Washington Recap: August 2025 + Special Fall Lookahead Edition
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 and what we’re watching in the month ahead. 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.
CONGRESS
What happened:
August was a quiet month for Congress with members back home in their states and districts for the month. In the weeks leading up to the August recess, the House and Senate Appropriations Committees each voted to advance their Transportation, Housing and Urban Development, and Related Agencies appropriations bills, and the House Appropriations Financial Services and General Government (FSGG) Subcommittee voted to advance its FY26 appropriations bill, which includes funding for the CDFI Fund, to the full Appropriations Committee. There are significant differences between the House and Senate THUD bills, but both provide substantially more funding for HUD programs than was proposed in the President’s FY26 Budget. Additionally, the House FSGG bill provides more funding for the CDFI Fund and retains CDFI grant programs that were eliminated in the President’s FY26 budget request.
See NAAHL’s full breakdown of the proposed spending here.
Just before departing, the Senate passed three of its 12 FY26 funding bills: Military Construction and Veterans Affairs, Agriculture, and Legislative Branch appropriations. The Senate also [SB1] teed up consideration of the National Defense Authorization Act (NDAA), the bill that authorizes defense spending of the coming year.
What we’re watching:
When Congress returns, it will be on a tight deadline to fund the government before the end of the fiscal year on September 30. With just three of the 12 funding bills passed in the Senate and two passed in the House, both chambers will have significant work to do to come to agreement on new funding levels. Congress could also agree to a short-term continuation of funding at current levels (a continuing resolution, or CR) or a full-year continuation of current funding (full year CR). If none of those are enacted, the government would face a shutdown at the end of the month.
The Senate will also be voting on NDAA and amendments that were filed to that bill. Filed amendments include the bipartisan ROAD to Housing Act, which passed the Senate Banking Committee unanimously last month, as well as a package of CDFI legislation that would make enhancements to the CDFI Bond Guarantee program, support a secondary market for CDFI loans, an expansion of the U.S. Department of Agriculture’s (USDA) Native CDFI relending pilot, and annual testimony requirements related to the CDFI Fund.
On the House side, all eyes are on House Financial Services and if and how they will consider a housing package now that the Senate Banking Committee advanced the bipartisan ROAD to Housing Act. While the Senate could advance the bipartisan housing package as a standalone bill or as an amendment to the NDAA, as outlined above, the House might also want to put their mark on a housing package. House Financial Services Subcommittee on Housing and Insurance Chairman Mike Flood (R-NE) has made updates to housing programs a top priority. In July, Chairman Flood and Ranking Member Emmanuel Cleaver (D-MO) held a bipartisan hearing on draft legislation to update the HOME Investment Partnerships program. But the House’s draft proposal had several differences from a version of the HOME reauthorization included in the Senate’s ROAD to Housing Act. Chairman Flood has also expressed interest in updates to the Community Development Block Grant (CDBG) program, which may or may not align with CDBG changes made in the ROAD to Housing Act, as well as tackling the future of Fannie Mae and Freddie Mac.
While there are no housing-related hearings or markups currently on the House Financial Services Committee’s September schedule, NAAHL will be closely watching for any changes to that schedule or housing-related markups.
ADMINISTRATION
Office of Management and Budget (OMB) & the Treasury CDFI Fund
What happened:
The Office of Management and Budget (OMB), which is the hub for federal funding, is reportedly holding FY25 funds that were appropriated by Congress, keeping agencies from taking applications for or awarding grant funds, including CDFI grant programs. In the past, when the Administration wants to cancel previously approved spending, OMB has submitted a formal request to Congress to pass a law rescinding appropriated funds in order to comply with the Impoundment Control Act, which prohibits the executive branch from withholding funds Congress provided.
In July, Senate CDFI Caucus members, led by Senators Crapo (R-ID) and Warner (D-VA), sent a letter to OMB urging the agency to swiftly deploy appropriated funds for CDFIs. But August reporting from OMB showed that it still had not advanced CDFI funds.
