Washington Recap: December 2025
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.
CONGRESS
Congress Fails to Enact Housing and CDFI Provisions in Final NDAA
On December 6, the House and Senate Armed Services Committees released final text for the National Defense Authorization Act (NDAA) that reconciled differences between each chamber’s version of this must-pass military funding bill. The Senate-passed NDAA had included bipartisan housing legislation, the ROAD to Housing Act, and a package of CDFI provisions, and NAAHL wrote to Congressional leadership and joined other industry partners in urging both chambers to include these vital provisions in the final bill. Unfortunately, despite the White House backing the inclusion of the ROAD to Housing Act, no housing or community development provisions were included in the final NDAA enacted this month.
Reporting indicated that House Financial Services Committee Chairman French Hill (R-AR) had concerns about including the Senate-crafted housing legislation. In a press release following NDAA’s release, Chairman Hill highlighted his plan for the House Financial Services Committee to advance housing legislation in December to continue the Committee’s housing work into next year (see below).
House Financial Services Committee Holds Housing Supply Hearing
On December 3 the House Financial Services Committee held a hearing titled, “Building Capacity: Reducing Government Roadblocks to Housing Supply” in preparation for a legislative markup later in the month.
The hearing highlighted 41 legislative proposals to address the critical shortage of affordable housing across the country, including many proposals that were also included in the Senate’s ROAD to Housing Act. While their legislative approaches varied, all members shared the view that we need to increase supply and bring down housing costs for renters and homeowners. Legislation discussed at the hearing included:
Community Investment and Prosperity Act: Representative Young Kim (R-CA) spoke about the bipartisan Community Investment and Prosperity Act which she introduced with Representatives Mike Lawler (R-NY) and Joyce Beatty (D-OH). This bill, which was also included in the ROAD to Housing Act, raises the cap on banks’ Public Welfare Investments (PWI) from 15% to 20%. This increase would mean more potential for investment in affordable housing and economic development.
Build America Buy America (BABA): Representative Mike Flood (R-NE), Chairman of the Housing and Insurance Subcommittee, highlighted how new BABA requirements have increased the cost and extended the timeline for housing projects. Representative Flood also put forward two pieces of legislation to exempt certain housing-related construction from BABA requirements.
Housing Affordability Act: Representative Monica De La Cruz (R-TX) spoke about her bill, the Housing Affordability Act, to increase FHA’s multifamily loan limits in order to increase private lending to expand housing supply. This is similar to a provision in the ROAD to Housing Act. NAAHL joined a letter expressing support for this provision.
Neighborhood Homes Investment Act: In written testimony, witnesses for the National Association of Realtors and the National Fair Housing Alliance highlighted the Neighborhood Homes Investment Act as legislation which would increase investment in building or rehabilitating affordable homes to increase homeownership. While the Neighborhood Homes Investment Act is not within the House Financial Services Committee’s jurisdiction, it is an important tool to drive investment in affordable homes for homeownership.
The hearing laid the groundwork for a subsequent introduction and markup of the House’s bipartisan housing legislation (see below).
House Financial Services Committee Holds Markup, Advances Bipartisan Housing Package
On December 11, House Financial Services Committee Chairman French Hill (R-AR) and Ranking Member Maxine Waters (D-CA), along with Subcommittee on Housing and Insurance Chairman Mike Flood (R-NE) and Ranking Member Emmanuel Cleaver (D-MO), released the Housing for the 21st Century Act. The bill includes a number of bipartisan proposals, many of which were discussed at the housing hearing earlier in the month.
The Committee then held a markup of the Housing for the 21st Century Act and other banking and housing legislation on December 16 and 17. During the markup, the Committee adopted updated text for the Housing for the 21st Century Act which added the Community Investment and Prosperity Act to the bill. While the Community Investment and Prosperity Act had been discussed at the Committee’s December 3 hearing and included in the Senate’s ROAD to Housing Act, it was not included in the first draft of the House’s housing package. NAAHL and other partners elevated the importance of this provision for increasing investment in housing supply, and it was ultimately added to the revised bill text. During the markup, Chairman Hill, Ranking Member Waters, and Representatives Warren Davidson (R-OH) and Joyce Beatty (D-OH) emphasized that the Community Investment and Prosperity Act would bring more private capital to support affordable housing investments.
The amended Housing for the 21st Century Act passed the Committee by a vote of 50-1.
While the Housing for the 21st Century Act includes a number of provisions that were also included in the Senate-passed ROAD to Housing Act, each bill includes distinct provisions, as well. NAAHL’s chart comparing provisions of the two bills be found here.
