The 21st Century ROAD to Housing Act: What It Means for Affordable Multifamily Housing

After more than a year of moving through Congress and despite not being signed by the President, the 21st Century ROAD to Housing Act (H.R. 6644) became law on July 11, 2026, as Public Law 119-101. The bill — ROAD stands for "Renewing Opportunity in the American Dream" — is a comprehensive, bipartisan housing package that covers everything from FHA small-dollar mortgages to community bank regulation and a ban on large institutional investors purchasing single-family homes.

Most headlines have centered on the single-family investor provision (Title X) and the bill's zoning and permitting reforms. However, hidden within its twelve titles are several changes that significantly impact owners, managers, syndicators, and agencies involved in LIHTC, HOME, and USDA Rural Development multifamily housing. This article outlines the provisions most relevant to that sector. It is not comprehensive — the Act spans twelve titles and over 300 pages — but it highlights the sections our clients are most likely to encounter in their daily compliance work.

Streamlined Inspections Across LIHTC, HOME, and RHS Properties (Sec. 405)

Of everything in the Act, this might be the most practically significant change for owners of Housing Choice Voucher-assisted units in LIHTC properties.

Section 405, the Choice in Affordable Housing Act, amends Section 8(o)(8) of the U.S. Housing Act of 1937 to let a public housing agency deem its Housing Quality Standards inspection requirement satisfied — without a separate PHA inspection — where a unit:

• Is in a building that received (or is eligible for) LIHTC allocation under IRC §42(h), or qualifies under the §42(h)(4) bond-financing rule, and was physically inspected and found suitable for occupancy within the past 12 months under the §42(i)(3)(B)(ii) compliance-monitoring inspection framework.
• Is assisted under the HOME Investment Partnerships Program and passed a HOME inspection within the preceding 12 months; or
• Is assisted by USDA's Rural Housing Service and has passed an RHS inspection within the preceding 12 months.

In each case, the PHA simply needs to be able to access the results of that existing inspection. The Act also allows remote or video HQS inspections for rural or small-area units, provided the inspection is thorough and accurately reflects the unit's condition. Additionally, it includes a "pre-approval" option that allows a PHA to inspect a new landlord's unit before a tenant chooses it, with that inspection counting as HQS for up to 60 days.

For owners handling separate compliance-monitoring inspections, HOME inspections, and PHA HQS inspections on the same units, this significantly reduces duplicate inspection efforts — although HUD guidance will be needed to clarify how "the applicable public housing agency is able to obtain the results" will work in practice.

Also, keep in mind that if the applicable alternative inspection has not occurred within the prior 12 months, a PHA inspection will still be required.

HOME Investment Partnerships Program Reforms (Sec. 501)

Section 501 of the HOME Investment Partnerships Reauthorization and Reform Act introduces several changes that participating jurisdictions and their subrecipients should be aware of.

• Income targeting. The Act replaces references to "low-income families" in the HOME rental assistance and tenant-based rental assistance provisions with a standard based on households at or below 100% of the area median income (with usual family-size adjustments), instead of the previous low-income family definition.
• The CHDO definition has been loosened. The requirement for a Community Housing Development Organization to demonstrate "significant" experience has been removed, making it easier for CHDOs to qualify.
• PJ has discretion over eligible activities. HUD cannot restrict a participating jurisdiction's choice among rehabilitation, substantial rehabilitation, new construction, reconstruction, acquisition, or other authorized uses unless the restriction is explicitly permitted elsewhere in the statute.
• Per-unit subsidy limits: The second sentence of the per-unit investment restriction is removed entirely. It's worth reviewing this carefully once HUD updates its regulations, since it impacts the maximum per-unit HOME subsidy amounts.
• Infrastructure spending is now linked to LIHTC properties. PJs that are not receiving CDBG funds can now use HOME funds for infrastructure improvements, such as water/sewer lines, sidewalks, roads, and utility connections, that are directly related to and adjacent to HOME-assisted housing or housing under IRC §42. This means HOME funds can support infrastructure serving a LIHTC property even if the property isn't HOME-assisted, without including that LIHTC property in HOME's affordability or monitoring requirements. This is an important change because off-site improvements are often an obstacle to LIHTC development.
• New affordable-rental qualification exception. Section 215 of the Cranston-Gonzalez Act introduces a new qualification exception for rental units (worth reviewing in full once implementing guidance is issued).

