With current federal funding set to expire Sept. 30, lawmakers and federal agencies are working to resolve outstanding funding differences before November’s midterm elections. This month’s HUD Insights takes a look at the path forward for a continuing resolution on Capitol Hill to keep HUD and other agencies running through mid-December. Plus, we take you inside a few of the conversations happening in Washington, D.C., that could impact housing:

• 1. House, Senate Pass Competing Federal Funding Extensions
• 2. Full ROAD Act Rollout Could Take Until the 2040s
• 3. HUD Proposes Narrower Title VI Liability Standard
• 4. HUD Opens Comment Period on Proposed Flood-Risk Rule Rescission
• 5. HUD Consolidates Fair Housing Grants, Groups Challenge Changes

1. House, Senate Pass Competing Federal Funding Extensions

The story: The House and Senate have each passed their own version of a continuing resolution to fund the federal government through mid-December at current FY2026 spending levels. The move is intended to avoid a funding lapse ahead of the midterm elections in November. The Senate version includes targeted HUD funding adjustments to prevent renewal shortfalls and a temporary delay in the Office of Management and Budget’s (OMB) rewrite of federal grant rules. Because the chambers approved different text, Congress has not enacted either extension, and current funding still expires September 30 unless the House and Senate agree on one measure and the president signs it.

• Current federal funding expires Sept. 30, and the House and Senate will have to reconcile the two versions before sending it to the White House for signoff.
• Both versions would generally continue FY2026 funding levels rather than establish full-year FY2027 appropriations, leaving final HUD program funding decisions for later negotiations.
• The Senate measure would pause the OMB grants-process rewrite through Dec. 11, a provision that could affect how federal grant recipients administer HUD-funded awards.

“The September deadline isn’t changing, but how Congress plans for it can. This bill takes partisan politics and posturing off the table, denying anyone the opportunity to manufacture leverage from the calendar before elections.”
– Rep. Tom Cole, Chair of the House Appropriations Committee, said in a statement

The follow-up: The House is set to return from recess on Aug. 31 and will then take up the Senate’s version for negotiations. Lawmakers have said they will resume work on a full-year FY2027 appropriations bill before the new funding deadline set by the continuing resolution.

The bottom line: An enacted CR would support near-term continuity for HUD operations and FHA multifamily processing, but it would provide only temporary funding and would not complete the FY2027 HUD budget. FHA multifamily borrowers shouldn’t assume that congressional action will change HUD staffing levels, review capacity, or transaction timelines.

2. Full ROAD Act Rollout Could Take Until the 2040s

The story: The enactment of the 21st Century ROAD to Housing Act was just one hurdle to cross. Implementation of the law is a much longer process that could take years—even decades—to realize. Federal agencies must write regulations and guidance, conduct studies, launch programs, and identify provisions that need added federal, state, or local action. The Bipartisan Policy Center launched a deadline tracker as the implementation rolls out, with the timeline extending through 2043. The center adds that HUD must carry out dozens of directives with limited staff capacity.

• Congress must still fund many programs: nearly all new grant programs depend on future appropriations, and authorization alone does not make funds available.
• HUD must translate the statute into operating rules, eligibility standards, notices, application processes, and reporting requirements; several HOME, CDBG, manufactured-housing, and local-planning provisions require further agency action.
• State and local action will shape project-level impact: several provisions depend on state certifications, local planning, or local adoption of new federal tools before multifamily properties can benefit.

“At HUD’s recent pace, finalizing these rules would be several years’ worth of work, assuming HUD paused all other rulemaking and prioritized the rules in 21st Century ROAD—and that still understates the lift.”
– Analysis by the National Association of Affordable Housing Lenders and the Center for Affordable Housing Lending

The follow-up: Watch HUD and FHA updates, including any revisions to multifamily loan-limit calculations, Multifamily Accelerated Processing (MAP) guidance, environmental review procedures, HOME or Community Development Block Grant requirements, and related implementation materials.

The bottom line: Don’t treat enactment as an immediate change to underwriting, processing, proceeds, or closing timelines. Until HUD publishes applicable guidance, borrowers should continue to structure their deals under current program requirements and evaluate each new provision only after HUD defines its effective date and operating rules.

3. HUD Proposes Narrower Title VI Liability Standard

The story: HUD is further rolling back its disparate impact policies, publishing a supplemental proposal that would remove effects-based language from its Title VI rules for recipients of HUD financial assistance. This is in addition to HUD’s proposal earlier this year to remove the disparate impact regulation from its fair housing rules. Disparate impact measures the discriminatory effects of policies based on their results rather than intent.

