The Most Underappreciated Part of the Bipartisan Housing Bill

Bipartisan Housing Bill Advances Measures on Small-Dollar Mortgages and Supply

President Donald Trump announced on Wednesday that he was canceling a scheduled signing ceremony for legislation containing more than 60 housing provisions that Congress passed with veto-proof margins. The delay stems from his request that lawmakers first approve the Save America Act, which would require documentary proof of U.S. citizenship for federal voter registration and photo identification at federal elections. The housing bill will become law in ten days if it is neither signed nor vetoed.

The legislation waives certain regulations, expands grants to localities that increase building activity, updates standards for manufactured homes, and restricts large investors from purchasing single-family residences. Many of these steps align with proposals from groups focused on expanding housing supply. Supporters expect the changes to increase the number of available units and moderate price growth over time.

A narrower set of provisions in the bill addresses small-dollar mortgages, defined as loans under $100,000. These loans often cover older or smaller homes priced below $100,000 that remain in many rural and smaller urban markets. Data from the Urban Institute indicate that such homes represent roughly 3 percent of active listings nationwide, or about 32,000 properties, with a higher share in rural counties.

Aniket Mehrotra, a policy coordinator at the Urban Institute’s Housing Finance Policy Center, stated that these properties are frequently within the price range of working-class households yet difficult to finance. Yuliya Panfil, director of the Future of Land and Housing program at New America, has described the stock as existing affordable housing that faces financing barriers. Research published by the Urban Institute in 2018 found that lenders originated fewer small-dollar loans even in areas where qualifying properties existed, citing the fixed costs of origination relative to loan size.

The bill establishes pilot programs to examine these barriers. One directs the Consumer Financial Protection Bureau to review compensation structures and fee caps for mortgage originators. Another creates a Housing and Urban Development demonstration to test methods for expanding access. Alanna McCargo, who contributed to the earlier Urban Institute analysis, noted that the economics of smaller loans have historically reduced lender participation.

The legislation contains limited provisions for rehabilitating older homes, focused mainly on grants for elderly and low-income owners. It does not authorize new funding for existing repair programs. Mehrotra observed that most U.S. housing units were built before 1980 and that repair needs are concentrated in rural areas and certain older cities. He added that separate proposals addressing developer returns in lower-value neighborhoods were not included but could be considered later.

Sabiha Zainulbhai of New America described the small-dollar mortgage measures as steps toward expanding options for first-time and moderate-income buyers. McCargo stated that full effects would require time for implementation and that households currently seeking such financing would not see immediate changes.

The Save America Act, which Trump linked to the housing bill, mandates documentary proof of citizenship for federal voter registration forms and photo identification for voting in federal elections. Multiple national surveys conducted in recent years have shown majority support for both requirements. The housing legislation itself does not address rental assistance programs, which have received limited consideration in the current Congress.

Implementation of the new mortgage pilots and supply measures will depend on agency rulemaking and lender participation following enactment.