HUD Announces Regulatory Best Practices
Washington, DC – The Department of Housing and Urban Development (HUD) announced the State and Local Best Practices for Home Construction Report, a series of regulatory actions for state and local governments to increase efficiency and ease regulatory barriers to housing construction and affordability.
“HUD is encouraging our state and local partners to take inventory of their regulations and policies and make changes that will lower the cost to build and enable more efficient housing supply growth. These Best Practices are an initial list of recommendations to facilitate growth while respecting communities’ unique needs. Adding efficiency to local building processes will result in more affordable homeownership opportunities for all Americans,” said Secretary Turner.
The report provides a clear starting point for all state and local governments to begin or continue an active effort to remove unnecessary burdens to home construction. Best practices are sorted into three categories:
- Cut Home Construction Costs
- Unlock Land for New Housing Supply
- Accelerate Construction Timelines
Regulatory costs account for more than $100,000 of the final price of a new single-family home, and green energy mandates in some states’ and localities’ building codes can add up to $30,000 to the cost of construction. Overall, deregulation efforts in 2025 are projected to save Americans a collective $212 billion.
These State and Local Best Practices for Home Construction are part of HUD’s ongoing actions to implement President Trump’s Executive Order 14394, Removing Regulatory Barriers to Affordable Home Construction, which is restoring housing affordability and helping families forge pathways to homeownership.
Since President Trump took office last year, HUD has taken significant actions to make the American dream of homeownership more attainable for Americans including:
- Rescinding the costly 2021 International Energy Conservation Code (IECC),
- Ending the Obama-Biden-era Affirmatively Furthering Fair Housing rule,
- Rescinding onerous rules within its Federal Housing Administration (FHA) single-family mortgage insurance program,
- Supporting homeownership and housing affordability for more than one million Americans, including more than half a million first-time homebuyers.
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Making Affordable Home Construction a Reality
HUD and USDA Announce Major Rescission of Building Code Requirements
WASHINGTON, DC – Secretary Scott Turner and Secretary Brooke Rollins today announced the rescission of a costly Biden Administration-era policy which added at least $20,000 to the cost of home construction.
A 2024 Final Determination issued under President Biden rendered all new home construction ineligible for an FHA or USDA-backed mortgage loan unless the home was built according to the burdensome and expensive 2021 International Energy Conservation Code (IECC) – a standard which has only been deployed in a few states.
According to some estimates, enforcing the 2021 IECC as a mandatory nationwide standard would result in an increased home construction cost of between $20,000 and $31,000 – an increase that pushes most new homes out of reach for many first-time homebuyers. This government mandate would also decrease new home production, complicate construction, and lengthen permitting and inspection timelines.
“By rescinding this mandate, we are removing a significant regulatory barrier that added tens of thousands of dollars to the cost of a new home,” said Secretary Turner. “The Trump Administration’s focus is to facilitate new housing supply and ensure that every American family has a path to homeownership without being sidelined by bureaucratic red tape.”
“Affordable rural housing is a top priority for the Trump Administration, and we are focused on removing all the unnecessary restrictions that artificially drive up new home prices,” said Secretary Rollins. “We launched the Rural Revival Agenda at USDA to bring rural communities to the forefront of our actions, and this joint determination restores common sense to our programs and ensures that we can continue bringing new affordable housing supply online for Americans.”
Since taking office, the Trump Administration has delayed the compliance date for the 2024 Final Determination. Most recently, HUD published an extension on February 3, 2026 that delayed the deadline for HUD programs until December 31, 2026. In July 2025, HUD and USDA issued a Request for Information (RFI) seeking additional comment from stakeholders to help inform the agencies’ review of the 2024 standard.
Following an extensive review of these comments, HUD and USDA are today issuing a Joint Determination which rescinds the 2024 Final Determination in its entirety. As a result, the FHA and USDA loan programs will comply with the energy efficiency standards that were in effect prior to the publication of the 2024 Final Determination. This determination is also in alignment with a recent ruling from the U.S. District Court for the Eastern District of Texas which found that the Biden-era determination would decrease housing availability.
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Related: NAHB Legal Challenges To 2021 IECC Mandate
In 2025, NAHB led a coalition of 15 state attorneys general, and filed a complaint in the Eastern District of Texas to stop HUD and USDA from adopting the 2021 IECC mandate. Arguments included:
- The underlying statute unconstitutionally delegated too much authority to private companies,
- The government misinterpreted the statute,
- The government improperly applied the statute, and
- The agencies based their decision on a faulty analysis.