OMB Director Russ Vought has asserted that OMB has the authority to prevent spending using a “pocket rescission”: because Congress has up to 45 days to vote on an administration’s request to rescind funds and OMB may pause funds while it waits for Congress to vote on the rescission, when a rescission request is made in the final 45 days of the fiscal year, the funds can be held until they expire without Congress voting to formally rescind them. CDFI funds are on a two-year cycle and so would not expire on September 30 but have still been delayed. OMB has indicated that more rescissions requests are coming.
What we’re watching:
In September, NAAHL will be monitoring delays in CDFI funding, progress on CDFI grant and Capital Magnet Fund awards, any unusual trends with the recertification process for CDFIs, and potential OMB rescission packages that could freeze funds through the end of the fiscal year.
Department of the Treasury
What happened:
Deputy Treasury Secretary Michael Faulkender resigned this month after the President indicated he was not aligned with the Administration’s second-term vision. Faulkender oversaw the Department’s day-to-day operations and played a key role in developing tax provisions included in the One Big Beautiful Bill Act. In addition, the President removed Billy Long as Commissioner of the Internal Revenue Service (IRS) and appointed Treasury Secretary Scott Bessent to serve as interim IRS Commissioner.
What we’re watching:
NAAHL will be watching how leadership changes at Treasury and the IRS affect the Administration’s tax agenda, including implementation of the One Big Beautiful Bill Act provisions.
NAAHL will also be engaging with Treasury and other Administration officials as they consider the future of the GSEs, covered more below.
Department of Housing and Urban Development (HUD)
What happened:
Executive Order Targets Housing Safety in DC: The White House issued an executive order on August 25 directing HUD to review the DC Housing Authority and local landlords for compliance with federal crime-prevention and safety requirements. The order emphasizes ensuring safe, sanitary living conditions and holding landlords accountable if tenants engage in criminal activity that threatens neighbors’ health or safety. Additionally, the HUD Secretary is tasked with referring cases of non-compliance to federal and local law enforcement.
HUD Announces English-Only Policy: Following an executive order making English the official language of the U.S., HUD announced that it would only use English for Department business and services. HUD had previously provided select documents in multiple languages.
HUD General Counsel Confirmed: HUD General Counsel David Woll was confirmed by the Senate just before Congress left for the August recess. Woll was previously serving in the Department in a different role.
What we’re watching:
The Senate Banking Committee could take up the nomination of Frank Cassidy to serve as the Federal Housing Administration (FHA) Commissioner in September. Additionally, some HUD grant programs remain delayed, and critical programs, including rental assistance and the HOME Investment Partnerships program, have seen proposed cuts both in the President’s budget request and appropriations bills. NAAHL will be closely monitoring disbursement of already appropriated funds, as well as FY26 funding levels in any spending bills.
Federal Housing Finance Agency (FHFA) and the GSEs
What happened:
FHFA Expands GSE Investments in Affordable Housing: On August 5, FHFA announced that it would increase the amount of Low-Income Housing Tax Credit (LIHTC) equity investments it allows each Enterprise to make annually from $1 billion to $2 billion, for a total of up to $4 billion. Of that amount, half ($1 billion per Enterprise) must be in difficult to serve LIHTC markets, and 20% of that amount must be in Duty to Serve rural areas. NAAHL applauded the announcement, which could help support affordable housing development and preservation across the country.
Possible GSE Stock Issuance: Reports indicate that the Administration has met with several large banks about the possibility of issuing new shares of Fannie Mae and Freddie Mac. Some have also called for the Administration to combine the two companies into one entity, and FHFA Director Pulte shared a video framing Fannie Mae and Freddie Mac as the Great American Mortgage Corporation, raising questions about whether the Administration will seek to merge them.
What we’re watching:
Several questions remain about the Administration’s plan for the future of Fannie Mae and Freddie Mac, including whether the companies would remain in conservatorship under their regulator, FHFA, and whether they might be combined into a single entity. NAAHL will be closely watching signals from FHFA, Treasury, and the White House about what plans they might have for the two companies. As the new convener of the Underserved Mortgage Markets Coalition (UMMC), NAAHL will be engaging with Treasury and others in the Administration on the essential role that Fannie Mae and Freddie Mac (the GSEs) play in supporting broad, nationwide access to affordable mortgage credit. NAAHL and UMMC will also be focused on ways that the GSEs can better support rural areas, manufactured housing, and other underserved parts of the housing market and boost housing supply.
