Washington Recap: October 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.
FEDERAL GOVERNMENT SHUTDOWN
The federal government has been shut down for 31 days and there is still no clear path to Congress enacting either short-term or long-term funding legislation. While the House has been out of session for the month of October after passing a bill to fund the government through November 21 in September, the Senate has been in session and has had 13 failed votes on funding bills. Senate Republicans have supported the House-passed bill, while Democratic leadership has maintained their opposition and continue to offer an alternative bill that would permanently extend Affordable Care Act subsidies, reverse Medicaid cuts from the One Big Beautiful Bill Act, and limit the Administration’s ability to withhold or rescind congressionally appropriated funds. In light of the length of the shutdown, recent reports have indicated that some House and Senate Republican leaders are looking at options for a continuing resolution (CR) that could carry funding into 2026.
As the shutdown continues, there are new consequences for federal employees and programs. Last week federal employees missed their first full paycheck, and approximately 42 million people may not receive Supplemental Nutrition Assistance Program (SNAP) benefits for the month of November due to the lapse in funding.
Federal agencies that rely on annual appropriations, including HUD, USDA, and the CDFI Fund, continue to operate based on their contingency plans and are staffed only with employees that have been deemed essential in these plans. All staff deemed non-essential remain furloughed. Since the CDFI Fund was not deemed essential in Treasury’s contingency plan, certification reviews, approvals, and new funding actions remain suspended until appropriations resume.
Shutdown Impacts on Housing and Community Development. While certain essential functions are continuing at HUD and USDA, the longer the shutdown lasts the greater the harm is to affordable housing and community development efforts across the country. Communities rely on federal funds to build and preserve affordable housing. Last week, NAAHL and the Center for Affordable Housing Lending released the “Essential Funding for Essential Housing” policy brief that explains the critical role that federal funds play in building and maintaining affordable housing, and highlights how disruptions to that funding, including during federal shutdowns, can imperil existing developments and pending deals.
This brief builds on NAAHL and the Center’s “Real Cost of Cuts” report, issued earlier this year, that provides an overview of the role the federal government plays in meeting the housing needs of American families and details how staff and funding cuts would imperil both new and existing affordable housing developments, with far-reaching consequences for families, financial markets, and the economy.
CONGRESS
National Defense Authorization Act
On October 9 the Senate passed the annual military authorization bill, the National Defense Authorization Act (NDAA). The Senate included the ROAD to Housing Act, sweeping bipartisan housing legislation that passed the Senate Banking Committee unanimously in July, and a compilation of bipartisan CDFI legislation as amendments to the NDAA bill.
NAAHL applauded the inclusion of these two bipartisan housing and community development amendments, which include provisions to expand and preserve housing supply, reduce barriers to housing development, and support additional investment in housing and other community needs. Among those provisions is the Community Investment and Prosperity Act, which would allow banks to increase their public welfare investments, including equity investments in Low-Income Housing Tax Credits (LIHTC) and New Markets Tax Credits. The Affordable Housing Tax Credit Coalition, Affordable Housing Investors Council, and NAAHL conducted a survey of banks to assess the potential impact of lifting banks’ PWI cap. Banks are key drivers of equity investment in affordable housing; in 2024, banks supplied about 80% of the $28.9 billion in Housing Credit equity, or roughly $23.1 billion. Twenty-two banks responded to the survey, representing $14 billion of LIHTC investment in 2024 – nearly two thirds of all bank LIHTC investments that year. Over 42% of the LIHTC investment reported came from banks nearing their public welfare investment cap. Lifting this cap could open up opportunities for additional investment in affordable housing. This week, NAAHL joined ACTION Campaign Steering Committee members in sending a letter to House Financial Services Committee leadership urging them to include an increase in the PWI cap in any housing legislation the Committee considers.
The House passed their own version of NDAA earlier in September, which did not include these housing and community development provisions. The House and Senate are now using their individual NDAA bills to negotiate a single agreed-upon bill to be voted on in each chamber. NAAHL has called on the House and Senate to include bipartisan housing and community development provisions in the final NDAA.
