H.R. 4856 — Revitalizing America’s Housing Act

This section directs the Secretary of Housing and Urban Development, in the department's annual report to Congress under Section 8 of the Department of Housing and Urban Development Act (42 U.S.C. 3536), to identify significant regulatory barriers to affordable housing—as defined in 42 U.S.C. 12705b (i.e., public policies that jurisdictions must identify in their comprehensive housing affordability strategies, excluding those that create or preserve low- and very-low-income housing such as displacement protections and inclusionary zoning)—and to discuss and analyze how to reduce or remove such barriers.

This section expands the Opportunity Zone tax deferral under IRC §1400Z-2 (i.e., temporary exclusion from gross income of amounts invested in a qualified opportunity fund (QOF)) to include qualifying ordinary income (i.e., ordinary income other than capital gains) received in taxable years beginning after December 31, 2026, in addition to previously eligible capital gains from sales or exchanges before January 1, 2027. (As background, the Opportunity Zone program incentivizes investment in designated low-income communities by allowing taxpayers to defer tax on capital gains reinvested in a QOF within 180 days, with further basis step-ups for long-term holdings and permanent exclusion of post-investment appreciation if held for 10 years.) The amendments apply to amounts invested after the date of enactment.

This section prohibits the Secretary of Energy from finalizing any energy conservation standard for liquid-immersed, low-voltage dry-type, or medium-voltage dry-type distribution transformers (i.e., devices that reduce voltage from distribution lines for end use) at an efficiency level above trial standard level 2 (TSL 2), as defined in table V.1 of DOE's proposed rule on distribution transformer standards (88 Fed. Reg. 1722, Jan. 11, 2023). It further delays the effective date of any such standard finalized at TSL 1 or 2 until 10 years after finalization. (Thus, these provisions limit potential manufacturing constraints amid reported transformer shortages.)

This section amends Section 104 of the Housing and Community Development Act of 1974 (42 U.S.C. 5304), governing citizen participation requirements for the Community Development Block Grant (CDBG) program—which provides formula block grants to states, metropolitan cities, urban counties, and certain units of general local government for community and housing development activities benefiting low- and moderate-income persons—by requiring such CDBG recipients, prior to receiving grants under 42 U.S.C. 5306(b), (d)(1), or (d)(2)(B), to have submitted to the Secretary of Housing and Urban Development (HUD), not less frequently than once every five years, a non-binding plan describing for each of 22 specified land use policies promoting housing density and affordability— (1) whether the recipient has adopted the policy in its jurisdiction; (2) its plan to implement the policy; or (3) the ways in which adopting the policy will benefit the jurisdiction. The policies include enacting high-density zoning, allowing accessory dwelling units and multifamily housing in single-family zones, reducing parking and lot size requirements, and streamlining permitting (e.g., allowing duplex subdivisions, office-to-apartment conversions, and transit-oriented development). (Thus, HUD's acceptance or nonacceptance of a plan does not endorse its contents.) The requirement takes effect one year after enactment and applies to grants awarded before, on, or after that date.

This section increases the exclusion of gain from the sale of a principal residence under IRC §121 to $500,000 for single taxpayers (from $250,000) and to $1,000,000 for married taxpayers filing jointly (from $500,000). (The exclusion applies to taxpayers who have owned and used the residence as their principal residence for at least two of the five years preceding the sale; the new amounts are adjusted annually for inflation after 2024 using a cost-of-living adjustment with 2023 as the base year.) The changes apply to sales and exchanges after the date of enactment.

This section states congressional findings on housing affordability challenges for middle-income families and directs the Comptroller General of the United States to submit a report to Congress not later than 180 days after enactment. The report must (1) identify affordability issues for middle-income homeowners and renters, including the most affected geographic areas; (2) identify federal housing programs (e.g., tax credits, grants, credit programs) available to lower-income but not middle-income households; (3) identify gaps in middle-income inclusion in federal housing affordability programs; (4) recommend a definition of "workforce housing" based on income parameters; and (5) analyze how such a definition could support incentives for workforce housing development through federal programs, policies, and initiatives.

