Episode 92: OMB's Proposed Rule Threatens $1 Trillion in Federal Grants

Episode 92: OMB's Proposed Rule Threatens $1 Trillion in Federal Grants

The Office of Management and Budget, joined by more than 40 federal agencies including HUD, has proposed a sweeping revision to government-wide rules governing federal financial assistance. With up to $1 trillion in funding in scope and a final rule targeted for October 1, 2026, the proposal carries direct implications for affordable housing developers, operators, and lenders reliant on HUD grants and related programs. Key Takeaways: * The proposed rule affects up to $1 trillion in federal financial assistance across grants, cooperative agreements, and other assistance mechanisms. * Comments are due July 13, 2026; OMB is targeting a final rule effective October 1, 2026. * E-Verify screening and English-only materials requirements would add new compliance layers to HUD and other federal grant programs. * Fraud allegations would be referred directly to inspectors general and prosecutors, bypassing standard internal agency review processes. * Proposed limits on disparate-impact enforcement could alter fair housing compliance strategies for affordable housing operators. * Greater authority for political appointees over grant approvals and monitoring reduces agency-level flexibility and insulation from political intervention. * OMB would gain expanded discretion to withhold funding — introducing timing and certainty risk for transactions dependent on reliable federal funding flows. This rule is not abstract policy. If finalized as proposed, it restructures the compliance environment and funding certainty for any affordable housing deal touching federal grants. Stakeholders with operational exposure to HUD programs should submit detailed, program-specific comments before the July 13 deadline. The October 1 effective date leaves little runway for implementation planning once a final rule is issued. Subscribe to The Spring Street Brief for daily updates on affordable housing in America.

Episode 91: FY 2027 T-HUD Bill Clears Subcommittee

The House T-HUD Appropriations Subcommittee passed its FY 2027 HUD funding bill last week on a 9-7 party-line vote, and the full House Appropriations Committee is marking it up today. With a total HUD budget of $71.4 billion — $5.9 billion below FY 2026 enacted levels — the bill sets the opening position for a funding fight that will directly affect LIHTC deal stacks, voucher availability, and HOME gap financing across the country. Key Takeaways: * Total HUD funding proposed at $71.4 billion, a $5.9 billion reduction from FY 2026 enacted levels. * HOME funded at $500 million, down from $1.25 billion — a significant cut, but an improvement over FY 2026's starting position, when both the President's budget and the House bill proposed zeroing it out entirely. * Tenant-based Section 8 at $38.083 billion, slightly below the $38.4 billion enacted in FY 2026 — a narrow but real gap for housing authorities already under pressure. * Project-based Section 8 receives a $432 million increase over FY 2026 enacted levels, coming in at $18.975 billion — a positive signal for preservation and new construction pipelines. * Choice Neighborhoods zeroed out again; Congress restored it at $25 million in FY 2026, but that outcome is not guaranteed to repeat. * HOME, CDBG, public housing, and several other programs exempted from Build America, Buy America compliance for FY 2027 and prior years — a significant relief provision for deals where BABA has been slowing draws and closings. * Continuum of Care funded at $3.778 billion, down $231 million from enacted levels, but the House rejected the administration's proposal to eliminate CoC and fold homeless assistance into ESG. Today's full committee markup is the next inflection point. The House bill is the floor of negotiations, not the ceiling — the Senate is expected to take a less aggressive posture on cuts, particularly for HOME and tenant-based vouchers. Developers and syndicators with HOME-dependent deal structures should model a wide range of outcomes. The BABA exemption provision, if it survives to enactment, would remove a material compliance barrier on HOME-funded closings. Watch for Senate appropriators' response and any floor amendments that could shift the HOME or voucher numbers before a final conference agreement takes shape. Subscribe to The Spring Street Brief for daily updates on affordable housing in America.

