The 12 Titles / Title V
Title V: Program Reform
This title overhauls five major federal housing programs. It reauthorizes and loosens the rules of the HOME affordable-housing block grant, modernizes USDA rural housing loans and rental assistance, lets communities seek waivers of homelessness-grant spending caps, permanently establishes a standing disaster-recovery block grant program at HUD with its own Treasury fund, and expands the Moving to Work demonstration to up to 25 more public housing agencies.
§ 501 Home Investment Partnerships Reauthorization and Reform Act Notable
Reauthorizes the HOME program, the main federal block grant for building and rehabilitating affordable housing, and rewrites many of its rules. Income eligibility rises from 'low-income' to families earning up to 100 percent of area median income, and the value cap on assisted homeownership units rises from 95 percent to 110 percent of the area median purchase price. Jurisdictions that don't receive CDBG funds may now use HOME money for water, sewer, sidewalk, road, and utility work tied to assisted housing. Several categories of projects (infill housing, property acquisition, rehabilitation, and new construction of 15 units or fewer) are exempted from federal environmental review, and small projects (50 units or fewer, in jurisdictions receiving under $3 million) are exempted from Section 3 local-hiring requirements. The bill also formally defines community land trusts, adds shared-equity and land-trust pathways for keeping homes affordable at resale, protects military members who receive deployment or transfer orders and heirs of deceased owners from losing eligibility, raises the minimum grant allocation threshold from $500,000 to $750,000, and strengthens HUD's enforcement tools, including cutting payments to jurisdictions that misspend funds.
Affects: renters, first-time buyers, low- and moderate-income families, homebuilders, local governments, states, community land trusts, nonprofit housing developers, military members, heirs of homeowners
- HUD: Issue rules implementing the new authority to use HOME funds for infrastructure improvements — 1 year after enactment (≈ July 11, 2027)
- HUD: Issue rules implementing the new environmental review exemptions and streamlining provisions — 1 year after enactment (≈ July 11, 2027)
- HUD: Complete a review of how Build America, Buy America requirements apply to HOME-assisted activities — 180 days after enactment (≈ January 7, 2027)
- HUD: Issue updated guidance clarifying Build America, Buy America application to HOME — 90 days after completing the review
- HUD: Report to House Financial Services and Senate Banking Committees on the Buy America review and guidance — 270 days after enactment (≈ April 7, 2027)
§ 502 Rural Housing Service Reform Act Notable
A broad modernization of USDA's rural housing programs. It permanently establishes a preservation and revitalization program for aging USDA-financed rural apartment properties: owners of maturing loans get annual notices of restructuring options, tenants must be warned in writing 2 years before a loan matures, USDA can restructure loans and renew rental assistance contracts for up to 20 years, and rental assistance can be 'decoupled' so it continues even after the underlying loan ends. Rural housing vouchers are extended to tenants in properties that leave the program through prepayment, foreclosure, or loan maturity after September 30, 2005, with new interim and annual reviews when a tenant's income or rent changes. The cap on Section 504 home-repair grants for low-income rural homeowners doubles from $7,500 to $15,000, loans can be refinanced with terms up to 40 years, sellers who transfer a guaranteed loan are released from liability, home-based child care providers become eligible for USDA-guaranteed loans, and rental income from an accessory dwelling unit can count toward qualifying for a loan on homes built before enactment. It also codifies the Rural Community Development Initiative (grants up to $500,000 to intermediaries, with a match requirement waivable in persistently poor regions) and states Congress's expectation that USDA decide loan applications within 90 days.
Affects: rural renters, rural homeowners, rural homebuyers, landlords and owners of USDA-financed apartments, nonprofit housing developers, farm laborers, child care providers, lenders, USDA Rural Housing Service
- USDA: Study and publicly report to Congress on Section 521 rental assistance subsidies and their recapture — 6 months after enactment (≈ January 11, 2027)
- USDA: Publish advance notice of proposed rulemaking and consult stakeholders for the housing preservation and revitalization program — 180 days after enactment (≈ January 7, 2027)
- USDA: Publish an interim final rule for the housing preservation and revitalization program — 1 year after enactment (≈ July 11, 2027)
- GAO: Report to Congress on Rural Housing Service technology, including modernization cost and staffing estimates — 1 year after enactment (≈ July 11, 2027)
- USDA: Issue regulations establishing a process for adjusting rural development voucher amounts after interim or annual reviews — 2 years after enactment (≈ July 11, 2028)
- USDA: Report to Congress on the timeliness of Section 502 and 504 loan application decisions, then annually until all determinations are made within 90 days — 90 days after enactment, and annually thereafter (≈ October 9, 2026)
- USDA: Submit and publish an annual report on the health of all rural housing programs, including loan performance and property risk ratings — annually
§ 503 Incentivizing Local Solutions to Homelessness
Lets communities receiving Emergency Solutions Grants under the McKinney-Vento Act ask HUD to waive the statutory cap on how much of their grant they can spend on emergency shelter activities, for fiscal years 2027 through 2030. A waiver request must show local need, include a detailed spending plan, and be preceded by public input; HUD must post all requests online and approve or deny each within 60 days. HUD must deny waivers to any recipient that relocates homeless individuals or their property without offering emergency shelter, rapid rehousing, transitional housing, or permanent housing options.
