21st Century ROAD to Housing Act

What the New Federal Housing Law Could Mean for North Carolina

A major bipartisan housing bill has become federal law, bringing a wide range of changes intended to make housing easier to build, finance, preserve, and access. The 21st Century ROAD to Housing Act touches nearly every part of the housing ecosystem. It includes provisions related to homeownership, rental housing, manufactured housing, federal lending, zoning reform, rural preservation, housing vouchers, and the reuse of vacant properties.

For affordable housing organizations like ANCHOR, the key question is straightforward: Will this law make it easier to create and preserve housing that North Carolinians can actually afford?

The answer is potentially Yes — but not by itself.

The law could improve some of the systems affordable housing developers rely on every day. It should reduce delays, modernize outdated programs, and create better tools for preserving existing properties. Those changes make a difference here, where housing costs continue to rise and the supply of deeply affordable homes remains far below the need.

At the same time, the law does not solve the central challenge facing most affordable housing developments: Without substantial public investment, the numbers for acquisition, rehabilitation, and preservation often do not work.

North Carolina needs more housing at every price point.

North Carolina’s housing shortage is no longer limited to Charlotte, Raleigh or other fast-growing metropolitan areas.

Communities across the state are facing the same basic problem: there are not enough homes, and the homes that are available are increasingly out of reach for working families, seniors, veterans, people with disabilities, and households living on fixed incomes.

Research highlighted by the North Carolina Housing Finance Agency projects that the state will need approximately 764,000 additional homes through 2029, including both rental housing and homes for purchase. The shortage is especially severe at the lowest income levels.

Low-Income Housing Tax Credit communities across North Carolina have extremely low vacancy rates. The same is true for federally subsidized properties serving households below 50% of area median income. In real terms, the affordable housing that already exists is almost always full, and residents seeking housing may remain on waiting lists for months or years.

Building more housing is essential. So is preserving the housing we already have. The ROAD to Housing Act includes provisions that could support both goals.

HOME Program changes could strengthen gap financing.

One of the most important sections of the law involves the HOME Investment Partnerships Program. HOME is a critical source of flexible funding for affordable housing. States and local governments frequently use it alongside Low-Income Housing Tax Credits, private debt, grants, and other public resources. In many developments, HOME funding is what closes the final financing gap.

The challenge is that the program can be difficult to administer. Requirements may overlap with other funding sources, approval processes can be slow, and older rules do not always reflect current construction costs or financing structures.

The law’s efforts to modernize HOME could make the program more responsive to today’s housing market.

For North Carolina developers, that could mean a stronger source of financing for new construction, rehabilitation, and preservation. It may be especially important in smaller markets, where rents cannot support high levels of debt, and projects often require several layers of subsidy to move forward.

The implementation of these changes will make a difference. A modernized program will only help if updated rules actually reduce duplication and give participating municipalities enough flexibility to respond to local conditions.

Rural housing preservation may be one of the biggest opportunities.

Some of the law’s most consequential provisions may be those affecting USDA rural housing.

North Carolina has a large inventory of affordable housing in small towns and rural counties. Many of these properties were financed decades ago through USDA programs and now face growing preservation risks. As older mortgages reach maturity, properties may lose access to rental assistance or become vulnerable to market-rate conversion. When that happens, residents can face displacement, and communities may lose housing that is nearly impossible to replace.

The new law creates a path for certain rental assistance to continue even after the original USDA mortgage ends.

In many rural communities, a single affordable housing property may serve dozens of seniors, families, or individuals with disabilities. Losing even one development can have an outsized effect because there may be no comparable housing nearby. Preservation is often more cost-effective than replacement. It also allows residents to remain near family, medical providers, churches, transportation, and other support systems.

For ANCHOR and other mission-driven owners, the rural housing provisions may create new opportunities to acquire, rehabilitate and stabilize properties before affordability is lost.

Voucher inspections could become less of a barrier.

The ROAD to Housing Act also includes changes intended to improve the Housing Choice Voucher program.

One persistent problem in the voucher system is the time required to complete inspections. A household may locate an apartment, receive landlord approval, and still lose the unit while waiting for the inspection process to be completed. Landlords may become frustrated and rent the unit to someone else. Families may have to restart their search. In some cases, vouchers may expire before a suitable apartment is approved.

The new provisions would allow certain recent federal inspections to satisfy voucher requirements and may give property owners the ability to request inspections before a tenant selects a unit.

