Sponsor
Michael Lawler
Representative · R-NY
Representative · R-NY
The bill shifts incentives and federal exposure to protect property interests and reduce federal mortgage losses, but does so at the risk of cutting community development aid, constraining local homelessness responses, and raising costs or enforcement pressures for vulnerable populations and borrowers.
Homeowners in affected jurisdictions face stronger protection for their property and mortgage collateral because jurisdictions that are found to permit unlawful occupancy risk losing certain federal supports.
Taxpayers may face lower losses to federally insured or guaranteed mortgage programs because loans originating in jurisdictions that permit unlawful occupancy can be excluded from federal backing.
Local governments receive a clear federal incentive to promptly enforce property laws, which could reduce unlawful occupancy, neighborhood blight, and related local costs.
Low-income residents and communities risk losing Community Development Block Grant (CDBG) funds that support housing, infrastructure, and services if their locality is deemed to permit unlawful occupancy.
People experiencing homelessness and localities that use harm-reduction or temporary-shelter approaches may be penalized, discouraging non-punitive housing strategies and narrowing local policy options.
Prospective homebuyers and local borrowers could face reduced credit availability and higher borrowing costs in jurisdictions barred from federal mortgage insurance and GSE purchase programs.
Based on analysis of 2 sections of legislative text.
Conditions CDBG eligibility and bars certain federal mortgage supports for jurisdictions that permit squatting, with definitions, corrective procedures, and annual public listings.
Official title: To prohibit Community Development Block Grant funding and Federal mortgage support in municipalities that allow squatting.
Introduced June 25, 2026 by Michael Lawler · Last progress June 25, 2026
Prohibits certain federal mortgage and community development support for jurisdictions that are found to permit or confer tenant-like rights on people who enter and live in private residential property without permission. It directs HUD to publish a list of local governments ineligible for CDBG formula funds for permitting squatting, requires covered federal agencies to jointly issue implementing guidance within 90 days, and defines which federal mortgage supports are barred for properties in those jurisdictions. The bill sets definitions for “squatting” (occupation without permission for a specified consecutive number of days), outlines corrective actions and procedures for jurisdictions to regain eligibility for CDBG funds, and requires annual publication of prohibited jurisdictions with justification. It links CDBG ineligibility to a ban on a range of federal mortgage supports (FHA, VA, USDA, certain guarantees and secondary market purchases) for 1–4 family residences in those jurisdictions.