Washington Recap: April 2026
NAAHL, in partnership with the Center for Affordable Housing Lending, is pleased to provide this monthly recap of the top federal policy developments in affordable housing and community development. NAAHL Members receive breaking policy updates and additional policy resources directly; however, any partner can sign up for NAAHL alerts and the monthly Washington Recap here.
NEIGHBORHOOD HOMES COALITION HOSTS WEBINAR
Unlocking Housing Supply and Homeownership Through the Neighborhood Homes Investment Act
On April 16, the Neighborhood Homes Coalition hosted a public webinar exploring how the bipartisan Neighborhood Homes Investment Act would boost the supply of affordable homes and increase homeownership in communities that need it most. The Neighborhood Homes Investment Act would create a federal tax credit to build and rehabilitate affordable homes for urban, suburban, rural, and Tribal communities, giving families opportunities to build wealth where they live and work. The webinar included remarks by Senator Todd Young (R-IN) and featured a panel of housing and community development experts discussing the gap in financing for affordable single-family homes today and how the Neighborhood Homes Investment Act would fill that gap.
The Neighborhood Homes Coalition is a national advocacy group of more than 50 national organizations. The coalition is co-chaired by the National Association of Affordable Housing Lenders (NAAHL), the National Community Stabilization Trust (NCST), and the Local Initiatives Support Corporation (LISC).
A recording of the webinar can be found here.
CONGRESS
House Appropriations Committee Approves Fiscal Year (FY) 2027 Financial Services and General Government Bill
On April 22, the full House Appropriations Committee voted 34 to 28 to advance its FY 2027 Financial Services and General Government (FSGG) appropriations bill. The bill provides a total of $276.6 million for the CDFI Fund, the same level of funding the House provided in its FY 2026 funding bill but less than the $324 million that Congress ultimately enacted for FY 2026. The FY 2027 bill would provide: $170 million for Financial Assistance and Technical Assistance grants, $35 million for Native Initiatives, $35 million for the Bank Enterprise Award Program, $3 million for the Small Dollar Loan Program, and $33.6 million for administrative expenses. The bill also provides $500 million in Bond Guarantee Program authority.
Notably, the committee report directs the CDFI Fund to “obligate previously appropriated funds in an expeditious manner to ensure program continuity and effectiveness.” The Committee directs that funding to the Office of the Secretary be withheld until all previously appropriated funds for CDFI awards are fully obligated.
House Financial Services Committee Discussing Changes to Bipartisan Housing Legislation
There was reporting this month that the House Financial Services Committee staff is working on a bipartisan basis on changes to the Senate-passed21st Century ROAD to Housing Act. The revised legislation is expected to be released in the near future and will likely address parts of the House’s own bipartisan housing bill, the Housing for the 21st Century Act, that were omitted and incorporate edits to certain Senate provisions, including the section aimed at limiting the purchase of single-family homes by institutional investors.
Updated text from the House would be the fourth iteration of bipartisan housing legislation from the Committees this Congress. The Senate’s 21st Century ROAD to Housing Act combined provisions of the House-passed Housing for the 21st Century Act with the Senate’s ROAD to Housing Act. The Senate’s revised bill also included two provisions that were not in the original House or Senate bills: a prohibition on the development of a central bank digital currency for five years, and limitations on large institutional investors purchasing single-family homes. The limitation on large institutional investors is a priority of President Trump. For a comparison of the provisions included in the House- and Senate-passed housing bills, see NAAHL’s comparison chart.
Congress Pursues Limited Reconciliation 2.0 Bill and Raises Possibility of Reconciliation 3.0
This month, the House and Senate passed a new budget resolution, setting up the chambers to pass the second reconciliation bill of this Congress in order to fund Immigration and Customs Enforcement and Customs and Border Protection. By passing funding through the reconciliation process, the Senate can avoid the 60-vote threshold needed to overcome a filibuster.
The Department of Homeland Security has remained unfunded since February 14. On April 23, the Senate voted 50 to 48 to advance a budget resolution that provides $70 billion to fund immigration enforcement programs. The House passed the same budget resolution on April 29 by a vote of 214 to 212, with one person voting present. The Committees with jurisdiction over immigration enforcement will now begin drafting a reconciliation bill based on the resolution’s instructions. President Trump has told Republicans that he wants an immigration enforcement funding bill passed by June 1.
While some House Republicans had advocated for a reconciliation bill that includes other policy priorities, the budget resolution that passed both chambers remains narrowly tailored. House Speaker Mike Johnson (R-LA) has promised that Congress will put together a broader “reconciliation 3.0” bill after this legislative effort concludes to advance other policies.
