Congress Passes 21st Century ROAD to Housing Act

The most significant federal housing legislation passed by the U.S. Congress in three decades is now law. The 21st Century ROAD to Housing Act (P.L. 119-101) (the Act) was enacted into law on July 11, 2026. The bipartisan legislation combines the U.S. Senate's ROAD to Housing Act (S. 2651) and U.S. House of Representatives Housing for the 21st Century Act (H.R. 6644) into a comprehensive package that seeks to collectively address the nation's affordable housing supply by implementation of 60 individual provisions that span the Act's 12 titles.

This Holland & Knight alert briefly summarizes pertinent provisions within the Act that in part relevantly aim to:

• provide regulatory relief for community banks (Title IX – Strengthening Community Banks' Role in Housing)
• increase the aggregate cap on allowable investments by financial institutions to promote public welfare (Title II – Building More in America)
• incentivize Federal Housing Administration (FHA) small dollar mortgages (Title I – Opportunities for Housing)
• revise FHA insured mortgage lending standards (Title III – Manufactured Housing for America)
• create incentives for small-dollar loan originators and reform FHA appraiser requirements (Title IV – Accessing the American Dream)
• prohibit the Federal Reserve from issuing a central bank digital currency (CBDC) (Title XI – Central Bank Digital Currency)
• prohibit large institutional investors from purchasing single-family homes (SFH) (Title X – Home Ownership for Main Street America)

View an in-depth Holland & Knight analysis of the impact that Title X will have on institutional investors.

As set forth in the Act, the titles and sections that follow take effect on January 7, 2027.

Title IX – Strengthening Community Banks' Role in Housing

• Section 901 – Community Bank Deposit Access Act: This provision would clarify that an insured depository institution's custodial deposits are not treated as brokered deposits, provided they do not exceed 20 percent of the institution's total liabilities. This provision applies only to institutions with less than $10 billion in assets.
• Section 902 – Keeping Deposits Local Act: This provision would amend the Federal Deposit Insurance Act to alter the amount of reciprocal deposits that insured depository institutions can hold without those deposits being classified as brokered deposits by creating a tiered threshold basis (50 percent of the first $1 billion, 40 percent of $1 billion to $10 billion and 30 percent of $10 billion to $96.3 billion). The provision modifies agent institution eligibility and requires a study on reciprocal deposits.
• Section 903 – Tailored Regulatory Updates for Supervisory Testing Act: This provision would raise the asset threshold for the extended on-site examination cycle from $3 billion to $6 billion, allowing more community banks to qualify for less frequent on-site examinations.
• Section 904 – Credit Union Board Modernization Act: This provision would replace the blanket board meeting requirement for federal credit unions to meet monthly, with a tiered schedule based on soundness ratings, requiring monthly meetings only for de novo and poorly rated credit unions while allowing well-rated credit unions to meet six times annually, with at least one meeting held during each fiscal quarter.
• Section 905 – Systemic Risk Authority Transparency Act: This bill would expand U.S. Government Accountability Office review requirements when the systemic risk exception is invoked for a failed bank and require the appropriate federal banking agency to submit detailed post-failure reports to Congress within 90 days, including examination records, mismanagement details, an assessment of supervisory shortcomings and legislative recommendations.
• Section 906 – Advancing the Mentor Protégé Program for Small Financial Institutions Act: This provision would establish a Financial Agent Mentor-Protégé Program at the U.S. Department of the Treasury to pair large financial institutions or designated financial agents with small financial institutions (under $2 billion in assets, minority depository institutions or rural institutions) to build their capacity to serve as financial agents or improve services to their customers.
• Section 907 – American Access to Banking Act: This provision would direct federal financial regulatory agencies to streamline the de novo charter application process, assign dedicated caseworkers to applicants, facilitate mentor-protégé partnerships for new institutions, and develop plans for state regulator and stakeholder engagement.
• Section 908 – Promoting New Bank Formation Act: This provision would authorize a pilot two-year phase-in of capital standards for qualifying community banks chartered between 2026 and 2028 with under $10 billion in assets, allow approved business plan deviations during that period, and require studies on the impact of these measures and the causes of low de novo bank formation.
• Section 909 – Rural Depositories Revitalization Study Act: This provision would require the federal banking agencies to jointly study methods to improve rural depository institution growth, capital adequacy and profitability and for the National Credit Union Administration (NCUA) to conduct a parallel study on rural credit unions.

Title II – Building More in America

• Section 201 – Increasing Housing in Opportunity Zones: This provision would allow the U.S. Department of Housing and Urban Development (HUD) to give additional weight to competitive housing grant applications that include proposals for projects located in, or substantially benefiting, communities designated as Qualified Opportunity Zones (i.e., designated low-income areas for which economic investments may receive certain tax benefits).
• Section 203 – Community Investment and Prosperity Act: This provision increases the aggregate cap on allowable investments that state member banks of the Federal Reserve System and national banks supervised by the Office of the Comptroller of the Currency may make to promote the public welfare, which include projects that provide housing, services, or jobs to low- and moderate-income communities or families from 15 percent to 20 percent of the bank's capital stock and unimpaired surplus. Federal banking regulators would be required to conduct a study every two years identifying investments associated with and attributed to the increased cap.
• Section 210 – Revitalizing Empty Structures into Desirable Environments Act: This provision would establish a $100 million competitive grant program for eligible entities to convert vacant and abandoned buildings into attainable housing with priority given to grants that will used in communities experiencing economic distress, qualified opportunity zones as defined in Section 1400Z-1(a) of the Internal Revenue Code, or construction of housing that will serve needs identified in community development plans.