USDA Rural Development: The Biggest Multifamily Change in the Bill (Sec. 502)

For clients with Section 514, 515, or 538 portfolios, Section 502 — the Rural Housing Service Reform Act — is arguably the most significant provision in the entire Act.

Permanent Multifamily Preservation and Revitalization Authority. The Act adds a new Section 545 to the Housing Act of 1949, permanently establishing the Housing Preservation and Revitalization Program (MPR) that RHS has managed administratively for years. Under the new statutory authority, RHS must:

• Provide owners of maturing Section 514/515/516 loans with annual written notices at least four years in advance about restructuring options and the availability of rental assistance decoupling.
• Notify residents, in clear English and translated as needed, of the loan maturity date, what may occur at maturity, and how to safeguard their right to stay in federally assisted housing or secure a voucher.
• Restructure loans by reducing or eliminating interest, deferring payments, subordinating or reamortizing, and using other financial tools, including permanently removing some units from income restrictions when sustained vacancies have occurred.
• Renew rental assistance contracts for up to 20 years (or the term of the restructured loan, if shorter) as part of any restructuring, with the authority to extend rental assistance to previously unassisted households when necessary to keep the project affordable.
• Allow rental assistance to be "decoupled" from the underlying loan and renewed for a 20-year term, even if restructuring isn't financially feasible, as long as the project was RA-assisted and the recipient was a §514/515 borrower.
• Require a restrictive use agreement, recorded and running with the term of the restructured loan (or 20 years if the RA is extended), as a condition of any preservation deal; and
• Fund technical assistance grants to nonprofits, housing cooperatives, and PHAs to support the acquisition or preservation of at-risk RD multifamily properties.

RHS has 180 days from enactment to issue an advance notice of proposed rulemaking and one year to publish an interim final rule.

Foreclosure and rental assistance preservation. The Act extends the multifamily mortgage foreclosure procedures under the Multifamily Mortgage Foreclosure Act of 1981 to RD-held §514, 515, and 538 mortgages, and requires RHS to maintain existing rental assistance attached to units during any foreclosure or disposition process, with that assistance available to support other 514/515/516 projects.

Other RD changes worth noting:

• The limit on §504 loans and grants for minor repairs to farm housing increases from $7,500 to $15,000, and RHS is granted broader authority to issue §504 loans to income-eligible applicants.
• A new Rural Community Development Initiative provides grants of up to $500,000, often requiring a dollar-for-dollar match that can be waived in persistently poor rural areas. These grants support intermediaries in strengthening the capacity of rural nonprofits, tribes, and communities on housing and community development projects.
• RHS must study and report on §521 rental assistance subsidy recapture from §502 borrowers, and Congress directs funding toward RHS staffing and IT modernization.
• A new annual report requirement (Sec. 546) will increase public access to RD's multifamily program data in the future.

CDBG, NEPA, and Development Pipeline Changes (Secs. 204-208, 210)

Several provisions focus on the early stages of the development process — addressing financing gaps and environmental review timelines that impact LIHTC and other affordable multifamily projects layered with CDBG or HOME.

