Sponsor
Michael Lawler
Representative · R-NY
Representative · R-NY
The bill strengthens protections for mortgage markets and federal finances by pressuring jurisdictions to remove unlawful occupants, but does so at the cost of penalizing local homelessness responses, risking loss of community development aid, reducing credit access in affected areas, and increasing criminalization risks for people experiencing homelessness.
Homeowners, mortgage lenders, and taxpayers see reduced risk because jurisdictions judged to 'permit' unlawful occupancy can lose access to federal mortgage backing and CDBG funds, lowering potential federal losses and protecting mortgage collateral.
Local governments, homeowners, and neighborhoods gain a stronger federal incentive to enforce property laws, which is likely to reduce unlawful occupancy, neighborhood blight, and related maintenance or safety problems.
Local governments and low-income communities have a clear compliance pathway because HUD's corrective-action and certification process lets jurisdictions restore CDBG eligibility after remedying problematic policies, preserving community development aid where corrections occur.
Low-income individuals and local governments risk losing CDBG funds that support housing, infrastructure, and social services if their jurisdiction is found to 'permit' unlawful occupancy, reducing aid to vulnerable residents.
People experiencing homelessness and cities using harm-reduction or temporary-shelter strategies could be penalized, discouraging non-punitive local approaches to homelessness and limiting policy flexibility.
Prospective homebuyers and small-business owners in affected jurisdictions could face reduced access to federal mortgage insurance and GSE-backed loans, raising borrowing costs and constraining credit availability in those areas.
Based on analysis of 2 sections of legislative text.
Withholds CDBG funds from jurisdictions that permit squatting, bars federal mortgage support for single-family homes in those jurisdictions, and requires HUD and other agencies to implement guidance and an annual ineligible list.
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
Bars CDBG (Community Development Block Grant) funding to local governments that "permit" or legally recognize squatters and prevents a range of federal mortgage supports for loans on 1–4 family homes in jurisdictions that lose CDBG eligibility. Requires HUD to issue regulations, publish an annual list of ineligible units of local government, and directs HUD, FHFA, VA, and USDA to issue joint implementing guidance within 90 days to define enforcement and corrective steps. Defines "squatting" for CDBG enforcement as unauthorized occupation of property for 10 or more consecutive days (14 days for mortgage-support prohibitions), lists what counts as Federal support for mortgages (FHA, VA, USDA, HUD programs, and purchase/securitization by Fannie Mae or Freddie Mac), and creates corrective-action procedures and certification paths for jurisdictions to regain eligibility.