A Primer on The 21st Century ROAD to Housing Act

In late June, Congress passed the 21st Century ROAD to Housing Act, a landmark piece of bipartisan legislation that aims to make housing more affordable across the country.

It was a rare display of unity in the oft-divided legislative branch: the legislation passed the House in a 358-32 vote after the Senate approved it by an 85-5 margin a day earlier.¹

The legislation—which contains 47 provisions aimed at increasing housing supply, reducing regulatory barriers to development, reforming the definition of manufactured housing, and expanding access to mortgage financing—became law on July 11th without the President’s signature ten days after it passed both chambers of Congress, making it one of the biggest pieces of housing legislation in several decades.^1,2,4

Here are three ways the ROAD to Housing Act could affect housing supply in the United States.

The legislation’s Modular Housing Production Act (Section 302) requires the FHA “to assess barriers to FHA-insured lending for modular housing.”^3,4 It also directs the HUD Secretary to consider modifying “the financing draw schedule to encourage modular housing construction.”^3,4 These provisions may make it easier for developers and manufacturers to finance the construction of modular housing.

Section 303 of the Act, the Property Improvement and Manufactured Housing Loan Modernization Act, will raise the statutory loan limits for manufactured homes “by an average of 107% across all loan types.”⁵ It also clarifies that FHA Title 1 Property Improvement Loans can be used to construct accessory dwelling units (ADUs), which are separate detached or attached structures built adjacent to a primary residence on the same lot.³

2. Build-to-Rent Communities Could Be Here to Stay

Section 1001 of the ROAD to Housing Act, titled Homes Are for People, Not Corporations, restricts for-profit corporations and funds that own 350 or more single-family homes from purchasing additional homes, effective January 7th, 2026.^3,6

However, the legislation includes certain “excepted purchases” that are not subject to this limitation, including the construction of new homes, renovation of existing homes, or construction of new build-to-rent communities.⁶

A previous version of the Act required institutional investors to dispose of their build-to-rent assets to individual homebuyers within seven years.⁶ However, the House rejected that requirement, and it did not appear in the final version of the Act.

3. The Entitlement Process Could Be Streamlined

A couple of provisions in the Act seek to reduce pre-development friction and reward municipalities that succeed in increasing local housing supply.

Section 107 of the Act, Housing Supply Frameworks, directs the Department of Housing and Urban Development (HUD) “to publish guidelines and best practice frameworks for state and local zoning and land-use policies.”³

Meanwhile, Section 208 of the Act, Innovation Fund, establishes a seven-year, “$200 million annual competitive grant program for local governments and tribes that demonstrate measurable increases in housing supply, incentivizing reforms such as streamlined permitting, density bonuses, and zoning changes.”³

To be clear, HUD’s guidelines under the Act are recommendations, not mandates. Local governments will continue to have the authority to determine their zoning and land use policies, though provisions such as the Innovation Fund may streamline the entitlement process in certain municipalities.