Washington Recap: March 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.
CONGRESS
Senate Passes Updated Bipartisan Housing Package
On March 12, the Senate passed the bipartisan 21st Century ROAD to Housing Act by a vote of 89 to 10. The Senate vote followed months of work in which the House and Senate each developed and passed their own housing packages that aim to increase housing supply and lower costs for families. The Senate’s original housing legislation, the ROAD to Housing Act, passed the Senate as an amendment to the National Defense Authorization Act (NDAA) last fall but was not enacted through that process. In February, the House passed its own housing legislation, the Housing for the 21st Century Act, sending this legislation to the Senate.
On March 2, Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) released an updated housing package, the 21st Century ROAD to Housing Act, that sought to combine provisions of the House-passed bill with the Senate’s ROAD to Housing Act. The revised Senate text includes key provisions to reduce regulatory burdens, modernize existing programs, and expand housing supply.
This includes provisions to:
Increase banks’ public welfare investment (PWI) cap, opening up the opportunity for more private investment in affordable housing;
Update and reauthorize the HOME Investment Partnerships program;
Modernize rural housing programs and provide a path to preserve hundreds of thousands of affordable rural units;
Cut red tape and streamline environmental reviews for homes constructed with funds from the Department of Housing and Urban Development (HUD); and
Authorize the primary long-term disaster recovery program, the Community Development Block Grant-Disaster Recovery (CDBG-DR) program.
The Senate’s 21st Century ROAD to Housing Act also includes two provisions that were not in the prior House or Senate bills and that have gotten significant attention: 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 bill defines large institutional investors as those who own over 350 such homes and would prohibit these investors from purchasing additional single-family homes, with certain exceptions. In some cases when an investor is allowed to purchase homes beyond the 350-home limit, including new “build for rent” homes, the investor would be required to offer those homes for sale to a homebuyer after seven years.
Limiting institutional investor ownership of single-family homes is a priority for President Trump. In January, President Trump issued an executive order directing agencies to restrict sales of homes that could otherwise go to homebuyers to large institutional investors, and directing review of some purchases for anti-competitive practices. President Trump subsequently called on Congress to turn his executive order into law, and the White House issued a Statement of Administration Policy in support of the 21st Century ROAD to Housing Act that highlighted the institutional investor limits included in the bill.
In advance of Senate consideration of the bill, NAAHL wrote to Senate leadership expressing support for the 21st Century ROAD to Housing Act. Last month, as the House was considering the Housing for the 21st Century Act, NAAHL also wrote to House leadership urging them to advance that legislation. Both letters call for bipartisan housing legislation to be quickly signed into law.
While the House and Senate have each passed bipartisan housing legislation, they have not passed the same bills. The two chambers must pass the same text for housing legislation to be sent to the President and become law. For a comparison of the provisions included in the House- and Senate-passed housing bills, see NAAHL’s comparison chart.
House Pushes Back on Senate Passed Housing Package
Following the release of the 21st Century ROAD to Housing Act, key voices in the House, including members of the Freedom Caucus, expressed concerns about the Senate’s package, and House Financial Services Committee Chairman French Hill (R-AR) suggested that, without changes, the Senate bill may need to be conferenced with the House-passed legislation. After the Senate passed its housing bill with minimal changes, House Speaker Mike Johnson (R-LA) also reportedly said that a formal conference might be needed for the legislation, acknowledging the concerns of some Republicans about the Senate’s bill.
Leading Democrats in the House have also said the chambers need to resolve differences between the House- and Senate-passed bills. On March 22, House Financial Services Committee Ranking Member Maxine Waters (D-CA) outlined changes she wants to see to the Senate-passed package, including adding back House-passed housing and community banking provisions that were not included in the Senate bill and removing other provisions, and called for a formal conference.
President Trump has not yet weighed in on the chambers’ efforts to find a compromise on the housing package.
Republicans Revive Effort for Second Reconciliation Bill
Following the House Republicans’ policy retreat early this month, reports that Republicans may be considering a second reconciliation package began to emerge. This Congress, Republicans previously passed the One Big Beautiful Bill Act through reconciliation, which made key tax law changes, including expansion of and improvements to the Low-Income Housing Tax Credit.
House Budget Committee Chair Jodey Arrington (R-TX), who would lead the start of the reconciliation process, initially argued that any effort should focus on safety-net programs and fraud prevention. But more recent reports indicate that House and Senate Republicans may be considering reconciliation as a way to fund parts of the Department of Homeland Security amid a weeks-long stalemate over funding for the agency, as well as provide supplemental defense funding for Iran and enact voting law changes. On March 23, Senate Majority Leader John Thune (R-SD) echoed suggestions the process could be used for immigration enforcement funding and election-related provisions.
ADMINISTRATION
President Trump Issues Two Executive Orders on Housing Affordability
On February 13, President Trump issued two executive orders related to housing affordability – one related to housing construction, and one related to mortgage finance.
Removing Regulatory Barriers to Affordable Home Construction
This executive order directs a number of different federal agencies to take actions to reduce barriers to residential construction and to better align existing financing tools to support the production of new homes. The order directs:
Federal agencies to revise existing requirements for certain federal programs related to land use, remove burdensome energy and water efficiency requirements, and update both National Environmental Protection Act (NEPA) requirements and historic preservation requirements in order to reduce barriers to housing development;
HUD and the Domestic Policy Council to produce a set of best practices for states and localities to promote housing affordability, and further directs HUD, the Department of Transportation, the Department of Agriculture, and the Department of Energy to consider updating regulations and funding opportunities to align with these practices; and
HUD and the Department of Treasury to facilitate greater coordination between Opportunity Zones and housing construction, and between Opportunity Zones and New Markets Tax Credits used to create housing for homeownership.