This section expands public housing occupancy permissions under 42 USC 1437a(a)(4) to include firefighters and emergency medical technicians (in addition to police officers, as determined by the public housing agency) and establishes special rent for families with one or more such members as the highest of 15% of monthly adjusted income or 5% of monthly income (instead of the standard highest of 30% of monthly adjusted income or 10% of monthly income). (Thus, these families residing in public housing—typically serving low-income households—receive a reduced rent burden to support retention of public safety personnel.)

This section expands eligibility under the Good Neighbor Next Door Sales Program—under which HUD sells foreclosed single-family homes owned by the agency at a 50% discount to promote homeownership by public servants—to include members of the Armed Forces, firefighters, and law enforcement officers. The section further makes all such HUD-owned single-unit properties available for purchase under the program regardless of location in a revitalization area (notwithstanding statutory and regulatory restrictions) and directs the Secretary of Housing and Urban Development to amend regulations as necessary to implement these changes.

This section defines a _qualified volunteer first responder_ (i.e., a certified volunteer firefighter or other first responder who performed qualified services for an eligible employer continuously for two years preceding application, meeting minimum active membership requirements or volunteering at least 200 hours per year) and— (1) makes such individuals eligible for an $18,000 deduction in annual income under the Department of Agriculture Single Family Housing Guaranteed Loan Program (i.e., loans for purchasing, building, rehabilitating, improving, or relocating dwellings in eligible rural areas), upon submission of a verification letter from the head of their eligible employer attesting to service requirements and including certification and join date; and (2) qualifies such individuals as firefighters or emergency medical technicians for discounted sales under the Department of Housing and Urban Development's Good Neighbor Next Door Sales Program and similar single family property disposition programs (i.e., sales of HUD-acquired homes at up to 50% discount to public safety professionals who occupy the home as principal residence for three years), upon submission of a verification letter attesting to service requirements, including certification and join date, and certifying good faith intent to continue volunteering for at least one year post-closing.

This section amends the definition of a low- and moderate-income person under the Community Development Block Grant (CDBG) program to exclude service-connected disability compensation received from the Department of Veterans Affairs (VA). (As background, CDBG provides formula block grants to states, metropolitan cities, urban counties, and other localities for community and economic development activities that principally benefit low- and moderate-income persons.) This section also directs the Comptroller General to submit a report to Congress within one year of enactment that (1) examines the treatment of VA service-connected disability compensation for eligibility determinations across all HUD-administered programs and identifies inconsistencies; and (2) provides legislative recommendations for each such program to better serve veterans and underserved communities.

This section authorizes appropriations for the Supportive Services for Veteran Families program for FY2026 and each fiscal year thereafter. (The program provides grants to private nonprofit organizations and consumer cooperatives to offer services—such as temporary financial assistance, outreach, and housing counseling—to low-income veteran families who are homeless or at risk of becoming homeless.)

This section establishes a new Neighborhood Homes Credit under a new Internal Revenue Code section 42A for taxpayers selling qualified residences (i.e., houses with 4 or fewer units, condominiums, or cooperative units located in qualified census tracts) in affordable sales. The credit equals the lesser of (1) the excess of reasonable development costs over the sale price (minus sale expenses), up to 120% if needed for financial feasibility as determined by a neighborhood homes credit agency; (2) 35% of eligible development costs; or (3) 28% of the national median sale price for new homes. Reasonable development costs include amounts for acquisition of buildings and land, construction, substantial rehabilitation (exceeding the greater of $20,000 or 20% of acquisition costs), demolition, or environmental remediation, as certified by the agency upon project completion; eligible development costs are similar but cap building/land acquisition at 75% of total. Such costs generally may not be incurred prior to agency allocation for the qualified project (except for building/land acquisition up to 3 years prior, with related-party limits). Qualified census tracts are those with median family incomes at or below area levels, elevated poverty rates, and home values at or below area medians; located in cities with populations over 50,000 and high poverty; in nonmetropolitan counties designated by the agency; or meeting other specified criteria. (Thus, the credit incentivizes private investment in constructing or rehabilitating owner-occupied homes for sale in distressed neighborhoods.)

This section establishes a process allowing a state or unit of local government to petition a federal agency to use the agency's unused property for affordable housing construction. Agencies receiving such petitions must submit copies to the Public Buildings Reform Board (PBRB), determine within 60 days whether the property is excess, and if not excess submit a justification to the Office of Management and Budget (OMB); if excess, the General Services Administration (GSA) may donate the property to the petitioner.

