Congress Is on August Recess: Where Things Stand and What We're Watching This Fall
Both chambers are on August recess and won't be back in session together until Monday, September 14. They'll then have just three weeks in session before leaving again ahead of the midterm elections (the House is currently set to wrap on October 1 and the Senate on October 2).
In that short window, top of the list for Congressional action includes avoiding a government shutdown and continuing to advance must-pass legislation that will otherwise have to wait until after the midterms.
On the heels of passing a bipartisan housing bill, here's what affordable housing and community development stakeholders should be watching for the remainder of this Congress:
FY2027 Funding Still Needed to Avoid a Government Shutdown in October
Where do things stand? Congress is heading into August recess without Fiscal Year (FY) 2027 funding, which will need to pass by September 30, 2026 to avoid a government shutdown.
This summer, the House Appropriations Committee advanced all 12 appropriations bills for FY2027. However, only three of those bills passed the full House, and no appropriations bills passed the Senate Appropriations Committee. Both chambers are unlikely to agree to all 12 bills before the fiscal year begins.
To avoid a shutdown, each chamber has advanced its own legislation to continue funding at current levels past the midterm election through a continuing resolution (“CR”): the House-passed bill extends current funding through December 4, while the Senate's version runs through December 11. The Senate bill also adjusts some funding levels to account for unique program features and includes a provision prohibiting the Office of Management and Budget's(OMB) proposed rule restructuring federal grantmaking from taking effect during the stopgap funding period.
What we're watching for in the Fall: The House and Senate must pass the same short-term funding bill before September 30 to avoid a shutdown.
Both chambers will also continue work on full-year funding legislation, including for HUD, USDA, and the CDFI Fund, to pass after the midterms.
Beyond protecting current funding levels, stakeholders are rapidly engaging appropriators to secure new funding for programs newly authorized through the 21st Century ROAD to Housing Act.
Bipartisan Housing Bill Becomes Law; Congress Turns to Funding and Oversight Next
Where do things stand? The 21st Century ROAD to Housing Act is officially law after nearly a year of negotiations between the Senate and the House.
What we're watching for in the Fall: Implementation is up next. As above, appropriators will need to consider new funding for newly authorized programs, and authorizers will engage the key agencies responsible for implementation. See NAAHL's implementation guide for the early actions Congress requires in the bill's first year. Some are already talking about “ROAD 2.0,” but it's too early to tell how much appetite there will be on the Hill for another bipartisan housing bill, especially after the midterms.
Congress Still Considering a Third Reconciliation Bill; Currently Does Not Include Tax or Housing
Where do things stand? The White House has been pushing for a third reconciliation bill. It remains unclear whether Republicans will be able to advance one before the midterms, when the ability to advance reconciliation bills may shift.
On July 22, the House passed a budget resolution establishing a $95 billion framework for a third reconciliation bill. The budget resolution was much narrower than initially expected, limited to defense spending, farm aid, and funding to encourage states to adopt voter ID laws. Senators have been more cautious about advancing a third reconciliation measure. Just before departing, the Senate put forward its own budget resolution, similar but not identical to the House-passed version. Neither budget resolution allows Congress to include tax provisions.
What we're watching for in the Fall: Both chambers still need to agree on identical instructions before reconciliation legislation can move forward. It remains unclear whether Congress will pursue another reconciliation package this year. NAAHL will be watching whether a final framework includes a tax component or housing and community development related spending changes.
NDAA Advances Toward End-of-Year Passage — With an Opportunity for CDFIs
Where do things stand? Both chambers of Congress have started work to pass the annual, must-pass FY2027 National Defense Authorization Act (NDAA) before year's end.
The House passed its version of the bill on July 22. The Senate had hundreds of amendments filed to its version, including the Access to Fair Financing for Opportunity and Resilient Development (AFFORD) Act, filed by Senators Daines (R-MT) and Warner (D-VA). The bipartisan AFFORD Act was included in the Senate-passed NDAA last year and has broad support but didn't advance in the final FY26 legislation. Enactment of the AFFORD Act is a NAAHL priority, as it would strengthen the community development sector by enhancing transparency at the CDFI Fund and giving CDFIs additional tools to support more community development projects.
What we're watching for in the Fall: Senators will need to take up this must-pass defense bill when they return. Both chambers will then need to negotiate and pass a final version by year's end. NDAA has passed every year for 65 straight years, making it one of the most reliable legislative vehicles and one of the strongest opportunities for bipartisan legislation to advance this year.
NAAHL has called on Congress to include the bipartisan AFFORD Act in NDAA. We'll continue advocating for its inclusion as a Senate floor amendment and in the final version that passes both chambers.
Must-Pass Federal Transportation Reauthorization Bill Could Also Advance Housing Outcomes
Where do things stand? Another must-pass bill worth watching is the bipartisan BUILD America 250 Act (H.R. 8870). The federal surface transportation reauthorization proposal is a five-year, $580 billion package designed to succeed the expiring Infrastructure Investment and Jobs Act (IIJA) before current authorities end on September 30, 2026.
On May 22, the House Transportation and Infrastructure Committee advanced the BUILD America 250 Act on a bipartisan vote. The full House hasn't yet taken it up. The Senate hasn't yet passed surface transportation reauthorization bills out of its relevant committees (Commerce; Environment and Public Works; and Banking).
This bill is noteworthy because it often includes provisions that make it easier to build housing near transit. For example, the House T&I-passed bill includes measures from the Build HUBS Act that would promote the use of low-cost Department of Transportation lending programs for housing projects within a half-mile of transit stations.
What we're watching for in the Fall: Both chambers will pick back up work on the long-term reauthorization, but a one-year extension of the current authorization is likely, with the 120th Congress taking up full reauthorization in the new year.
Main Street Capital Access Act Passed the House but Faces an Uphill Battle
Where do things stand? On July 21, the House passed the Main Street Capital Access Act by a vote of 270-155-1. The banking regulatory relief bill, sponsored by House Financial Services Chair French Hill (R-AR) and Rep. Andy Barr (R-KY), includes provisions requiring annual Treasury Secretary testimony to Congress on the CDFI Fund and strengthening the CDFI Bond Guarantee Program. Both of these provisions are also part of the bipartisan AFFORD Act.
What we're watching for in the Fall: The bill is now in the Senate, which must pass the legislation for it to become law. While the Senate Banking Committee could take it up, Ranking Member Elizabeth Warren (D-MA) put out a statement opposing the bill before the House passed it, making it unlikely to move through the Senate this Congress.
Nominees Confirmed, More on Deck
Notable recent confirmations include:
Kevin Warsh — Chairman of the Federal Reserve
Glen Smith — Under Secretary for Rural Development at USDA
Francis Brooke — Deputy Secretary of the Treasury
Hal Duncan — Deputy Director of OMB
Notable nominations still awaiting a vote include:
Brian Johnson — Director, Consumer Financial Protection Bureau
Irving Dennis — HUD Chief Financial Officer
Jeffrey Ledbetter — HUD Inspector General
Notable departures and vacancies include:
Treasury Under Secretary for Domestic Finance (following the departure of Jonathan McKernan; requires Senate confirmation)
HUD FHA Commissioner (Ginnie Mae President Joseph Gormley is Acting Commissioner following the resignation of Frank Cassidy; requires Senate confirmation)
CDFI Fund Director (to be filled by a career federal employee; doesn't require Senate confirmation, but noteworthy)