H.R. 8127 — Permanent Housing Affordability Act

This section defines terms for purposes of the Act, including (1) community development financial institution (as defined in 12 U.S.C. 4702); (2) community land trust (a nonprofit entity, state, unit of local government, or instrumentality that acquires, develops, or holds land to provide permanently affordable housing to low- and moderate-income persons for at least 99 years—or the maximum period permitted by state law—using ground leases, deed covenants, or similar mechanisms, with preemptive purchase options); (3) eligible entity (a unit of local government, state or local instrumentality, or nonprofit organization—including a community land trust—that manages a shared equity homeownership model program); (4) eligible grantee (a state agency, state-chartered housing authority, or community development financial institution certified by the Secretary of the Treasury); (5) qualified homebuyer (a homebuyer with household income not exceeding 120% of area median income); (6) resale formula (a method under 24 C.F.R. 92.254(a)(5)(i)(A), as in effect on March 28, 2025, for determining fair return and resale price); and (7) shared equity homeownership model (resale-restricted, owner-occupied housing affordable to low- and moderate-income households for at least 99 years—or the maximum period permitted by state law—with resale value limited by formula in a ground lease, deed restriction, or similar mechanism).

This section establishes the Lasting Home Affordability Fund, directing the Secretary of the Treasury to create a grant program within 90 days of enactment under which eligible grantees receive grants to capitalize revolving funds for providing low-interest construction loans (not more than 3% interest rate and 1% origination fee) to eligible entities for costs associated with constructing or rehabilitating housing sold to qualified homebuyers, limited equity cooperative members, or community land trust residents as primary residences. Eligible entities must ensure initial and subsequent sales are to qualified homebuyers at below-market values via a resale formula in a ground lease, deed restriction, or similar mechanism; eligible grantees must prioritize loans for properties in high cost-burden areas (as determined by the Secretary), areas with displacement risk due to rising housing costs or redlining, or those required to remain affordable for more than 99 years and may not require eligible entities to hold more than 10% of the loan amount in liquid assets. The Secretary must seek geographic diversity in grants, including to areas of persistent poverty, underserved areas, and rural areas; require annual grantee reports on loan details, affordability mechanisms, and project outcomes; and submit aggregated annual reports to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services. This section authorizes $100 million for FY2027 to carry out the program, to remain available until expended.

This section establishes a five-year Lasting Affordability Homeownership Grant pilot program under the Secretary of Housing and Urban Development to provide grants to eligible entities for purchasing vacant land, existing properties, or predeveloped land to develop or renovate and sell housing to homebuyers or limited equity cooperative members, with priority for the longest-term affordability. Homes must be built and marketed (vacant land) or ready for sale (existing properties or predeveloped land) within three years of purchase, subject to discretionary extensions by the Secretary; all homes must be sold to households with incomes at or below 80% of area median income (120% in rural areas) using ground leases, deed restrictions, covenants, or other mechanisms for permanent affordability and an entity-determined resale formula. Eligible entities must submit streamlined biennial reports to the Secretary for six years beginning two years after receiving a grant, covering metrics such as units developed, households served, purchase prices, and delinquency rates; the Secretary must submit annual aggregate reports to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services. The section authorizes $100 million annually for FY2027 through FY2031, with no more than 10% for technical assistance to grantees.

This section establishes a HUD program, through the Office of Policy Development and Research, to conduct and disseminate research on best practices for community land trusts and other shared equity homeownership models (i.e., arrangements using ground leases, deed restrictions, or similar mechanisms to preserve long-term affordability); provide technical assistance and capacity building funding, through nonprofit representatives, to states, localities, tribes, and shared equity entities; and authorizes such sums as necessary for these activities. The section further requires HUD, not later than one year after enactment, to conduct a public awareness campaign on the benefits and responsibilities of such models—including a website, information for housing counseling agencies and potential homebuyers, and lender guidance on ground leases and appraisals—and authorizes $3 million annually for FY2027 through FY2029; directs HUD, in coordination with the Federal Housing Finance Agency (FHFA) and others, to carry out an education and outreach campaign for consumers, homebuilders, lenders, and real estate professionals on such models and authorizes such sums as necessary; and requires annual reports to the Senate Banking Committee and House Financial Services Committee describing these activities, FHFA consultations, research conducted, and entities receiving assistance.

This section amends the federal surplus real property disposal program to (1) define "shared equity homeownership model" by cross-reference to the Permanent Housing Affordability Act; (2) authorize the Administrator of General Services to convey suitable surplus real property, as determined by the Secretary of Housing and Urban Development, to a community land trust or shared equity homeownership model at a discounted value of 75% of market value (or more if justified); (3) require the deed of conveyance to mandate perpetual use for that purpose with reversion to the government if violated; and (4) designate the Secretary of Housing and Urban Development to enforce compliance for such transfers, in addition to low-income housing assistance. (As background, the program enables no-cost or discounted transfers of surplus federal real property to states and nonprofits for public uses such as education, health, parks, and housing, with designated agency heads ensuring compliance.) This section further requires the Secretary of Housing and Urban Development to submit an annual report to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services detailing the number of surplus properties conveyed for affordable housing—including to community land trusts or shared equity homeownership models—and the average discounted value of such properties.