This section strikes the second and fourth provisos in the Rental Assistance Demonstration (RAD) provision of the Department of Housing and Urban Development Appropriations Act, 2012 (P.L. 112-55). The RAD program enables public housing agencies and owners of HUD-assisted multifamily properties (i.e., public housing projects and certain project-based Section 8 properties) to convert to Section 8 project-based rental assistance or tenant-based vouchers to access private capital for preservation and rehabilitation. Specifically, the section (1) strikes the second proviso, which prohibits the Secretary of Housing and Urban Development from limiting RAD eligibility to projects described in the first proviso; and (2) strikes the fourth proviso, which requires public housing agencies to certify accurate calculations of their total public housing units and proposed RAD conversions. (Thus, permits the Secretary to potentially restrict RAD eligibility and eliminates the PHA certification requirement.)

This section defines a small dollar mortgage as a loan of not more than $70,000 secured by 1-to-4 family real property that is FHA-insured, VA-guaranteed or insured, USDA-guaranteed or insured, or eligible for purchase or securitization by Fannie Mae or Freddie Mac. The section further directs the Director of the Bureau of Consumer Financial Protection (CFPB) to issue regulations not later than 270 days after enactment to update Regulation Z (i.e., 12 CFR part 1026, implementing the Truth in Lending Act) to allow salaried originators of residential mortgage loans who exclusively originate small dollar mortgages.

This section defines a small dollar mortgage as one with an original principal obligation of less than $70,000 and directs the Director of the Bureau of Consumer Financial Protection (CFPB), in consultation with the Secretary of Housing and Urban Development and the Director of the Federal Housing Finance Agency, to amend points-and-fees limitations under Regulation Z (12 CFR 1026.32, or successor regulation)—which cap upfront fees (e.g., origination points, broker fees) for qualified mortgages to protect consumers—within 180 days of enactment to encourage additional lending for such mortgages.

This section revises the definition of "manufactured home" under the National Manufactured Housing Construction and Safety Standards Act of 1974 by striking the requirement that such homes be "built on a permanent chassis and." (Thus, factory-built dwellings meeting the size, transportability, utility, and other criteria may now qualify as manufactured homes without a permanent chassis.) It further directs the consensus committee to meet within 90 days of enactment to recommend revisions to federal manufactured home construction and safety standards and related regulations to implement this change, with the Secretary of Housing and Urban Development to consider the recommendations for adoption pursuant to specified procedures.

This section directs the Comptroller General of the United States to conduct a study identifying the number of residential dwelling units and public housing dwelling units (as defined in section 3(b) of the United States Housing Act of 1937) located within one mile of each site on the National Priorities List under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. The Comptroller General must submit a report to Congress with these findings within six months of enactment.

This section directs the Secretary of Housing and Urban Development and the Comptroller General of the United States, not later than one year after enactment, to conduct a study and submit a report to Congress identifying (1) the number of inspections required to be conducted by the Secretary in the prior one-year period that remain incomplete, and (2) the number of inspectors needed to ensure all required inspections can be completed each year. (As background, these inspections are conducted by HUD's Real Estate Assessment Center to assess the physical condition of public and assisted multifamily housing properties.)

This section authorizes the Secretary of Housing and Urban Development to use up to 10% of amounts available for a fiscal year to carry out subtitle B of title IV of the McKinney-Vento Homeless Assistance Act—covering the Continuum of Care program and the Emergency Solutions Grants program—for bonuses or other incentives to geographic areas where recipients have demonstrably and measurably improved housing outcomes for homeless individuals. (The Continuum of Care program funds coordinated systems to provide housing and services to move homeless persons and families into permanent housing; the Emergency Solutions Grants program funds emergency shelter, rapid rehousing, and supportive services.)

