Community Housing Act of 2026
- Sponsor
- Rep. Balint, Becca [D-VT-At Large]
- Committees
- Financial Services Committee (primary)
- Last action
- Jun 30, 2026
Bottom line
This bill seeks to significantly boost affordable housing supply and preservation, promote shared equity models, and encourage local zoning reforms through substantial federal funding and regulatory changes.
What it actually does
The Community Housing Act of 2026 proposes substantial federal investments and policy reforms to address the national housing crisis. It appropriates tens of billions of dollars over multiple fiscal years to expand affordable housing programs like the Housing Trust Fund, Capital Magnet Fund, and HOME Investment Partnerships Program, and establishes new grant programs for shared equity housing and zoning reform. Key policy changes include increasing GSE contributions to affordable housing, repealing the Faircloth Amendment to allow public housing expansion, and creating a new HUD office for land use and zoning.
Proponents argue
Supporters argue the bill provides a comprehensive, multi-faceted approach to tackle the severe housing affordability crisis by increasing supply, promoting innovative ownership models, and removing restrictive barriers. They contend that the proposed investments are necessary to meet the escalating demand for affordable housing and to address systemic inequities in housing access.
Opponents contend
Critics might argue that the bill's substantial appropriations represent excessive federal spending, potentially contributing to inflation or increasing the national debt. Concerns could also be raised about federal overreach into local zoning decisions and the effectiveness of some proposed programs in genuinely reducing housing costs without distorting local markets.
The bill is moderately long and covers diverse policy areas, requiring a dedicated reading to grasp its full scope. The time given for review would depend on the legislative timeline, but a thorough understanding would necessitate more than a cursory glance.
Sec. 101, Title I
Housing Trust Fund Appropriation
This provision appropriates an additional $44.5 billion annually to the Housing Trust Fund for fiscal years 2027 through 2036. This funding is intended to supplement existing allocations, providing a significant and dedicated source of capital for states to develop and preserve affordable housing for extremely low-income households.
Supporters argue
Supporters argue that a substantial, dedicated funding stream for the Housing Trust Fund is critical to addressing the severe shortage of affordable housing for the lowest-income Americans, enabling states to build and preserve more units.
Critics contend
Critics may contend that such a large, multi-year appropriation represents excessive federal spending and could contribute to inflationary pressures or the national debt, without sufficient oversight on local implementation.
Tradeoffs
The provision balances the urgent need for affordable housing funding with concerns about the scale of federal spending and its potential macroeconomic impacts.
Sec. 102, Title I
GSE Basis Point Fee Increase
This section increases the contribution rate from Fannie Mae and Freddie Mac (Government-Sponsored Enterprises or GSEs) to the Housing Trust Fund and Capital Magnet Fund. The fee on their new business purchases will rise from 4.2 basis points to 10 basis points, effectively channeling more of their profits into affordable housing initiatives.
Sec. 103, Title I
Capital Magnet Fund Appropriation
This section appropriates an additional $1.5 billion annually to the Capital Magnet Fund for fiscal years 2027 through 2036. The Capital Magnet Fund provides grants to Community Development Financial Institutions (CDFIs) and non-profit housing organizations to finance affordable housing and related economic development projects in distressed communities.
Sec. 104, Title I
Investments in Affordable and Accessible Housing Production
This section appropriates a total of $24.85 billion for fiscal year 2027, with funds remaining available until September 30, 2030. Specifically, $9.925 billion is for the HOME Investment Partnerships Program, and $14.925 billion is for activities consistent with the Housing Trust Fund. It also includes $50 million for technical assistance and $100 million for HUD administrative costs. The bill waives certain HOME program requirements like matching funds and set-asides for community housing development organizations for these specific appropriations.
Sec. 105, Title I
Unlocking Possibilities Program
This section establishes a new competitive grant program at HUD, funded with $1.646 billion for fiscal year 2027 (available until 2036). The program offers grants to eligible entities (states, cities, counties, regional planning agencies) for developing housing plans, streamlining regulatory requirements, reforming zoning codes, increasing housing inspection capacity, and implementing community development strategies that promote housing supply elasticity and affordability.
Sec. 106, Title I
Repeal of Faircloth Amendment
This provision repeals Section 9(g)(3) of the United States Housing Act of 1937, commonly known as the Faircloth Amendment. This amendment currently prohibits public housing agencies from increasing their number of public housing units above the total they had in 1992, effectively capping new construction.