• The potential effect of the proposal falls on civil rights compliance and enforcement.
• Because the Title VI statute excludes contracts of insurance or guaranty, FHA mortgage insurance alone does not necessarily place a borrower within this Title VI rule; properties with HUD grants, rental assistance, or other covered aid may face more direct implications.
• The proposal is not final. Current rules remain in effect, including separate duties under the Fair Housing Act, state or local law, loan documents, and other program requirements.

The follow-up: HUD has reopened the comment period for its original disparate impact proposal, and the public can make comments on both proposals through Oct. 9. Housing organizations and apartment industry stakeholders will be allowed to submit comments past that period and up to when HUD decides whether to issue a final rule. The proposal changes no compliance obligation unless the rule takes effect.

The bottom line: FHA multifamily borrowers should not revise tenant selection, marketing, site planning, servicing, or property-management practices based on the proposal alone. Borrowers should identify each HUD assistance stream, continue testing neutral policies for fair-housing risk, document consistent application, and monitor both rulemakings with counsel and their HUD lender.

4. HUD Opens Comment Period on Proposed Flood-Risk Rule Rescission

The story: HUD is accepting public comments through Sept. 8 on a proposal to roll back most of the federal flood-risk requirements it adopted in 2024. The proposal would largely restore the earlier framework based on mapped flood zones and HUD’s established environmental review. It could reduce design and review requirements on some multifamily projects, but it would not eliminate floodplain review or project-specific mitigation.

• HUD would remove its preference for newer climate-based methods when defining the floodplain subject to review. Borrowers could rely more consistently on established federal flood maps and accepted data sources.
• HUD estimates that rescinding the 2024 requirements could save as much as $85 million in construction costs each year across affected programs. Actual savings would depend on a project’s location, design, scope, and other applicable requirements.
• HUD would preserve several 2024 flexibilities, including more flexibility in allowing for construction of projects that may have floodplains, floodways, and wetlands onsite.

“The proposal may reduce compliance costs and make more public housing and multifamily-assisted rehab projects eligible for HUD funding.”
– Nixon Peabody

The follow-up: The Mortgage Bankers Association is encouraging lenders, providers, and other industry participants to provide project-specific feedback on costs, mapping, design standards, processing, and flood-risk controls. Comments can be made online. HUD will review the public record before deciding whether to issue a final rule.

The bottom line: The proposal could improve predictability for FHA 221(d)(4) and substantial-rehabilitation transactions, but current underwriting and environmental review obligations remain in place. Borrowers should confirm flood-zone and insurance requirements early.

5. HUD Consolidates Fair Housing Grants, Groups Challenge Changes

The story: HUD restructured portions of its Fair Housing Initiatives Program (FHIP) by concentrating much of the funding into fewer, larger awards. But that has prompted a lawsuit from fair housing groups, who say some vital programs could be lost in the transition. FHIP supports fair housing education and enforcement; HUD currently lists separate FY2026 opportunities across four FHIP initiatives, with approximately $84.4 million available and 55 expected awards.

• The lawsuit alleges that HUD would direct $46 million of a $56 million FY2025 appropriation to five grants instead of the program’s historical distribution across more than 100 awards.
• The impact on borrowers: Consolidation could shift where tenants and housing providers find local education, complaint intake, testing, and investigation resources. Final awards and recipient partnerships will determine the practical effect.
• FHIP grant allocations do not change owners’ obligations under federal fair housing law.

“When a family faces an act of discrimination, they don’t call someone in HUD’s D.C. offices for help. They call one of the more than 100 private, nonprofit fair housing organizations throughout the nation. … Virtually all these community-based organizations depend on FHIP’s critical funding to operate.”
– Nikitra Bailey, executive vice president of the National Fair Housing Alliance, said in a statement

The follow-up: The National Fair Housing Alliance and the Massachusetts Fair Housing Center, which brought the lawsuit, asked a federal court in Massachusetts to halt the challenged directives. The plaintiffs allege that HUD changed the program unlawfully; HUD says it will enforce the Fair Housing Act and responsibly manage taxpayer resources. The court must determine whether the challenged notices can proceed.

The bottom line: The dispute may redistribute third-party fair-housing resources, but it does not suspend or narrow an owner’s compliance duties. FHA multifamily borrowers should maintain consistent tenant-selection, reasonable-accommodation, advertising, leasing, training, and recordkeeping practices under the Fair Housing Act and applicable HUD requirements regardless of the outcome.

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