ADMINISTRATION
White House Releases FY 2027 Budget Request
On April 3, the White House released the President’s FY 2027 Budget Request. The proposal includes an additional $1.5 trillion for defense and a 10 percent cut to non-defense discretionary spending – which includes Department of Housing and Urban Development (HUD), USDA Rural Housing Service, and Community Development Financial Institutions (CDFI) Fund programs – compared to FY 2026 enacted levels.
HUD
The President’s budget calls for $73.5 billion for HUD, which is 13 percent lower than the FY 2026 enacted level of $84.2 billion but significantly higher than the President’s FY 2026 request of $43.5 billion. Unlike the FY 2026 President’s budget request, the FY 2027 proposal would maintain HUD’s current assisted housing programs, including Housing Choice Vouchers and the public housing program. However, the proposal includes funding cuts for most of these programs, including Project-Based Rental Assistance, the Section 202 Housing for the Elderly program, and the Section 811 Housing for Persons with Disabilities program.
The budget also proposes to eliminate block grants that support the creation and preservation of affordable housing supply, including the Community Development Block Grant and HOME Investment Partnerships programs, as well as the competitive PRO Housing grant program that helps communities looking to reexamine their land use policies. Additionally, the President’s budget would replace HUD’s existing homelessness assistance programs, including the Continuum of Care program, with a single block grant, an updated version of Emergency Solutions Grants.
CDFI Fund
The President’s budget proposes $119.5 million for the CDFI Fund, a 63 percent cut from the FY 2026 enacted level of $324 million. The proposal would eliminate the traditional CDFI Program, Bank Enterprise Award Program, Small Dollar Loan Program, Healthy Foods Financing Initiative, and AmeriCorps CDFI Economic Mobility Corps program and replace those programs with a $100 million Rural Financial Assistance Program. Under the new program, at least 60 percent of each recipient’s lending must go to rural areas. No new Bond Guarantee Program authority was requested.
U.S. Department of Agriculture
The President’s budget proposes$20.8 billion for the U.S. Department of Agriculture (USDA), which is 19 percent below FY 2026 enacted funding levels. Within the Rural Housing Service, the President’s budget proposes to eliminate the Rural Housing Voucher program while increasing funding for Section 521 Rental Assistance. It would also reduce funding for Section 502 Single-Family Direct Loans and rural housing assistance grants for home repair while maintaining funding for home repair loans and the Multifamily Preservation and Revitalization Demonstration.
Other Relevant Agencies
The President’s budget once again proposes to eliminate NeighborWorks America and the U.S. Interagency Council on Homelessness (USICH). Both agencies were funded by Congress for FY 2026.
What’s Next?
The President’s budget request is the first step in the government funding process. The House and Senate Appropriations Committees have already begun their work to fund federal programs for FY 2027. Final federal appropriations amounts are determined by Congress and then signed into law by the President.
A comparative table of enacted and proposed funding levels for select housing and community development programs is available here.
Treasury, IRS Release Guidance on Opportunity Zones 2.0 Designations
On April 7, the Treasury Department and Internal Revenue Service released guidance for states on nominating Census tracts as Opportunity Zones under the permanent Opportunity Zone program enacted through the One Big Beautiful Bill Act. The guidance clarifies which areas can qualify and limits the total number of Opportunity Zones Census tracts to 25 percent of eligible low-income tracts in each state. The 90-day window for states to submit nominations begins on July 1; designations will take effect on January 1, 2027 and last for ten years.
Council of Economic Advisers Releases 2026 Economic Report of the President
On April 14, the Council of Economic Advisers released the 2026 Economic Report of the President, which includes a dedicated chapter on housing affordability and homeownership. The chapter documents the rise in home prices and decline in homeownership rates, attributes the crisis to institutional investor demand and supply-side regulatory costs, and outlines the Administration's policy response, including efforts to reduce mortgage rates, roll back regulations, and limit institutional investor purchases of single-family homes.
While the report highlights the role of regulatory and financing costs in expanding housing supply, NAAHL has documented how federal tax credit and financing tools, including those that have been expanded or that Congress has proposed to enhance, are also essential to growing the supply of affordable housing. For example, the permanent expansion of the Low-Income Housing Tax Credit enacted through the One Big Beautiful Bill Act could build or preserve an estimated 1.2 million homes over the next decade, and HUD's block grant and rental assistance programs are essential in creating and preserving affordable housing. NAAHL will continue to elevate the importance of both addressing regulatory barriers and supporting public-private partnerships in order to address our housing shortage.
OMB Apportions FY 2025 CDFI Fund Dollars; Treasury Announces Rulemaking and Review
On April 9, the Office of Management and Budget (OMB) apportioned $289 million in FY 2025 appropriations for the CDFI Fund, allowing Treasury to begin obligating funds to grantees. The apportionment includes funding for Financial Assistance, Technical Assistance, the Small Dollar Loan Program, Bank Enterprise Awards, and other awards. The action followed a March 19 letter from NAAHL and partner organizations calling on the Administration to release more than $1 billion in CDFI Fund resources to build and preserve an estimated 100,000 affordable homes.
