Authored by: McIver Mann and Laura Hanf
Key Takeaways:
- Enacted July 11, 2026, the Act creates new tools across RD preservation, HOME funding, financing, environmental review, and inspection processes.
- Section 521 rental assistance can now continue permanently after an RD mortgage matures, and the Multifamily Preservation and Revitalization program is permanently authorized.
- The HOME program gets expanded eligibility, streamlined environmental review for qualifying activities, and updated income and infrastructure-use provisions.
- The bank public welfare investment cap rises from 15% to 20% of capital, and the Rental Assistance Demonstration program cap increases by 100,000 units.
- Many provisions require agency guidance, rulemaking, or funding before they’re usable — organizations should confirm implementation status before relying on a provision for a transaction.
BRC Affordable Housing Update – July 2026
On July 11, 2026, the 21st Century ROAD to Housing Act became law, creating a broad federal housing package intended to expand housing supply, support preservation, improve access to financing, and streamline certain federal program requirements.
For affordable housing organizations, the Act may be most relevant to RD preservation planning, HOME-funded projects, development financing, environmental reviews, inspections, and other approval processes. Many provisions will require agency guidance, rulemaking, funding, or other implementation steps before they can be used for specific projects.
Key Provisions Affecting Affordable Housing
USDA Rural Development Preservation and Rental Assistance — Section 502
For owners of RD-financed properties, Section 502 includes important preservation tools, particularly for properties with Section 514 or Section 515 mortgages approaching maturity.
Notable changes include:
- Permanent authority to continue Section 521 rental assistance after the related mortgage matures, subject to applicable requirements.
- Permanent authorization of the Multifamily Preservation and Revitalization program.
- Authorization of RD technology and staffing improvements intended to support program administration.
HOME Investment Partnerships Program — Section 501
The Act reauthorizes and reforms HOME, HUD’s largest federal block grant program designed exclusively to create affordable housing for low-income households.
Notable changes include:
- Expanded HOME program eligibility and flexibility, including changes to maximum eligible income provisions and broader use of funds for certain housing-related infrastructure.
- Direction for HUD to review the application of Build America, Buy America Act requirements and update related HOME guidance.
- Streamlined environmental review requirements for certain HOME activities, including qualifying infill, small-scale housing, and real-property acquisition activities.
Financing and Development Tools
The Act also expands several financing and development tools:
Notable Changes
- Raises the bank public welfare investment cap from 15% to 20% of capital, potentially increasing investment capacity for affordable housing and community development projects — Section 203.
- Updates statutory maximum loan limits and the adjustment formula for FHA multifamily mortgage insurance programs — Section 211.
- Increases the Rental Assistance Demonstration program cap by 100,000 units — Section 212.
- Expands certain local development tools, including HUD planning grants and new affordable housing construction as an eligible CDBG activity — Sections 204 and 207.
- Authorizes and reforms the CDBG-DR program for three years — Section 504.
Streamlined Reviews and Approvals
Several provisions are intended to reduce duplication, streamline reviews, and improve development timelines:
- Allows certain LIHTC-, HOME-, and USDA-financed units that passed a qualifying inspection within the preceding year to satisfy Housing Choice Voucher inspection requirements — Section 405.
- Expands certain environmental review exemptions and categorical exclusions and authorizes broader delegation of review responsibilities — Sections 205 and 206.
- Supports local adoption of pre-reviewed housing designs — Section 209.
- Directs HUD and USDA to coordinate environmental review processes and other regulatory requirements — Section 802.
What Clients Should Do Now
The Act creates potential opportunities, but availability and timing will vary by provision. Clients should:
- Monitor HUD, USDA RD, and relevant state and local guidance.
- Identify projects or portfolios that could be affected by RD mortgage maturities, HOME funding, RAD opportunities, CDBG funding, environmental review, or inspection requirements.
- Consider the Act when evaluating project pipelines, preservation plans, financing structures, and approval timelines.
- Confirm that applicable guidance, funding, and program requirements are in place before relying on a provision for a transaction or compliance decision.
- Coordinate with legal counsel, lenders, investors, syndicators, and housing agencies regarding project-specific implications.
- Contact BRC with any further questions.
BRC will continue monitoring implementation developments affecting affordable housing organizations.