Housing finance expansion for owner-occupied homes

Summary#

The Working Families Home Construction Act of 2026 would create a new law and amend the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. It would require the Federal Housing Finance Agency (FHFA) Director to let Fannie Mae and Freddie Mac purchase and securitize certain construction loans; it would not require them to buy every eligible loan. The stated goal is to make this kind of financing available for projects building owner-occupied homes for families in a specified income range.

  • The bill sets conditions for eligible loans, including a builder or developer’s contribution of at least 10% of the project’s required capital, counting the land’s value.
  • It limits eligible loans to $100,000 per planned home and $2.4 million per project. They may be combined with other financing.
  • It requires each home financed with a loan to be sold to a family with income of 90% to 130% of area median income. The buyer must agree to live there for at least one year, secured by a recorded restriction on the property.
  • An originating lender must document the project’s financial viability, ability to be completed, and local-government support. The FHFA Director would set the loan interest rate, considering affordability and expected costs and losses.
  • The bill changes the shares of certain amounts under the 1992 Act that are assigned to existing purposes and adds a 22% share for these construction loans. The supplied material does not explain the other purposes or the dollar amounts involved.

What it means for you#

  • FHFA and Fannie Mae and Freddie Mac: The FHFA Director must permit the two enterprises to purchase and securitize qualifying loans. The bill does not make purchasing any particular loan mandatory.
  • Lenders and builders or developers: Eligible lenders would include depository institutions, credit unions, state housing finance agencies, and other entities the Director determines. Builders and developers seeking qualifying loans must meet the project, contribution, documentation, loan-limit, and home-sale conditions.
  • Homebuyers: A home built with a qualifying loan must be sold to a family within the stated income range, and the buyer must agree to live in it for at least one year. The bill does not create a direct benefit payment or a general right to buy a home.
  • Local governments: A project must have documented local-government support. The bill treats zoning approval, a building permit, a resolution or letter from a local elected official, or other documentation accepted by the Director as sufficient.
  • General public: The bill does not directly change taxes, rents, or rules for existing homeowners.

Money#

No publicly available information on an estimated public cost is included in the supplied material.

  • The bill assigns 22% of certain amounts for each enterprise to purchasing and securitizing qualifying construction loans; it does not state a dollar figure or provide a new appropriation.
  • It changes other percentage shares in the same provision. Without the 1992 Act text, the amounts covered and effects on existing uses cannot be verified.
  • The bill gives no estimate for FHFA staffing, administration, or the enterprises’ operating costs or expected losses.

What is unclear#

  • The supplied material does not include the 1992 Act, so the existing allocation rules and what the bill would displace cannot be verified against current law.
  • The bill does not set application, review, approval, appeal, or reporting procedures, or say when the changes would start.
  • It does not define terms such as “financial viability,” “capacity to complete,” or “affordability,” or explain how the Director will set interest rates.
  • The Director may decide which other loan-making entities qualify and what other documentation can show local support. The bill does not spell out those decisions.
  • The bill was introduced and referred to committee; it is not law, and passage is uncertain.

Case for#

  • A possible argument for the bill is that construction projects may need financing beyond a conventional construction loan. The bill expressly allows qualifying loans to be combined with other sources.
  • Linking eligibility to documented project viability and a developer contribution could help limit the enterprises’ exposure to projects that lack a viable plan or adequate backing.
  • The income and one-year occupancy conditions tie the financing to homes for owner-occupiers in a defined income range, rather than unrestricted sales.

Case against#

  • The bill redirects shares of amounts already divided among other purposes. Without the parent Act, it is unclear what those other uses are or what would receive less.
  • The bill gives the FHFA Director important discretion over interest rates, eligible lenders, and acceptable local-support documents, but does not set detailed decision rules or review procedures.
  • The income range and owner-occupancy requirement exclude households outside that range and homes not intended for owner-occupiers. The bill does not explain why those limits were chosen.
  • The bill calls for consideration of expected costs and losses but gives no cost estimate or detailed account of how those risks would be handled.