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NCSHA Washington Report | June 12, 2026

Published on June 12, 2026

NCSHA Washington Report - 2025

It’s not news that America’s housing shortage, while largely national in scope, is highly local in scale, with huge variations in how much and what type of additional housing is needed where, often within fairly small geographic areas.

What’s newer is the ability of analysts to make better sense of the nuances and provide more granular recommendations to policymakers — sometimes challenging long-held assumptions.

A Moody’s Analytics report by an all-star research team contends that relying on national estimates of housing undersupply is “like looking for a weather forecast for a trip to the beach and being told that the average temperature nationwide is likely to be 67 degrees.” Applying an econometric model to data at the census tract level instead, they recommend supply-side policies focus on “modest- and middle-income communities, where the shortfalls are most prevalent and tend to be deepest,” which especially need more rental, and in some cases more for-sale, units.

Economist Lisa Sturtevant, examining the 100 largest metro areas through the statistical lens of income inequality, finds that it “has a profound impact on real estate, effectively bifurcating market outcomes based on the velocity of local housing demand.” She argues that, in high-demand areas, supply-stimulating efforts must be accompanied by affordability protections, while low-demand markets “should focus on the demand side, including initiatives that expand local middle-class employment and offer targeted down-payment assistance.”

Other analysts have drilled deeper than ever into comparisons of rents for market-rate and “affordable” (i.e., publicly subsidized in some way) properties. A Yardi Matrix study finds “significant differences in competitiveness” between the two, which is influenced further by whether the developments in a given geographic area are eligible for a deeper subsidy (“basis boost”) from the Low-Income Housing Tax Credit.

Comparing market-rate and affordable rents in terms of economic cycles, researcher Jay Parsons unpacks the confounding fact that rents in LIHTC properties “exceed market-rate effective rents in a large number of high-supplied markets, where rents have fallen in recent years due to high supply.” Parsons argues that the phenomenon is a temporary result of “the largest [market-rate] supply wave in a half century putting downward pressure on rents.”

These analysts aren’t among the “supply skeptics,” who remain a vocal minority in the research community. They all agree America has a housing shortage. Their work is pushing anyone invested in solving it to think more deeply and critically about the optimal, locally specific responses.

***

Our heartfelt thanks and best wishes to Tony Freedman, who recently retired after more than 40 years of housing law and policy leadership in Washington, DC, and pretty much everywhere else. Tony represented dozens of state HFAs, spoke on hundreds of NCSHA and other industry panels, worked on more than 1,000 housing development transactions, and enlightened countless among us along the way with his intelligence, insight, and wit.

Stockton-Williams-Washington-ReportStockton Williams | Executive Director

Washington Report will return June 26.

In This Issue

  • House Passes FY27 Rural Housing Funding Bill
    On June 4, the U.S. House of Representatives voted 213 – 210 to approve the fiscal year 2027 (FY27) appropriations bill for the U.S. Department of Agriculture (USDA). The bill would provide $22.5 million in discretionary funding for USDA, a $675 million or three percent decrease over current FY26 funding levels. Despite the slight reduction in overall funding for USDA, the bill would provide level funding for most affordable housing programs administered through USDA. The bill would also expand USDA’s current pilot mortgage and rental assistance decoupling program, designed to preserve affordability in multifamily properties with expiring USDA mortgages, from 1,000 units to 5,000 units.

    The bill has been sent to the U.S. Senate for consideration, which has not yet released its own version of the legislation. For more information, see NCSHA’s blog.

    FY27 HUD Funding Bill Cleared by House Appropriations Committee
    The House Appropriations Committee met on June 3 to mark up the FY27 Transportation, Housing and Urban Development, and Related Agencies funding bill. The committee voted to advance the bill 34 – 27 along party lines, with Democrats voting against its passage. The bill would provide $71.377 billion in discretionary funding for the U.S. Department of Housing and Urban Development (HUD), which is nearly $6 billion or eight percent less than FY26 funding levels. Funding levels for HUD’s housing programs remained unchanged from when the bill passed out of the House Appropriations Subcommittee last month; however, several amendments were adopted prior to the committee’s June 3 vote of approval.

    One amendment added report language directing HUD to continue serving mixed immigration-status households that are eligible for assistance under current law, including language saying, “[T]he Committee expects HUD to prioritize family unity and housing stability when administering these provisions.”

    A second amendment added report language directing HUD to make individual pre- and post-purchase housing counseling services eligible for reimbursement through HUD’s counseling grant program, regardless of how the mortgage or prospective mortgage is insured or whether the client receives or has applied for HUD rental assistance. A third amendment added report language directing HUD to conduct a feasibility study on allowing Housing Choice Voucher renewal funds to be used to cover security deposits for tenants.

