New 'Housing for US Act' Links Fannie/Freddie Funds to Middle-Class Housing, Mandates Prevailing Wages and Apprentice Hiring

The Housing for US Act is setting up a new financial pipeline aimed squarely at boosting middle-class housing supply. This bill creates a federal-state revolving loan fund, financed initially by money the government receives when Fannie Mae and Freddie Mac are released from certain obligations (SEC. 2). Essentially, the Department of Housing and Urban Development (HUD) will give states “capitalization loans,” which the states then use to fund local housing projects for families earning between 80% and 165% of the area median income (AMI) (SEC. 3).

The State-Level Housing Bank

To get the federal cash, states must create their own housing revolving loan funds and put up a minimum 20% match of non-federal money (SEC. 3). This is a big deal for state budgets, as it means they have to find that cash upfront. The state funds then lend money to local governments or non-profits to build or rehab housing. The loans are designed to be paid back into the state fund within 30 years, creating a self-sustaining pot of money. After 10 years, the states must repay the original federal capitalization loan, and that money is earmarked specifically for reducing the national deficit (SEC. 2).

Strict Rules for Affordability and Labor

This isn't just a handout; it comes with serious strings attached, particularly around who can live in the housing and who builds it. For rental units, they must remain affordable for at least 15 years, with rents capped based on the area median income. For homeownership projects, most units must be aimed at families earning 80% to 165% AMI, and there are 5-year resale restrictions to ensure the homes remain affordable for subsequent middle-income buyers (SEC. 3).

Crucially, the bill imposes significant labor requirements on all construction projects funded by these loans. Contractors must pay prevailing wages, following the rules of the Davis-Bacon Act. They must also hire apprentices: at least 15% of total labor hours must be performed by qualified apprentices, and contractors with four or more employees must hire at least one (SEC. 3). If a contractor misses the 15% threshold without proving a “good faith effort,” they face a $50 penalty per hour missed. Furthermore, contractors must enter into a “covered project labor agreement,” which mandates things like no strikes or lockouts and quick dispute resolution, potentially favoring unionized labor and increasing compliance costs for some developers.

Who Gets Left Out?

While the bill focuses on the middle-class housing crunch, it explicitly excludes several types of crucial housing assistance. State funds cannot be used for modernizing existing public housing, providing tenant-based rental assistance (like Section 8 vouchers), or covering the ongoing operating costs of rental housing (SEC. 3). This means that while the bill helps people in the 80% to 165% AMI range, it does nothing to address the needs of the lowest-income renters who rely on those excluded programs. For many cities struggling with homelessness and deeply subsidized housing needs, this bill won't be the answer—it's strictly focused on increasing supply for the middle tiers.