In a recent ruling, the court agreed with NAHB’s assertion that HUD and USDA’s adoption of the energy efficiency standards will decrease housing availability and thus is in violation of the Cranston-Gonzalez National Affordable Housing Act. The court also held that under the Cranston-Gonzalez Act, the agencies may only adopt one amendment to the 2006 IECC, which they did in 2015 by adopting the 2009 IECC.
“This ruling means that HUD and USDA cannot impose new energy code mandates that will raise construction costs and limit access to federal mortgage programs at a time when many American families are already struggling to afford a home,” NAHB Chairman Bill Owens said in a statement.
NAHB will continue to monitor the federal mortgage programs to ensure compliance with the rescission.
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HUD Slashes Red Tape to Cut Homeownership Financing Costs
WASHINGTON – U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner announced the Federal Housing Administration (FHA) is rescinding more than 12 sub-regulatory policies under its Single Family mortgage insurance program. These sweeping changes cut red tape, help reduce the cost of homeownership, and eliminate financial and regulatory burdens. The rescissions span the loan origination process from the point of mortgage application submission through FHA’s issuance of an insurance endorsement on the mortgage.
FHA Eliminates 12 Costly And Burdensome Policies In Sweeping Rollback
“These rescissions are bold, necessary, and long overdue,” said HUD Secretary Scott Turner. “Under President Trump’s leadership, we’re slashing red tape that drives up costs and shuts families out of the market. Every hardworking American deserves a fair shot at owning a home – the American Dream should never be buried under a pile of regulations. These changes open doors for families and lenders, unlocking opportunities nationwide.”
Today’s policy retractions, executed through a series of Mortgagee Letters (ML), are aimed at eliminating policies that directly or indirectly increase the cost of home ownership for aspiring first-time buyers.
Specifically, the FHA:
Today’s policy retractions, executed through a series of Mortgagee Letters (ML), are aimed at eliminating policies that directly or indirectly increase the cost of home ownership for aspiring first-time buyers. The removal of these requirements will strengthen the housing market, reduce unnecessary regulations, increase America’s affordable housing supply, reduce financing costs, and save taxpayer funds by creating a more efficient FHA lending process.
- Rescinded Outdated and Costly FHA Appraisal Protocols. By removing antiquated and burdensome procedural steps that an appraiser must complete during each assignment, FHA is better aligning its appraisal policies with industry standards and reducing unnecessary costs and delays that are passed through to homebuyers. During the first Trump Administration, HUD made targeted technology investments through FHA Catalyst that have substantially improved FHA’s collateral valuation analytics. As a result, FHA is now able to extend the benefit of these investments to borrowers, lenders, and taxpayers in the form of streamlined appraisal procedures, lower costs, and quicker turn times.
- Rescinded Full-Time Direct Endorsement Underwriter Requirements. By rescinding its previous full-time employment requirement for Direct Endorsement underwriter eligibility and now allowing part-time employment, lenders will have increased flexibility to more effectively manage their staffing needs, reduce origination costs, and encourage greater participation in FHA programs.
- Rescinded the Supplemental Consumer Information Form (SCIF) Collection Requirement. Rescinding the required collection of the SCIF removes a requirement that had limited benefit and was an additional collection burden for lenders.
- Rescinded the Federal Flood Risk Management Standard (FFRMS) for New Construction Eligibility. Rescinding the FFRMS restores the previous established policy, thus removing what would have been limits on the land available for development and eliminating increases in the cost of construction for FHA-insured single-family properties, which would have exacerbated the insufficient supply of affordable housing for the next generation of homebuyers.
- Rescinded the Mandatory Pre-Endorsement Inspection Requirements for Properties Located in Presidentially-Declared Major Disaster Areas. Modifying FHA disaster inspection requirements aligns FHA’s policies with industry standards and allows lenders the discretion to assess property condition and determine appropriate risk-based actions prior to endorsement. This update reduces costly and unnecessary delays and will improve the bandwidth of home property inspectors that are often overwhelmed following a natural disaster.
This announcement, made during National Homeownership Month, underscores HUD’s ongoing commitment to expand homeownership opportunities for Americans.
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May 21, 2026