A fact sheet on the executive order is available here.
Promoting Access to Mortgage Credit
This executive order seeks to expand access to mortgage credit for homebuyers, with a particular focus on expanding access to credit through banks. It includes several proposals that align with the revised capital standards proposal that the banking regulators released this month (see “Banking Regulators Propose Revised Basel III Capital Standards” below), as well as proposals to update lending and servicing requirements across the single-family mortgage market. It directs banking, housing, and consumer protection regulators to:
Consider updating mortgage lending requirements, including the Ability to Repay rule, mortgage points and fees limits, and the TILA-RESPA Integrated Disclosure (TRID) rule, and to consider raising the threshold for reporting under the Home Mortgage Disclosure Act;
Tailor capital requirements for mortgage-related assets;
Support construction lending by community banks;
Revise appraisal requirements;
Take steps to facilitate greater adoption of digital mortgages;
Clarify mortgage servicing expectations; and
Revise regulatory enforcement.
A fact sheet on the executive order is available here.
Both executive orders include a number of distinct actions, including many instructions that require coordination across multiple federal agencies. Several also involve changes through rulemaking. As a result, these changes could take months or longer to be announced. NAAHL will closely monitor agencies’ implementation of these executive orders.
NAAHL, Partners Call for Release of $1 Billion from CDFI Fund to Support Affordable Housing
On March 19, NAAHL sent a letter to National Economic Council Director Kevin Hassett calling for the release of more than $1 billion in funding at the CDFI Fund. These funds would support the construction or rehabilitation of an estimated 100,000 affordable homes. The letter is signed by NAAHL and other partner organizations collectively representing the full range of CDFIs and the Capital Magnet Fund Coalition. The letter builds on a recent NAAHL and Center for Affordable Housing Lending brief that demonstrates how CDFIs crowd-in substantial private investment to boost housing supply and support small businesses. To date, the CDFI Fund has not awarded grant funds provided by Congress in Fiscal Year 2025 or 2026, funds transferred to the Capital Magnet Fund to award competitive grants, or funds available through the Emergency Capital Investment Program.
See press coverage on the letter here.
GSEs
FHFA Announces Updates to Property Insurance and Condominium Requirements
On March 18, Federal Housing Finance Agency (FHFA) Director Bill Pulte announced that the agency and two of the entities it regulates, Fannie Mae and Freddie Mac, were revising insurance and condominium requirements to reduce costs for homeowners. Fannie Mae and Freddie Mac revised their property insurance requirements to permit homeowners and condominiums to purchase less extensive roof coverage, allowing property owners to save money on monthly insurance premiums. FHFA also announced several changes to Fannie Mae and Freddie Mac’s condominium requirements that would allow more condominiums to qualify for Enterprise-backed lower-cost financing.
Later in the month, FHFA Director Pulte stated that additional changes to reduce costs for homebuyers would be announced soon.
BANKING REGULATORS
Banking Regulators Propose Revised Basel III Capital Standards
On March 19, the Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) released a proposed bank capital framework. This proposal replaces a proposal put forward by the regulators in 2023 and would implement an international bank capital agreement known as Basel III in the U.S. banking system.
The proposal includes several changes to the risk-based capital treatment of mortgage-related assets that Federal Reserve Vice Chair for Supervision Michelle Bowman has said are intended to support access to mortgage credit through the banking system, particularly through community banks. The proposal:
Revises the risk-based capital treatment of single-family mortgage loans that banks hold. While these loans all currently receive the same 50% risk weight, the revised framework would vary the risk weight for most single-family loans by the loan-to-value (LTV) ratio of the loan, requiring more capital for loans where borrowers have less equity and less capital for loans where borrowers have more.
Updates the treatment of mortgage servicing assets by applying the same risk weight for all mortgage servicing assets. The current framework deducts from a bank’s capital once their volume of mortgage servicing assets passes a certain threshold, disincentivizing holding large volumes of these assets.
The Basel III proposal is multifaceted and touches on all elements of banks’ balance sheets. NAAHL will continue to analyze the impacts of this proposal and its effects on housing and community development.
Warsh Nomination Received in the Senate
On March 4, President Trump formally nominated Kevin Warsh to serve as the next Chairman of the Board of Governors of the Federal Reserve System. Warsh must now have a nomination hearing before the Senate Banking Committee and have his nomination voted on by the Committee before he can be confirmed by the full Senate.
Jerome Powell’s term as Federal Reserve Chair expires on May 15, but the timing of Warsh’s confirmation process remains uncertain. Senate Banking Committee member Thom Tillis (R-NC) has objected to the Department of Justice’s (DOJ) investigation into Chair Powell and has said he will not vote for a Federal Reserve nominee until the investigation is over. Because Republicans hold a slim majority on the Senate Banking Committee, they cannot advance Mr. Warsh’s nomination with Republican votes alone unless he has Senator Tillis’s support.
Chair Powell has said that he will remain as Chair until a successor is confirmed by the Senate. He has also stated that he will remain as a member of the Board of Governors until the DOJ investigation concludes. While Powell’s term as Chair expires this year, his term on the Board does not expire until 2028. It has been customary for an outgoing Chair to also resign their Board seat once a successor has been confirmed, but they are not required to do so.
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
NOMINATED: Kevin Warsh to be Chairman of the Board of Governors of the Federal Reserve System.