The Committee also voted to advance three additional housing-related bills:
Respect State Housing Laws Act,which eliminates a requirement from the CARES Act to provide tenants in federally-assisted or federally-backed housing at least a 30-day notice to vacate their unit. This bill passed the Committee 29-22.
Whistleblower Protection Act of 2025, which extends whistleblower protections to cover individuals working under HUD contracts, regardless of when the contract began. This bill passed the Committee 51-0.
NFIP Extension Act of 2026, which extends the authorization for the National Flood Insurance Program through September 30, 2026. This bill passed the Committee 53-0.
While the Housing for the 21st Century Act advanced with broad support, during the markup Ranking Member Waters emphasized the bill was a “foundation, not a finish line” and that she expects there to be refinements to the bill as the public reviews it. She particularly noted that she will be closely reviewing a provision that exempts certain projects under the HOME program from Build America Buy America requirements. Chairman Hill also emphasized that the committee’s work on housing will continue throughout 2026 and will include a hearing with Department of Housing and Urban Development (HUD) Secretary Scott Turner.
NAAHL applauded the continued progress of a bipartisan housing package and urges Congress to swiftly enact a package early next year.
Senate Makes Progress Towards Funding the Federal Government
The funding legislation that reopened the government on November 12 contained full Fiscal Year (FY) 2026 appropriations for three of the 12 appropriation bills while extending funding for remaining agencies and programs, including the Department of Housing and Urban Development (HUD) and the CDFI Fund, based on Fiscal Year (FY) 2025 levels through January 30, 2026. If Congress does not pass FY 2026 appropriations bills or otherwise extend funding beyond January 30 for these remaining agencies, those agencies and programs would again shut down at the end of next month.
It was reported earlier this month that the Senate was nearing agreement on a partial package, or “minibus,” of five FY 2026 appropriations bills: Labor-HHS-Education; Defense; Transportation, Housing and Urban Development (THUD); Interior; and Commerce-Justice-Science. The Senate worked late into the night on December 18 but there were still objections to moving the package and it did not advance before Congress left for the holiday break.
The Senate is expected to return from recess on January 5 and the House on January 6. This will give Congress about four weeks to pass the remaining bills, including the THUD appropriations bill, which funds HUD, and the Financial Services and General Government (FSGG) appropriations bill, which funds the CDFI Fund.
ADMINISTRATION
HUD Publishes Updated Notice on Continuum of Care (CoC) Funding
On December 19, HUD published an updated version of a previously-withdrawn Notice of Funding Opportunity (NOFO) for the $3.5 billion in CoC funding. This came after a federal judge granted a preliminary injunction halting implementation of HUD’s previous NOFO. National groups estimated that the now-withdrawn change in the breakdown of CoC funding, which would have significantly reduced the proportion of funds available to support permanently supportive housing, would have put more than 170,000 people at risk of homelessness. While the new NOFO lists an application deadline of February 25, 2026, HUD said it will not implement or enforce this NOFO pending further court order.
Funding Remains Stalled at CDFI Fund
While approximately $410 million is available in Treasury accounts, the Office of Management and Budget (OMB) has not formally released the funds needed to support Capital Magnet Fund (CMF) operations, including staff salaries; issuance of a CMF NOFO; or eventual grant awards. The CDFI Fund also has not disbursed FY 2025 Financial Assistance awards, despite closing the supplemental applications for these funds in October.
Department of Justice (DOJ) Issues Title VI Final Rule
On December 9, the DOJ issued a final rule amending its regulation implementing Title VI of the Civil Rights Act of 1964 to remove disparate impact liability. Local governments and other organizations that receive federal funding are required to comply with Title VI. The DOJ has required recipients of federal funds to consider whether their actions would disproportionately harm a protected group since 1973. The DOJ did not provide a period of public input for the rule change, citing that a notice-and-comment period is not required for rules “relating to agency management or personnel or … grants, benefits, or contracts.”
This rule will impact the ability to allege bias in housing, criminal justice, employment, and other areas of law. This action comes after an April executive order that instructed agencies to eliminate disparate-impact liability to the maximum degree possible. That executive order specifically instructed the Attorney General to repeal or amend regulations implementing Title VI of the Civil Rights Act of 1964 that contemplate disparate impact liability.
