Current Legislative & Regulatory Efforts

NALHFA is your voice on regulatory and legislative issues. As the industry faces a broad range of challenges and potentially harmful regulations, we remain committed to advocating on behalf of our members. Our legislative and regulatory priorities below showcase what we are fighting for and how we are addressing these challenges.

NALHFA also strives to educate our members on the legislative and regulatory issues impacting the industry so you can stay informed and be a part of the conversation.

2025 Legislative and Regulatory Policy Priorities

The National Association of Local Housing Finance Agencies (NALHFA), founded in 1982, is the national association of professionals working to finance affordable housing in the broader community development context at the local level. As a non-profit association, NALHFA is an advocate before Congress and federal agencies on legislative and regulatory issues affecting affordable housing and provides technical assistance and educational opportunities to its members and the public. On behalf of our members, NALHFA will concentrate its 2024 advocacy activities on key federal affordable housing and development programs listed below.  The list is not exhaustive, as other issues are likely to arise, and NALHFA will be both proactive and reactive to these as needed to support the industry.

Enhancing Low Income Housing Tax Credits (Housing Credit):

The Housing Credit is the most successful tool available for incentivizing private investment in the production and preservation of affordable housing. The Housing Credit is structured to allow investors in the private sector to provide equity capital in exchange for a credit against their tax liability. Since it was established in 1986, the Housing Credit has financed over 2.8 million homes for 6.5 million low-income families and generated $100 Billion in private investment in communities nationwide. Every year, the Housing Credit supports more than 90,000 affordable homes and nearly 100,000 jobs every year.

Additionally, Private Activity Tax Exempt Bonds (PABs) generate 4 percent Housing Credits, which finance approximately 50 percent of all Housing Credit developments. PABs are a critical affordable housing tool, leveraging private and public resources, creating tens of thousands of jobs, and facilitating the creation of millions of low- income homes. Currently, the cap on PABs is a major limiting factor for a growing number of states and localities as they seek to preserve existing affordable and public housing and create new housing to meet the growing need. Increasing the cap on PABs for affordable and public housing would help create a public good and support the country’s continuously growing housing infrastructure needs.

Further, Mortgage Revenue Bonds (MRBs) benefit Housing Finance Agencies (HFAs) by providing a reliable source of low-cost capital to fund affordable housing initiatives. They enable HFAs to offer below-market interest rates on mortgages, making homeownership more accessible for low- and moderate-income families. MRBs also help stimulate local economies by increasing homeownership rates and promoting residential stability. Additionally, they support HFAs in fulfilling their mission to address housing affordability challenges while fostering community development.

Increase Opportunities for Single Family Ownership:

Reducing bureaucratic obstacles and simplifying regulatory frameworks will empower local HFAs to more effectively address housing shortages and reduce costs. NALHFA aims to foster a more flexible and responsive housing market where financing is accessible, housing stock can be increased and essential resources are allocated to address community-specific housing needs to alleviate market disruption during high inflationary periods. Further, the bipartisan Neighborhood Homes Investment Act would support localized housing investment and private market discipline for unit construction and financing.

Additionally, opening up federal lands in the United States for affordable housing development could significantly boost the nation's housing supply, especially in areas facing severe shortages. By making more land available for residential projects, particularly in regions with high housing demand, federal agencies could aid lower land acquisition costs—a major expense in housing development. This approach would create opportunities to build affordable housing units in urban and suburban areas where land is often scarce and expensive, thereby addressing housing affordability issues more directly. Utilizing federal lands will encourage innovative public-private partnerships, allowing developers and government entities to work together to create sustainable, affordable communities.

Ensuring Full HUD Funding:

Despite their proven track record, HUD’s affordable housing programs have been chronically underfunded. After years of cuts to HUD programs, low federal spending caps required by the Budget Control Act of 2011 further decreased funding for affordable housing and community development programs. This has only made it more difficult to ensure low-income seniors, people with disabilities, families with children, and other vulnerable populations are stably housed. Today, of the families who qualify for housing assistance, only a quarter will get the help that they need.

Lowered or even level HUD funding threatens affordable housing and community development investments and could destabilize millions of low-income families. More than 85% of HUD’s budget goes directly to renewing housing assistance already in place. When HUD’s resources are not fully funded, families may lose access to stable housing, putting them at increased risk of homelessness. HUD programs are critical to families, communities, and our economy, including HOME, housing choice vouchers, tenant protection vouchers, rental assistance, CDBG and others. Our country must continue to invest in these crucial programs.

