordable Housing Bond Enhancement Act (H.R. 7414) earlier this year. NCSHA expressed support for the new bill in a press release Moore issued announcing its introduction.

DHS Posts Final Public Charge Rule
The U.S. Department of Homeland Security (DHS) July 20 published a final rule rescinding regulations it published in 2022 on the inadmissibility of certain applicants for immigration into the United States on grounds they would become “public charges” reliant on public assistance programs. DHS says this rescission restores broader discretion for its officers to evaluate all pertinent facts and aligns with long-standing policy that aliens in the United States should be self-reliant and government benefits, including some forms of housing assistance, should not incentivize immigration. The government is not replacing the 2022 rule with a new rule but may provide additional guidance later. The new final rule is effective on September 18 for applications for admission made on or after that date. However, receipt of means-tested public benefits before September 18 will be considered consistently with the 2022 rule.

HUD Solicits Feedback on Reinstatement Advance Payment Demonstration for Draft Partial Claim
Monday on its Single-Family Housing Drafting Table, the Federal Housing Administration (FHA) posted a draft mortgagee letter (ML) on Reinstatement Advance Payment (RAP) for stakeholder review and feedback. The ML proposes a policy to help implement the voluntary RAP demonstration, which would provide an alternative method of securing the partial claim or payment supplement debt through a RAP Repayment Agreement secured under the FHA-insured first mortgage. The RAP would eliminate the need for a partial claim note and subordinate mortgage. Under the RAP demonstration, the mortgagee would retain the RAP Repayment Agreement and remain responsible for servicing the partial claim or payment supplement and collecting the amount due from the borrower. To help inform NCSHA’s comments on the proposed changes, please send your feedback by August 21 to Rosemarie Sabatino. HUD is accepting feedback via the Drafting Table through September 3.

Federal Regulators Warn Financial Institutions About Risks of Lending to Undocumented Immigrants
Last week, three federal banking regulators — the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration — published guidance for their regulated institutions regarding lending to borrowers who do not legally live in the United States, warning these borrowers could pose elevated risks to financial institutions because they may not be able to work legally in the country to earn the income needed to repay their loans. The regulators cite a statement the Consumer Financial Protection Bureau published in June underscoring creditors are permitted, and in some cases may be obligated, to consider an applicant’s immigration status when evaluating their ability to repay a mortgage or credit card loan. The guidance also contends lenders who have financed a significant number of loans to specific geographic markets, employers, or industries that could be impacted by changes in immigration policies may face elevated loan performance risk. The other major federal banking regulator, the Federal Reserve, so far has not issued guidance on this topic.

NLIHC Report Finds Rental Housing Remains Out of Reach for Low-Wage Workers
The National Low Income Housing Coalition (NLIHC) released its annual report Out of Reach: The High Cost of Housing on July 23, finding that rental housing remains unaffordable for millions of low-wage workers across the country. The report calculates a national “housing wage” of $34.73 per hour for a modest two-bedroom rental home and $29.19 per hour for a one-bedroom rental — well above the wages earned by many workers. According to the report, the average renter earns $24.84 per hour, nearly $10 less than the hourly wage needed to afford a modest two-bedroom apartment at fair market rent without spending more than 30 percent of income on housing. The report also finds there is no state, county, or metropolitan area where a full-time worker earning the federal minimum wage can afford a modest two-bedroom rental home.

NLIHC attributes the nation’s persistent affordability challenges to a shortage of deeply affordable rental housing and longstanding underinvestment in federal housing assistance. The report estimates a nationwide shortage of 7.2 million affordable and available rental homes for extremely low-income households and notes only one in four households eligible for federal housing assistance currently receives it. NLIHC calls on Congress to expand investments in rental assistance and affordable housing production and preservation programs while pursuing policies that reduce barriers to housing development and improve affordability for renters with the lowest incomes.

Looking Ahead

Legislative and Regulatory Activities

• July 24 | Comments Due on FHFA Proposed Amendment: Enterprise Duty to Serve Rule
• July 31 (NCSHA) and August 12 (HUD) | Comments Due on HUD Proposed Rule: Elimination of Chassis Rule for Multi-Story Manufactured Homes
• August 21 (NCSHA) and September 3 (HUD) | Comments Due on HUD Draft Mortgagee Letter: Reinstatement Advance Payment Demonstration for Draft Partial Claim

State and Industry Events

• August 4 | National League of Cities: 2026 Housing Supply Accelerator Summit | Washington, DC
  Jennifer Schwartz will speak at this event.
• 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
  Jennifer Schwartz will speak at this event.
• September 2 | Indiana Housing Conference | Indianapolis, IN
  Stockton Williams will speak at this event.
• September 9 – 10, 1:00 – 4:30 pm ET | NCSHA Webinar: Housing Credit Administration | Virtual
• September 9 – 10 | HousingIowa Conference | Des Moines, IA
  Jennifer Schwartz will speak at this event.
• September 17 – 18 | 2026 Southeastern States Affordable Housing Conference | Charleston, SC
  Jennifer Schwartz will speak at this event.
• October 3 – 6 | NCSHA’s Annual Conference & Showplace | Detroit, MI