BANKING REGULATORS
House Financial Services Committee Holds Hearing with Regulators
On December 2, the House Financial Services Committee held an oversight hearing with Federal Reserve Vice Chair for Supervision Michelle Bowman, Comptroller of the Currency Jonathan Gould, then-Acting Federal Deposit Insurance Corporation Chairman Travis Hill, and National Credit Union Administration Chairman Kyle Hauptman. While the hearing primarily focused on the banking regulators’ approach to capital standards and digital assets, they also addressed their approaches to CDFIs and the Community Reinvestment Act (CRA). During the hearing, Federal Reserve Vice Chair for Supervision Bowman affirmed that the Federal Reserve recognizes the value of CDFIs and the unique role that they play in providing financial services in underserved areas.
On CRA, Comptroller Gould reiterated his interest in pursuing a streamlined strategic plan option for community banks, which the OCC subsequently proposed guidance on (see below), while Chairman Hill addressed questions about whether the 1995 CRA rule that the regulators have proposed to reinstate adequately accounts for the growth in mobile and online banking. Chairman Hill stated that, while modernizing CRA is something worth considering doing, the 1995 rule is a better alternative than the 2023 rule that is currently in place.
OCC Proposes CRA Streamlined Strategic Plan Option for Community Banks
On December 22, the OCC proposed to update existing guidance to create a streamlined strategic plan process for OCC-regulated community banks (those with assets of up to $30 billion in the OCC’s revised organizational structure) to comply with CRA. The proposal would create “elective goals” that banks could use for setting the measurable goals required under the strategic plan process. Banks could still create their own custom goals and, if using elective goals, must still take into account public input. The proposal would also clarify that the OCC will provide a community bank with timely initial feedback on the adequacy of its strategic plan and the merits of its proposed measurable goals through the existing, optional consultation process. Finally, the OCC will create a simplified strategic plan form to help ensure community banks’ plans are complete at submission. The regulator may waive the effective date requirement or data requirements in certain cases.
While this proposal revises guidance and is not a rule, it has been published in the Federal Register with a 60-day comment period. The comment period closes on February 20, 2026.
FEDERAL HOUSING FINANCE AGENCY (FHFA) & THE GSES
FHFA Finalizes 2026-2028 Enterprise Housing Goals Rule
On December 23, FHFA finalized its rule establishing single-family and multifamily housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2026-2028. The Enterprises are required to meet annual goals established by FHFA for purchasing loans that finance homes for very low-, low-, and moderate-income households.
The final rule revises the goals for 2026 and 2027 that were previously established by the agency. The final rule adopts the agency’s proposal to reduce the targets for lending to low-income homebuyers from 25% to 21% and for very low-income homebuyers from 6% to 3.5%. It also finalizes the agency’s proposal to combine goals for purchasing loans to borrowers of any income in low-income census tracts with the goals for purchasing loans to borrowers with incomes at or below 100% of area median income in minority census tracts.
While FHFA had originally proposed to maintain the low-income homeowner refinance loan goal, that goal was also reduced from 26% to 21% in the final rule.
FHFA maintained the multifamily housing goals at the levels finalized for 2025-2027.
FHFA Increases Enterprises’ Multifamily Lending Cap
Under conservatorship, FHFA, as the conservator of the Enterprises, has established annual caps on their multifamily business. For 2026, FHFA will allow each Enterprise to back up to $88 billion in multifamily loans, an increase of more than 20% over the Enterprises’ 2025 limits. Of the $88 billion, at least half must be for mission-driven, affordable housing, as defined by FHFA. This is a significant increase in the amount of support that the Enterprises can provide for multifamily housing.
FHFA Increases Conforming Loan Limit
FHFA also announced an increase of more than 3% in the conforming loan limit – the maximum loan amount for loans that are eligible to be backed by the Enterprises. Congress established a formula to determine allowable increases in the conforming loan limit. The increase reflects continued increases in home prices.
CONFIRMATIONS AND APPOINTMENTS
Department of Agriculture (USDA)
HEARING HELD: Glen Smith to be Under Secretary for Rural Development.
Department of Housing and Urban Development (HUD)
CONFIRMED: Benjamin Hobbs to be Assistant Secretary for Public and Indian Housing.
CONFIRMED: Ronald Kurtz to be Assistant Secretary for Community Planning and Development.
CONFIRMED: Francis Cassidy to be Assistant Secretary for Housing and Federal Housing Commissioner.
CONFIRMED: Joseph Gormley to be President of Ginnie Mae.
Department of the Treasury
CONFIRMED: Derek Theurer to be Assistant Secretary for Legislative Affairs.
Consumer Financial Protection Bureau
NOMINATED: Stuart Levenbach to be Director of the Consumer Financial Protection Bureau.
Federal Deposit Insurance Corporation (FDIC)
CONFIRMED: Travis Hill to be Chair of the Federal Deposit Insurance Corporation.