by Tyler Williams
The 21st Century ROAD to Housing Act became law two months ago.
Now comes the hard part: getting the money to get the results.
The implementation process, including securing funding for new programs and finalizing regulatory changes, could take from now until well into 2028, optimistically speaking.
After that, possibly, some early outcomes.
The bill, the most comprehensive federal housing legislation in decades, includes a host of provisions to boost housing supply, including significant measures focused on attainable and affordable housing. While industry leaders almost unanimously applauded the bill’s passage, stakeholders acknowledge that implementing its provisions and the benefits that they would trigger will take time.
Against this backdrop, a session hosted this week by the Bipartisan Policy Center and the National Association of Affordable Housing Lenders (NAAHL) offered insights into roadblocks that could delay the implementation of certain provisions meant to increase the supply of attainable and affordable housing.
While some supply-focused changes could have an impact quickly, others may take a year or more to begin to materialize.
Why ROAD will take time to fund and implement
ROAD created roughly a dozen new programs that require funding approval from Congress, a process typically painstaking, contentious and plodding.
While some deadlines begin this year, many of the law’s new programs may hit delays because of a lack of federal funding. The House’s FY 2027 Transportation, Housing and Urban Development appropriations bill, which passed in June before ROAD became law, does not fund the ROAD provisions. The Senate appropriations bill is still pending, and it’s not yet clear if it will fund any of the programs tied to the housing legislation.
“The Senate has not yet released its own funding bill, but it’s possible that many of the programs authorized in ROAD will not receive funding until fiscal year 2028 at the earliest,” Kristen Klurfield, associate director at the Bipartisan Policy Center, said during the session.
Aaron Shroyer, Director of Policy and Advocacy at NAAHL, added that “until those programs get funded, they really only exist on paper.”
The bill also changed regulations and public reporting requirements that federal agencies, most notably HUD, must implement. Federal agencies must write rules, issue guidance, establish programs and complete significant administrative work before provisions in the law can begin having their intended impact.
HUD accounts for roughly 70% of the 125 identified federal actions and must develop nine new rulemakings. Because HUD rules typically take 18 months to two years to finalize, some rules in ROAD could be finalized in early 2028, though existing agency workloads could push that timeline further out.
One wildcard is HUD’s staffing levels. The agency currently has about 5,800 employees, compared with 8,800 during fiscal year 2024, a 34% decrease in staffing. Some industry leaders worry that, with fewer workers, fully implementing the first comprehensive housing bill in decades could take years.
“One of the biggest tasks for them at HUD and for other agencies is to figure out how to stack up these new rulemakings they’re tasked with against what was in their queue before ROAD,” Shroyer said.
Manufactured housing’s permanent chassis removal
A new rule that will remove the permanent chassis requirement from HUD’s manufactured housing definition is, potentially, one of the most consequential changes in the housing bill.
The change will give manufacturers greater design flexibility to go vertical, enabling lower-cost manufactured housing to be built in high-density urban and infill markets, where manufactured homes are still uncommon. It will also allow manufactured housing to more closely resemble traditional site-built housing, likely increasing acceptance among local officials and planning boards, who often hold longstanding stigmas and misconceptions about manufactured homes.
However, manufacturers won’t be able to take advantage of this increased design flexibility until HUD follows through on its mandate to draft new standards for chassis-free homes.
“The challenge is that the law needs to be updated so that we can bring forward the innovations that we have in the factory and build homes that can fit in those neighborhoods that are in need of attainable housing solutions,” Lesli Gooch, CEO of the Manufactured Housing Institute, said during the session.
In a July interview with HousingWire TBD, Gooch explained that manufactured housing developers are already ready to adapt to new home designs. However, when they can do so will largely depend on how quickly the regulatory process moves along. HUD must update the manufactured housing code through its advisory committee process, public comment period and final rulemaking.
After HUD completes those steps, manufacturers can submit their chassis-free designs for review and approval by HUD-approved third-party inspection agencies. Once those designs receive approval, manufacturers can begin producing the homes.
