Massive Housing Bill Ties Local CDBG Grants to Zoning Reform, Boosts FHA Limits to $195K for Manufactured Homes

The aptly named Renewing Opportunity in the American Dream to Housing Act of 2025, or the ROAD to Housing Act, is a massive piece of legislation designed to tackle the housing crisis from multiple angles—from zoning laws and manufactured housing finance to disaster recovery and small-dollar mortgages. This bill is less about a single fix and more about throwing the kitchen sink at the problem, mixing federal incentives with mandatory local policy changes. If this passes, it will fundamentally change how federal housing money flows and how homes get built in your town, particularly by forcing a long-overdue conversation about local restrictions.

The Federal Government Comes for Local Zoning

One of the most consequential parts of this bill is Title II, which essentially uses federal grant money as leverage to force local governments to address restrictive zoning. The Housing Supply Frameworks Act (Sec. 203) requires HUD to publish guidelines on best practices for zoning reform within three years, covering everything from eliminating minimum parking requirements to allowing duplexes and quadplexes "by-right." While HUD can’t outright punish a town for not adopting these guidelines, the Build Now Act (Sec. 206) introduces a huge financial incentive: it ties a city’s Community Development Block Grant (CDBG) funding directly to its rate of housing growth. If a city’s housing growth rate is below the median for its peers, it faces a 10% cut to its CDBG allocation. If it’s a high-growth city, it gets a bonus. For local governments, this is a real wake-up call; fail to streamline permitting or reduce density barriers, and you risk losing crucial federal funds used for local infrastructure and community projects.

Modernizing Manufactured Homes and FHA Loans

Title III focuses on making factory-built housing a major part of the solution. The Property Improvement and Manufactured Housing Loan Modernization Act (Sec. 303) drastically increases the loan limits for FHA Title I loans, which are often used for improvements or the purchase of manufactured homes. For instance, the limit for purchasing a multi-section manufactured home without land jumps from roughly $69,000 to $195,322. If you own a home and need to finance a major repair or build an accessory dwelling unit (ADU)—a backyard cottage—the loan limit for those improvements is now set at $75,000. This makes it significantly easier for homeowners to use FHA financing to upgrade their property or build income-generating ADUs, especially in rural areas. Furthermore, the Housing Supply Expansion Act (Sec. 301) requires states to treat manufactured homes the same way regardless of whether they are built on a permanent chassis, removing a key barrier to financing and insurance.

Incentivizing Small Loans and Protecting Renters

For many first-time buyers or those in lower-cost markets, securing a mortgage under $100,000 is surprisingly difficult because lenders make less money on them. Title IV aims to fix this. The Creating Incentives for Small Dollar Loan Originators (Sec. 401) requires the CFPB to study how loan officers are compensated and then write rules ensuring they are paid the same for originating a small-dollar mortgage (under $100,000) as they would be for a large one. This removes the financial disincentive for loan officers to serve this crucial market segment. Meanwhile, the Whole-Home Repairs Act (Sec. 204) establishes a pilot program offering grants to homeowners and forgivable loans to small landlords for repairs. Crucially, landlords who take these loans must cap annual rent increases at the lower of 5% or the inflation rate for at least three years, providing stability for renters in those properties.

Overhauling Disaster Recovery and Cutting Red Tape

Title V includes a major reform of federal disaster assistance. The Reforming Disaster Recovery Act (Sec. 501) creates a dedicated, standing Long-Term Disaster Recovery Fund and an Office of Disaster Management and Resiliency within HUD. This is designed to eliminate the agonizing delays that often follow major disasters by having funds and a structure ready to go. On the development side, the Unlocking Housing Supply Through Streamlined and Modernized Reviews Act (Sec. 208) aims to cut bureaucratic delays by reclassifying many routine housing activities—like tenant assistance, operating cost coverage, and small-scale infill projects—to require less intensive environmental review. While this is intended to speed up building, it’s worth watching closely to ensure that necessary environmental and safety checks aren't sacrificed for speed.

What This Means for You

If you live in a city or county that has notoriously tough zoning laws, this bill could be the financial hammer that finally forces change, potentially leading to more housing options and slower rent growth over time. If you’re a veteran, the Housing Unhoused Disabled Veterans Act (Sec. 603) ensures that your VA disability payments won't count against you when determining eligibility for certain supported housing programs. And if you’re a consumer, the Appraisal Modernization Act (Sec. 705) gives you a clear, formal right to challenge an appraisal you believe is wrong or discriminatory, requiring your lender to review and potentially order a second appraisal if the evidence supports it. This bill touches nearly every part of the housing ecosystem, making it one of the most comprehensive legislative efforts in years.