Banking and Finance Law Daily Wrap Up, COMMUNITY DEVELOPMENT—House passes comprehensive bill to expand housing supply, increase affordability, (Feb 10, 2026)

By A. Bryan Gerepka

Lawmakers say the bipartisan housing package addresses the housing shortage and the need to build more homes by cutting red tape, modernizing HUD, and unlocking financing to boost supply.

On Feb. 9, 2026, the U.S. House of Representatives overwhelmingly passed H.R. 6644—The Housing for the 21st Century Act, which includes several initiatives aimed at alleviating the nation's housing crisis. Among the key proposals are changes to zoning, environmental and permitting laws, easing community bank regulations, promoting de novo bank formations, and modernizing Housing and Urban Development (HUD) programs.

The bill, which passed the House by a 390-9 vote, was led by Rep. French Hill (R-Ark.), chairman of the House Financial Services Committee, Ranking Member Rep. Maxine Waters (D-Calif.), House Subcommittee on Housing and Insurance Chair Mike Flood (R-Neb.), and Ranking Member Emanuel Cleaver (D-Mo.). The bill now moves to the Senate.

Key features. H.R. 6644 attempts to boost the housing supply and increase affordability by proposing changes in the following three key areas:

• Removing unnecessary regulatory barriers by allowing the use of ready-to-use, pre-approved home designs so builders can get permits faster and build homes more quickly. Modernizing and streamlining federal and local housing processes by strengthening local housing operations and community capacity to produce more affordable homes in rural and urban areas.

• Modernizing HUD programs to accelerate homebuilding and expand financing by updating rules for manufactured homes and making HUD the leading authority on standards. Improving the HOME Program, which is the largest federal block grant program for states to increase the supply of affordable housing. Exempting small-scale housing developments from burdensome federal environmental reviews and giving jurisdictions more flexibility and time to commit funds, while facing fewer rigid federal constraints.

• Enhancing community banking operations by cutting red tape and streamlining bank exams and outdated thresholds, allowing well-run banks to focus on lending, not paperwork. Expanding community and rural banks’ access to stable deposits so they can lend locally and support small businesses, farmers, and households. Supporting rural banks, encouraging new banks, and providing regulators with flexibility to manage bank failures without hurting local access to banking.

“The Housing for the 21st Century Act includes real, bipartisan solutions to expanding supply, lowering costs, and providing families with more options,” said Hill. “Our Committee has been laser-focused on creating solutions, and today, we delivered for the American people.”

Waters called the bill “a historic first step toward confronting a housing crisis that is squeezing families and communities nationwide. While more must be done, including real federal investments to meet the scale of this housing crisis, H.R. 6644 provides a strong foundation to build on.” Waters also committed to continued collaboration with members “to deliver a strong bicameral bill to the President’s desk as we owe it to the millions of renters and homeowners who need us to act now.”

America's significant housing shortage is locking entire generations out of home ownership, Flood noted. “Now that the legislation has passed the House floor, I look forward to working with our colleagues in the Senate to get housing affordability legislation to President Trump’s desk swiftly." Added Cleaver, “I’m proud of the overwhelming support we were able to obtain with this comprehensive housing package, which underscores the bipartisan nature of the legislation and the broad support for reforms that will drive down costs.”

Trade groups laud bill’s passage. The American Bankers Association (ABA), Independent Community Bankers Association (ICBA), the Affordable Housing Tax Credit Coalition (AHTCC), and the American Fintech Trade Council (AFC) celebrated the passage of H.R. 6644.

These measures provide regulatory and examination relief for smaller banks, incentivize the formation of new banks, and increase transparency around the FDIC’s resolution authorities, the ABA stated.

ICBA, meanwhile, cited several of its key policy proposals that were embraced by the bill. They include helping community banks maintain lower funding costs by allowing them to hold custodial deposits and more reciprocal deposits without them being considered brokered deposits, which are subject to restrictions. In addition, ICBA highlighted proposals for 18-month exam cycles and other examination relief for banks with up to $6 billion in assets, which would alleviate resource drain and allow community banks to focus on serving their communities. ICBA also noted the bill’s support for streamlining the application process, providing regulatory flexibility, and creating a two-year pilot program for the formation of de novo community banks, especially in rural areas. The bill also establishes a Treasury Financial Agent program, enabling partnerships between minority depository institutions, rural community banks, and other financial institutions, as well as requiring the federal banking agencies to study growth, capital adequacy, and profitability improvements for rural depository institutions, the group stated.

AHTC praised the bill’s proposal to increase banks’ public welfare investment cap (PWIC) to 20 percent from 15 percent, allowing them to invest in more affordable housing developments. The increase will support additional private-sector investment that supports affordable housing development using the low-income housing tax credit (LIHTC), the nation’s most successful tool for producing affordable rental housing, the group stated.

While AFC also supported many aspects of the bill, the group took issue with the treatment of custodial deposits in Section 601. The group urged lawmakers to remove the 20 percent cap on custodial deposits, arguing it will create an artificial barrier for institutions seeking to increase deposit accounts through bank-fintech partnerships. Adjusting the cap would enable community banks to responsibly scale access to digital-first deposit products, particularly for historically underserved communities, the fintech group stressed.

Companies: Affordable Housing Tax Credit Coalition; American Bankers Association; American Fintech Trade Council; Independent Community Bankers Association

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