Section 1 Short title
This Act may be cited as the “Permanent Housing Affordability Act”.
Permanent Housing Affordability Act
A BILL
To promote shared equity models of homeownership, and for other purposes.
Sec. 2 Definitions
In this Act:
Community development financial institution— The term community development financial institution has the meaning given the term in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702).
Community land trust— The term community land trust means a nonprofit entity, a State, a unit of local government, or an instrumentality of a State or unit of local government—
that is not managed by, or an affiliate of, a for-profit organization;
the primary purpose of which is acquiring, developing, or holding land to provide housing that is permanently affordable to low- and moderate-income persons;
that monitors properties to ensure affordability is preserved;
that provides housing that is permanently affordable to low- and moderate-income persons using a ground lease, deed covenant, or other similar legally enforceable measure, determined acceptable by the Secretary, that—
keeps the housing affordable to low- and moderate-income persons for not less than—
99 years; or
the greatest minimum affordability period permitted by applicable State law, if that law restricts minimum affordability periods to a number of years that is less than 99; and
enables low- and moderate-income persons to rent or purchase the housing for homeownership; and
that maintains preemptive purchase options to purchase the property, if such purchase would allow the housing to remain affordable to low- and moderate-income persons.
Eligible entity— The term eligible entity means a unit of local government, an instrumentality of a State or unit of local government, or a nonprofit organization, including a community land trust, that manages a shared equity homeownership model program.
Eligible grantee— The term eligible grantee means—
any agency of a State;
any authority chartered by a State to help meet affordable housing needs of the residents of the State; and
a community development financial institution that is certified by the Secretary of the Treasury.
Qualified homebuyer— The term qualified homebuyer means a homebuyer with a household income that is not more than 120 percent of the area median income.
Resale formula— The term resale formula means a permissible method of determining fair return and resale price under section 92.254(a)(5)(i)(A) of title 24, Code of Federal Regulations, as in effect on March 28, 2025.
Shared equity homeownership model— The term shared equity homeownership model means a model of resale-restricted, owner-occupied housing the primary purpose of which is to create and preserve a supply of owner-occupied units affordable to low and moderate income households that—
carry terms of affordability that are not less than—
99 years; or
the greatest minimum affordability period permitted by applicable State law, if that law restricts minimum affordability periods to a number of years that is less than 99; and
restrict the resale value of properties in the program according to a resale formula described in a ground lease, deed restriction, or similar legal mechanism.
Sec. 3 Lasting Home Affordability Fund
In general— Not later than 90 days after the date of enactment of this Act, the Secretary of the Treasury (in this section referred to as the Secretary) shall establish a program to provide grants to eligible grantees to use for the purpose of providing low-interest construction loans to eligible entities.
Application by eligible grantees— To be eligible to receive amounts under this section, an eligible grantee shall submit an application at such time and in such manner as the Secretary may reasonably require, including a detailed description of—
how the eligible grantee intends to use any amounts provided under this section; and
the qualifications such eligible grantee has that will allow such eligible grantee to successfully administer a grant under this section.
Use of amounts by eligible grantees—
In general— Any eligible grantee that receives amounts under this section shall use such amounts and related proceeds to establish a revolving fund and provide low-interest construction loans to 1 or more eligible entities, which amounts may be awarded to eligible entities on a rolling basis.
Loan requirements—
In general— Loans provided by an eligible grantee to an eligible entity using amounts provided under this section shall—
have an interest rate of not more than 3 percent; and
have an origination fee of not more than 1 percent of the amount of the loan.
Liquidity requirements— An eligible grantee may not require, as a condition of receiving a loan under this section, that an eligible entity has more than 10 percent of the amount to be loaned in liquid assets at the time of the loan.
Limitation— An eligible entity that receives amounts under this section may not be the same entity as the eligible grantee that provides those amounts.
Priority— An eligible grantee shall prioritize loans to eligible entities that plan to use amounts loaned under this section to construct or rehabilitate properties—
located in areas with high cost burden, as determined by the Secretary, individuals at risk of displacement due to rising housing costs, or redlining; or
that are required to be affordable as described in subsection (e) for terms that are more than 99 years.
Use of amounts by eligible entities— An eligible entity may use amounts loaned by an eligible grantee for costs associated with the construction or rehabilitation of housing intended to be sold to a homebuyer, a member of a limited equity cooperative, or a community land trust and used as a primary residence, including materials, labor (including contractor fees), land development (including demolition and grading), permit and developer fees, insurance costs, on-site infrastructure costs (including the installation of roads, water, electrical, sewer, storm drainage, and sidewalks), and predevelopment (including architectural costs and engineering costs).
Affordability requirement— An eligible entity that uses amounts loaned under this section to construct or rehabilitate a property—
may only sell or facilitate the sale of such property to qualified homebuyers; and
shall ensure any subsequent sales are to qualified homebuyers at a below-market value that is determined by a resale formula described in a ground lease, deed restriction, or other similar mechanism.
