Washington Recap: September 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
Stalled Government Funding Negotiations Signal Possible Shutdown
As the fiscal year draws to a close, Congress still has not reached agreement on funding for Fiscal Year 2026 (FY 2026) or a short-term funding extension, making a government shutdown on October 1 likely. The House passed a continuing resolution (CR) to fund the government at current funding levels through November 21 on a largely party-line vote, but the bill did not receive the 60 votes required to pass in the Senate. Senate Democrats countered with an alternative CR lasting through October 31 that would also 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. That bill also failed to get the 60 votes required for passage. A planned White House meeting with Democratic leaders was canceled, and the path forward to fund the government for the short term remains unclear.
In addition to disagreements on short-term funding, Congress has yet to reach agreement on full-year FY 2026 funding. The House and Senate have each passed 3 of the 12 funding bills but have not reached consensus on any. The Transportation, Housing and Urban Development, and Related Agencies (THUD) bill has been reported out of both the House and Senate Appropriations Committees but has not received a floor vote in either chamber. The House Appropriations Committee has advanced its Financial Services and General Government (FSGG) bill, which funds the CDFI Fund, but the Senate has yet to act. No additional hearings are scheduled at this time. See NAAHL’s full breakdown of the proposed funding levels here.
If a shutdown occurs, the impact will vary across agencies and programs. Banking regulators and the Federal Housing Finance Agency (FHFA) are not funded through annual appropriations and would see minimal impact on daily operations. But the Department of Housing and Urban Development (HUD), the U.S. Department of Agriculture (USDA), and the Community Development Financial Institutions (CDFI) Fund rely on appropriations for core operations, as well program funding. For these agencies and programs, effects will vary by program and funding stream. The National Flood Insurance Program (NFIP) would also lapse on October 1 without an extension, which would prevent the issuance or renewal of policies. Federal agencies generally release contingency plans outlining their operations during a lapse in federal funding.
NAAHL will report out updates along with progress in Congress on short-term and full year funding discussions as we near the September 30 deadline.
Housing and Community Development Legislation
Congress is continuing to work through multiple channels to advance affordable housing and community development legislation. In the Senate, there are ongoing efforts to include the Senate Banking Committee’s bipartisan ROAD to Housing Act, as well as a package of CDFI legislation, as amendments to Congress’s must-pass defense funding bill, the National Defense Authorization Act (NDAA). In the House, the Financial Services Committee’s Housing and Insurance Subcommittee is also continuing to work on housing legislation. Subcommittee Chairman Mike Flood (R-NE) has put forward bipartisan proposals, including proposals with Ranking Member Emmanuel Cleaver (D-MO) to update the HOME Investment Partnerships program and to update oversight of manufactured housing standards, as well as a proposal with Congressman Sam Liccardo (D-CA) to expand the Community Development Block Grant (CDBG) program to include new construction. Congressman Flood has said he would like to mark up housing legislation in October.
ADMINISTRATION
The White House
Earlier this month, Treasury Secretary Scott Bessent said in an interview that the President may declare a national housing emergency this fall, a move that could give the Administration additional authority to take executive actions aimed at addressing housing affordability. Secretary Bessent said the Administration is considering the emergency declaration alongside other steps such as simplifying permitting and encouraging standardization to boost housing supply. He also noted that rents have begun to decline and suggested that falling interest rates could help unlock more real estate transactions by encouraging owners with low-rate mortgages to list their homes.
As of date, the Administration has not issued a national housing emergency. The Administration may also be exploring issuing a housing supply related executive order – whether that would be complimentary or in place of the national declaration is unclear.
The Administration has continued to expand executive control over federal agencies. On September 23, the Supreme Court agreed to hear a case on presidential authority to remove members of independent commissions and allowed the removal of a Federal Trade Commission (FTC) commissioner to take effect while the case proceeds. The Supreme Court could revisit how much control the executive branch may exercise over commission leadership.
Office of Management and Budget (OMB) & the CDFI Fund
After sustained advocacy from stakeholders and pressure from bipartisan Members of Congress in the CDFI Caucus, the Treasury Department published supplemental Notices of Funds Availability (NOFA) on September 25 for FY25 CDFI Fund award programs, following months of uncertainty over whether appropriated funds would be released. The NOFAs cover the Financial Assistance (FA), Technical Assistance (TA), and Native American CDFI Assistance (NACA) award programs. The notices update the funding applications and provide a 30-day window for applicants to revise their submission based on the updates. The updated NOFAs no longer include climate-focused financing as an eligible activity, remove race and ethnicity categories from the definition of eligible markets, and amend the definition of healthy foods under the Health Foods Financing Initiative to align with Administration policies. The timeline for the release of funds and funding awards remains uncertain.
NAAHL will be monitoring the supplemental application process and timing for the release of funds from OMB and awards from Treasury, as well as the NOFA process for other awards administered by the CDFI Fund.
Department of Housing and Urban Development (HUD)
FHA Multifamily Insurance Premium Updates
This month, HUD finalized its previous proposal to update its pricing for FHA multifamily mortgage insurance premiums. Under HUD’s new policy, HUD will charge a 25-basis point mortgage insurance premium for all multifamily mortgage loans. HUD had previously charged different premium amounts based on the loan type. The new mortgage insurance premiums will go into effect for loan applications submitted or amended on or after October 1.
