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.
Center for Affordable Housing Lending Policy Brief Lays Out Path to Bringing Back Starter Homes
On October 15, the Center for Affordable Housing Lending (the Center), in partnership with the National Association of Affordable Housing Lenders (NAAHL), released The Next Playbook: Bringing Back the Starter Home, a research brief from Senior Fellow Julia Gordon and NAAHL’s Aaron Shroyer that documents the forces driving the starter home shortage.
This brief offers a five-part framework for federal action: BUILD more starter homes, REPAIR existing homes, EXPAND allowable home types, FREE UP supply, and FIRST DIBS for homeowners. It identifies two immediate federal actions to meaningfully expand the starter home supply: (1) funding and implementing the 21st Century ROAD to Housing Act and (2) enacting the Neighborhood Homes Investment Act. To build on the brief recommendations, NAAHL also released a fact sheet highlighting implementation priorities in the 21st Century ROAD to Housing Act, hosted a webinar, and published a Q&A with Julia Gordon exploring the challenges and opportunities for expanding starter homes.
The brief is the first in The Next Playbook series, part of the Center’s Housing Supply Research & Fellowship Program, made possible with support from the Citi Foundation.
Read the brief here.
CRA
NAAHL and FairPlay Release Map Showing CRA Coverage in Your Neighborhood
The Community Reinvestment Act (CRA) is a powerful tool, but the impact of CRA depends on which banks are incentivized to provide capital to communities—and where. Every bank and every community is unique.
NAAHL partnered with FairPlay to create an interactive map that allows users to see how many banks in their state, city, county, or congressional district are incentivized to provide financing for affordable housing and community development, and how that could change if the regulation were updated. The map offers an important tool for lenders, communities, and policymakers trying to better understand what changes could mean in their market.
The interactive map is available here.
Nearly 650 Comments Submitted on FDIC and OCC CRA Proposed Rule
The comment period for the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency’s (OCC) proposed rule updating the agencies’ CRA regulations closed on October 13. The agencies received nearly 650 comments from a wide variety of stakeholders, including banks, banking trades, community development financial institutions (CDFIs), housing organizations, advocacy groups, members of Congress, and state and local officials.
NAAHL submitted detailed comments that underscore the critical role that CRA plays in expanding access to homeownership, supporting small businesses, and growing our affordable housing supply. The letter emphasized several elements of the proposed rule that NAAHL supports to make the CRA framework clearer, support innovation, and encourage banks to use the best financing tools for the community's needs, while also encouraging the agencies to make updates to ensure that changes work together to expand incentives for affordable housing and community development. NAAHL’s comments urged the agencies to:
Establish asset thresholds that support diverse, dynamic markets that meet the range of affordable housing and community development needs.
Maintain CRA's focus on lending, investment, and services that expand economic opportunity and build wealth.
Ensure local service providers, community-based organizations, and nonprofits can continue to help lenders meet local credit needs.
Maintain a CRA framework that incentivizes community development financing tailored to unique local needs in low- and moderate-income communities.
Support access to affordable housing and community development financing in all communities through clear, uniform guidance.
Maintain a flexible strategic plan option that prioritizes affordable housing and community needs.
Maintain the Interagency Questions & Answers, which provides clear and well-understood guidance on CRA implementation.
Establish a thoughtful transition process.
In addition to its technical comments, NAAHL also joined more than 475 organizations in a national sign-on letter asking the FDIC and OCC to maintain meaningful community development incentives for banks of all sizes, and a letter from the ACTION Campaign Steering Committee emphasizing the important role that CRA investment incentives play in the Low-Income Housing Tax Credit (LIHTC) market.
Members of Congress also submitted comments on the proposal. House Financial Services Committee Ranking Member Maxine Waters (D-CA) led a comment letter signed by all of the Committee’s Democratic members raising concerns about the proposed changes and urging the agencies to extend the comment period to at least 120 days to give the public more time to analyze the proposal. Senate Banking Committee Ranking Member Elizabeth Warren (D-MA) also led a letter signed by 20 Senate Democratic colleagues, including all Banking Committee Democrats, raising concerns about the proposal’s impact on investments in affordable housing and community development and urging the agencies to withdraw the proposed rule. Additionally, Ranking Member Warren joined Senate Small Business Committee Ranking Member Ed Markey (D-MA) in a separate letter addressing the proposal’s effect on access to capital for small businesses and highlighting the importance of CDFIs in providing capital and technical assistance in this market.