Episode 90: HUD Overhauls CoC Funding With $4.04B Recovery-First NOFO

HUD has released its Fiscal Year 2026 Continuum of Care Notice of Funding Opportunity — $4.04 billion in federal homelessness assistance structured around a fundamental policy shift away from housing-first and toward recovery, self-sufficiency, and competitive performance accountability. For developers, syndicators, and lenders with exposure to supportive housing, the implications for operating subsidy assumptions are immediate. Key Takeaways: * HUD's FY2026 CoC NOFO releases $4.04 billion — described by HUD as a record funding level for the program. * $1.3 billion is specifically reserved for new projects, with explicit priority given to Transitional Housing and Supportive Services over permanent supportive housing. * Automatic renewal of CoC grants is eliminated; CoC recipients must now competitively scrutinize and prioritize projects based on performance outcomes. * HUD is conditioning funding on prohibiting facilitation of illicit drug use, directly targeting harm-reduction models that have operated within CoC-funded programs. * HUD is actively encouraging new applicants, signaling that incumbent grantees no longer hold a structural funding advantage. * Deals carrying CoC-dependent operating revenue — particularly those built on housing-first frameworks — face genuine renewal risk under the new NOFO structure. * State QAP scoring of supportive housing and lender underwriting of CoC grant revenue may need to be reassessed as the federal program's priorities realign. This NOFO represents the most significant structural overhaul of the CoC program in its history. For the affordable housing finance community, the shift isn't just ideological — it changes the risk profile of supportive housing deals that depend on CoC operating subsidies. Developers, syndicators, and lenders should review existing and pipeline deals for CoC revenue exposure, and state HFAs should expect pressure to realign supportive housing priorities in upcoming QAP cycles. The $1.3 billion in new project funding is a real opportunity, but only for organizations positioned to compete under the new performance and programmatic framework. Subscribe to The Spring Street Brief for daily updates on affordable housing in America.

Episode 89: 21st Century ROAD to Housing Act Clears the House

The 21st Century ROAD to Housing Act passed the House 396-13, with White House advisers signaling the President would sign the bill in its current form. Senate Banking Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) issued a joint statement pledging to advance legislation — but signaled the Senate's version isn't simply a rubber stamp on the House bill. A key fault line over institutional investor home-buying restrictions remains unresolved between progressive lawmakers in both chambers. Key Takeaways: * The House passed the 21st Century ROAD to Housing Act 396-13, reflecting overwhelming bipartisan support rarely seen on housing legislation. * The White House issued a Statement of Administration Policy indicating presidential advisers would recommend the President sign the bill as passed — a strong pre-signature signal. * Senate Banking Committee Chairman Scott and Ranking Member Warren issued a joint statement committing to continue work toward a bill that can pass the Senate, stopping short of endorsing the House text outright. * The institutional investor single-family home-buying provision remains a point of disagreement between House Financial Services Ranking Member Maxine Waters (D-CA) and Senator Warren — a fault line that could force amendments or a conference process. * The Senate previously passed its own strong bipartisan housing bill, meaning reconciliation between chambers is a live possibility, introducing timeline risk for practitioners. * LIHTC stakeholders should monitor the Senate Banking Committee for markup activity and any targeted amendments to the institutional investor provision. * The bill's momentum is real — a 396-13 vote and White House backing are rare alignments — but Senate procedure and intra-progressive disagreements could slow final passage. This is one of the most significant bipartisan housing pushes in years, and the political window appears genuinely open. For affordable housing investors, developers, and syndicators, the near-term question is whether the Senate moves on the House text or insists on its own version — and how the institutional investor provision gets resolved without fracturing the coalition. Track Senate Banking Committee activity closely over the coming weeks. Subscribe to The Spring Street Brief for daily updates on affordable housing in America.

Episode 88: Carey and Panetta Introduce 5-Year LIHTC Carryback Bill

Representatives Mike Carey (R-OH) and Jimmy Panetta (D-CA) have introduced the Affordable Housing Credit Carryback Act (H.R. 9012), a bipartisan standalone bill that would allow Low-Income Housing Tax Credit investors to carry back unused credits up to five years against prior tax liability. For LIHTC investors, syndicators, and developers, the proposal addresses a structural limitation in the current tax code that constrains investor absorption capacity and deal pricing. Key Takeaways: * H.R. 9012 would permit 5-year carrybacks of unused LIHTC against prior-year tax liability — a mechanism currently unavailable for the Housing Credit. * The current code allows only 20-year carryforwards, which defers value and reduces capital efficiency for investors who hit absorption ceilings in a given year. * A carryback mechanism can generate immediate tax refunds rather than stranded credits, improving investor liquidity and willingness to commit capital. * Improved investor absorption capacity is a direct input to credit pricing — better pricing at the deal level helps developers close financing gaps in a high-cost construction environment. * The bill was introduced with bipartisan support: Rep. Carey sits on the House Ways and Means Committee, giving the bill a sponsor with direct committee standing. * H.R. 9012 has been referred to Ways and Means — the same committee that would handle any broader tax legislation where this provision could be incorporated. * The bill may move as a standalone measure or be folded into a larger tax package; either path requires early engagement from industry stakeholders. The Affordable Housing Credit Carryback Act is early-stage legislation, but it targets a real friction point that the LIHTC investor community has long identified. With a Republican co-sponsor on Ways and Means and a bipartisan House introduction, the bill has a credible path to at least a committee hearing. Developers, syndicators, and lenders should monitor the Ways and Means calendar closely and engage their congressional contacts now — particularly as broader tax legislation remains active in the current session. Subscribe to The Spring Street Brief for daily updates on affordable housing in America.