Sec. 107, Title I
Establishment of HUD Office of Community Land Use and Zoning
This section establishes a new Office of Community Land Use and Zoning within the Department of Housing and Urban Development (HUD), headed by a Director. Its mission is to encourage communities to pursue land use policies that increase housing availability and affordability. The office will collect and disseminate information, provide technical assistance, maintain a Regulatory Barriers Clearinghouse, and administer the new Unlocking Possibilities Program and Shared Equity Housing Resource Center.
Sec. 201, Title II
HUD Eviction Protection Grant Program
This section appropriates $10 million annually for fiscal years 2027 through 2036 to the Secretary of Housing and Urban Development for grants under the Eviction Protection Grant Program. This program provides funding to legal aid organizations and other non-profits to offer legal assistance and other services to low-income tenants facing eviction.
Sec. 202, Title II
Shared Equity Housing Resources
This section appropriates $12 million for fiscal year 2027 to the Neighborhood Reinvestment Corporation (NeighborWorks America) for promoting and developing shared equity housing models, including capital grants for affiliates to acquire homes. It also directs HUD to establish a Shared Equity Housing Resource Center under the new Office of Community Land Use and Zoning to provide technical and legal assistance on forming shared equity governance structures.
Sec. 203, Title II
Homeownership Assistance (Rural & HCV Downpayment)
This section provides significant funding for homeownership. It appropriates $4 billion annually for direct rural homeownership loans and $148.4 million annually for the cost of these loans for fiscal years 2027-2036, with a minimum interest rate of 1.0 percent. Additionally, it appropriates $1 billion annually for fiscal years 2027-2036 for a Housing Choice Voucher (HCV) Downpayment Program, allowing HCV recipients to use their assistance for homeownership down payments.
Sec. 204, Title II
Report on Tax on Secondary Homes
This section requires the Secretary of the Treasury to submit a report to Congress within 180 days of enactment. The report must analyze the feasibility, economic consequences, and revenue effects of establishing a tax on vacation homes and short-term rental homes.
Sec. 205, Title II
Shared Equity Housing Fund
This section establishes a Shared Equity Fund at HUD, appropriating $500 million for fiscal year 2027 (available until 2035). The fund will award competitive planning and implementation grants to eligible local partnerships to create, expand, and maintain community land trusts and shared equity homeownership programs. The grants can be used for acquisition, rehabilitation, and new construction, with affordability requirements for at least 30 years.
Sec. 206, Title II
Historic Tax Credit Modernization
This section directs the Secretary of the Interior, through the National Park Service, to revise the standards for rehabilitation used for the Federal Historic Preservation Tax Incentives program within 180 days. The revision aims to provide greater flexibility for owners of historic commercial, multi-story properties to incorporate residential dwelling units on upper floors not generally accessible to the public, while preserving the exterior and public-facing historic characteristics.
Sec. 301, Title III
Expanding Federal Home Loan Bank Contributions to Affordable Housing
This section amends the Federal Home Loan Bank Act to increase the percentage of the preceding year's net income that Federal Home Loan Banks (FHLBs) must contribute to affordable housing programs. Starting in 2027, this contribution will rise from 10 percent to 20 percent.
Sec. 302, Title III
Continuation of FHA-FFB Affordable Rental Housing Financing Partnership
This section directs the Secretary of Housing and Urban Development to continue carrying out the FHA affordable rental housing financing partnership with the Federal Financing Bank (FFB). Under this partnership, the FFB provides financing for loans insured under the FHA Multifamily Risk-Sharing Program, facilitating low-cost capital for affordable rental housing projects.
Sec. 303, Title III
Allow GSEs to Purchase Mezzanine Debt
This section directs the Director of the Federal Housing Finance Agency (FHFA) to issue a final rule within one year to permit Fannie Mae and Freddie Mac (GSEs) to purchase and securitize mezzanine debt. Mezzanine debt is a hybrid form of financing that combines debt and equity, often used in real estate development, particularly for home construction.