This section addresses indoor residential mold in federally assisted housing by (1) defining "indoor residential mold," "residential mold inspection," and "toxigenic mold"; (2) directing the National Institute of Environmental Health Sciences, in coordination with HUD, CDC, EPA, and other agencies, to conduct a study on mold's health effects—including detection methods, exposure risks, public health burden, and impacts on vulnerable populations (e.g., children and seniors)—and submit results to Congress within three years; (3) requiring HUD to develop, within one year, a geographic information system mapping tool identifying mold-impacted areas using the prior two years of inspection data—including Section 8 (i.e., Housing Choice Voucher program) contract transfers—and update it annually; and (4) directing EPA, HUD, and other agencies to launch, within one year, an annual public information and education campaign on indoor air quality risks, including mold prevention, inspection, remediation, and ventilation guidelines.

This section requires the Department of Housing and Urban Development (HUD), beginning one year after enactment and annually thereafter, to conduct a risk assessment of covered housing—dwelling units receiving project-based or tenant-based rental assistance under Section 8 of the U.S. Housing Act of 1937—to identify properties posing the greatest risk of exposing children under age 6 to lead hazards, including lead-based paint and lead service lines; develop an action plan for remediation, control, and safeguards in those properties, with priority to those housing children under age 6; and submit a report to Congress on such properties, including the number of children under age 6 residing there. It further requires HUD to include lead-based paint and lead service lines as exigent health and safety deficiencies in uniform physical condition inspections (per 24 CFR part 5 or successor regulations), ensuring they are tracked at each property and owners are held accountable for remediation.

This section directs the Comptroller General of the United States to conduct a study, due not later than one year after enactment, identifying options to remove barriers and improve housing for elderly or disabled persons, including potential impacts of providing capital advances for (1) the supportive housing for the elderly program under section 202 of the Housing Act of 1959 (i.e., HUD capital advances and rental assistance for low-income seniors), and (2) the supportive housing for persons with disabilities program under section 811 of the Cranston-Gonzalez National Affordable Housing Act (i.e., HUD capital advances and rental assistance for low-income adults with disabilities).

This section establishes annual testimony requirements for the Secretary and Inspector General of the Department of Housing and Urban Development (HUD) before the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs. Specifically, subsection (a) requires the Secretary to testify each year on (1) the physical condition of public housing and other HUD-assisted housing, (2) the financial health of Federal Housing Administration (FHA) mortgage insurance funds, (3) oversight of grantees and subgrantees to address waste, fraud, and abuse, and (4) ongoing departmental activities; subsection (b) requires the Inspector General to testify by October 1 each year on efforts to detect and prevent fraud, waste, and abuse; ability to conduct audits, investigations, and reviews; actions to advance HUD program success; and ongoing activities.

This section requires the President of the Government National Mortgage Association, the Federal Housing Commissioner, and the Administrator of the Rural Housing Service to testify annually before the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services regarding mortgage loans guaranteed or insured by the federal government.

This section revises duties of the United States Interagency Council on Homelessness by (1) changing the deadline for developing the National Strategic Plan to End Homelessness to 12 months after enactment of the Revitalizing America’s Housing Act (from 12 months after May 20, 2009) and replacing the requirement to update the plan annually with a requirement to submit annual reports thereafter to the President and Congress that include the plan's status of completion, any modifications made and the reasons therefor, and an estimate of when homelessness will be ended; and (2) requiring the Council to testify annually before Congress.

This section directs the Inspector General of the Department of Housing and Urban Development (HUD) to investigate the New York City Housing Authority (NYCHA)—the largest U.S. public housing agency, serving over 520,000 residents in 177,000 apartments—including (1) NYCHA's compliance status with its January 31, 2019, voluntary agreement with HUD and New York City to remedy a substantial default declaration under 42 U.S.C. 1437d(j)(3)(A); (2) the monitor's oversight actions and any gaps; (3) a survey of NYCHA housing physical conditions; (4) waste, fraud, abuse, and federal law violations by NYCHA employees or contractors; and (5) other priority issues. The Inspector General must submit a report with investigation findings, a summary of HUD actions to compel remedies, and recommendations to the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs not later than 180 days after enactment.

