Congress recently passed the 21st Century ROAD to Housing Act, which became law on July 11, 2026. This legislation brought together past efforts to reform federal involvement in housing production across the country into a single bill that includes regulatory reforms, new funding opportunities, and other incentives for housing development.
The legislation creates new funding programs and expands existing opportunities for state, local, and tribal governments to support and incentivize housing production. The top provisions we think will have an impact on housing supply and affordability in the communities where we work:
- Changes that increase banks’ ability to invest in LIHTC and other affordable housing and community development projects
- Grants and other support for local housing strategies and implementation to increase housing supply and affordability
- Changes to CDBG and HOME programs that expand local funding options for affordable and mixed-income housing but may impact funding levels in some communities
- Funding for manufactured home community preservation and stabilization
We’re hoping funding appropriations follow the funding authorizations for new and expanded grant programs in the bill. We’re also hoping updated agency guidance or rules on modular housing and single-stair apartments directed by the bill help facilitate broader adoption of these potentially cost-saving construction methods.
See our detailed summary for more of what we’re tracking from this bill.
Provisions of the Road to Housing Act that we’re following at ECOnorthwest
- Funding to support local housing production (requires subsequent appropriations):
- An “innovation fund” grant program offering flexible funding for local governments and tribes that demonstrate measurable increases in housing supply to advance reforms such as streamlined permitting, density bonuses, and zoning changes. Grant amounts can range from $250,000 to $10m, with a total of up to $200m per year authorized 2027-2031.
- Grants for local governments to adopt and implement pre-reviewed housing designs for mixed-income middle housing (plexes, cottage courts, multiplexes, and other structures with 2-25 units).
- Affordable housing planning grants for states, regions, counties, and cities to advance housing plans and strategies, update zoning codes, address disparities in housing needs and access to opportunity, plan for location-efficient and transit-accessible housing, and develop or implement other housing strategies.
- Changes to funding and financing for affordable and low-cost housing:
- Updates to the Public Welfare Investment Cap for banks that will expand banks’ ability to invest in affordable housing and community development projects, including LIHTC.
- A pilot grant program to help local governments convert vacant commercial or industrial properties into affordable housing, prioritizing underinvested areas.
- Grant funding for protection and stabilization of manufactured housing communities.
- Adjustments to Community Development Block Grant (CDBG) allocation formulas for certain jurisdictions based on local housing production and affordability and modifications to allow CDBG funding to be spent on construction of new affordable housing.
- A pilot program to support home repair programs.
- Potential priority for federal housing funding in Opportunity Zones.
- Expansion of the Rental Assistance Demonstration (RAD) program to facilitate the repair and modernization of public housing units.
- Reforms and updates to several other federal funding programs, including the CDBG-DR (Disaster Recovery) program and the HOME Investment Partnership Program.
- Changes to federal regulations to address barriers to production:
- Reforms to support manufactured and modular housing, including eliminating permanent chassis requirement for manufactured housing and direction to agencies to consider changes to support modular housing.
- Exempting or streamlining National Environmental Protection Act (NEPA) reviews for federally supported housing related activities, including infill housing.
- Technical assistance and guidance:
- Directing HUD to develop best practices for zoning and land use policies, including recommendations regarding reducing or eliminating parking minimums, by-right review, allowances for ADUs and middle housing, and considerations for transit-adjacent development.
- Directing HUD to issue guidance to help jurisdictions permit single-stair apartments (“point-access block buildings”) up to six stories.
- Directs the Government Accountability Office (GAO) to study obstacles to workforce housing and housing for middle-income households and barriers to housing for individuals with disabilities and older adults.
- Changes to lending and purchasing provisions:
- A restriction on large institutional investors purchasing single-family homes, with carve-outs for build-to-rent developments.
- Changes to FHA loan limits for multifamily loans and manufactured housing loans.
- A pilot program to expand access to small-dollar mortgages (under $100,000).
How might this impact the communities where we work?
While many of the changes are incremental individually, taken together, they have the potential to meaningfully support and complement local, state, and regional efforts to increase housing supply, affordability, and opportunity.
Communities in the Western US and nationwide working to boost housing supply and affordability can now tap into several new federal resources:
- New Funding & Grants: Expanded financial support for local planning, housing production, and preservation.
- Cut Red Tape: Regulatory reforms that make it easier to build manufactured and infill housing.
- Easier Financing: Updated banking and lending standards to help secure loans for low-cost housing.
- Expert Resources: Technical assistance and upcoming federal studies on housing best practices.
Here are some of the highlights of where we’re seeing potential for meaningful impacts:
Changes that increase banks’ ability to invest in LIHTC and other affordable housing and community development projects: Expanding banks’ ability to continue investing in LIHTC projects and other affordable housing and community development projects comes at a time when demand for tax credits for these projects has taken a hit. Analysis by Novogradac and others shows that many banks were reaching the limits of the amount they could invest, making this update a meaningful one to maintain investment in these programs.
Grants and other support for local housing strategies and implementation to increase housing supply and affordability: This legislation includes multiple provisions to support communities already working through barriers to housing production and affordability. The bill does not include land use mandates or preemption, but provides incentives for communities to facilitate more housing development, and may result in some new resources that can inform local efforts. While many of the communities in Oregon, Washington, California, and Colorado where we work have already invested substantial time and effort in advancing local housing strategies, we are excited to see additional funding and resources available to support local planning and implementation efforts across the country.
Changes to CDBG and HOME programs that expand local funding options for affordable and mixed-income housing but may impact funding levels in some communities: We will be following how updates to CDBG and HOME programs take shape across the country. Updates to CDBG expand eligible activities and adjust local allocations for some communities but do not change the overall amount of federal funding allocated to the program. These changes may impact the communities we work in differently depending on local context.
- Adding new construction of affordable housing as an eligible CDBG activity (up to 20% of the local allocation) expands locally-controlled resources that can be used for gap financing in affordable housing projects, although this may compete with other eligible activities for funding. The amount of funding available will be limited in many communities given overall allocation amounts and the 20% cap. However, in entitlement communities that have few other locally-controlled sources of funding for affordable housing, this new option could make a meaningful difference in the jurisdiction’s ability to support affordable housing projects at the local level.
- Changes to the CDBG funding allocation formula based on a community’s annual housing growth will also impact communities differently depending on their situation. Communities seeing relatively more housing production will have access to bonus program funding. Others not seeing that growth may see a reduction in program funding, though there are carve-outs for communities with low rents and home prices, high vacancy rates, or disaster impacts. While we haven’t independently verified the analysis, early efforts to identify potential impacts to funding suggest that key regions in Oregon, Washington, California, and Colorado could potentially see funding reductions. We will be following how this shift plays out in the communities where we work.
- Updates to the HOME program include a more flexible income threshold (100% AMI) to support mixed-income projects and a pilot program to convert vacant and abandoned buildings into “attainable” housing. Attainable is defined for this provision as “housing that serves households earning not more than 120 percent of the area median income, if the majority of the housing units are affordable to households earning not more than 60 percent of the area median income.” These shifts expand the flexibility of this funding source for mixed-income housing and re-use projects. We will be following how these changes translate into innovative housing projects at the local level.
Funding for manufactured home community preservation and stabilization: Grants to support manufactured home community preservation and stabilization could also help fill a critical need for additional resources to prevent displacement and improve housing conditions in some of the most affordable unregulated housing in many of the communities where we work.