Sec. 401, Title IV
Permanent Establishment of Housing Preservation and Revitalization Program; Decoupling Rental Assistance
This section permanently establishes a Housing Preservation and Revitalization Program within the USDA Rural Housing Service. It mandates notice to owners and tenants of maturing loans, allows for loan restructuring (reducing interest, deferring payments, etc.) to preserve affordable housing, and offers 20-year rental assistance contract renewals. Crucially, it allows for the decoupling of rental assistance from maturing loans, meaning rental assistance can be renewed even if the underlying loan is not restructured, provided the owner enters a restrictive use agreement.
Sec. 402, Title IV
Interagency Task Force on Substance Use Disorder Treatment and Affordable Housing
This section establishes a joint interagency task force between the Secretary of Housing and Urban Development and the Secretary of Health and Human Services. The task force is charged with developing recommendations for Congress on how to better coordinate the delivery of substance use disorder treatment within affordable housing settings. It will submit a report within two years and then terminate.
Sec. 403, Title IV
Rural Rental Housing Loans
This section appropriates $200 million annually for fiscal years 2027 through 2037 to the Secretary of Agriculture for the Section 515 rural rental housing loan program. This program provides direct loans to eligible applicants to build, repair, or purchase rental housing in rural areas for low-income individuals and families.
This subsection waives the commitment requirements, matching requirements, and the set-aside for housing developed, sponsored, or owned by community housing development organizations (CHDOs) for the significant new HOME program funds appropriated in Sec. 104(a).
Sec. 104(b)(3), Title I
Why it matters:While potentially intended to expedite the use of funds, waiving these long-standing requirements could significantly alter how HOME funds are typically deployed and who benefits. It might be buried to avoid immediate scrutiny over changes to established program structures.
Case for: Proponents would argue that these waivers are necessary to streamline the deployment of a large influx of funds, reducing administrative burdens and accelerating the production of affordable housing without the delays associated with traditional matching or specific organizational requirements.
Case against: Critics might argue that waiving matching requirements could reduce local financial commitment and accountability, while waiving the CHDO set-aside could diminish the role of community-based, non-profit developers, potentially favoring larger, for-profit entities.
Estimated impact: This waiver applies to $24.85 billion in HOME program funds for FY2027, potentially redirecting how these substantial funds are allocated and utilized by grantees.
This subsection specifies that, notwithstanding any other provision of law, the annual interest rate payable on a direct loan authorized by section 502 of the Housing Act of 1949 (rural homeownership loans), as modified by payment assistance, may not be lower than 1.0 percent.
Sec. 203(a)(2), Title II
Why it matters:This detail could be easily overlooked amidst the larger funding figures. While a 1.0% floor is still very low, it sets a hard limit on how deeply subsidized these loans can be, potentially impacting the lowest-income borrowers who might otherwise qualify for even lower effective rates with payment assistance. It might be included to manage the long-term cost of the loan program or to ensure some minimal return.
Case for: Proponents would argue that a 1.0% floor ensures a minimal return on federal investment and prevents the program from being perceived as a giveaway, while still offering highly affordable financing to rural residents.
Case against: Critics might contend that for the extremely low-income rural renters the program aims to serve, even a 1.0% interest rate could be a barrier, and that the program should allow for the lowest possible rates to maximize affordability and access.
Estimated impact: This provision affects the affordability and cost-effectiveness of $4 billion in annual direct rural homeownership loans over ten years, potentially impacting thousands of low-income rural homebuyers.
This section directs the Director of the Federal Housing Finance Agency (FHFA) to issue a final rule within one year to permit the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), collectively GSEs, to purchase and securitize loans made for the purpose of home construction.
Sec. 303, Title III
Why it matters:The directive to FHFA to allow GSEs into a new area of financing (construction loans, potentially including mezzanine debt) is a significant policy shift. It might be placed here to be less conspicuous than if it were a standalone bill or in a more prominent regulatory section, potentially avoiding immediate scrutiny over expanding GSE risk profiles.
Case for: Proponents argue that allowing GSEs to purchase and securitize construction loans will increase liquidity in the market for home builders, reduce financing costs, and ultimately stimulate housing supply, which is critical for affordability.
Case against: Critics might contend that expanding the GSEs' role into construction financing, particularly higher-risk forms like mezzanine debt, could expose them and, by extension, taxpayers to greater financial risk, especially if not carefully regulated. This could be seen as mission creep for entities with government backing.
Estimated impact: This regulatory change could open up a new multi-billion dollar market for GSE involvement, potentially impacting the financing structure of a significant portion of new home construction nationwide.