Congressional Committee Hearings on Housing
On October 21, the Senate Banking Committee’s Subcommittee on Housing, Transportation, and Community Development held a hearing titled “Innovation in U.S. Housing: Solutions and Policies for America’s Future.” Members discussed the need to make housing more affordable and highlighted ways that the ROAD to Housing Act could help address housing costs. They also highlighted how building more resilient housing can help bring down insurance costs, as well as the benefits of using new building technologies, including modular construction.
In the House, the Financial Services Committee postponed a housing hearing as well as a Committee markup due to the House being out of session.
ADMINISTRATION
Tariffs
On October 14, new tariffs on imported timber, lumber, kitchen cabinets, bathroom vanities, and upholstered furniture took effect. These tariffs are part of the Administration’s economic plan to drive manufacturing back to the U.S., but groups like the National Association of Home Builders warn that they could lead to an increase in housing production costs that would cut against another Administration goal to lower housing costs. The rates for many of the products impacted by the mid-October tariffs are set to rise again on January 1.
CDFI Fund
All CDFI Fund staff were furloughed and certifications and other activities were paused as a result of the government shut down. On October 10, the Office of Management and Budget took steps to more permanently shrink the federal workforce through a multiagency reduction in force (RIF). As part of this action, termination notices were sent to the entire staff at the CDFI Fund.
After the reduction in force announcement, NAAHL wrote to Treasury Secretary Bessent and OMB Director Vought, and joined with other banking trade associations in a separate letter, to reaffirm the essential role that the CDFI Fund plays as a vehicle for community investment.
NAAHL also applauded a bicameral letter of support for the CDFI Fund led by Senate CDFI Caucus Co-Chair Mike Crapo (R-ID) and Congresswoman Young Kim (R-CA) that over 100 Republican Members of Congress joined. 122 House Democrats also sent a letter to Secretary Bessent and OMB Director Vought to express concern over the recent actions to the CDFI Fund and its staff.
On October 28, a federal judge in San Francisco granted a preliminary injunction in the case of federal employees that received RIFs during the government shutdown. This indefinitely halts the government’s ability to issue new RIFs, as well as the ability to enforce the RIFs issued during the shutdown for employees covered by the ongoing litigation.
NAAHL will continue to monitor the CDFI Fund and encourage the full reinstatement of vital CDFI Fund employees.
Department of Housing and Urban Development (HUD)
Reductions in Force
An additional 442 HUD employees received termination notices as part of the October 10 RIF action. This represents a 5-10% cut in overall HUD staff (on top of cuts and departures that occurred earlier this year). Nearly every major HUD program office was impacted, with the largest cuts (by number of staff) occurring in the Offices of Public and Indian Housing and Fair Housing and Equal Opportunity. The Office of Housing Counseling and the Office of Community Planning and Development, which oversees HOME, CDBG, and homelessness funding, were also impacted. See below for a brief overview of how these RIFs would impact essential HUD programs:
Office of Public & Indian Housing (PIH) – 116 staff members from PIH received RIF notices on October 10, the majority of which were in the Real Estate Assessment Center (REAC). This would be an approximately 10% staff reduction within PIH, which reported 1,042 staff in HUD’s September government funding lapse plan.
Impact – PIH oversees the public housing program, Section 8 vouchers, and Native American housing programs. Eliminating staff could result in delays in inspections and and in addressing maintenance issues.
Office of Community Planning and Development (CPD) – 34 CPD staff received RIF notices. This would be an approximately 5% reduction in CPD staff based on staff numbers reported in September 2025.
Impact – The RIFs will eliminate positions that oversee CPD’s core grant programs, which include HOME, CDBG, and homelessness assistance funds, as well as positions that help states and localities meet federal requirements to utilize those funds.
Office of Housing/Federal Housing Administration – 122 employees, including 53 employees in the Office of Housing Counseling within FHA received RIF notices.
