House Passes Key Housing Affordability Bill

A key housing affordability bill—the 21st Century ROAD to Housing Act—passed the House of Representatives on May 20.

The House voted 396–13, sending it back to the Senate for final approval.

Supporters say the legislation will help increase the number of new homes and lower costs, as it contains several provisions that would support the creation of supply.

Some of the measures consist of cutting red tape in environmental reviews, authorizing a pilot program offering competitive grants, and encouraging local zoning reform.

One facet of the bill is its restrictions on large institutional investors purchasing single-family homes. Both chambers have made slight adjustments to an idea that initially received the White House’s endorsement.

The upper chamber approved text mandating that large investors who construct single-family rentals sell them within seven years.

Although the House version still curbs Wall Street’s ownership of single-family units, the latest draft softens those rules. The lower chamber introduced broader exemptions for institutional investors for newly-built rentals and residential properties requiring major renovations, as well as other carve-outs.

Data from the American Enterprise Institute suggest that institutional investors’ market share is about 1 percent nationwide.

Despite differences between the chambers, the legislation still enacts President Donald Trump’s goal, said Rep. French Hill (R-Ark.), chairman of the House Financial Services Committee.

“Importantly, it delivers on President Trump’s call to limit institutional investors from competing with the American people as they seek to purchase a home,” Hill said in a May 19 statement.

“I remain committed to advancing a bipartisan, bicameral housing package that can ultimately be signed into law by the President.”

For months, the Trump administration has touted its support for ensuring that housing stock is dedicated to Main Street rather than wealthy investors.

The president signed an executive order in January directing his administration to advance home sales to individual buyers, scrutinize large investors’ property purchases, and bar federal programs from facilitating Wall Street companies’ acquisition of single‑family homes.

“To preserve the supply of single-family homes for American families and increase the paths to homeownership, it is the policy of my Administration that large institutional investors should not buy single-family homes that could otherwise be purchased by families,” Trump said in the order.

Trump, meanwhile, had urged Congress to pass the bill immediately.

“I called for Congress to save the American Dream of Homeownership, and ban these purchases, PERMANENTLY!” he wrote in a May 11 post on Truth Social.

“[Sens. Bernie Moreno (R-Ohio) and Tim Scott (R-S.C.)] have worked to ensure my call becomes a reality, and have a Bill which has passed the Senate with nearly 90 votes. I am asking Congress to pass that Bill, the 21st Century ROAD to Housing Act, which would ensure that homes are for people, not Corporations.”

The 21st Century ROAD to Housing Act also had the backing of many Democrats.

Sen. Elizabeth Warren (D-Mass.), ranking member of the Senate Banking Committee, urged swift passage of the bill, warning that the United States “is in a full-blown housing crisis.”

“This landmark, bipartisan bill will help tackle the root cause of this crisis by getting more homes built in every community across the country,” Warren said on the Senate floor in March.

“It will make sure families own those homes, not giant corporate landlords looking to jack up the rent and squeeze out every nickel of profit they can.”

Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, said the comprehensive housing package introduces necessary housing policy reforms.

“This legislation will help reform housing programs, cut through unnecessary barriers that are slowing the development of affordable and innovative housing, including modular homes, and strengthen protections for renters and communities nationwide,” she said.

Industry groups also lent their support to the most consequential housing legislation in decades.

Bill Owens, chairman of the National Association of Home Builders, commended both parties for working together to restore housing affordability.

“Solving our nation’s housing crisis is truly a bipartisan issue, and [the National Association of Home Builders] has been encouraged by the collaboration between leaders in both parties to pass legislation that comprises the shared goal of President Trump and Congress to increase the supply of attainable housing,” Owens said in a May 14 statement.

“The House amendment reflects that effort.”

Administration Policy Measures

Since returning to the Oval Office, the president and his team have proposed several measures that could bolster homeownership.

Proposals over the past year have largely focused on the demand side of the equation, including portable mortgages, 50-year mortgages, credit scores, and interest rates.

In April, the U.S. government implemented new mortgage credit score models.

Fannie Mae and Freddie Mac are proceeding with the shift to VantageScore 4.0 and FICO Score 10T, updating their selling guides accordingly and immediately allowing approved lenders to deliver loans under the new VantageScore model.

FICO Score 10T is a credit-scoring model that monitors how consumers manage credit over time—typically 24 months—rather than relying on a single-point-in-time snapshot.

VantageScore 4.0, meanwhile, is another modern credit scoring tool that uses trended data and machine learning to assess consumers’ creditworthiness.

“We are modernizing credit scoring with more predictive models, helping millions of Americans who responsibly pay rent qualify for mortgages,” Federal Housing Finance Agency Director Bill Pulte said in an April 22 statement.

“That’s fair, it’s commonsense, and it’s finally delivering the benefits of competition to homebuyers nationwide.”

The U.S. housing market has been at a standstill in recent months, with the balance of power shifting more toward prospective homebuyers.

In April, according to Redfin data, there were an estimated 47 percent more sellers than buyers.

But buyers are coming off the sidelines, said Asad Khan, senior economist at Redfin.

“Homebuyer demand has been dwindling for months, but finally ticked up in April thanks to a strengthening job market and declining recession risk,” he said in a May 12 report. “More house hunters entering the market helped narrow the gap between the number of buyers and sellers.”

Home prices rose by 0.2 percent last month, and the median sale price is almost $398,000.

Naveen Athrappully contributed to this report.