Implementation of Executive Orders on Immigration Status
This month, HUD took multiple actions to implement the President’s Executive Order 14218, “Ending Taxpayer Subsidization of Open Borders,” which directs agencies to ensure that no taxpayer-funded benefits go to ineligible immigrants. In September, HUD reissued a Notice of Funding Opportunity (NOFO) for a homelessness assistance program, Continuum of Care (CoC) Builds, with new eligibility criteria requiring jurisdictions to cooperate with federal immigration enforcement, prohibit public camping, and meet other policy benchmarks. A federal judge temporarily blocked HUD from awarding funds under the revised NOFO, but the outcome remains uncertain. HUD was also reported to be sending notifications to public housing authorities to submit information on tenants’ citizenship status within 30 days or risk losing federal funding.
Fair Housing
In September, several whistleblowers also alleged that staffing reductions and reassignments along with changes in enforcement in HUD’s Office of Fair Housing and Equal Opportunity (FHEO) were undermining enforcement of the Fair Housing Act. A group of FHEO attorneys have filed a lawsuit against HUD, and Senate Banking Committee Ranking Member Elizabeth Warren has requested HUD’s Acting Inspector General to conduct an independent investigation into the whistleblowers’ claims.
Federal Housing Finance Agency (FHFA) and the GSEs
This month, the Administration continued to signal interest in potential actions impacting Fannie Mae and Freddie Mac. Commerce Secretary Howard Lutnick said that an issuance of shares in the Enterprises could come as soon as this year. He clarified that the aim of the issuance would not be to sell the entire companies, but to establish a “mark-to-market” to demonstrate the value of the companies. While Secretary Lutnick said any offering would be a small share of the companies, he also said it could be the largest offering ever. The government has held a controlling stake in the two companies since 2008 through its ownership of both senior preferred shares and warrants.
Fannie Mae and Freddie Mac’s regulator, Federal Housing Finance Agency (FHFA) Director Bill Pulte, also announced this month that FHFA would exit the Network of Central Banks and Supervisors for Greening the Financial System, a global network of financial regulators focused on environment and climate risk management in the financial sector. FHFA Director Pulte also announced that the agency would terminate its Advisory Committee on Affordable, Equitable, and Sustainable Housing. The advisory committee was developed during the prior administration.
Changes to Financial Oversight and Regulation
Community Reinvestment Act
In September, the Office of the Comptroller of the Currency (OCC) issued a bulletin announcing that it would consider a bank’s policies and procedures to avoid engaging in politicized or unlawful debanking in licensing decisions, and that any instances of politicized or unlawful debanking would be considered on a case by case basis in determining a bank’s CRA rating. The bulletin is part of the OCC’s effort to implement the President’s Executive Order 14331, “Guaranteeing Fair Banking for All Americans.”
This month, the three banking regulators also announced a public listening session for input on any of the categories of regulations on which the regulators have sought comments under the Economic Growth and Regulatory Paperwork Reduction Act, including CRA. The hybrid public listening session will take place on October 30 at the Federal Reserve Bank of Kansas City.
OCC Bank Supervision Changes
This month, the OCC announced that it would restructure its Bank Supervision and Examination group into three distinct lines of business: Large and Global Financial Institutions (institutions with over $500 billion in assets and those with a foreign parent), Regional and Midsize Financial Institutions ($30 billion to $500 billion in assets), and Community Banks (less than $30 billion in assets). This change will further tailor bank supervision and examinations by bank size. The OCC also announced a reorganization of the Office of the Chief National Bank Examiner.
Federal Reserve Personnel
Following Federal Reserve Governor Adriana Kugler’s resignation from the Board in August, President Trump nominated Stephen Miran, who was serving as the Chair of the Council of Economic Advisors (CEA), to fill the remainder of Kugler’s term, which ends January 31, 2026. The Senate moved quickly on Miran’s nomination, and he was confirmed on September 15. Governor Miran has said he will take a leave of absence from his position as CEA Chair but will return to that post at the expiration of his term on the Fed.
Uncertainty also continued around Governor Lisa Cook’s service on the Federal Reserve Board. In August, President Trump moved to remove Governor Cook from the Board as a result of allegations that she had improperly received multiple mortgages for properties classified as primary residences. Governor Cook sued, alleging that the President’s attempt to remove her was unlawful, and she returned to the Board early in September following a U.S. District Court ruling. President Trump appealed, asking to immediately remove Governor Cook, but an appeals court allowed Governor Cook to remain on the Board as litigation proceeds. President Trump has appealed the case to the Supreme Court, asking the Court to allow the President to immediately remove Governor Cook while the case continues to be considered. The Supreme Court has not issued a decision on the Administration’s request, and Governor Cook remains on the Federal Reserve Board.
If the Court allows President Trump to remove Governor Cook, it could significantly alter understandings of the President’s ability to remove Federal Reserve Governors.
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: Benjamin DeMarzo to be Assistant Secretary for Congressional and Intergovernmental Relations.
AWAITING FLOOR CONSIDERATION: Craig Trainor to be Assistant Secretary for Fair Housing and Equal Opportunity.
HEARING HELD: Benjamin Hobbs to be Assistant Secretary for Public and Indian Housing.
HEARING HELD: Ronald Kurtz to be Assistance Secretary for Community Planning and Development.
NOMINATED: Jeremy Ellis to be Inspector General.
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
HEARING 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.
WITHDRAWN: Jason De Sena Trennert to be Assistant Secretary for Financial Markets.
Federal Reserve Board of Governors
· CONFIRMED: Stephen Miran for Governor.