Impact – This would limit HUD’s ability to administer its housing counseling program, including certifying and providing grant funds to housing counseling agencies across the country. Consumers access services from HUD-approved housing counseling agencies to become homeowners, to avoid foreclosure, and to be eligible for reverse mortgages.
Office of Fair Housing & Equal Opportunity (FHEO) – 170 FHEO staff received RIF notices, a 54% reduction in FHEO, which reported 315 staff in September. Many of the staff are located in field offices throughout the country.
Impact – FHEO had already seen significant staff reductions since the beginning of the year. News reports indicate that FHEO will have lost nearly 70% of its staff this year, potentially impacting HUD’s ability to conduct fair housing complaint intake, Rental Assistance Demonstration (RAD) program compliance, and grant program administration and compliance.
Continuum of Care Funding
After the shutdown ends, HUD will issue a notice of funding opportunity for the $3.5 billion in Continuum of Care (CoC) funding. The majority of this funding enables CoCs to renew assistance in permanent supportive housing. Reports indicate that HUD is planning to cap the amount of funding that can go towards permanent supportive housing at 30% and increase funding for transitional housing. National groups estimate that this change in the breakdown of CoC funding would put more than 170,000 people at risk of homelessness. This policy change could also cause serious problems for permanent supportive housing developments because CoC dollars are often used by developers, owners, and operators of supportive housing to underwrite the operating costs for deeply affordable housing. More than 20 House Republicans sent a letter to HUD Secretary Turner urging HUD to extend for an additional year all existing grants expiring in 2026 under this program.
HOME Investment Partnerships Rule Delays
On October 22, HUD further delayed the effective date of certain regulatory changes to the HOME Investment Partnerships program. These regulations, finalized at the end of the Biden Administration, include further tenant protections for those living in units supported by HOME and increased subsidies for buildings meeting green standards. The effective date is now April 30, 2026.
FINANCIAL OVERSIGHT AND REGULATION
While appropriated agencies have reduced operations and limited staff, banking regulators, which are funded outside of the appropriations process, have largely continued to operate normally.
Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA)
In October, pursuant to the Economic Growth and Regulatory Paperwork Reduction Act, the regulators hosted a joint outreach session to receive input on existing regulations, including the Community Reinvestment Act (CRA). In comments provided during the session, NAAHL reiterated support for the regulators’ joint proposal to reinstate the 1995 CRA rule, which will provide certainty for banks and their partners to engage in the long-term housing and community development lending and partnerships that are the hallmarks of CRA.
NAAHL also suggested additional subregulatory guidance and tools that could help operationalize existing CRA regulations and support financing for naturally occurring affordable housing, affordable housing in high-cost areas, and innovative affordable housing and community development projects. This included a proposal to update the Federal Reserve’s public welfare investment regulation to align with other banking regulators and support additional investment serving low- and moderate-income communities.
NAAHL also submitted a written comment letter in response to the regulators’ request for feedback on CRA regulations.
Federal Reserve Personnel
In August, President Trump wrote to Federal Reserve Governor Lisa Cook to remove her from the Federal Reserve Board. Governor Cook sued, stating that the President could not remove her. On October 1, following litigation at lower courts, the Supreme Court allowed Governor Cook to remain on the Board until it hears the case on her dismissal in January 2026.
This month, Treasury Secretary Scott Bessent also announced a list of five candidates under consideration to serve as Chair of the Federal Reserve when current Chair Jerome Powell’s term expires next year. The list includes:
Federal Reserve Governor Christopher Waller
Federal Reserve Governor Michelle Bowman
National Economic Council Director Kevin Hassett
Former Federal Reserve Governor Kevin Warsh
BlackRock Executive Rick Rieder
NAAHL will continue to monitor updates on future Federal Reserve nominees.
Office of the Comptroller of the Currency (OCC) Updates to Supervision
This month, the OCC announced a series of regulatory and subregulatory actions to reduce regulatory burden for community banks. Following these actions, Comptroller Jonathan Gould discussed the OCC’s efforts, including easing CRA reviews for community banks and potentially creating a streamlined strategic plan option for them.