• New construction now qualifies for CDBG (Sec. 204). CDBG grantees can now allocate up to 20% of their funding to new affordable housing development, as defined under Cranston-Gonzalez § 215. Previously, new construction was rarely permitted under CDBG. This change applies only to funds appropriated after the law took effect. Similar to the ability to use HOME funds for offsite improvements (as noted above), this creates an important new resource for developers needing assistance with offsite costs.
• NEPA and environmental review streamlining (Secs. 205-206). The BUILD Housing Act authorizes HUD to designate certain assistance for "special project" treatment under the Multifamily Housing Property Disposition Reform Act, extends environmental-review self-determination options to tribes, and the accompanying streamlining provision directs HUD to expand and reclassify categorical exclusions for various housing activities — including affordable housing predevelopment costs, infill projects, office-to-residential conversions, and new construction or rehab of small multifamily buildings — modeled on and modernizing the existing Part 58/Part 50 exempt activity and categorical exclusion framework. HUD must report on review time and cost reductions, with a specific focus on the affordable housing sector.
• New planning and innovation grant programs (Secs. 207-208). A new competitive HUD grant program funds housing plan development, zoning reform, and barrier-reduction planning (capped at 5 years, non-construction only). A companion Innovation Fund grants at least 25 awards annually ($250,000-$10,000,000 each) to localities that have demonstrably increased housing supply, including "attainable housing" serving households up to 120% AMI, where a majority of units are affordable at 60% AMI or below — language that closely aligns with LIHTC income-targeting concepts.
• Adaptive reuse pilot (Sec. 210, the RESIDE Act). A new HUD pilot program (FY2027-2031) provides competitive grants to repurpose vacant, abandoned commercial and industrial buildings into affordable housing, prioritizing opportunity zone projects and initiatives that address needs outlined in a jurisdiction's consolidated plan.

FHA Multifamily Loan Limits (Sec. 211)

The Housing Affordability Act updates how FHA's Section 207/223(f) and related multifamily mortgage insurance loan limits are indexed, adopting the Census Bureau's Price Deflator Index for Multifamily Residential Units Under Construction, effective July 1, 2025. This replaces the previous outdated reference point. The change ensures FHA multifamily loan limits better reflect actual construction cost inflation, which is important for anyone using FHA-insured debt (including HUD 221(d)(4) and 223(f)) alongside LIHTC.

Interagency Coordination and Oversight (Secs. 801-803)

Three provisions worth flagging for portfolios that touch multiple federal programs:

• HUD-USDA-VA coordination (Sec. 801). The three agencies must sign a memorandum of understanding to share housing market data and jointly report to Congress within 180 days on regulatory barriers influencing housing insured by HUD, financed by RD, and guaranteed by VA.
• Streamlining Rural Housing Act (Sec. 802). HUD and USDA must, within 180 days, agree on a process to evaluate shared categorical exclusions, designate lead agencies for jointly funded projects, and study a joint physical inspection process for properties funded by both departments — relevant for RD/LIHTC or RD/HOME layered deals.
• Self-sufficiency study (Sec. 803). HUD must examine Moving to Work PHA work-requirement outcomes on homelessness, poverty, and administrative burden, report within a year, and monitor whether your properties serve HCV households through MTW agencies.

What's Not in Scope: Title X

Title X, "Homes Are for People, Not Corporations," restricts large institutional investors from buying single-family homes (with exceptions for build-to-rent and certain renovate-to-rent and homeownership programs). It's the provision that received the most media coverage, but since it applies only to single-family homes and not multifamily rental property, it shouldn't directly impact LIHTC or other multifamily portfolios.

Practical Takeaways

Most of what matters here won't be self-executing on day one. RHS has a firm one-year deadline for an interim final rule on the new MPR program, HUD has a year to report on NEPA streamlining results, and several HUD/USDA MOUs and reports are due within 180 days of enactment. Owners with maturing Section 514/515/538 loans should begin engaging with RHS on restructuring and decoupling options now, as the annual notice requirements and 20-year rental assistance renewal authority give both the agency and the owner considerably more room to negotiate than before. Owners and management companies with HCV tenants in LIHTC, HOME, or RD properties should also watch for PHA guidance implementing the new inspection deeming provisions, since practical implementation will depend heavily on how PHAs interpret "able to obtain the results" of existing inspections.

We'll continue to track HUD, USDA, and IRS guidance implementing these provisions and will post updates as agencies begin rulemaking.

This article provides a general overview of selected provisions of Public Law 119-101 and is not intended as legal advice. Clients with questions about how specific provisions impact their properties or portfolios should contact our office directly.