This bill mandates the withdrawal of recent energy efficiency standards for federally financed housing programs and restricts related future actions by HUD, USDA, VA, and the Federal Housing Finance Agency.
John Barrasso
Senator
WY
This bill mandates the Secretaries of HUD and Agriculture to withdraw their recent final determination on energy efficiency standards for federally financed housing. It prohibits the implementation of these withdrawn standards or any substantially similar ones across HUD, USDA, and VA programs. Furthermore, the legislation restricts the Federal Housing Finance Agency from finalizing new energy efficiency rules and requires consideration of existing state-level energy codes.
Federal Housing Bill Mandates Rollback of Energy Efficiency Standards for New Homes
This legislation is straightforward: it forces four major federal housing agencies to drop their plans for making new, federally-backed homes more energy efficient. Specifically, it tells the Secretaries of Housing and Urban Development (HUD) and Agriculture (USDA) to immediately withdraw the final determinations they made regarding energy efficiency standards for new construction. They can’t use any federal money to implement or enforce those rules, or anything “substantially similar.”
The Cost of Keeping the Status Quo
When federal agencies set higher energy efficiency standards—like requiring better insulation, more efficient windows, or updated HVAC systems—it means the homes built under their programs (think VA loans, HUD housing, or USDA rural development) are cheaper to run. This bill slams the brakes on that. By forcing HUD and USDA to revert to older, less efficient standards, and by telling the Department of Veterans Affairs (VA) not to implement similar rules, the government is essentially locking future homeowners and renters into higher utility bills. For a young family buying their first home with a VA loan, or a low-income renter in a HUD property, those extra fifty or hundred dollars a month in heating and cooling costs are real money, especially when budgets are tight.
FHFA Gets Benched
Perhaps the biggest play in this bill is the restriction placed on the Federal Housing Finance Agency (FHFA). FHFA oversees Fannie Mae and Freddie Mac, which back the vast majority of mortgages in the country. The bill explicitly prohibits the FHFA Director from finalizing or implementing any rule or determination concerning energy efficiency standards for single-family and multifamily housing. This is a massive curb on their regulatory authority, effectively preventing the agency responsible for safeguarding the housing finance system from nudging the market toward more resilient, cost-saving homes.
The 26-State Rulebook
There’s also a subtle but significant change tucked into the Cranston-Gonzalez National Affordable Housing Act. This amendment states that any future federal energy efficiency standards must consider whether at least 26 states—a majority—have already adopted a comparable code. This provision creates a high hurdle for any future federal standard. Essentially, it means that unless the majority of states have already agreed to a certain level of energy efficiency, the federal government is heavily constrained from setting a national floor. This could mean that future federal housing will be built to the lowest common denominator, potentially trapping homeowners in regions with lax state codes into paying more for energy than they should. For builders, this might lower upfront construction costs, but for the people who actually live in and pay for the houses, it’s a long-term expense.