21st Century ROAD to Housing Act Becomes Law with Bipartisan Support

The law represents the most comprehensive federal housing reform in nearly three decades. It includes more than 45 provisions addressing housing supply, housing affordability, and efforts to streamline government programs and remove barriers to community development.

Here are some key provisions to note:

Housing Counseling and Financial Literacy

Section 101 reforms housing counseling and financial literacy programs requires that FHA borrowers who are 30 days or more delinquent on their mortgages be given the opportunity to participate in housing counseling provided by a HUD-approved housing counseling agency.

It also creates dedicated funding that will come through the Mutual Mortgage Insurance Fund (MMIF) and the FHA Fund. This creates a more consistent funding source that better reflects the ongoing cost of housing counseling, rather than relying solely on the appropriations process. It also helps diversify the funding base for housing counseling agencies.

The law also extends eligibility for these housing counseling services to borrowers with USDA and VA loans.

Housing counselors will continue to undergo performance reviews through HUD’s Office of Housing Counseling. Counselors with significantly lower performance reviews will be required to complete continuing education and additional training and will have opportunities to demonstrate improvement. If a housing counselor remains out of compliance, they may lose their certification.

The Office of Housing Counseling will be responsible for establishing the performance standards. NHRC plans to participate in the development of these standards and encourage housing counselors to provide input during the process.

Institutional Investors and Single-Family Homes

The final version of the bill includes language restricting institutional investors from purchasing single-family homes. However, it includes an exception for large investors seeking to purchase or build new single-family homes specifically for the rental market.

The law also establishes a renter outreach resource at HUD to help renters whose homes are owned by large institutional investors navigate landlord disputes.

New Housing Pilot Programs

The bill authorizes several pilot programs. However, because no funding is directly attached to these programs, HUD may need to use existing funding from other programs to implement them. These pilot programs include:

• Small-Dollar Mortgage Pilot Program (Section 105): Authorizes a HUD pilot program to increase access to small-dollar mortgages with original principal balances of $100,000 or less that are backed by the Federal Housing Administration (FHA). The program sunsets after four years. This can help to identify barriers to the small dollar loan program and address changes need to increase availability.
• Whole Home Repair Act (Section 202): Authorizes a pilot program offering grants and forgivable loans to eligible recipients to address comprehensive home repair needs and health hazards and help stabilize the nation’s aging housing stock.
• Regional Housing Planning and Community Development (Section 207): Authorizes a competitive grant program to assist state, local, and Tribal governments with regional housing planning and community development activities. This can help local governments to modernize their zoning codes and develop comprehensive housing strategies.
• Revitalizing Empty Structures into Desirable Environments (RESIDE) Act (Section 210) : Authorizes a pilot program to convert vacant and abandoned buildings into attainable housing.
• Family Self-Sufficiency (FSS) Escrow Expansion Pilot (Section 404): Creates a 10-year pilot program under HUD’s Family Self-Sufficiency initiative that would allow families in  tenant based and project based renal assistance programs to build their savings in a interest bearing escrow that they can use to purchase a home. This helps to promote economic mobility and homeownership by helping more families increase their household savings.
• Build Now Act (Section 213): Creates a pilot program to incentivize housing development in participating CDBG jurisdictions.

Other Key Provisions

• Gives the HUD Secretary greater flexibility to prioritize applicants for competitive HUD grants that are located in or primarily serve designated Opportunity Zones, with the goal of supporting housing preservation and construction.
• Adds new construction as an eligible use of Community Development Block Grant (CDBG) funds.
• Reduces barriers related to environmental reviews by empowering state, local, and Tribal governments to streamline environmental review processes and support increased housing development.
• Appraisal Workforce: Section 403 supports the appraisal workforce through licensing and training reforms, including allowing both licensed and certified appraisers to conduct appraisals for FHA-insured mortgage lending transactions.
• Manufactured Housing: Section 303, the Property Improvement and Manufactured Housing Loan Modification Act, updates mortgage lending standards for manufactured housing through the FHA and expands access to financing. The law also directs HUD to study the cost-effectiveness and long-term value of supporting factory-built housing.
• Build America, Buy America: Directs HUD to review the implementation of Build America, Buy America Act requirements and update its guidance to clarify how these requirements apply to HOME-funded projects.
• Second Appraisals: Requires the USDA, VA, FHA, and the Federal Housing Finance Agency (FHFA) to establish requirements for lenders of federally backed mortgages to have procedures for reviewing and resolving requests for second appraisals made by consumers.
• Public Appraisal Database: Requires the Government Accountability Office (GAO) to issue a report assessing the feasibility of creating a public appraisal database that consolidates data collected by the FHFA, HUD, USDA, and VA.
• Manufactured Housing Communities: The PRICE Act authorizes HUD to establish a seven-year program providing grants to entities to maintain, protect, and stabilize manufactured housing communities.
• Innovation Fund (Section 208): Creates a seven-year program providing $200 million annually in competitive grants to local governments and Tribal governments that demonstrate measurable increases in housing supply. The program incentivizes reforms such as streamlined permitting, density bonuses, and zoning changes.
• Zoning and Land Use: Section 107 directs HUD to develop a best-practices framework for zoning and land-use policies to help communities identify and overcome barriers to housing development.

Implementation Will Be Key

Much of the success of the law will depend on how the federal government implements its provisions, including how agencies reform existing programs and issue new regulations. The response of state and local governments, as well as the private sector, will also play an important role.

Implementation will take a while with the federal government, and following significant federal staffing cuts in 2025, many agencies are already operating with limited capacity. The law does not provide additional funding for staffing or agency operations. As a result, HUD and other federal agencies may need to redirect existing funds and staff time to implement the law’s provisions if additional funding is not appropriated in the future.

Over the long term, these changes could help increase housing supply across different segments of the housing market and reduce cost pressures for many households. However, for the law to be effective, federal agencies will need adequate staffing and resources.

The law also authorizes several pilot programs, including the Whole Home Repair program and the Build Now Act, which incentivizes housing development of various types. These programs will likely require future congressional appropriations to be fully implemented.

Learn more here:

21st Century ROAD to Housing Act Implementation Tracker | Bipartisan Policy Center

Section-by-Section: 21st Century ROAD to Housing Act | United States Committee on Financial Services