Key facts
- The 21st Century ROAD to Housing Act has been enacted.
- The legislation combines over 60 housing provisions.
- A pilot program for small-dollar mortgages, with a $100,000 threshold, is included.
- The act generally bars large institutional investors (controlling at least 350 single-family homes) from acquiring additional properties, with exceptions for new construction.
- Industry experts view the law as a positive but incremental step toward improving housing supply and affordability.
The 21st Century ROAD to Housing Act, a new piece of legislation, is being hailed by mortgage industry experts as a significant, albeit initial, move to tackle housing affordability and supply issues. The bipartisan package consolidates over 60 housing-related provisions.
Industry leaders like Bill Killmer of the Mortgage Bankers Association (MBA) and Kimber White of the National Association of Mortgage Brokers (NAMB) acknowledge the bill's potential. Killmer described it as "Congress at its best," highlighting its comprehensive nature, while White emphasized that the law's ultimate impact will depend on its implementation.
A key component of the act is a pilot program for small-dollar mortgages, aiming to make it more economically viable for lenders to originate lower-balance loans, particularly in rural and less expensive markets. The FHA pilot sets a $100,000 threshold, though some, like Killmer, suggest this could be expanded. Frank Cassidy, former FHA commissioner, noted that the challenge for small-dollar loans has always been the high origination costs relative to loan size.
Laurie Goodman of the Urban Institute expressed skepticism about a standardized nationwide threshold for small-dollar mortgages due to market variations, but acknowledged the Illinois Housing Development Authority's program as a successful model for offsetting lender costs. Scott Olson of the Community Home Lenders of America (CHLA) believes the measure could still have a notable impact in lower-cost areas.
Title X of the act, dubbed the "Home-Ownership for Main Street America" provision, addresses concerns about large institutional investors acquiring single-family homes. It generally prohibits institutional investors controlling at least 350 homes from purchasing more, with exceptions for new construction. Cassidy noted this provision follows President Donald Trump's directive to ban such corporate acquisitions. Olson, however, suggested the measure might be late in the cycle to have a substantial impact, given that significant institutional buying occurred years after the 2008 recession.