NAAHL will continue to monitor CRA proposals at the OCC and other banking regulators.
FEDERAL HOUSING FINANCE AGENCY (FHFA) & THE GSES
Regulatory Updates
This month, President Trump and FHFA Director Bill Pulte issued a series of social media posts on the need for homebuilders to increase building activity. In one of the posts, President Trump called on Fannie Mae and Freddie Mac to get homebuilders building. Following those posts, news reports indicate that homebuilders have called for Fannie Mae and Freddie Mac to play a larger role in construction lending, which is beyond the scope of the role the two companies currently play in the market.
Director Pulte also continued to emphasize that the Administration was considering an offering of shares in Fannie Mae and Freddie Mac. In interviews, Director Pulte stated that an offering could be as early as the end of 2025.
Rulemaking and Request for Input
This month FHFA proposed new Enterprise Housing Goals for 2026-2028. The proposal comes early in the usual three-year cycle for housing goals rules: FHFA had finalized housing goals for 2025-2027 in December.
The proposal would reduce the Enterprises’ single-family home purchase goals for mortgages to low-income and very low-income borrowers compared to the levels set in December. It would also combine two housing purchase subgoals – mortgages in low-income census tracts and in minority census tracts, along with mortgages in disaster areas – into a single low-income areas purchase subgoal. But it would maintain the low-income refinance goal and multifamily housing goals and subgoal at the same levels established last year.
Comments on the proposal are due by November 3.
FHFA also issued its proposed Strategic Plan for 2026-2030. FHFA issues strategic plans for the agency’s supervision and regulation of Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System. FHFA has requested input on the revised plan by November 5.
Fannie Mae Leadership Changes
This month, Fannie Mae announced the departure of its President & CEO, Priscilla Almodovar. Fannie Mae’s Chief Operating Officer, Peter Akwaboah, will serve as the Acting CEO, while the role of President will be filled by Co-Presidents John Roscoe and Brandon Hamara. Roscoe previously served as Fannie Mae’s Executive Vice President of Operations and Public Relations and had also served as Chief of Staff at FHFA. Hamara joined Fannie Mae as a member of the board and staff member in October 2025.
Fannie Mae also announced the departures of its General Counsel, Danielle McCoy, and head of Single-Family, Malloy Evans. Tom Klein, Fannie Mae’s Enterprise Deputy General Counsel, will serve as Acting General Counsel, and Jake Williamson, Fannie Mae’s Senior Vice President for Single-Family Collateral Risk, will serve as Acting Head of Single-Family.
CONFIRMATIONS AND APPOINTMENTS
Department of Agriculture (USDA)
NOMINATED: Glen Smith to be Under Secretary for Rural Development.
Department of Housing and Urban Development (HUD)
CONFIRMED: Craig Trainor to be Assistant Secretary for Fair Housing and Equal Opportunity.
AWAITING FLOOR CONSIDERATION: Benjamin Hobbs to be Assistant Secretary for Public and Indian Housing.
AWAITING FLOOR CONSIDERATION: Ronald Kurtz to be Assistant Secretary for Community Planning and Development.
HEARINGS HELD: Francis Cassidy to be Assistant Secretary for Housing and Federal Housing Commissioner.
HEARINGS HELD: Joseph Gormley, to be President of Ginnie Mae.
WITHDRAWN: Jeremy Ellis to be Inspector General.
Department of the Treasury
CONFIRMED: Jonathan McKernan to be Under Secretary for Domestic Finance.
CONFIRMED: Brian Morrissey, Jr. to be General Counsel.
AWAITING FLOOR CONSIDERATION: Derek Theurer to be Assistant Secretary for Legislative Affairs.
Federal Deposit Insurance Corporation (FDIC)
HEARINGS HELD: Travis Hill, to be Chair of the Federal Deposit Insurance Corporation