Housing for the 21st Century Act: A Guide for Real Estate Investors

The U.S. House of Representatives passed the Housing for the 21st Century Act in a decisive 390–9 vote, marking one of the most bipartisan housing reform efforts in recent years. The bill now heads to the Senate for consideration.

Broad in scope, the legislation combines more than 40 individual housing proposals into a single package aimed at improving affordability and increasing housing supply nationwide.

For seasoned real estate investors, the key question isn’t political, it’s practical: What does this actually change?

What is the Housing for the 21st Century Act?

At its core, the Housing for the 21st Century Act focuses on modernizing federal housing programs while encouraging increased housing supply. Key provisions include:

• Directing HUD to publish best-practice frameworks for zoning and land-use reform
• Encouraging duplexes, triplexes, and accessory dwelling units (ADUs) in traditionally single-family zones
• Creating grants to help municipalities streamline permitting and adopt pre-approved housing designs
• Expanding categorical exclusions under NEPA to reduce environmental review delays
• Updating FHA multifamily loan limits
• Establishing a pilot program for FHA-backed small-dollar mortgages under $100,000
• Reforming manufactured housing standards
• Expanding flexibility within the HOME Investment Partnerships Program
• Supporting community banks and new bank formation

Overall, the bill takes a wide-reaching approach, touching housing supply, financing, regulation, oversight, and the role of community banking in expanding access to capital.

A Federal Push for Supply

The backdrop is clear: the U.S. faces an estimated housing shortage of roughly five million homes. Affordability pressures persist across many markets, and first-time buyers are entering the market later than in previous generations.

The Housing for the 21st Century Act signals that Congress is increasingly treating housing supply constraints as a core driver of the affordability crisis.

That said, the bill leans more on guidance, incentives, and modernization than on sweeping mandates. Zoning authority and permitting decisions still largely rest with state and local governments.

And that distinction matters.

What This Means for Real Estate Investors

For experienced operators, most of these changes will likely be incremental rather than immediate.

That said, there are several areas worth watching closely:

• Streamlined environmental reviews for certain federally supported projects
• Updated FHA multifamily loan limits
• Greater flexibility for manufactured housing
• Expanded participation from community banks and support for new bank formation
• New small-dollar mortgage pilot programs

Over time, these reforms could reduce friction within federal housing programs and expand financing tools at the margins.

But the biggest constraints (local permitting timelines, zoning restrictions, density limitations, and municipal policies) remain firmly in the hands of state and local governments.

A Step Forward, Not a Structural Reset

The bill’s passage is significant. Bipartisan alignment on housing reform underscores growing national concern around affordability.

But experienced investors know markets are driven by fundamentals:

• Local supply constraints
• Cost of capital
• Construction costs
• Demand trends
• Regulatory timelines

Policy matters. Execution matters more.

The Housing for the 21st Century Act makes meaningful federal adjustments, but measurable supply growth will depend on local implementation.

For investors, disciplined underwriting, strong market knowledge, and reliable capital remain the edge. At Dominion Financial, we focus on what matters most: speed, certainty, and financing built for real-world execution.

Because housing is local, and performance is operational.