Affects: people experiencing homelessness, local governments, states, homeless service providers, Continuums of Care
- HUD: Approve or deny each spending-cap waiver request — 60 days after receiving the request
- HUD: Waiver authority applies to grant funds for fiscal years 2027 through 2030 — fiscal years 2027-2030
§ 504 Reforming Disaster Recovery Act Notable
Permanently authorizes the CDBG Disaster Recovery program, which until now has required a new act of Congress after every major disaster, often delaying aid for months or years. It creates a Long-Term Disaster Recovery Fund in the Treasury and a new Office of Disaster Management and Resiliency at HUD, and sets standing rules: HUD must decide within 90 days (120 at most) whether a disaster is 'catastrophic' and qualifies, may award preliminary grants of up to $5 million before that determination, and must allocate money by a published formula that can add up to 18 percent for mitigation. Grantees must submit an action plan within 90 days with at least 14 days of public comment, spend at least 70 percent of funds to benefit low- and moderate-income people, follow construction and insurance standards in hazard-prone areas, and spend funds within 6 years (extendable by 4, or 6 for mitigation). The section also mandates data sharing among HUD, FEMA, and SBA to prevent duplicate benefits, sets aside money for the HUD Inspector General, and caps administrative costs at 8 percent. The new program sunsets 3 years after enactment unless Congress continues it.
Affects: disaster survivors, renters, homeowners, low- and moderate-income families, states, local governments, Indian tribes, small businesses
- HUD: Publish a Federal Register notice with the latest formula allocation methodologies for unmet disaster needs — 30 days after enactment (≈ August 10, 2026)
- HUD: Issue proposed rules for the disaster recovery program (with a 90-day public comment period), after consulting FEMA and SBA — 6 months after enactment (≈ January 11, 2027)
- HUD: Issue final regulations for the new CDBG Disaster Recovery program (section 124) — 1 year after enactment (≈ July 11, 2027)
- HUD: Determine whether each major disaster is catastrophic and qualifies for funding — 90 days after the disaster declaration (no later than 120 days if data is insufficient)
- HUD: Approve, partially approve, or disapprove each grantee action plan — 60 days after receiving the plan
- HUD: Grantees must spend grant funds — 6 years after obligation (extendable up to 4 more years, or 6 for mitigation)
- HUD: The new CDBG Disaster Recovery program terminates — 3 years after enactment (≈ July 11, 2029)
§ 505 New Moving to Work Cohort Notable
Authorizes HUD to add up to 25 more high-performing public housing agencies to the Moving to Work demonstration, which lets agencies waive certain federal public housing and voucher rules to test local approaches. The new 'Economic Opportunity and Pathways to Independence Cohort' comes with guardrails: HUD may only grant waivers already codified in its 2020 operations notice, several specific waivers are off-limits, and participation in any work or self-sufficiency program under waivers 10 or 11 must be optional for residents. Selected agencies must keep serving substantially the same number of families, ensure at least 75 percent of assisted families are very low-income, and may redirect no more than 5 percent of their voucher funds to other purposes. Selection caps agency size at 27,000 combined vouchers and units, reserves most slots for smaller agencies, and prioritizes agencies serving above-average shares of families with children and youth aging out of foster care. The section also imposes extensive new annual reporting on all Moving to Work agencies, covering eviction rates, waitlists, voucher utilization, and other outcomes.
Affects: public housing agencies, public housing residents, housing voucher holders, low-income families, youth aging out of foster care
- HUD: Submit a comprehensive report to Congress on all Moving to Work cohorts, including tenant and agency outcome data, then annually — 180 days after enactment, and annually thereafter (≈ January 7, 2027)
- HUD: Keep Moving to Work research products, reports, and agency plans publicly available online — at least 5 years
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