Congress has approved H.R. 6644, the 21st Century ROAD to Housing Act, a broad bipartisan housing package that combines housing supply, community development, disaster recovery, housing finance, and regulatory reform provisions.  

Background   

On June 23, the U.S. House of Representatives approved the final compromise version of the legislation following Senate passage of the measure. The bill reflects months of bipartisan negotiations led by Senate Banking Committee Chairman Tim Scott (R-S.C.), Ranking Member Elizabeth Warren (D-Mass.), House Financial Services Committee Chairman French Hill (R-Ark.), and Ranking Member Maxine Waters (D-Calif.). If signed into law, the legislation would represent one of the most significant federal housing policy packages considered by Congress in decades.  

The Latest 

Although the bill has been approved by both chambers of Congress and sent to President Trump, the President announced on June 24 that he was postponing consideration of the legislation pending congressional action on separate election-related legislation. As a result, the bill has not yet been signed into law. 

What Economic Developers Should Know 

Key highlights of the legislation for economic developers:  

• Creates a new $200 million annual Innovative Housing Growth Grant Program for cities, counties, and tribes that increase housing supply. 

• Authorizes the Community Development Block Grant–Disaster Recovery (CDBG-DR) program for three years. 

• Expands eligible uses of Community Development Block Grant (CDBG) funds to include new affordable housing construction. 

• Revises CDBG funding formulas and establishes housing production incentives tied to CDBG funding. 

• Reauthorizes and modernizes the HOME Investment Partnerships Program. 

• Streamlines environmental reviews for numerous housing and redevelopment activities. 

• Expands financing tools supporting affordable housing and community development investments. 

• Establishes new tools to support adaptive reuse projects, manufactured housing, multifamily housing development, and homeownership opportunities.  

Community Development Block Grant (CDBG) Reforms 

• Affordable Housing Construction: Expands eligible CDBG activities to include new construction of affordable housing, capped at 20 percent of a jurisdiction's annual allocation. 

• Formula Changes: Reallocates CDBG formula funding based on housing costs and vacancy rates. 

• Housing Production Incentives ("Build Now"): Establishes a framework under which a portion of CDBG funding may be redirected from recipients that do not meet specified housing production benchmarks to communities demonstrating stronger housing production performance. 

• Disaster Exemption: Exempts communities that have received a major disaster or emergency declaration within the previous three years. 

• Housing Market Exemptions: Exempts communities that fall below specified housing cost thresholds, rental cost thresholds, or exceed the national median vacancy rate. 

• Zoning Exemption: Exempts jurisdictions with limited legal authority over zoning or land-use decisions. 

• Implementation Timeline: Establishes a three-year glide path, delaying implementation until 2029. 

• HUD Notification Requirement: Requires HUD to annually notify CDBG grantees regarding eligibility and funding status. 

Community Development Block Grant–Disaster Recovery (CDBG-DR) 

• Program Authorization: Authorizes the Community Development Block Grant–Disaster Recovery program for three years. 

• Current Process: Under current law, CDBG-DR does not have a standing authorization or annual funding stream and is typically funded through supplemental appropriations enacted after major disasters. 

• Disaster Recovery Funding: The authorization is intended to provide a more predictable framework for delivering long-term disaster recovery resources following major disasters and reduce delays associated with case-by-case congressional appropriations. 

• Eligible Recovery Activities: CDBG-DR funds are commonly used for long-term housing recovery, infrastructure restoration, economic revitalization, and other disaster recovery activities that complement the more immediate recovery programs administered by FEMA. 

• Treasury Disaster Recovery Fund: Creates a Treasury disaster recovery fund. 

• HUD Disaster Office: Establishes a HUD disaster recovery office that would terminate three years after enactment. 

HOME Investment Partnerships Program 

• Program Reauthorization: Reauthorizes and modifies the HOME Investment Partnerships Program. 

• Expanded Eligibility: Raises the income eligibility threshold from 80 percent to 100 percent of Area Median Income (AMI). 

• Increased Local Allocations: Increases the minimum allocation for participating localities and consortia to $750,000. 

• Affordable Homeownership Cap: Raises the affordable homeownership purchase price cap from 95 percent to 110 percent of area median purchase price. 

• Infrastructure Eligibility: Expands eligible uses to include infrastructure improvements that support housing development. 

• Environmental Review Relief: Creates NEPA categorical exclusions for infill construction, property acquisition, rehabilitation projects, and developments containing 15 units or fewer. 

Environmental Review Streamlining 

• HUD-Funded Activities: Establishes NEPA exemptions for tenant-based rental assistance, supportive services, homebuyer assistance programs, and affordable housing predevelopment activities. 

• Public Facility Repairs: Creates categorical exclusions for certain public facility repair projects. 

• Small Residential Rehabilitation: Creates categorical exclusions for small residential rehabilitation projects. 