Changes to Financial Oversight and Regulation
Community Reinvestment Act (CRA)
What happened:
The comment period for the banking regulators’ joint proposal to rescind the 2023 Community Reinvestment Act (CRA) final rule and to reinstate the CRA rule that was in place immediately prior to the 2023 rule (often referred to as the 1995 rule) closed on August 18. NAAHL submitted a comment applauding the regulators’ joint proposal and urging them to quickly reinstate the 1995 rule to provide the certainty to banks and their partners that will facilitate CRA lending and investments. NAAHL also joined a letter signed by multifamily industry groups emphasizing the importance of CRA for affordable housing investment and urging the regulators to reinstate the 1995 rule.
What we’re watching:
Regulators are now reviewing the comments in preparation for publishing a final rule. Regulators also published a request for comments on regulatory improvements to CRA, as they’re required to do every 10 years under the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). NAAHL will be submitting comments; the comment period ends on October 23.
Federal Reserve Personnel
What happened:
On August 1, Federal Reserve Governor Adrianna Kugler submitted her resignation from the Board effective August 8. Her term was set to expire on January 31, 2026. Her resignation leaves a vacancy for the remainder of her term, and President Trump announced that he would nominate current Chair of the Council of Economic Advisors Stephen Miran.
On August 25, President Trump announced the immediate removal of Federal Reserve Governor Lisa Cook, citing allegations that she falsified mortgage records. FHFA Director Bill Pulte alleged that Governor Cook had committed mortgage fraud by claiming multiple homes as her primary residence. Director Pulte referred the allegation to the Department of Justice, which urged Federal Reserve Chair Jerome Powell to fire Governor Cook. Governor Cook said that she would not step down from the Board of Governors and that no cause exists under the law for the President to fire her.
President Trump also continued to express concerns that the Federal Reserve, particularly Chair Jerome Powell, had not lowered interest rates.
What we’re watching:
Several changes could reshape the Federal Reserve Board in the coming months. Although Stephen Miran’s nomination for the Board of Governors has not yet been formally transmitted to the Senate, reports suggest the Administration and Senate may move quickly on his confirmation. Meanwhile, President Trump’s effort to remove Governor Lisa Cook is expected to trigger a court battle over whether a President can dismiss a Fed Governor for cause. Looking ahead, with Chair Jerome Powell’s term ending in May 2026, the President is reportedly weighing potential successors, including Vice Chair for Supervision Michelle Bowman, Governor Christopher Waller, Vice Chair Philip Jefferson, and National Economic Council Director Kevin Hassett.
CONFIRMATIONS AND APPOINTMENTS
Department of Agriculture
NOMINATED: Glen Smith to be Under Secretary for Rural Development.
Department of Housing and Urban Development (HUD)
CONFIRMED: David Woll to be General Counsel.
AWAITING FLOOR CONSIDERATION: Craig Trainor to be Assistant Secretary for Fair Housing and Equal Opportunity.
AWAITING FLOOR CONSIDERATION: Benjamin DeMarzo to be Assistant Secretary for Congressional and Intergovernmental Relations.
NOMINATED: Benjamin Hobbs to be Assistant Secretary for Public and Indian Housing.
NOMINATED: Jeremy Ellis to be Inspector General.
NOMINATED: Ronald Kurtz to be Assistance Secretary for Community Planning and Development.
NOMINATED: Francis Cassidy to be Assistant Secretary for Housing and Federal Housing Commissioner.
NOMINATED: Joseph Gormley, to be President of Ginnie Mae.
Department of the Treasury
HEARINGS HELD: Brian Morrissey, Jr. to be General Counsel for the Department of the Treasury.
AWAITING FLOOR VOTE: Jonathan McKernan to be Under Secretary for Domestic Finance.
HEARINGS HELD: Derek Theurer to be Assistant Secretary for Legislative Affairs.
NOMINATED: Jason De Sena Trennert to be Assistant Secretary for Financial Markets.
Federal Reserve Board of Governors
· APPOINTMENT ANNOUNCED: Stephen Miran for Governor.