21st Century Road To Housing Act Becomes Law

On July 11, 2026, the 21^st Century Road to Housing Act (the “Act”) became law. This major legislation is the first comprehensive federal housing package in decades. The Act’s many varied provisions can be broadly categorized into four main legislative priorities: reducing environmental reviews for federally subsidized new housing construction, creating new opportunities to receive federal support for housing projects, incentivizing manufactured and standardized housing, and limiting institutional ownership of single-family homes. Although it will take some time for certain environmental streamlining provisions to take effect, the Act does include several new major provisions designed and intended to encourage additional housing development.

Reducing Environmental Reviews for Federally Subsidized New Housing Construction

The Act has several provisions that once in effect will reduce the degree of environmental review federally subsidized housing projects will face. Many of these provisions will only apply to projects newly funded by Congress after the Secretary of the U.S. Department of Housing and Urban Development (“HUD”) develops implementing regulations.

In general, the National Environmental Policy Act (“NEPA”) requires federal agencies to determine whether their actions, including the projects they fund, have environmental effects through a time intensive environmental review process. Federal agency projects include housing development subsidized with funding from HUD and other agencies. The Act creates several new carve outs from having to go through the environmental review process. Section 206 allows small and infill housing projects including rehabilitation of 1–4 unit buildings, new construction of 5–15 units, and office-to-residential conversions that do not increase the building footprint by more than about 20%, are categorically excluded from the NEPA review process. Section 802 also reduces the burden on housing projects funded by the USDA by directing HUD and USDA to coordinate on joint environmental reviews for housing projects funded by both agencies. Even larger projects may have a path to reduced environmental review burdens through Section 205, which allows housing assistance for certain multifamily housing projects to be treated as “special projects” entitled to simplified review and expands HUD’s authority to delegate environmental review responsibilities under NEPA to states, local governments and tribes that presumably would be conducting their own form of environmental review already.

Creating New Opportunities to Receive Funding for Housing Projects

The Act has several provisions that will further facilitate funding of housing projects. Section 213 will use the Community Development Block Grant (“CDBG”) funds to incentivize housing construction by determining a median housing production target—akin to California’s Regional Housing Needs Allocation—that jurisdictions will need to meet in order to avoid their CDBG funding cut by 10%. This also authorizes HUD to give bonus funds to jurisdictions that exceed their housing production targets. Section 207 also focuses on local jurisdictions by authorizing the creation of a $1 billion competitive grant program to help state, local, and tribal governments with regional housing planning and community development activities including updating zoning codes. Section 208 also creates a $200 million competitive grant program for local governments and tribes that can show they are increasing housing production and implementing innovative housing reform programs such as density bonuses. Section 503 will further increase local governments’ ability to access federal funding by allowing those that receive Emergency Solutions Grant funding for addressing homelessness to request a waiver of the statutory 60% spending cap on emergency shelter beds and street outreach. Section 211 will also further encourage investment in multifamily projects by requiring the Federal Housing Administration (FHA) to substantially increase multifamily loan limits. Finally, Section 201 will further encourage housing in opportunity zones by allowing HUD to give extra points on funding applications for housing projects in opportunity zones.

Incentivizing Manufactured and Standardized Housing

The Act has several provisions that will further incentivize the use of manufactured and standardized housing. On the manufactured housing front, Section 301 updates the federal definition of manufactured housing to include units not built on a permanent chassis, which will allow many mobile homes to be considered manufactured homes under federal law. Section 302 requires HUD to identify barriers for modular housing financing and initiate a rulemaking to reduce those barriers and further encourage modular housing construction. Section 303 raises the statutory maximum of federally insured manufactured housing loans and federally insured property improvement loans to be used for the construction for accessory dwelling units. Section 304 reauthorizes HUD’s Preservation and Reinvestment Initiative for Community Enhancement Program (also known as PRICE) for seven years, which will further fund the repair, preservation, and improvement of existing manufactured housing. On the standardized housing front, Section 209 authorizes a grant program to fund communities establishing pre-approved housing designs to facilitate expedited local construction processes.

Limiting Institutional Ownership of Single-Family Homes

The Act notably includes a first of its kind prohibition (Section 1001) that prohibits large institutional investors from directly or indirectly, including in tandem with other entities, owning more than 350 single-family homes in the United States at one time. Violations of this prohibition will result in a civil penalty that is three times the purchase price of the property involved or an amount less than one million dollars, whichever is greater. This prohibition only applies to for-profit entities that are engaged in the business of investing in, owning, managing or holding single family homes. This prohibition does not apply to institutional investors seeking to buy the property pursuant to qualifying renovate-to-rent and rent-to-own programs. It also does not apply to institutional investors building new family homes specifically for the rental market. This new prohibition is forward-looking and does not require existing institutional investors with ownership of greater than 350 single-family homes from liquidating existing holdings.