NCSHA Washington Report | May 8, 2026
It’s more difficult than usual to gauge levels of economic stress among lower-income homeowners and assess what they may signal for the broader housing market.
Data from the fourth quarter of 2025 reported earlier this year showed a delinquency rate of 11.5 percent for FHA-insured home mortgage loans, the highest since 2021. The share of seriously delinquent FHA loans (those 90 days or more past due) increased by 25 percent between September of last year and January 2026.
But an analysis published last month by the Center for Responsible Lending found that almost all the uptick was a result of “how an FHA policy change is reported rather than increasing financial fragility among FHA borrowers.” Since last October, FHA borrowers who are behind have been required to complete a “trial payment program” before the agency no longer counts them as seriously delinquent. “Absent the reporting change,” the analysis found, the FHA seriously-delinquent share would have remained largely unchanged from last fall.
Ginnie Mae has come to a similar conclusion, announcing two weeks ago that it will temporarily exclude loans in payment plans from its delinquency calculations. The agency said in a statement that “a meaningful deterioration in mortgage credit performance would typically be reflected in a rapid increase in loans rolling from current or early stage delinquency into 90+ day delinquency. The data does not show such a shift.”
Nevertheless, the Mortgage Bankers Association cited “some deterioration in FHA loan pools, even as the industry and Ginnie Mae write off the recent increase in delinquencies as an immaterial consequence of altered modification timelines.” Taking a longer view, another analyst observed “a fundamental rise in distress,” in terms of early missed payments, for Ginnie Mae-backed loans made between 2022 and 2025 compared to those in 2002 – 2004.
Similarly, while the number of home foreclosures was 26 percent higher in January of this year compared to 2025, the overall rate is about where it was before Covid. And some of the recent pain was only a matter of time, once special Covid-era relief programs finally ended. As former Ginnie President Ted Tozer said recently, “This is kind of cleaning out a lot of some loans that probably should have gone through foreclosure and gotten dealt with years ago.”
It’s undeniably the case that “hidden” costs of homeownership, beyond mortgage payments, are accelerating. The latest evidence comes from a study by the Dallas Federal Reserve Bank released this month, which found homeowners insurance premiums increased by 70 percent between 2019 to 2025, “reflecting greater climate disaster risk and higher construction costs” and “now make up 14% of the average monthly mortgage payment, up from 10% in 2013.”
If anything’s clear, it’s that a truly accurate view of how lower-income homeowners are faring, and what that might mean for the housing market, requires a wider lens than one that focuses solely on traditional measures of homeowner distress.
Stockton Williams | Executive Director
In This Issue
- 2026 Income Limits for HUD Housing Programs Released
- IRS Publishes New MRB, MCC Safe Harbors
- HUD Streamlines Environmental Reviews for Multifamily Insurance Program
- New CoC NOFO Coming Out by June 1
- Bipartisan Bill to Create Workforce Housing Tax Credit Introduced in the House
- NCSHA in the News
- Looking Ahead
2026 Income Limits for HUD Housing Programs Released
On May 1, the U.S. Department of Housing and Urban Development (HUD) released 2026 income limits to determine eligibility for various HUD-assisted multifamily housing programs. The average change across HUD areas is 3.4 percent, with increases capped at 10 percent; 221 areas hit the cap for fiscal year 2026. As in previous years, annual increases are limited to the greater of five percent or twice the change in national median family income, absent applicability of Housing and Economic Recovery Act special limits. The new limits are effective immediately; any decreases must be implemented by June 15.
IRS Publishes New MRB, MCC Safe Harbors
The Internal Revenue Service (IRS) Wednesday published Revenue Procedure 2026-23, updating the nationwide average purchase price limits and the average area purchase price safe harbors for the Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate (MCC) programs. The revenue procedure establishes the new purchase price limitations by taking the Federal Housing Administration single-family loan limits set in December 2025 and dividing them by .86. The specific price limits listed in the revenue procedure account for the .86 adjustment but do not account for the actual MRB and MCC purchase price limit of 90 percent of average area purchase price (110 percent for federally targeted areas). HFAs will have to make calculations themselves, for both targeted and non-targeted areas, using the information provided in the revenue procedure.
The new safe harbors took effect May 6, with an exception allowed for loans and certificates an HFA commits to finance before July 6 and that are financed by bond sales occurring before June 15.
