Legislative State-of-Play
Congress Passes FY 2026 HUD Funding Bill
On February 3, Congress passed appropriations legislation funding the U.S. Department of Housing and Urban Development (HUD) and most other federal agencies for Fiscal Year 2026 (FY26), after a brief shutdown that began January 31.
HUD programs largely fared well, with most either receiving an increase in funding compared to FY25 or were flat-funded, though some programs did receive cuts. Overall, HUD received $77.3 billion, an increase of more than $8 billion from the FY25 enacted funding levels.
Congress provided $1.25 billion for the HOME Investment Partnerships program, which is often used to fill financing gaps in Housing Credit developments. House appropriators had initially zeroed out funding for HOME in their version of the Transportation, Housing, and Urban Development (THUD) funding bill. Fortunately, Senate appropriators, who instead sought to level-fund the program, were successful in achieving the $1.25 billion that the program ultimately received. In July, ACTION’s Steering Committee took a rare step and sent a letter to the Senate Appropriations Committee urging them to protect HOME funding, given its importance to the Housing Credit.
The final THUD bill also included language directing HUD to use funding appropriated for FY25 to renew existing contracts for permanent supportive housing under the Continuum of Care (CoC) program for 12 months and providing a little over $4 billion for FY26. The bill directs HUD to use at least 60 percent of FY26 CoC funding for PSH project renewals. As ACTION has previously reported, HUD has sought to limit funding for CoC permanent housing contract renewals, with litigation pending.
The only federal agency that still does not have final FY26 funding is the Department of Homeland Security (DHS). The DHS shutdown has halted most operations of the Federal Emergency Management Agency (FEMA), including the National Flood Insurance Program (NFIP). While NFIP is not fully operational at this time, meaning new flood policies cannot be issued and other NFIP activities are paused, existing NFIP policies that are already in force remain active.
House Passes Housing Affordability Legislation; Senate Floor Consideration for Counterpart Bill Imminent
On February 9, the House of Representatives passed its housing authorization package, the Housing for the 21st Century Act (H.R. 6644) by an overwhelming vote of 390-9 (more than 30 representatives were not present for the vote). The House considered the bill via an expedited parliamentary procedure that required a ⅔ majority of those voting to pass. This bipartisan vote strongly exceeded the required margin.
The Senate will hold a procedural floor vote on the House’s Housing for the 21st Century Act tonight, after Senate Majority Leader John Thune (R-SD) filed a cloture motion on it on February 26, enabling the Senate to begin consideration of it. The Senate is likely to use the House’s bill as the vehicle for advancing the final package that is expected to blend at least some of the House’s provisions with those from the Senate’s own package, the ROAD to Housing Act (S. 2651).
This package has a number of identical or corresponding provisions to Housing for the 21st Century, but both bills have a number of provisions that are not included in the other. The Senate previously passed ROAD to Housing as an amendment to the National Defense Authorization Act, but the housing provisions were ultimately left out of the final version of that legislation enacted into law.
As covered in the February ACTION newsletter, both the Housing for the 21st Century Act and the ROAD to Housing Act would increase the Public Welfare Investment (PWI) cap for banks from 15 percent of capital and surplus to 20 percent, without removing existing safeguards that protect banks’ customers and clients. This proposal is a top priority among Housing Credit stakeholders that could drive more investment to the program.
Trump Nixes Possibility of Second Reconciliation Package; Some Republicans Still Want It
While some Republicans, particularly certain Republican Study Committee and House Freedom Caucus members, continue to support another budget reconciliation package, President Trump suggested that another reconciliation bill is not necessary. Without presidential pressure to advance a reconciliation bill in 2026, it is unlikely that Congress will do so. Reconciliation bills, which can only contain provisions impacting the budget—either costing money or cutting spending—are often used to advance tax policy changes. Reconciliation is always a partisan process, and bills that are provided reconciliation protections are not subject to the Senate’s filibuster, meaning they require only a simple majority to pass in both chambers.
A bipartisan tax package is still theoretically possible. Though bipartisan efforts to fix certain healthcare tax credits appear to have failed, Congress could still advance tax legislation that deals with cryptocurrency, a gambling provision changed last year, or other provisions. The best chance for a bipartisan tax bill would be after the election during the “lame duck” period, as Congress often struggles to advance legislation in the months leading up to an election.