Modernizing HOME Investment Partnership Program:

For over 30 years, the HOME Investment Partnerships Program (HOME) has been one of the most effective, locally driven flexible financing tools to help communities produce and preserve affordable rental housing while also serving as a needed subsidy for homeownership. Every $1 of HOME funds yields $4.69 in additional investments. To date, HOME has leveraged an additional $163 billion in public and private resources.

HOME’s administration suffers from years of sedimentary regulation that has impacted its efficiency and effectiveness. Modernization should include modifications to allow states and localities to do more with existing resources, better aligning HOME with other HUD programs and other affordable housing programs, and administrative improvements.

 Increase Down Payment Assistance:

In 2019, the Department of Housing and Urban Development (HUD) published a Mortgagee Letter (ML) regarding the Federal Housing Administration’s (FHA) insurance rules for down payment assistance (DPA) programs. Initially, the ML was supposed to be effective immediately. However, within a week from the release of the ML, several non-governmental entities filed suit against FHA in attempts to stop the effective date of the ML. In response, FHA issued a 90-day extension on the effective date.

The ML states that in order to provide jurisdictional authority, a mortgagee must obtain documentation as evidence that the down payment assistance is being provided by a federal, state, or local government agency or entity in which the property is located in. A mortgagee also must obtain a legal opinion signed and dated within two years of closing, stating that government entity providing the down payment assistance has the correct jurisdiction. In addition, the mortgagee must provide evidence that the down payment assistance is being provided by a governmental entity by collecting a letter from the governmental entity stating the funds provided for the Borrower’s MRI legally belonged to the government entity at or before closing.

In 2021, HUD’s entries in the Unified Regulatory Agenda noted that they would be initiating a rulemaking on this issue. NALHFA contacted HUD staff to discuss the issue and articulate initial concerns. In the fall of 2022, HUD communicated to NALHFA directly that they are limited on what information they can share, but that the proposed rule is not trying to adversely impact local HFA’s.

Creating a Permanent Federal Housing Administration (FHA) – Housing Finance Agency (HFA) Multifamily Loan Risk-Sharing Federal Financing Bank (FFB) Program:

The Federal Housing Administration (FHA) – Housing Finance Agency (HFA) Multifamily Loan Risk-Sharing Federal Financing Bank (FFB) Program is an important option for many HFA’s affordable rental housing developments. The Federal Financing Bank (FFB) and Risk- Sharing Program is a partnership between HUD and the U.S. Department of Treasury that provides low cost capital through a strong network of state and local HFAs across the country, efficiently leveraging private investment and state and local government resources, with little risk to the federal government.

Treasury and HUD finalized an agreement in 2021 to restart FFB’s support of HUD’s Risk Sharing program, which had been suspended in 2019, for a period of three years. The agreement provides low-cost Ginnie Mae-comparable rates to HFAs that finance affordable housing development, enabling the development of new quality and affordable housing. NALHFA conducted a survey of members in 2022 garnering a 100% positive response when asked whether the FFB Risk Sharing program should be made permanent by congressional action. When asked if Ginnie Mae should be permitted to create a risk-share program, members also responded unilaterally for congressional action that would allow the program to become operational.

 
Advocating for NALHFA Member Interests in Upcoming Federal Rulemaking Processes

Over the course of the coming months, HUD and other agencies that oversee the programs utilized by NALHFA members will undertake regulatory action to update and make changes to key agency programs. Per the direction of the Biden Administration, HUD officials have indicated that they plan to finish all rulemaking procedures and finalize the agency’s regulatory work by May of 2024.

HUD plans to take regulatory action in several key areas, notably to make changes to the administration of the HOME and Community Development Block Grant programs, to update their Section 504 disability standards, and determine how they will issue waivers for the Build America Buy America (BABA) requirements. Additionally, NALHFA expects that the final rules for Affirmatively Furthering Fair Housing (AFFH) will be released in the coming months. 

 
Ensuring Affordable Broadband Access for Underserved Communities

Equal broadband access within housing leads to increased community growth. By providing lower-cost internet to affordable housing properties greater workforce opportunities can be achieved through decreasing the digital divide that affects many lower-income households. This deficiency of broadband access also negatively impacts younger members of communities in need who struggle with obtaining modern internet services that are needed to achieve educational success in K-12 learning. By implementing increased broadband development households can gain high-speed internet access at home to increase workforce opportunities and higher education achievements.

For more information, contact the NALHFA team at 202-367-1197 or [email protected].