Areas of service— The Secretary shall seek to provide grants to eligible grantees that will fund activities in geographically diverse areas, including areas of persistent poverty, underserved areas, and rural areas.
Rulemaking— The Secretary may issue rules to carry out this section.
Reporting—
Grantee reports— The Secretary shall require each grantee receiving grant amounts in any given year under this section to submit a report, for such year and each year that loans are made using grant funds, to the Secretary that includes—
the number of qualifying loans made;
the organizations receiving loans;
the number of outstanding loans on September 30th of the report year;
the percentage of organizations belonging to each type of eligible grantee as described in subparagraphs (A) through (C) of section 2(4);
the projected number of units constructed or rehabilitated by each loan;
the average interest rate on qualifying loans;
the average origination fee on qualifying loans;
the median purchase price of the homes constructed or rehabilitated by each loan compared to the median market rate price in the area;
the zip codes where the homes constructed or rehabilitated by each loan are located;
the area median income level of households assisted;
the percentage and number of loans made for the purpose of construction;
the percentage and number of loans make for the purpose of rehabilitation;
a description of any mechanism used to ensure permanent affordability by each grantee, such as ground leases, deed restrictions, covenants, or other mechanisms;
the resale formula used by each eligible entity that receives a loan from the grantee; and
where applicable, for each loan made, the percentage of total project cost expected to be covered by the loan.
Report to Congress— Not later than 90 days after the conclusion of each fiscal year in which assistance under this section is made available, the Secretary shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on amounts provided under this section that contains, with aggregates, averages, and summaries, as appropriate, information provided by grantees under paragraph (1).
Authorization of appropriations— There is authorized to be appropriated to the Secretary $100,000,000 for fiscal year 2027 to carry out this section, to remain available until expended.
Sec. 4 Lasting affordability homeownership grant pilot program
In general— The Secretary of Housing and Urban Development (in this section referred to as the Secretary) shall establish a pilot program to provide grants to eligible entities.
Use of amounts— Each eligible entity that receives amounts under this section shall use such amounts to—
purchase vacant land to develop housing and sell that housing to homebuyers or members of a limited equity cooperative; and
purchase existing properties or predeveloped land on which properties will be developed that will be sold to homebuyers or members of a limited equity cooperative.
Priority— The Secretary shall prioritize the award of grants to eligible entities that will maintain affordability for the homes sold by the eligible entity for the longest term.
Requirements—
Vacant land— In the case of vacant land purchased by an eligible entity under this section, the housing shall be built and marketed for sale not later than 3 years after the date of the purchase, which period may be extended at the discretion of the Secretary for extenuating circumstances, such as delays in the development process, provided that the Secretary makes public a list of localities where such extenuating circumstances are occurring.
Existing land or properties— In the case of existing properties or predeveloped land purchased by an eligible entity under this section, the homes shall be ready for sale to homebuyers not later than 3 years after the date of the purchase, which period may be extended at the discretion of the Secretary for extenuating circumstances.
All properties— Each home developed with amounts provided under this section shall be sold to households—
with an income that is less than or equal to—
80 percent of the area median income; or
120 percent of the area median income, if the home is located in a rural area;
with ground leases, deed restrictions, covenants, or other mechanisms to ensure permanent affordability; and
according to a resale formula determined by the eligible entity.
Reporting—
Eligible entity reports— Not later than 2 years after receiving a grant under this section, and biennially for 6 years thereafter, an eligible entity shall submit to the Secretary a streamlined report that includes—
as applicable, the number of acres purchased;
as applicable, the number of units purchased;
as applicable, the number of buildings and units developed;
as applicable, the number of buildings and units renovated;
a description of the ground leases, deed restrictions, covenants, or other mechanisms used to ensure permanent affordability;
a description of the resale formula used;
the number of households served;
the average size of units;
the median purchase price;
to the extent possible, the average amount of the down payment paid by households;
the average tenure of residents;
to the extent possible, the average credit score of purchasers;
the average delinquency and foreclosure rate; and
the average annual resident fees.
Report to Congress— Not later than 90 days after the conclusion of each fiscal year in which assistance under this section is made available, the Secretary shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on this section that contains, with aggregates, averages, and summaries, as appropriate, information provided by eligible entities under paragraph (1).
Authorization of appropriations—
In general— There is authorized to be appropriated to the Secretary $100,000,000 for each of fiscal years 2027 through 2031 to carry out this section.
Technical assistance— Not more than 10 percent of amounts appropriated under paragraph (1) may be used to provide technical assistance to eligible entities that receive a grant under this section.