HUD Streamlines Environmental Reviews for Multifamily Insurance Program
HUD announced on May 4 the Federal Housing Administration (FHA) had published a mortgagee letter revising its multifamily insurance program — Multifamily Accelerated Processing Guide — to streamline environmental review requirements for lenders and developers seeking FHA-insured financing. The changes removed standalone railroad vibration assessment requirements, restored prior policy for pressurized pipelines, updated standards for high voltage power lines and fall hazards, and clarified noise-sensitive outdoor uses. The changes will be implemented immediately for any mortgage application that has not reached initial endorsement. A recording of a May 7 webinar on the mortgagee letter will be available on HUD’s website soon.
New CoC NOFO Coming Out by June 1
In a press release published late last week, HUD announced the notice of funding opportunity (NOFO) for the FY26 Continuum of Care (CoC) program will be available by June 1 and applicants can expect awards to be granted by December 1. HUD says it intends to “rebalance the CoC program” by increasing its investment in transitional housing and supportive services such as “street outreach, childcare, outpatient addiction treatment, and job training.” While it also lists permanent supportive housing (PSH) as an eligible expense for CoC funding, the press release echoes language in the FY25 CoC NOFO, suggesting prohibitions or preferences against housing-first models and PSH in favor of treatment-first and temporary shelter initiatives again could be included in the FY26 NOFO. The FY25 NOFO has been temporarily blocked by court order as litigation continues.
Bipartisan Bill to Create Workforce Housing Tax Credit Introduced in the House
On May 6, Representatives Jimmy Panetta (D-CA) and Mike Carey (R-OH) introduced the Workforce Housing Tax Credit Act, a bipartisan proposal to expand the supply of housing available to moderate-income households. To qualify for the credit, at least 60 percent of a building’s units must be occupied by individuals earning 100 percent or less of the area median income with rents restricted to 30 percent of the designated income. The credits would be provided to developers over a 15-year period, with a 15-year compliance period and a 30-year affordability period.
Similar to the Low-Income Housing Tax Credit, state HFAs would allocate the credits to developers through a competitive process. States annually would receive $1 per capita for allocation, with a $1.5 million small-state minimum and an additional five percent allocation for housing in rural areas. The legislation allows states to transfer any portion of the Workforce Housing Tax Credit allocation to Low-Income Housing Tax Credits as needed and allows the two credits to be used together to enhance a project’s financial feasibility as long as at least 20 percent of the total units are designated middle-income units.
NCSHA in the News
The Bond Buyer, 4.28.26, How mortgage revenue bonds can boost your portfolio
KARE 11, 3.27.26, A Build America, Buy America law is causing construction delays amid the US housing crisis
Legislative and Regulatory Activities
- May 11 | Comments Due | HUD Notice for Comment: HOME Maximum Per-Unit Subsidy Limit Methodology and Amount
- May 25 | Comments Due to NCSHA | HUD Supplemental Notice of Proposed Rulemaking: HOME Final Rule
- June 1 | Comments Due | HUD Supplemental Notice of Proposed Rulemaking: HOME Final Rule
- June 5 | Comments Due to NCSHA | Bank Regulators’ Proposed Rules: Bank Capital Requirements
- June 15 | Comments Due to NCSHA | HUD Proposed Rule: Equal Access to Housing in HUD Programs Revisions
- June 18 | Comments Due | Bank Regulators’ Proposed Rules: Bank Capital Requirements
- June 29 | Comments Due | HUD Proposed Rule: Equal Access to Housing in HUD Programs Revisions
State and Industry Events
- May 14, 1:00 – 4:30 pm ET | NCSHA Webinar: Mortgage Revenue Bonds 101 | Register
- May 18 – 20 | Montana Housing Partnership Conference | Anaconda, MT
Jennifer Schwartz will speak at this event. - June 2 – 5 | NCSHA’s Housing Credit Connect & Marketplace 2026 | St. Louis, MO
- June 9 – 10 | CAHEC Partners Conference | Raleigh, NC
Jennifer Schwartz will speak at this event. - June 10 – 11 | AHTCC and HAG 2026 Affordable Housing Symposium | Washington, DC
Jennifer Schwartz will speak at this event. - June 18, 1:00 – 5:00 pm ET | NCSHA Webinar: Implementing BABA in Affordable Housing | Register