    Finally, a fourth amendment added a statutory provision banning funds appropriated under the bill from being provided to local jurisdictions that do not comply with requests from the Department of Homeland Security to provide advance notice of immigrants without legal documentation being released from local custody.

    The bill now heads to the House floor for consideration; a date for the vote has not yet been announced. A bill summary is available here. For more information on program funding, see NCSHA’s budget chart.

    HUD Publishes 2026 Continuum of Care Notice, PIT Count of Homelessness
    On June 1, HUD released a notice of funding opportunity (NOFO), CPD-2600-DC-0025, for the FY26 Continuum of Care Competition and Youth Homelessness Demonstration Program Grants to provide $4.04 billion in homeless assistance funding under the Continuum of Care (CoC) program. Eligible applicants include nonprofits, states, local governments, tribal governments and tribally designated housing entities, and public housing agencies. Applications are due to HUD by August 26. HUD expects to make awards by December 1.

    The NOFO conforms to language in the FY26 Transportation, Housing and Urban Development, and Related Agencies funding bill requiring HUD to provide at least 60 percent of CoC funds to renew expiring contracts, mostly for permanent supportive housing (PSH). However, PSH renewals in recent years have required between 80 to 90 percent of total CoC funds, meaning some CoCs likely will not be able to renew all ongoing contracts for rental and operating assistance and service funding. This will allow HUD to award up to 40 percent of the funds to so-called “tier two” projects under the competitive grant program, which will provide priority to transitional housing and supportive services, such as behavioral health care, job training, education, case management, and child care. The NOFO seeks to move away from the “housing-first” approach to homelessness prevention toward models that mandate services and sobriety as a condition of housing assistance.

    HUD also announced June 10 a separate notice for $193 million in funding available to communities nationwide to prevent and address youth homelessness under the Youth Homelessness System Improvement Grants and the Youth Homelessness Demonstration Program. The application deadline is August 10.

    Additionally, this month, HUD released the 2025 Annual Homelessness Assessment Report: Part 1, Point-in-Time (PIT) Estimates, finding that 745,652 people were homeless, including 266,320 of whom were living on the streets, on a single night in January 2025. While the numbers marked a three percent decrease from the PIT count in 2024, homelessness has risen 27 percent since 2013, according to the report.

    Senate Appropriators Cancel Scheduled Markups Amid Disagreement on Overall Spending Levels, Policy Issues
    The U.S. Senate was scheduled to kick off committee-level markups of its FY27 appropriations bills last Thursday, but the markups were postponed amid disagreements on overall funding levels and potential amendments on policy concerns unrelated to the funding measures. Senate leadership was hoping to reschedule the markups for this week, but Senate Appropriations Chair Susan Collins (R-ME) announced Monday the markups had been canceled for a second week. Collins and Senate Appropriations Ranking Member Patty Murray (D-WA) have been unable to reach an agreement on top-line funding for defense and non-defense programs for FY27, and Democrats are unwilling to begin the markup process without an understanding with Republicans in place on overall spending totals. At the time of writing, the Senate Appropriations Committee has not yet rescheduled the markups.

    $50 Million PRO Housing Fund Availability Published by HUD
    HUD has announced the availability of $50 million for the FY26 Pathways to Removing Obstacles to Housing, or PRO Housing, competition. The PRO Housing program provides funds for communities working to reduce barriers to affordable housing production and preservation. State and local governments, metropolitan planning organizations, and multijurisdictional government-based entities are eligible to apply for the funds, which HUD says will award about 10 grants of $5 to $10 million each. Applications are due August 3.

    The announcement says HUD will prioritize projects that directly create or preserve affordable housing; affordable homeownership; rural communities; Opportunity Zones; jurisdictions that have already reduced zoning, land use, permitting, or other regulatory barriers; and efforts that reduce the time, cost, or complexity of producing housing.

    FHA Seeks Comments on Single-Family Minimum Property Requirements
    On May 29, HUD and the Federal Housing Administration published in the Federal Register a request for information to solicit input on modernizing HUD’s Single-Family Minimum Property Requirements (MPRs). They also are seeking to identify ways to balance the benefits of the MPRs with the burdens they impose. For example, one of the nine questions they post is, “Are there opportunities to expand post-closing repair flexibility while still protecting borrowers and the Mutual Mortgage Insurance Fund?” Comments are due June 29. To help inform NCSHA’s comments, please send your feedback to Rosemarie Sabatino by June 22.