Sec. 5 Shared equity housing research and awareness programs
Housing research—
In general— The Secretary of Housing and Urban Development (in this section referred to as the Secretary), acting through the Office of Policy Development and Research, shall establish a program that conducts, supports, and disseminates research about best practices for community land trusts and other shared equity homeownership models, including best practices regarding ground leases, deed restrictions, or other legal mechanisms for preserving long-term affordability.
Awards— For States, local governments, Tribal governments, and entities managing shared equity homeownership models, including nonprofit organizations, the Secretary shall provide funding to organizations representing nonprofit shared equity model interests to create or sustain shared equity homeownership models through technical assistance and capacity building.
Authorization of appropriations— There is authorized to be appropriated to the Secretary such sums as may be necessary to carry out this subsection.
Public awareness—
In general— Not later than 1 year after the date of enactment of this Act, the Secretary shall conduct a public awareness campaign to educate the public and the financial sector about the benefits and responsibilities of shared equity homeownership models, including community land trusts, which may include—
creating a web page to publicize shared equity homeownership models;
disseminating information to housing counseling agencies or other entities to provide information to potential homebuyers;
providing information to lenders about the shared equity homeownership model, including standard ground leases and appraisal guidance developed by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; and
to the extent possible, work with States, local governments, Tribal governments, and entities managing shared equity homeownership models, including nonprofit organizations, to advance public awareness.
Authorization of appropriations— There is authorized to be appropriated to the Secretary $3,000,000 for each of fiscal years 2027 through 2029 to carry out this subsection.
Outreach—
In general— The Secretary, in consultation and coordination with other appropriate entities, including the Federal Housing Finance Agency, shall carry out an education and outreach campaign to inform and educate consumers, home builders, residential lenders, and other real estate professionals on the availability, benefits, and advantages of community land trusts and other shared equity homeownership models.
Authorization of appropriations— There is authorized to be appropriated to the Secretary such sums as may be necessary to carry out this subsection.
Report— Not later than 90 days after the conclusion of each fiscal year in which assistance under this section is made available, the Secretary shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the shared equity housing research and awareness programs described in this section that includes, for the period covered by the report—
a description of public awareness and public outreach campaigns conducted by the Secretary;
a description of consultation and coordination efforts with the Federal Housing Finance Agency, including a description of Federal Housing Finance Agency activities to improve mortgage lender education and outreach that resulted from consultation and coordination efforts;
a description of the research conducted on best practices for community land trusts and other shared equity homeownership models; and
the number and location of entities that received technical assistance and capacity building on community land trusts and other shared equity homeownership models.
Sec. 6 Surplus land
in subsection (a)—
in the subsection heading, by striking “Definition” and inserting “Definitions”; and
by striking “section, the term” and inserting
“(1) the term shared equity homeownership model has the meaning given the term in section 2 of the Permanent Housing Affordability Act; and”
in subsection (b)(2)(D), by inserting “and for property transferred under subsection (i) to a community land trust or other shared equity homeownership model” after “families”; and
by adding at the end the following:
“(i) Property for community land trust or other shared equity homeownership model
“(1) Conveyance—The Administrator may convey to a community land trust or other shared equity homeownership model the right, title, and interest of the Government in and to any surplus real property that the Secretary of Housing and Urban Development determines is suitable for a community land trust or other shared equity homeownership model.
“(2) Deed of conveyance—The deed of conveyance of any surplus real property disposed of under this subsection—
“(A) shall provide that all of the property be used and maintained for purposes of a community land trust or other shared equity homeownership model in perpetuity, and that if the property ceases to be used or maintained in a community land trust or other shared equity homeownership model, all or any portion of the property shall, in its then existing condition, at the option of the Government, revert to the Government; and
“(B) may contain additional terms, reservations, restrictions, and conditions the Administrator determines are necessary to safeguard the interests of the Government.
“(3) Fixing value
“(A) In general—In fixing the sale or lease value of property disposed of under paragraph (2), the Secretary of Housing and Urban Development shall take into consideration and discount the value for any benefit which has accrued or may accrue to the Government from the use of the property by the community land trust or other shared equity homeownership model.
“(B) Amount of discount—The amount of the discount under subparagraph (A) is 75 percent of the market value of the property, except that the Secretary of Housing and Urban Development may discount by a greater percentage if the Secretary, in consultation with the Administrator, determines that a higher percentage is justified.”
Report— Not later than 90 days after the conclusion of each fiscal year in which assistance under section 550(i) of title 40, United States Code, as added by subsection (a), is made available, the Secretary of Housing and Urban Development shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on surplus land that includes—
the number of surplus real properties conveyed by the Federal Government for the purpose of affordable housing, including such properties that were conveyed to a community land trust or other shared equity homeownership model; and
the average discounted value of real property conveyed by the Federal Government for the purpose of affordable housing, including such real property that was conveyed to a community land trust or other shared equity homeownership model.