ACTION continues to work closely with the Affordable Housing Credit Improvement Act (AHCIA) lead sponsors and staff to identify viable paths to advance Housing Credit provisions from the AHCIA as opportunities emerge.
Problem Solvers Caucus Endorses AHCIA
On February 4, the bipartisan House Problem Solvers Caucus published a wide-ranging affordability agenda that includes endorsement of the AHCIA. The Problem Solvers Caucus is evenly divided between Republicans and Democrats and focuses on advancing commonsense bipartisan solutions to key issues facing the nation.
New Democrat Coalition Once Again Calls for Housing Credit Expansion
On February 11, the House New Democrat Coalition published its own wide-ranging affordability agenda. The Coalition once again called for further expanding the Housing Credit. The group most recently called for expanding the Housing Credit last September. The New Democrat Coalition is a center-left caucus made up of 115 House Democrats who seek to work across the aisle and focus on building a strong economy.
AHCIA Cosponsorship
The push to build cosponsorship of the AHCIA continues, and we need your help to leverage the momentum from the One Big Beautiful Bill Act votes to add more Republicans to the bill. Strong cosponsorship is important should there be additional opportunities to advance a tax package in the remainder of this Congress and to ensure a strong foundation of support for the next Congress.
The AHCIA currently has almost 39 percent of Congress cosponsoring, with support evenly divided by Republicans and Democrats. Last Congress, we had nearly 60 percent of Congress signing on as cosponsors. There are a number of Democrats in the queue waiting to join as cosponsors, so please keep up your efforts to enlist more Republicans and make sure we finish this session of Congress with as many cosponsors as possible. Representatives Nick LaLota (R-NY-01) and Eugene Vindman (D-VA-07) recently cosponsored the bill, bringing our House total to 165. Senate cosponsorship stands at 42 members.
Administration Updates
HUD Delays Publication of Income Limits to May 1
On February 4, HUD announced that it is delaying the publication of FY26 income limits until May 1. HUD typically publishes annual income limits in early April each year. The delay is largely due to last year’s historic shutdown, which caused the Census Bureau to delay the release of the 2024 American Community Survey five-year data, which HUD uses to calculate income limits. A blog post by ACTION member Novogradac & Co., published before the Census Bureau released the 2024 ACS data, provides insights into what to expect for the FY26 income limits.
HUD Secretary Touts Expansion of Housing Credit
During a recent Cabinet meeting, HUD Secretary Scott Turner touted the expansion of the Housing Credit and its success in building affordable housing across America. Secretary Turner noted that he is working with Treasury Secretary Scott Bessent to maximize the impact of the Housing Credit expansion.
ACTION Membership
In February, the ACTION Campaign welcomed two new members to the coalition!
Please join us in welcoming the following new members:
- Apartment Appraisers & Consultants, Colorado
- Bureau Veritas, national
Help ACTION continue to grow our membership and advocacy strength by encouraging your networks to support affordable housing and the Housing Credit by joining the coalition. Membership is free.
Insurance
Enterprise Publishes Report on Insurance Crisis
On February 5, ACTION co-chair Enterprise Community Partners published a report on the insurance crisis affecting the affordable housing sector. As covered in several ACTION newsletters in recent years, insurance prices have gone up significantly for many affordable housing providers, while coverage has stayed flat or declined, jeopardizing the financial wellbeing of many properties and providers. The report analyzes a variety of factors that are driving this crisis. It also contains toolkits with multiple steps that practitioners such as developers, owners, and operators; federal, state, and local policy officials; and insurers and insurance brokers all can take to mitigate this crisis and improve outcomes for everyone.
Housing Credit Research
- A February study in the Journal of the American Medical Directors Association explores the use of the Housing Credit to fund affordable assisted living properties. The study finds that assisted living properties funded by the Housing Credit are generally located in medically underserved areas and in communities with greater needs for affordable housing compared to assisted living properties not funded by the Housing Credit, among other things.
Housing Credit in the News
- In a February 18 interview with Bloomberg TV, AHCIA original cosponsor Rep. Mike Flood (R-NE-01) touted the recent expansion of the Housing Credit and called it the “gold standard for creating affordable housing in America.” His remarks about the Housing Credit start at the 9:49 mark in the video.
- A February 26 blog post by the Urban Institute notes that Congress can use the Housing Credit as part of a multifaceted strategy to address housing affordability.
