By Jessi Heale | Inman (abridged)
The 21st Century ROAD to Housing Act is the broadest federal housing package since the Cranston-Gonzalez National Affordable Housing Act of 1990, according to The New York Times, and it touches nearly every corner of the housing market, from institutional investors to manufactured home builders to local zoning boards.
Here is what agents, builders and lenders need to know.
What the law does
The legislation bundles more than 40 provisions covering housing supply, financing and oversight, according to NPR. A few provisions stand out for the real estate industry.
For the first time, the law limits how many single-family homes large institutional investors can buy. Investors who own 350 or more single-family homes are barred from buying additional ones, with exceptions carved out for certain build-to-rent projects, according to the Bipartisan Policy Center. The provision addresses a popular target for both parties, even though large investors hold only about 3 percent of the single-family rental market nationally, according to NPR; their footprint is larger in some individual metro areas.
Manufactured housing gets a boost, too. The law removes the longstanding federal requirement that manufactured homes sit on a permanent steel chassis, a rule that made those homes harder to finance and build. Housing policy experts say the change could cut construction costs by $5,000 to $10,000 per home, according to NPR.
On the local level, a new $200 million annual grant program will reward cities and counties that streamline permitting and zoning rules, according to the Bipartisan Policy Center. The law also expands categorical exclusions from environmental review for smaller infill projects, cutting one of the slower steps in getting new housing built.
Lenders will feel the law, too. It raises FHA multifamily loan limits for the first time in more than two decades and directs the Consumer Financial Protection Bureau to study small-dollar mortgages under $100,000. It also raises the cap on public welfare investments in community development by banks, including affordable housing, from 15 percent to 20 percent, freeing up more capital for those projects.
Further down the bill, disaster recovery and rural housing programs get a permanent home. The law permanently authorizes HUD’s Community Development Block Grant Disaster Recovery program and updates several USDA rural housing programs, according to the Bipartisan Policy Center.
None of this comes with new money attached. The law does not appropriate additional federal funding for any of these programs, according to the bill text.
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