New HOME Act Grants HUD Power to Cap Rent and Sale Prices During a Declared Housing Crisis

The Housing Oversight and Mitigating Exploitation Act of 2025, or the HOME Act, is taking a massive swing at price gouging in the housing market. Simply put, this bill gives the Secretary of Housing and Urban Development (HUD) the power to temporarily stop landlords and sellers from charging “unconscionably excessive” prices for rental or single-family homes when a national “affordable housing crisis period” is declared. This crisis declaration is based on economic indicators like median home prices, interest rates, and median income, and it can be renewed every 30 days.

The Federal Price Cap: What It Means for Your Rent

This is the biggest, and perhaps most controversial, part of the bill. Under Section 3, once HUD declares a crisis, hiking your rent or the sale price of your house becomes illegal if it’s deemed “unconscionably excessive.” How do they figure that out? They look at what you were charging for that unit (or a similar one) in the 30 days before the crisis started, and what similar units are going for nearby. If your price is way out of line, you could be in violation. This is huge for renters and buyers who often face immediate, massive price spikes during economic instability or after a major disaster. However, the term “unconscionably excessive” is subjective, which leaves a lot of room for interpretation and potential legal headaches for property owners. Owners can defend themselves if they can prove the higher price is due to extra costs or risks they’re taking on, but that’s a high bar to clear.

Targeting the Big Players: Why Wall Street is on Notice

The HOME Act is clearly aimed at the institutional investors who have been aggressively buying up single-family homes, often converting them into rentals. The bill mandates several new investigations and enforcement units to monitor these players. Under Section 6, HUD must launch a formal investigation if any single buyer snags more than 5% of the homes sold in a local market over three years, or if all institutional investors combined buy more than 25% of homes in one year. This means if you’re trying to buy your first home and keep getting outbid by a massive investment firm, the government is now required to step in and find out if that activity is manipulating the market. Sections 4 and 5 establish a new Housing Monitoring and Enforcement Unit within HUD specifically tasked with tracking these institutional purchases, looking for market manipulation, and ensuring fair competition.

New Protections for Renters and Applicants

It’s not just about sales prices; the bill also focuses on making the rental market fairer. Section 7 requires HUD, the FTC, and the Consumer Financial Protection Bureau (CFPB) to team up and investigate unfair tenant screening practices. They’re looking at how landlords use computer algorithms for background checks and how they treat income sources like disability payments or housing vouchers. If you’ve been denied housing because of an opaque algorithm or a landlord’s bias against non-traditional income, this investigation aims to shed light on—and potentially regulate—those practices.

Furthermore, Section 8 targets Fannie Mae and Freddie Mac. The Director overseeing these entities must create new rules requiring renter protections and limits on “really huge, unfair rent hikes” for tenants living in apartment buildings whose mortgages are backed by these government-sponsored enterprises. This is a direct attempt to use federal financing power to stabilize rents in a significant portion of the nation’s rental housing stock.

The Catch: Enforcement and Ambiguity

While the protections sound good, the devil is in the details of enforcement. HUD is authorized to use the same powers as the FTC to enforce these price controls, and state Attorneys General are also empowered to sue violators in federal court. This dual enforcement mechanism could be powerful. However, the temporary nature of the 30-day crisis declaration (Section 3) means that price controls could be a stop-and-start affair, potentially creating uncertainty for both buyers and sellers. Furthermore, the risk is that if property owners feel overly restricted by the price caps, they might pull their properties off the market entirely during a declared crisis, worsening the supply shortage the bill is trying to fix. The success of the HOME Act hinges entirely on how HUD defines and enforces that “unconscionably excessive” line without accidentally freezing the housing market.