The FRAMER Act requires states to reimburse builders for the added construction costs of meeting state energy codes above federal standards when building homes in Opportunity Zones.
Jeff Crank
Representative
CO-5
The FRAMER Act establishes a program requiring states to reimburse builders for the added cost of meeting state energy codes that exceed federal standards when constructing homes in designated Opportunity Zones. To maintain eligibility for federal community development funds, states must make this payment within 30 days of occupancy. Builders receiving this reimbursement must disclose the cost difference and the reimbursement amount to the home's first buyer. This program is set to expire seven years after enactment.
FRAMER Act Mandates State Payouts to Builders for High Energy Standards in Opportunity Zones
The FRAMER Act introduces a specific financial mandate for states: if a state’s energy codes for new homes are stricter—and more expensive—than federal HUD standards, the state must pay the builder the difference. This rule specifically targets 'Opportunity Zones,' which are federally designated areas intended for economic revitalization. To keep receiving federal community development funds, states will have to cut a check to builders within 30 days of a home passing its final inspection. Essentially, if a state wants greener homes than the federal baseline, it has to foot the bill so the developer doesn’t have to.
The Cost of Going Green
Under Section 2, the Secretary of Housing and Urban Development (HUD) gets the job of math teacher, calculating exactly how much more it costs to build to a state’s high-efficiency code versus the federal 'Minimum Energy Standard.' For a contractor building a set of townhomes in a local Opportunity Zone, this could mean a significant reimbursement for installing high-end insulation or heat pumps required by state law. However, the bill puts the financial weight squarely on state taxpayers. If your state has ambitious climate goals and strict building codes, it now faces a choice: lower those standards to the federal floor or find the room in the state budget to reimburse every developer working in these zones.
Transparency at the Closing Table
If you are a homebuyer looking at a new build in one of these zones, the bill includes a 'receipt' requirement. Builders who get this state cash must provide a disclosure form—designed by HUD—showing exactly how much they were reimbursed. Crucially, the document must also state if any of that money was actually used to lower the home's purchase price. For a young family buying their first home, this means seeing whether the state’s subsidy helped them get a better deal or simply padded the builder's profit margin after meeting those higher energy requirements.
A Seven-Year Experiment
This isn't a permanent change to the tax code; the FRAMER Act includes a sunset clause that repeals the entire program seven years after it starts. During those seven years, the Comptroller General will keep a running tally of which states are paying out and exactly where that money is going. While the bill aims to spark construction by removing the 'green premium' for developers, the 30-day payment deadline could create a massive administrative headache for state agencies. If a state misses the window or lacks the funds, they risk losing the federal community development grants that many cities rely on for infrastructure and local services.