• Office-to-Residential Conversions: Creates categorical exclusions for office-to-residential conversion projects. 

• USDA Infill Housing Projects: Exempts certain USDA-supported infill residential construction projects from environmental study requirements. 

• HUD-USDA Coordination: Requires HUD and USDA to establish a memorandum of understanding to align housing standards and streamline environmental review processes. 

Housing Supply and Production 

• Innovative Housing Growth Grants: Authorizes $200 million annually from FY 2027 through FY 2031 for competitive grants to cities, counties, and tribal governments that have increased housing supply. Individual grants would range from $250,000 to $10 million and would be subject to prevailing wage requirements. 

• HUD Zoning Guidelines: Directs HUD to release voluntary best-practice guidelines for state and local zoning within three years aimed at accelerating housing production. 

• Housing Conversions: Makes HUD's Rental Assistance Demonstration (RAD) program permanent, increases the RAD unit cap from 455,000 to 555,000 units, and establishes a pilot program to support the conversion of vacant buildings into attainable housing. 

• Multifamily Lending: Increases FHA maximum loan limits for multifamily construction and provides future inflation adjustments. 

• Bank Investment in Housing: Authorizes the Office of the Comptroller of the Currency and the Federal Reserve to increase the public welfare investment cap for banks from 15 percent to 20 percent of total capital. 

Affordable Housing and Community Development Finance 

• Public Welfare Investments: Authorizes the Office of the Comptroller of the Currency and the Federal Reserve to increase the public welfare investment cap for banks from 15 percent to 20 percent of total capital. These investments are commonly used to support affordable housing, community development projects, and Low-Income Housing Tax Credit (LIHTC) investments. 

• Community Bank Examination Cycles: Extends examination cycles to 18 months for banks and credit unions under $6 billion in assets. 

• Reciprocal Deposits: Increases reciprocal deposit thresholds for qualifying financial institutions. 

• New Community Banks: Provides a two-year phase-in period for capital requirements applicable to newly chartered community banks. 

• Bank Mentorship Program: Codifies a mentorship program allowing larger financial institutions to mentor smaller institutions. 

Manufactured Housing 

• Permanent Chassis Requirement: Removes the requirement for a permanent steel chassis, enabling broader manufactured housing designs. 

• State Certification: Requires states to certify parity treatment for qualifying chassis-less manufactured homes. 

• Energy Efficiency Standards: Requires development of energy efficiency standards within one year of enactment. 

• Expanded FHA Financing: Raises FHA loan limits for manufactured housing. 

• Longer Loan Terms: Extends maximum loan terms to 30 years. 

Homeownership and Borrower Assistance 

• Savings Account Pilot Program: Establishes a 10-year pilot program allowing up to 5,000 Section 8 and Section 9 households to build savings toward homeownership. 

• Small-Dollar Mortgage Pilot: Creates a four-year pilot program for mortgage loans up to $100,000. 

• FHA Appraiser Reforms: Allows licensed or certified appraisers and recognizes single-state credentials nationwide. 

• Appraisal Appeals: Requires a formal appeals process for appraisals associated with federally backed mortgages. 

Institutional Investor Provisions 

• Large Institutional Investor Restrictions: Prohibits institutional investors controlling 350 or more single-family homes from purchasing additional single-family homes. 

• Exemptions: Provides exemptions for new construction, build-to-rent developments, renovate-to-rent projects, homeownership programs, foreclosure mitigation activities, senior housing communities, and purchases of pre-enactment homes from other large investors. 

• No Forced Divestiture: Does not require the sale of properties acquired before enactment. 

• Civil Penalties: Establishes civil penalties of up to $1 million per violation or three times the purchase price. 

• Rulemaking Authority: Grants implementation authority to the Federal Housing Finance Agency (FHFA), Securities and Exchange Commission (SEC), and Treasury Department. 

• Sunset Provision: Terminates the restrictions 15 years after taking effect. 

 Rural Housing and Community Development  

• Multifamily Preservation Program: Codifies USDA's Multifamily Preservation Program. 

• Rural Community Development Initiative: Codifies the Rural Community Development Initiative. 

 Public Housing and Veterans Provisions 

• Moving to Work Expansion: Expands the Moving to Work program by up to 25 public housing authorities. 

• Veterans' Disability Benefits: Excludes veterans' disability benefits from certain HUD eligibility calculations. 

• VA Loan Disclosure Requirements: Requires VA loan disclosures on mortgage applications. 

Central Bank Digital Currency (CBDC) 

• Temporary Restriction: Prohibits the Federal Reserve from issuing a central bank digital currency through December 31, 2030. 

• Congressional Authorization: Requires explicit congressional authorization before any future CBDC issuance. 

• Stablecoin Exemption: Exempts stablecoins from the restriction. 

IEDC will continue to monitor the status of this legislation and provide updates.