Notably, Capital Magnet Fund, Emergency Capital Investment Program, Bond Guarantee Program, and FY 2026 CDFI program dollars were not included in the apportionment, meaning hundreds of millions of dollars that could be deployed to build and preserve affordable housing remain held up at OMB.
Updates to CDFI Rule and Agreements
Separately, Treasury announced that the CDFI Fund will issue a notice of proposed rulemaking to ensure that awards comply with federal law and that taxpayer-funded public benefits are not diverted to subsidize non-U.S. citizens. The timeline for the proposed rule is unclear, and it is unlikely to be finalized in time to affect FY 2025 awards. At the same time, Treasury announced a new provision that will be added to CDFI Fund agreements requiring that certified CDFIs do not violate federal anti-discrimination laws, including providing employment or financial preferences based on race or sex.
Treasury Review of CDFIs
This month, Treasury also announced that it has begun a review of certified CDFIs to identify potential violations of law or CDFI requirements and to ensure federal CDFI funds are being deployed appropriately. NAAHL will be closely following the review process.
CFPB Finalizes Changes to Fair Lending Rule
On April 22, the Consumer Financial Protection Bureau (CFPB) issued its final rule making updates to its Equal Credit Opportunity Act (ECOA) regulation, which governs fair lending requirements. The changes are intended to align the regulation with last year’s Executive Order, “Restoring Equality of Opportunity and Meritocracy,” which states that it is the policy of the U.S. to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.”
The final rule eliminates references to disparate impact under ECOA, limiting liability to disparate treatment. It also revises the definition of what actions may constitute illegally discouraging consumers from applying for credit and amends the standards for Special Purpose Credit Programs (SPCPs) that private lenders may offer. Under the updated rules for SPCPs, a lender may only offer an SPCP that uses the protected characteristics of religion, marital status, age, or income derived from public assistance as the common characteristic among those eligible for the program. The lender must also explain why the class of persons would not otherwise receive credit under the organization’s standards of creditworthiness and show that each participant in an SPCP would not otherwise receive credit based on their protected characteristic.
The revised rule will go into effect on July 21, 2026.
Recent HUD Personnel Changes
On April 1, HUD Principal Deputy Assistant Secretary for Policy Development and Research John Gibbs announced that he would be leaving the agency. The Office of Policy Development and Research (PD&R) produces research, data, and analysis that informs HUD’s programs and policies. General Deputy Assistant Secretary Todd Richardson is expected to lead the office in the interim.
It was also reported that Federal Housing Administration (FHA) Commissioner Frank Cassidy will be taking a leave of absence. During this time, Ginnie Mae President Joseph Gormley will also be leading FHA.
BANKING REGULATORS
Senate Banking Committee Advances Federal Reserve Chair Nominee
On April 21, the Senate Banking Committee held a nomination hearing for Kevin Warsh to serve as the next Chair of the Board of Governors of the Federal Reserve System. During the hearing, members focused on the independence of the Federal Reserve, Warsh’s views on setting interest rates, affordability, and the impact of AI on the broader economy. But it was not clear that the Senate Banking Committee had the votes necessary to advance Mr. Warsh’s nomination to the full Senate because of opposition to an ongoing Department of Justice criminal investigation into the current Federal Reserve Chair, Jerome Powell, related to statements he made about cost overruns in the Federal Reserve building’s renovations. Senate Banking Committee member Thom Tillis (R-NC) had said he supports Mr. Warsh’s nomination but would not vote for any nominee until the investigation was closed because of his concerns about Federal Reserve independence.
Following the hearing, the Department of Justice announced that it would close its criminal investigation into Chair Powell and would instead ask the Federal Reserve Inspector General (IG) to review the matter. The IG began reviewing the renovations last summer at Chair Powell’s request. Closing the investigation cleared the path for the Banking Committee to vote on Mr. Warsh’s nomination, and his nomination was advanced to the full Senate on April 29 by a vote of 13 to 11. Mr. Powell’s term as Chair expires on May 15, and it is expected that the Senate will vote to confirm Mr. Warsh prior to that date. While Mr. Powell’s term as Chair is expiring, his term as a member of the Federal Reserve Board of Governors does not expire until 2028. Mr. Powell announced that he will remain on the Board after his term as Chair expires.
CONFIRMATIONS AND APPOINTMENTS
Department of Agriculture (USDA)
NOMINATED: Glen Smith to be Under Secretary for Rural Development.
Department of Housing and Urban Development (HUD)
NOMINATED: Irving Dennis to be Chief Financial Officer of the Department of Housing and Urban Development.
Federal Reserve
AWAITING FLOOR CONSIDERATION: Kevin Warsh to be Chairman of the Board of Governors of the Federal Reserve System.