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Key Takeaways
- The Housing for the 21st Century Act aims to add inventory by “modernizing” federal policies
- Zoning and environmental restrictions would be lowered and affordable housing expanded in order to streamline more construction
- The bill needs to pass Senate vote before it can move onto presidential approval
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Housing market conditions have softened in 2026 and could continue improving behind some new legislation. The Housing for the 21st Century Act takes multiple steps toward reforming and “modernizing” housing policy.
In an attempt to streamline more for-sale inventory, the bill directs the Department of Housing and Urban Development (HUD) to update and lower zoning restrictions, and make housing-related activity (such as repairs, rehabilitation, and certain types of construction) exempt from National Environmental Policy Act (NEPA) requirements.
It also raises the limits on FHA multifamily loans (both initially and annually) to better capture current building costs. The bill then raises the maximum income eligibility for HUD-backed community development grants, aimed at stoking the supply of affordable housing and those who would qualify to live in it.
For veterans, it would exclude disability benefits from counting as income, increasing borrower eligibility under the Veterans Affairs Supportive Housing program. The restrictions on manufactured homes would become more laxed, dropping the rule that they must be constructed with a permanent chassis — which would ultimately lower the construction costs.
“Housing affordability is a top concern for homeowners, renters, and communities across the country,” said Bob Broeksmit, CEO at the MBA. “[The] overwhelming bipartisan vote signals meaningful legislative momentum to expand supply, improve affordability, and modernize housing policy. This legislation advances several core MBA priorities, including regulatory modernization, broader FHA multifamily financing, stronger rural housing programs, and better coordination across federal housing agencies.”
Introduced in December 2025 by U.S. representative French Hill (R-Ark.), the legislation swept through the Financial Services Committee with a 53-1 vote and then the full House of Representatives with a 390-9 margin on Feb. 9, 2026. The bipartisan bill heads to the Senate and must pass before it can be signed into law by the president.
The bottom line
If passed, the Housing for the 21st Century Act could help homebuyer affordability, lax regulation, and ramp up construction — ultimately adding more supply to the market.
Regardless of when and whether the legislation passes into law, you can take steps now to get as prepared as possible and see if you qualify for down payment assistance.
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FAQs: Housing for the 21st Century Act
The proposed bill would aim to help affordability and housing supply with increased construction through reduced zoning, streamlined permitting, and modernized policy. It would also expand financing for affordable housing and provide grants for community development. Further, it would make certain building rehab and repair exempt from the environmental review process.
As of February 2026, the Housing for the 21st Century Act has not yet become law. It is moving through the approval process though, passing the House of Representatives and now awaits Senate vote. If it passes both chambers of Congress, it will move to presidential approval and can be signed into law.
Rep. French Hill (Arkansas) introduced the Housing for the 21st Century Act in the House of Representatives in December 2025. The bill awaits Senate vote.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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