    SEC Establishes Data Standards Required by Financial Data Transparency Act
    The U.S. Securities and Exchange Commission (SEC) Monday announced it had established joint data reporting standards with other federal financial regulators. The new standards were authorized under the Financial Data Transparency Act of 2022, which directed SEC and eight other federal agencies to establish common financial data reporting standards so that such data can be more easily aggregated and analyzed, including through machine reading. As such, the standards generally don’t change the data reporting entities must provide but instead proscribe the format in which such information must be provided. SEC released a fact sheet summarizing the new standards.

    The final rule appears to give SEC significant leeway in establishing specific standards for the entities it regulates, which includes HFAs and other municipal bond issuers. The SEC will now develop specific rules for the municipal securities market that will be implemented by the Municipal Securities Rulemaking Board (MSRB). While SEC has until October 1, 2028, to develop its rule, there is no statutory implementation deadline for MSRB, so we don’t know when the standards will fully go into effect for the municipal market.

    CFPB Issues Statement on Ability-to-Repay and Immigration Status
    The Consumer Financial Protection Bureau (CFPB) Monday published a statement in the Federal Register emphasizing that lenders should consider a mortgage applicant’s immigration status when determining their ability to repay the loan. The statement pertains to lenders’ obligations under the Truth in Lending Act and the ancillary CFPB’s Ability-to-Repay/Qualified Mortgage Rule, both of which require lenders to make a reasonable and good faith determination that a borrower will be able to repay a mortgage loan before extending it to the borrower. The statement also applies to credit card loans.

    CFPB notes in the statement that lenders are allowed to take a wide range of information into account when determining an applicant’s ability to repay a loan, including an applicant’s immigration status. One of the key factors in any credit decision, the bureau argues, is an applicant’s employment status, which could be impacted by immigration status. Therefore, CFPB contends 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. CFPB makes it clear the statement is intended to act as guidance and does not have the force of law.

    Trump Nominates Brian Johnson to Lead CFPB
    President Trump on Wednesday announced he was nominating Brian Johnson to serve as director of the Consumer Financial Protection Bureau. Johnson served as CFPB’s deputy director during the first Trump term and before that worked for the House Financial Services Committee. Since leaving the CFPB in 2020, Johnson worked at Patomak Global Partners and was most recently a senior executive at Capital One.

    Office of Management and Budget Director Russ Vought currently leads CFPB in an acting capacity. His authority to head CFPB will expire in August. After Vought’s tenure ends, Mark Paloletta, CFPB’s chief legal officer, will serve as acting director until Johnson is confirmed.

    EIV Changes Proposed by HUD
    On June 5, HUD issued a public notice of its intent to modify the Enterprise Income Verification (EIV) System used by administrators of multiple HUD rental assistance programs. The EIV modifications include implementation of a new Systematic Alien Verification for Entitlements report and replacement of the Income Discrepancy Report with the Income Validation Tool. EIV is used to verify program participants’ and tenants’ reported income, identify unreported income sources and/or amounts, and identify substantial annual income discrepancies among households that receive HUD-provided rental assistance through programs administered by HUD’s Office of Public and Indian Housing and the Office of Housing, Multifamily Housing Programs.

    Comments will be accepted on or before July 6, after which the changes will be effective unless comments are received which result in HUD changing its plans. To help inform NCSHA’s comments, please send Garth Rieman your feedback by July 1.

    HUD Announces $3 Million Pilot to Speed Up Housing Permitting
    HUD announced on May 29 it will be awarding up to $3 million in grants to state, local, and tribal governments to adopt and utilize automated building code permitting systems. The grant, which is administered by HUD’s Office of Policy Development & Research, is intended to gather information and research on the impact such systems have on the permitting process for new housing, including timelines, and to identify best practices that can assist other jurisdictions in implementing automated permitting systems. Eligible applicants are limited to state, county, city, and tribal governments. More information is available here. The deadline to apply is July 13.

    Elimination of Chassis Rule for Multi-Story Manufactured Homes Proposed by HUD
    HUD issued a proposed rule yesterday that would amend the definition of ‘manufactured home’ in its manufactured home standards to remove the requirement for upper floors of manufactured homes to be transported and built on a permanent chassis. The transportable sections of the lowest floor would still need a permanent chassis. The notice of proposed rulemaking published today in the Federal Register cites a January 2025 presidential memo about reducing housing costs as rationale for the proposed change. HUD estimates the proposed rule could save consumers $4,800 to $6,700 per unit. Comments are due August 12. To help inform NCSHA’s comments, please send Greg Zagorski feedback by July 31.

    NCSHA in the News
    Tax Credit Advisor, 6.8.26, Pennsylvania’s PHARE Program: A National Model for State-Supported Gap Funding
    Capitol Weekly, 6.3.26, Why California’s Housing Reorganization Isn’t Enough

    Looking Ahead

    Legislative and Regulatory Activities

     

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