Housing Affordability Act

On April 30, 2025, Senator Gallego (D-AZ) introduced the Housing Affordability Act (S.1527), which amends Title II of the National Housing Act to dramatically increase FHA multifamily mortgage insurance loan limits. The bill specifically raises per-unit limits across Sections 207 and 213 from historical levels of approximately $38,000–$85,000 to between $167,000 and $375,000 per unit — a 4x–5x increase. It also changes the inflation index from CPI-U to the Census Bureau's Price Deflator Index of Multifamily Residential Units Under Construction, a metric that more accurately reflects construction cost inflation. The bill has been referred to the Senate Banking Committee and has a companion bill (H.R. 6132) in the House. This is an authorization bill that does not appropriate funding — it modifies program parameters rather than allocating direct spending. The expanded loan limits directly reduce equity requirements for developers by allowing more project cost to be covered by insured debt. This improves the financing viability of multifamily projects, particularly in higher-cost metro areas where prior limits were binding. The switch to a construction-specific deflator also ensures limits keep pace with real construction cost inflation rather than general CPI. Real market data shows homebuilders are already in an uptrend: DHI +16.56%, MTH +15.62%, TOL +9.62%, PHM +8.99%, KBH +6.95%, and LEN +2.29% over 30 days. Lenders are also up: BAC +12.11%, USB +10.54%, JPM +10.12%, WFC +5.58%. The 7-day reversal (-0.5% to -3%) suggests near-term profit-taking, but the legislative catalyst is long-term structural. Immediate path requires Senate Banking Committee markup, then floor vote, then House companion passage, then presidential signature. The bill has only 2 cosponsors and is early stage — probability of passage in the current Congress is moderate. The Presidential Memorandum on energy infrastructure (Apr 20, 2026) is not directly relevant to this housing bill. Affected sectors: Finance (mortgage lenders originating FHA multifamily loans) and Real Estate (homebuilders with multifamily divisions). Key winners include D.R. Horton ($DHI), Lennar ($LEN), Toll Brothers ($TOL), PulteGroup ($PHM), and lenders JPMorgan ($JPM), Wells Fargo ($WFC), Bank of America ($BAC), and U.S. Bancorp ($USB).