The agencies are now reviewing the comments that have been submitted. The third federal banking regulator that implements CRA, the Federal Reserve, did not join the proposed rule and has indicated that it intends to formally reinstate the 1995 CRA regulation that banks operate under today. The three banking agencies jointly proposed to reinstate the 1995 regulation in July 2025, prior to the FDIC and OCC’s recent proposal. NAAHL has urged the banking agencies to work together to adopt a single regulation that maintains strong levels of community development lending and investment from lenders of all sizes.
CONGRESS
Appropriations Work Continues as Congress Prepares to Return to DC
The House and Senate are both scheduled to return to Washington, DC, on November 9 and will have approximately a month to work on their next steps for funding the federal government before the current stopgap funding measure expires on December 11. The results of the midterm elections on November 3 could affect how appropriators negotiate what comes next. If one or both of the chambers is set to flip to Democratic control in the 120th Congress, there could be more incentive for Democrats to push for another continuing resolution that extends funding at Fiscal Year (FY) 2026 levels into 2027, when they will have more say in the process, instead of voting for full-year appropriations bills.
The House Appropriations Committee has voted to send all 12 of its FY 2027 appropriations bills to the full House for consideration, including the bills that fund the Department of Housing and Urban Development (HUD) and the CDFI Fund. The Senate Appropriations Committee has yet to release any FY 2027 funding bills. NAAHL will be closely monitoring funding discussions, including whether funding is provided for programs authorized by the bipartisan 21st Century ROAD to Housing Act.
See NAAHL’s budget chart for a more detailed breakdown of the funding levels for key programs.
AFFORD Act Supporters Seek Inclusion in NDAA
The Access to Fair Financing for Opportunity and Resilient Development (AFFORD) Act, which combines several bills that would strengthen community development finance, continues to gain support in the Senate and currently has 53 bipartisan co-sponsors.
Senators Steve Daines (R-MT) and Mark Warner (D-VA) filed the AFFORD Act as an amendment to the FY 2027 National Defense Authorization Act (NDAA). NDAA is must-pass military funding authorization legislation and is often used as a vehicle to pass non-defense related bills. The Senate is reported to be developing a “manager’s package” of several amendments for inclusion. NAAHL strongly supports the AFFORD Act and urges Congress to include it in the FY 2027 NDAA.
ADMINISTRATION
Trump Signs Executive Order to Lower Housing Costs, Expand Access to Homeownership
On October 22, President Trump signed an executive order that directs the Federal Housing Finance Agency (FHFA), HUD, U.S. Department of Agriculture (USDA), Department of Veterans Affairs (VA), and Department of Commerce to take a series of actions aimed at lowering the cost of buying a home. Most of the order runs through FHFA, as conservator of Fannie Mae and Freddie Mac (the Enterprises). The order:
Directs the FHFA Director, if he determines it is in the best interest of the Enterprises or FHFA and the American public, to establish a pilot program at the Enterprises, applicable only to mortgages made after the pilot is established, under which the Enterprises would periodically review covered loans using automated valuation models (AVMs) and other data, identify borrowers who appear to have enough equity to cancel private mortgage insurance (PMI) based on the current valuation, and cancel that coverage without a borrower request (Section 2);
Creates a Task Force on Manufactured Housing Innovation, co-chaired by HUD and FHFA and including USDA, Commerce, and VA, to recommend within 180 days how to streamline federal requirements for manufactured and other factory-built housing (Section 3);
Directs the FHFA Director, if he determines it is in the best interest of the Enterprises or FHFA and the American public, to expand the Enterprises’ title acceptance pilot into an ongoing, nationwide program at both Enterprises, under which an Enterprise could accept an automated title review in place of a lender’s title insurance policy on eligible refinances (Section 4); and
Directs USDA and VA to reduce the interest rates charged on their direct single-family home loans, consistent with applicable law and available appropriations (Section 5).
The White House fact sheet is available here, and the full text of the order is available here.