This section amends FHA reporting requirements for the Mutual Mortgage Insurance Fund (MMIF)—which provides mortgage insurance on single-family home loans—by requiring the Secretary of Housing and Urban Development to (1) submit monthly reports to Congress on the Fund's capital ratio required under section 205(f)(2) of the National Housing Act (i.e., at least 2% of the aggregate outstanding principal balance of insured mortgages); and (2) notify Congress as soon as practicable if the ratio falls below that level. The section further defines a first-time homebuyer, for purposes of qualifying for a federally backed mortgage loan when a consumer report is provided, as a borrower whose consumer report shows no prior or current consumer-purpose loan secured by 1- to 4-unit residential real property. Finally, the section directs the Government Accountability Office to conduct a study, due within 180 days of enactment, on metrics for sustainable homeownership under FHA title II mortgage insurance (e.g., borrower default, refinancing to non-FHA loans, or transitioning to renting)—including for first-time homebuyers as defined—and the feasibility of FHA developing and reporting to Congress a borrower performance scorecard using those metrics.

This section establishes congressional findings declaring that squatting—defined as entering and residing on a property without the owner's permission for 14 or more consecutive days without rent or a rental contract—should not confer tenant status and that federal benefits must not incentivize it. The section amends the Community Development Block Grant (CDBG) program (i.e., formula grants to localities for housing, community development, and economic opportunity) to prohibit funding for any unit of general local government that permits squatting or confers tenancy rights on squatters, with requirements for public notice of prohibited jurisdictions, corrective actions, and Secretary of Housing and Urban Development certification to restore eligibility. The section further prohibits federal support—including Federal Housing Administration insurance under title II of the National Housing Act, Home Equity Conversion Mortgage insurance, section 184/184A guarantees, Department of Veterans Affairs or Agriculture guarantees/insurance/loans, and Federal National Mortgage Association or Federal Home Loan Mortgage Corporation purchases/securitization—for loans secured by 1-to-4 family residential properties (including condominiums and cooperatives) located in such prohibited jurisdictions, with joint regulations required from the Departments of Housing and Urban Development, Veterans Affairs, and Agriculture and the Federal Housing Finance Agency within 90 days of enactment.

This section directs the Secretary of Housing and Urban Development, at the end of each fiscal year, to recapture from public housing agencies any unobligated tenant-based rental assistance funds under this subsection (i.e., Housing Choice Voucher program funds, which enable low-income households to rent housing in the private market) and reallocate such amounts to public housing agencies that obligated all of their tenant-based rental assistance funds.

This section revises the Moving to Work (MTW) program—currently a HUD demonstration authorizing select public housing agencies (PHAs) to combine and flexibly use public housing capital and operating funds and Section 8 tenant-based assistance (i.e., Housing Choice Vouchers) to promote resident self-sufficiency and cost savings—by converting it to a permanent program (previously a demonstration) with three explicit purposes: (1) promoting economic independence through employment and supportive services, (2) providing flexibility for cost-effective administration of housing assistance, and (3) increasing housing choices for low-income families. The section further (1) eliminates any limit on participating PHAs and invites all non-troubled PHAs (i.e., not designated as troubled in the prior two fiscal years) to apply, with approved participation lasting at least 10 years; (2) updates PHA action plan requirements to include steps achieving the program's purposes, hardship exceptions for extenuating circumstances, and informal hearings prior to eviction or assistance termination (with public access to hearing contents and results); and (3) directs HUD to provide training and technical assistance and identify replicable models, while updating statutory references from former sections 9 and 14 to current public housing Capital Fund (section 9(d)) and Operating Fund (section 9(e)) authorities.

This section amends HUD's housing counseling grant program (i.e., grants to public and private organizations for counseling low- and moderate-income families on homeownership, tenancy, and property maintenance) to (1) require grantees to employ counselors certified in sustainable homeownership who have passed examinations on responsible homeownership; (2) suspend such certifications, and potentially deny future grants to the organization, if a counselor's borrowers exceed average local default rates; (3) prohibit grantees from engaging in political activities, advocacy, or lobbying; (4) reserve 40% of funds for organizations providing rental or pre-foreclosure counseling; and (5) ensure geographic diversity among grantees, including those serving urban and rural areas. The section also requires prepurchase housing counseling before any purchase of residential property securing a covered mortgage loan—defined as an FHA-insured mortgage under title II of the National Housing Act, a Home Equity Conversion Mortgage, a section 184 or 184A loan, or a USDA-guaranteed, insured, or direct loan—and foreclosure mitigation counseling for any borrower 30 or more days delinquent on such a loan.