Title I – Opportunities for Housing

• Section 105 – FHA Small-Dollar Mortgages: This provision would require HUD to issue a report within one year of enactment on how to incentivize small-dollar mortgages (less than $100,000). Specifically, the report would provide a proposal for a four-year pilot program on small-dollar mortgages that could authorize direct payments to lenders, adjust terms and costs of FHA loans, provide direct grants to borrowers to cover costs associated with obtaining a mortgage, including title insurance, and provide technical assistance to lenders for these loans.
• Section 107 – Housing Supply Frameworks Act: This provision would direct HUD to develop nonbinding guidelines and best practices for state and local zoning reforms aimed at increasing housing supply and affordability. The guidelines would cover reforms such as reducing parking minimums, allowing more by-right multifamily and accessory dwelling unit development, streamlining reviews, promoting transit-oriented development, reducing impact fees and preventing displacement.

Title III – Manufactured Housing for America

• Section 301 – Housing Supply Expansion Act: This provision would change the federal definition of "manufactured housing" to include modular and prefabricated units not built on a permanent chassis and require HUD to establish federal construction and safety standards for manufactured homes. Federal agencies would be prohibited from establishing energy-efficiency standards for manufactured housing until they are adopted by HUD.
• Section 302 – Modular Housing Production Act: This provision would require FHA to evaluate barriers to FHA lending for modular housing. The provision would also allow HUD to modify the financing draw schedule to encourage modular housing construction.
• Section 303 – Property Improvement and Manufactured Housing Loan Modernization Act: This provision would update mortgage lending standards for manufactured housing through the FHA and direct HUD to conduct a study into the cost effectiveness of supporting factory-built housing.
• Section 304 – PRICE Act: This provision would authorize HUD's Preservation and Reinvestment Initiative for Community Enhancement (PRICE) Program for seven years to provide grants for development or improvement of manufactured housing communities.

Title IV – Accessing the American Dream

• Section 401 – Creating Incentives for Small-Dollar Loan Originators: This provision would require the Consumer Financial Protection Bureau (CFPB) to submit a report to Congress within 270 days on loan originator compensation practices, including the effect on small-dollar mortgage availability.
• Section 402 – Small-Dollar Mortgage Points and Fees: This provision would require the CFPB Director, within 270 days, to evaluate the impact of qualified mortgage points-and-fees thresholds on small-dollar mortgage originations.
• Section 403 – Appraisal Industry Improvement Act: This provision would require Reforms FHA appraiser requirements to allow federal employees to be licensed in one state to appraise in all states, requires verifiable education in FHA appraisal requirements, allows appraisal management company fee adjustments, adds state-credentialed trainee appraisers to the national registry and authorizes workforce training grants.
• Section 404 – Helping More Families Save Act: This provision would establish an Escrow Expansion Pilot Program under which up to 25 eligible entities can create interest-bearing escrow accounts for up to 5,000 covered families receiving Section 8 or Section 9 assistance, depositing amounts equal to rent increases attributable to earned income gains. This section terminates 10 years after enactment.
• Section 405 – Choice in Affordable Housing Act: This provision would allow housing choice voucher inspection requirements to be satisfied by inspections conducted under the Low-Income Housing Tax Credit, HOME Investment Partnerships or Rural Housing Service programs. This permits remote/video inspections in rural areas and allows preapproval inspections for new landlords.

Title XI – Central Bank Digital Currency

• Section 1101 – Central Bank Digital Currency: This provision would prohibit the Federal Reserve from issuing a CBDC (defined as a dollar-denominated digital asset that is a direct liability of the Federal Reserve and widely available to the general public) directly or indirectly through intermediaries, with an exception for dollar-denominated currency that is open, permissionless and private. The provision includes a rule of construction explicitly stating that the Federal Reserve cannot create a CBDC without Congress' approval after the prohibition sunsets on December 31, 2030.

Title X – Home-Ownership for Main Street America

• Section 1001 – Homes Are for People, Not Corporations: This provision would generally prohibit large institutional investors (LIIs) that invest in SFHs (and have investment control of at least 350 such homes in aggregate) from purchasing SFHs and authorize specified agencies to issue rules to implement the prohibition. The provision imposes a reporting requirement for LIIs to report all of their SFH holdings but does not require existing LIIs to divest homes purchased before enactment. LIIs may still transact with one another for homes or portfolios owned prior to enactment, and they may also acquire homes from smaller investors for up to two years after enactment. The provision requires HUD to establish a renter outreach resource (toll-free number and website) for tenants of LIIs to report disputes and authorizes civil penalties of up to $1 million per violation or three times the purchase price, if an investor purchases a nonexempt SFHs, whichever is greater. Exempt SFHs include excepted purchases and purchases in connection with restructuring or reorganizing the ownership of an SFH owned or purchased pre-enactment. The prohibition takes effect 180 days after enactment (July 11, 2026) and is repealed 15 years after the Effective Date (January 7, 2027).

Forward Look

Mortgage lenders, community banks, manufactured housing finance providers, servicers, institutional investors and other industry stakeholders should identify the provisions within the Act that are applicable to their operations and successively monitor implementation deadlines and state and federal agency rulemaking activities. Though the Act does not directly amend the Internal Revenue Code, provisions such as Title II – Section 201, Increasing Housing in Opportunity Zones, could have tax consequences. Lastly, because the Act prohibits the Federal Reserve from creating a retail CBDC through 2030, industry stakeholders should reassess the practicality of partnerships and/or developed products, payments and digital asset planning strategies that were predicated on the viability of an imminent CBDC.

For more information regarding the implications of the Act, please contact the authors.

A deeper look by Holland & Knight at the 21st Century ROAD to Housing Act is available online.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.