HUD, USDA, Treasury Take First Steps to Implement Bipartisan Housing Law
NAAHL continues to track key developments in the implementation of the recently passed bipartisan housing law, the 21st Century ROAD to Housing Act. Over the past month, the federal government took its first implementation actions:
On September 29, HUD and USDA entered into a memorandum of understanding (MOU) to streamline standards related to environmental review. The MOU kicks off an interagency process to review standards, and the 21st Century ROAD to Housing Act stipulates that agencies announce any resulting actions by next summer.
On October 7, HUD unveiled its Next Generation Manufactured Housing Action Plan to communicate its path to modernize and support updated codes and guidance to define the next 50 years of affordable, factory-built housing. The document includes HUD’s plans to update energy efficiency standards, change regulations to implement removal of the permanent chassis requirement from the definition of manufactured housing, and examine whether it could expand the HUD Code, which establishes building standards for manufactured housing, to multifamily buildings.
On October 22, the Department of the Treasury published a notice of proposed rulemaking in the Federal Register to implement Section 1001's prohibition on large institutional investor purchases of single-family homes. Treasury is accepting public comments for 30 days before issuing a final rule. The underlying statutory prohibition on large institutional investor purchases takes effect on January 7, 2027, and remains in place for 15 years from that effective date, so NAAHL expects this rule to be finalized in advance of that date.
NAAHL has updated our ROADmap matrix into a live tracker that shows implementation progress by section of the bill, and we have rolled up that progress into a tracking dashboard. Use this matrix and dashboard to monitor progress on implementation and track key deadlines.
White House Rescinds Housing Counseling Funds
On September 25, the White House rescinded $810 million in appropriated funds from programs across the federal government through a controversial budgetary move called a “pocket rescission.” The rescissions included $56 million from HUD's Comprehensive Housing Counseling program, a competitive grant program that funds HUD-approved housing counseling agencies providing information, advice, and tools for consumers looking to purchase, maintain, or rent a home and assisting homeowners facing foreclosure.
There are discussions on both sides of the aisle about including language in future appropriations bills to prevent “pocket rescissions.” Senate Appropriations Chair Susan Collins (R-ME) issued a statement referring to the September 25 rescissions as “illegal.”
The National Urban League and nine other nonprofits filed a lawsuit challenging the housing counseling funding rescission. On September 30, a federal judge issued a ruling that prevents the funds, which were set to expire on September 30, from expiring as the case is litigated.
$179 Million for USDA’s Rural Homeownership Program Expires
At the end of September, approximately $179 million in federal funds for rural homeownership expired. In FY 2026, Congress appropriated $1 billion for the Single Family Housing Direct Home Loan program, also known as the Section 502 Direct Loan program, which provides mortgage loans to help rural low- and very low-income families become homeowners. USDA reports that the agency allocated $571 million of the funds before the end of the fiscal year. Of the unspent money, $250 million can carry over to the next fiscal year, but the remaining $179 million expired on September 30. USDA cited the historically long government shutdown as a reason the funds were not spent.
A bipartisan group of House members wrote to USDA Secretary Brooke Rollins asking the department to use every lawful authority to prevent the expiration of the funds. They also raised concerns that changes made in February 2026 related to the processing and eligibility of Section 502 loans contributed to the funds not being allocated before expiration. It does not appear that the funds will be reinstated at this time.
GAO Reports 29% Reduction in HUD Staffing Levels
On September 30, the U.S. Government Accountability Office (GAO) published a report on HUD’s 2025 workforce and spending changes. This report found that HUD’s workforce decreased by about 29% between December 2024 and December 2025. Seventy-two percent of these staff losses were through a deferred resignation program. The remaining 28% left the department through terminations, retirements, resignations, or other means. Additionally, the report found that over half of the separated employees had worked at HUD for at least 10 years, including 41% who had over 20 years of employment with HUD.
GAO interviewed representatives of 20 stakeholder organizations for this report, including Fair Housing Initiatives Program grantees, Fair Housing Assistance Program agencies, public housing agencies, project-based rental assistance property managers, and national housing organizations. Nearly all stakeholders GAO interviewed noted confusion following the departure of experienced HUD staff. Most also reported canceled standing meetings with the agency and changes in HUD guidance that added to the confusion. Stakeholders described delays in communication and program operations.
The report notes that since 2025, HUD has launched a number of initiatives aimed at increasing efficiency and streamlining operations, including grant and other business processes, and modernizing IT systems.
