Sponsor
Scott Fitzgerald
Representative · R-WI
Representative · R-WI
The bill expands financing to increase for‑sale housing for middle‑income households and supports small builders, but does so at the cost of added taxpayer exposure and limits that may reduce usefulness in high‑cost areas and constrain developers and buyers.
Middle‑income households (targeting 90–130% of AMI) will have greater access to owner‑occupied homes because Fannie Mae and Freddie Mac will buy/securitize qualifying construction loans (a 22% allocation), increasing the supply of for‑sale housing aimed at this income band.
Small builders and developers can access up to $100,000 per unit in supplemental gap financing and benefit from an FHFA‑set interest rate designed to balance affordability and safety, making moderate‑income for‑sale projects more financially feasible and potentially lowering financing costs for targeted buyers.
Loan underwriting requirements (documenting financial viability, completion capacity, and local government support) should reduce project failures and protect taxpayers and buyers by ensuring stronger project readiness and oversight.
Taxpayers could face increased exposure if the enterprises purchase riskier construction loans, increasing the potential for government losses.
The program’s financing caps (per‑project cap of $2.4 million and per‑unit cap of $100,000) may make it impractical for larger developments or housing markets with high construction costs, limiting the policy’s reach in expensive areas.
Developer requirements—at least 10% equity and a one‑year occupancy covenant—raise upfront costs for builders and can restrict resale options, potentially reducing developer participation and buyer flexibility.
Based on analysis of 2 sections of legislative text.
Allows Fannie Mae and Freddie Mac to buy and securitize qualifying construction gap loans for owner-occupied housing targeted to households earning about 90–130% of AMI, with underwriting rules and caps.
Official title: To permit the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association to purchase and securitize certain residential construction loans.
Introduced June 25, 2026 by Scott Fitzgerald · Last progress June 25, 2026
Allows Fannie Mae and Freddie Mac to buy and securitize restricted "qualifying construction loans" that provide gap or supplemental financing to developers building owner-occupied housing targeted to households earning roughly 90–130% of area median income (AMI). The FHFA Director must set loan terms, eligibility, and an interest-rate policy that balances affordability for these moderate-income households with the safety and soundness of the enterprises. The bill sets underwriting and program limits (minimum developer equity, per-unit and per-project caps, allowable uses of funds, and a one-year owner-occupancy covenant), and requires the enterprises to allocate 22% of certain available amounts to purchase and securitize these loans. Originating lenders may include banks, credit unions, state housing finance agencies, and others the FHFA allows.