In June 2026, Congress, in a bi-partisan action, passed the 21st Century ROAD to Housing Act (the “Act”) which is widely viewed as the most significant federal housing legislation in decades. While President Trump did not sign the Act into law, neither did he timely veto the Act and so, as of July 11, 2026, the Act became law and will take effect on January 7, 2027.

The Act is expected to have potentially significant implications for affordable housing finance and development. Among other objectives, it aims to increase housing production, modernize federal housing programs, expand public housing preservation through RAD conversions, and support the continued availability of rental assistance in rural communities. A few of the more significant impacts of the Act on the landscape of affordable housing include:

• Increase Public Welfare Investment. The Act increases the Public Welfare Investment cap under the Community Investment and Prosperity Act from 15% to 20% for banks regulated by the Office of the Comptroller of the Currency and the Federal Reserve. This additional 5% is a significant increase for many banks that are near their 15% ceiling and could mean hundreds of millions of dollars of increased capital for investment in LIHTC which would directly result in an increase to affordable housing construction and preservation of existing properties nationwide.
• USDA Rural Housing Reform. Wrapped within the Act is the Rural Housing Service Reform Act (the “RD Reform Act”). The RD Reform Act will provide overdue updates to the United States Department of Agriculture’s (USDA) Rural Housing Service programs which are critical to the preservation of more than 500,000 affordable rental units in hundreds of rural communities across the County. A considerable number of RD 515 loans are set to mature in the next several years, and, under the existing structure, on maturity of those loans, the rental assistance that subsidizes a sizable portion of those rural affordable housing projects would be lost. The RD Reform Act will permanently separate existing rental assistance from maturing Section 515 mortgages. Rental assistance for RD affordable housing would be provided under stand-alone project-based rental assistance contracts, preserving the subsidy for rural housing regardless of the maturity of a 515 loan.
• Rental Assistance Demonstration (RAD) Program. The Act raises the cap on RAD conversions giving public housing authorities a clear pathway to converting public housing to Section 8 housing, a more stable and financeable platform for preservation.

• HOME Program Revitalized. The Act contains significant updates to the HOME Investment Partnerships Program aimed at increasing housing production and improving program efficiency. Notable provisions include a HUD review of Build America, Buy America waiver requirements and the creation of a pilot program to support the acceleration of conversion of vacant underutilized buildings into housing (subject to appropriations requirements).
• Streamlined Review. Compliance with the National Environmental Policy Act (NEPA) has historically hindered affordable housing projects with delays or even insurmountable pre-development obstacles. The Act will exempt from NEPA review “infill housing projects,” qualifying rehabilitation projects, and small-scale construction projects, reducing delays and creating a streamlined pathway for these projects while preserving review of any project that presents a significant environmental concern.
• Zoning and Land Use. Recognizing that a significant impediment to production of affordable housing is often state and local land-use law and oversight, the Act also provides a framework for the sharing of best-practice guidelines to states and municipalities with the goal of an overhaul of outdated local regulations that have long stymied affordable housing projects.

Kate Mathews and Scott Rosenthal are real estate attorneys at Stoel Rives LLP with extensive experience in affordable housing development and preservation. For more information on how the 21st Century ROAD to Housing Act might affect your projects, contact Kate at kate.mathews@stoel.com or Scott at scott.rosenthal@stoel.com.