It’s not yet clear how long this federal process will take. But Gooch highlighted during the session that states and localities must also change their zoning laws to allow manufactured and factory-built housing in more neighborhoods.
“We’ve got the law passed, but now our job is to make sure that, at the state level and at the local level, the policies catch up with the federal law so that we can actually see this come to reality,” Gooch said.
USDA’s Section 515 program
ROAD includes several provisions that are particularly important for affordable housing in rural America. It makes the Multifamily Preservation and Revitalization (MPR) program permanent and allows certain nonprofits and limited partnerships to purchase properties before rehabilitation and preserve them as affordable housing.
It also expands access to housing capital in underserved rural areas and makes federal housing programs more accessible to smaller rural developers and communities.
The changes to the U.S. Department of Agriculture (USDA) Section 515 program, which provides 1% interest-rate loans for the development and preservation of rural multifamily housing, could prove to be the most impactful.
In particular, ROAD allows USDA to decouple Section 521 Rental Assistance for low-income tenants from a Section 515 loan in certain properties nearing loan maturity. In effect, this lets properties built or preserved with a Section 515 loan keep receiving rental assistance even after the USDA mortgage ends. This matters because losing a single affordable project can devastate a small community with a limited housing supply.
“For those who work in rural America, you know there’s very little affordable housing available. So, if you lose a project in one of these places, it really distorts the market and puts the [residents] at risk of not being able to live in the community,” Jonathan Harwitz, Director of Public Policy at the Housing Assistance Council, said during the session.
However, decoupling USDA Section 515 rental assistance from Section 515 mortgages requires formal rulemaking, which the Rural Housing Service (RHS) within USDA must complete. Additionally, Congress has not yet released the technical assistance funds it appropriated for the Rural Housing Service decoupling, which is slowing implementation.
“Those of us who are trying to make decoupling work are hamstrung by that,” Harwitz said.
HOME Investment Partnerships Program
ROAD aimed to improve the HOME Investment Partnerships Program, a HUD-administered block grant program used by organizations like Habitat for Humanity to develop and preserve affordable housing for low-income households.
Changes to the program include exempting small housing projects from NEPA review, raising income eligibility to 100% of area median income, and increasing purchase price limits, among other reforms. Proponents of these changes argue that the updated rules will make it faster, easier and less costly to build much-needed affordable housing supply.
Liz Osborn, Vice President of Policy at Enterprise Community Partners, argued during the session that these reforms have great potential. However, they are administratively difficult to implement.
“There’s a lot that HUD needs to do to implement these changes. They’re going to have to issue new regulations and guidance around the updated eligibility rules, clarify and provide guidance on which projects qualify for the streamlined review process, update their internal systems to reflect new eligibility and streamlined rules, and they’re going to need to do all of that on reduced staff,” she explained.
Because of that workload, the benefits won’t be immediate.
“There’s a tremendous amount of work that the administration needs to do,” Osborn said. And I think that’s all to say, we might not see the impact of the changes to the HOME program for a little while.”
Public Welfare Investment cap increase
Not all supply-focused provisions in ROAD will take long to implement. For example, the bill increased the statutory cap on bank public welfare investments (PWI) from 15% to 20% of a bank’s capital and surplus. Public welfare investments incentivize banks to fund community development projects in low- and moderate-income areas in exchange for incentives like tax credits.
Sarah Brundage, President & CEO of the National Association of Affordable Housing Lenders, said that this change, which complements the permanent low-income housing tax credit (LIHTC) expansion, should be relatively quick to jump-start. While regulators from the Office of the Comptroller of the Currency (OCC) may need rulemaking and guidance, banks can prepare right away.
“We believe OCC will need to eventually do some rulemaking and updates of guidance, but banks should be preparing imminently if they’re near or at their PWI cap,” Brundage said.
“Again, it’s a big win. No need for appropriations. No new programs. This is a policy that leverages private-sector investments with a direct tie to supply,” Brundage added. “This should be one of the most fast-acting direct-to-supply provisions in the bill upon enactment.”