Treasury Proposes CDFI Certification Updates
On September 30, the CDFI Fund published a notice of information collection and request for public comment on the CDFI program certification application.
Among the changes proposed or under consideration, the CDFI Fund would:
Eliminate race- and ethnicity-based Other Targeted Population categories as eligible Target Markets, with a proposed one-year transition period for currently certified CDFIs relying on those Target Markets;
Replace the current board-representation approach to demonstrating Target Market accountability with an approach based on Target Market activity;
Eliminate most board and executive staff demographic information from the application;
Add questions related to administrative proceedings and compliance with other federal award programs; and
Seek input on additional potential changes, including moving to an annual certification application cycle, requiring audited financial statements in certain circumstances, increasing the minimum Target Market activity required before applying for certification, and establishing activity thresholds for CDFIs serving multiple Target Markets.
Importantly, the Fund has not yet specified what new minimum activity thresholds might look like, and the implications for CDFIs serving multiple Target Markets will depend on how any future requirements are structured. The CDFI Fund is also seeking public comment on proposed changes to the Annual Certification and Data Collection Report (ACR) and Abbreviated Transaction Level Report (TLR), which would align the reporting tools with the proposed certification changes, including removing certain demographic and climate-related data fields.
Comments on these proposed changes are due on November 30.
FHFA Reduces Office of Inspector General’s Funding
At the end of September, FHFA’s Inspector General informed Congress that FHFA had reduced the Inspector General’s annual funding by more than 60% for FY 2027, significantly below the Inspector General’s request. The Inspector General characterized the reduction as an “unreasonable refusal to provide necessary resources” and said this would require the Inspector General to cut staff by 70% to 80% and discontinue nearly all of its criminal investigations.
Unlike many other federal agencies, FHFA and its Inspector General are not funded through appropriations. Rather, they are funded by assessments on the entities they oversee. FHFA provides a portion of its assessments to the Inspector General. Members of Congress raised concerns about the reduction, which some said would impede the Inspector General’s “ability to complete its statutorily required functions.”
Treasury Says Action on Fannie Mae, Freddie Mac Possible in 2027-2028
This month, Treasury Secretary Scott Bessent said that the Administration could make changes to the ownership structure of Fannie Mae and Freddie Mac in 2027 or 2028. Treasury has owned a controlling stake in both companies since 2008, when the companies entered conservatorship after experiencing significant financial difficulties during the financial crisis.
Last year there were reports that Treasury and FHFA were considering options to offer shares in the Enterprises, transferring more of the companies to private ownership, but those plans seemed to pause in recent months. However, with Treasury’s warrants giving them the right to purchase up to 79.9% of the shares in each company set to expire in 2028, there may be renewed interest in action on ownership or extending those warrants. If Treasury does take action on the Enterprises’ ownership, Secretary Bessent has said that Treasury’s actions will be guided by the goal that mortgage rates don’t increase.
BANKING REGULATORS
OCC Notifies Employees of Possible Staff Reductions
This month, the OCC notified about 600 of its 2,600 employees that their positions may be realigned, consolidated, or eliminated following an organizational assessment, according to news reports. Among those reported to be impacted are up to 20 members of the OCC’s Community Affairs team, which supports banks and communities in carrying out community development, including CRA-qualifying community development financing, and expanding access to the financial system.
These reports follow several prior rounds of staff reductions at the OCC, including a voluntary transition offer and reduction in force earlier this summer. The agency’s staff has declined by about 30% since the beginning of 2025. NAAHL will continue to closely monitor changes to agency staff that support community development financing and CRA implementation.
CONFIRMATIONS AND APPOINTMENTS
Department of Housing and Urban Development (HUD)
AWAITING FLOOR CONSIDERATION: Irving Dennis to be Chief Financial Officer
AWAITING FLOOR CONSIDERATION: Jeffrey Ledbetter to be Inspector General
HEARING HELD: Matthew Jones to be an Assistant Secretary of Housing and Urban Development
Department of Treasury
NOMINATED: Francis Browne to be an Under Secretary of the Treasury
Consumer Financial Protection Bureau
AWAITING FLOOR CONSIDERATION: Brian Johnson to be Director of the Bureau of Consumer Financial Protection