A faster inspection process could help residents move into housing more quickly. It could reduce vacancy losses for affordable housing owners and make more landlords willing to participate in the voucher program.

Inspection standards must continue to protect residents, but the process should not create unnecessary delays that prevent households from securing otherwise suitable homes.

Higher FHA loan limits could improve feasibility.

Construction and rehabilitation costs have increased dramatically in recent years.

Materials, labor, insurance, interest rates, and operating expenses have all become more expensive. Yet some federal lending limits have not kept pace with those increases.

The law directs the Federal Housing Administration to update multifamily loan limits to better reflect actual development costs.

This could make FHA financing more useful for certain affordable, workforce, and mixed-income projects. It may also reduce the size of the gap developers must fill with subordinate loans, grants, or deferred fees.

Still, higher loan limits are not the same as deeper affordability.

Debt must be repaid. If a development serves households with very low incomes, rent revenue may not support a larger mortgage. Those projects will continue to need rental assistance, tax credits, grants, operating subsidies or other public resources. Financing tools can improve feasibility, but they cannot replace subsidy where resident incomes are simply too low to support development costs.

Local zoning and public land will still matter.

The legislation encourages HUD to develop best practices for zoning and land-use reform and offers incentives to communities that take steps to support housing production.

Affordable housing developments are frequently delayed or made more expensive by minimum lot sizes, excessive parking requirements, low-density zoning, lengthy approval processes, or political resistance to multifamily housing. These barriers are not unique to large cities. They also affect smaller communities where land may be available but zoning or infrastructure limitations prevent development.

Federal guidance may help local governments identify better approaches. It may also give housing advocates and developers additional support when making the case for regulatory reform. A federal framework will not automatically change a City Council vote, extend a sewer line or overcome neighborhood opposition. Local leadership will still determine whether communities make room for housing that serves a range of incomes.

The law also supports greater attention to vacant properties and publicly owned land. That could be useful in North Carolina communities with empty schools, former offices, unused government facilities or surplus public parcels. Publicly owned real estate should be treated as a community asset. In areas facing severe housing shortages, surplus land and vacant buildings should be evaluated for affordable housing before they are sold without considering long-term public benefit.

What the law does NOT do

The ROAD to Housing Act represents progress, but it should not be described as a complete solution to the housing crisis.

It does not create enough rental assistance for every household that needs it. It does not eliminate the financing gaps affecting most affordable developments. It does not provide sufficient funding for supportive services, case management, transportation, health coordination or workforce assistance.

It also does not guarantee that local governments will change restrictive zoning policies or that every authorized program will receive enough funding from Congress to operate at a meaningful scale. Some provisions will require federal rulemaking. Others will depend on future appropriations or decisions made by state and local governments.

In other words, ROAD improves the landscape, but it does not provide every resource needed to complete the job.

Preservation must remain a priority.

New construction often receives the greatest attention because it is visible and easy to measure. But preserving an existing affordable property can be just as important as building a new one.

North Carolina has thousands of apartments developed through federal subsidies, tax credits, and other affordability programs. Many are aging. Some face expiring restrictions. Others need substantial rehabilitation that current rents cannot support. When one of these properties is lost, the state does not simply lose a building. It loses homes that may have served low-income residents for decades.

The new law’s rural housing reforms, HOME changes, federal lending provisions and preservation tools could help responsible owners recapitalize aging properties. North Carolina should build on those federal changes with stronger state and local preservation strategies, including housing trust funds, property-tax relief, acquisition financing and long-term affordability requirements.

A Useful Step Forward

The new law reflects a broader recognition that the housing shortage is affecting nearly every part of the country. It affects growing cities, rural towns, older adults, families with children, people with disabilities, veterans, employers, and local governments.

There is no single policy that will solve a problem of this scale.

The ROAD to Housing Act offers several practical improvements. It updates federal programs, addresses administrative barriers, and gives communities additional tools to support development and preservation. But North Carolina will still need sustained public investment, strong local partnerships, and organizations willing to take on complicated developments that the private market alone will not produce.

At ANCHOR, our focus remains the same: creating and preserving housing that is safe, stable, and affordable over the long term.

More housing is necessary. But the type of housing matters. The level of affordability matters. The location matters. Resident protections matter. The success of this law will ultimately be measured by whether more North Carolinians are able to find a home they can afford and remain there with dignity and stability.