The Washington Report

On June 25, 2025, the National Fair Housing Alliance (NFHA) and the Tennessee Fair Housing Council (TFHC) filed a class action lawsuit against the U.S. Department of Housing and Urban Development (HUD). The lawsuit, filed in the United States District Court for the District of Columbia, challenges HUD’s failure to administer congressionally-appropriated funds for local organizations engaging in fair housing activities.

The Fair Housing Initiatives Program (FHIP), created by Congress in 1992, funds the local organizations that investigate housing discrimination and educate real estate professionals and consumers about civil rights laws. Local fair housing centers have been funded for decades by both parties. In the lawsuit, the fair housing groups allege that HUD has halted the release of new grant awards and frozen the second and third years of existing multi-year grants. The groups claim that the loss of tens of millions in grant funding is causing shutdowns, layoffs, and terminations of investigations for fair housing organizations across the country.

The Administration's proposed FY 2026 budget zeroes out the FHIP program.

Download the Class Action Complaint

Rep. Maxine Waters (CA), along with Reps. Al Green (TX), Ayanna Pressley (MA), and Sylvia Garcia (TX), reintroduced the Downpayment Toward Equity Act (H.R. 4069) this week, legislation that would provide $100 billion in direct assistance to help first-time, first-generation homebuyers purchase their first home.

The bill provides up to $20,000 for first-generation homebuyers and up to $25,000 for socially and economically disadvantaged homebuyers. The assistance can be used for down payments, closing costs, and mortgage interest rate buydowns. Eligibility extends to those with incomes up to 120% of area median income (or 180% in high-cost areas) and includes homebuyer education and counseling.

H.R. 4069 seeks to address persistent barriers facing communities that have been historically excluded from homeownership. Historic housing discrimination has prevented millions of Americans from building intergenerational wealth, creating lasting obstacles to homeownership. Without family wealth to draw upon, these communities are particularly impacted by rising housing costs and face greater challenges saving for a down payment, even if a family can afford a monthly mortgage payment. NAR's 2024 Profile of Home Buyers and Sellers demonstrates these disparities, showing that 83% of recent home buyers identified as White or Caucasian, while only 7% identified as Black/African American, 6% as Hispanic/Latino, and 4% as Asian/Pacific Islander. Homeownership remains a critical pathway to building generational wealth.

NAR supports this legislation. Shannon McGahn, NAR's Senior Vice President of Government Affair, stated: "We applaud Ranking Member Waters' reintroduction of the Downpayment Toward Equity Act. This bill has the potential to be a meaningful step toward addressing long-standing disparities in wealth and homeownership, while expanding access for first-generation buyers. By directing assistance to those who need it most, the bill acknowledges that the greatest barrier to homeownership today isn't credit—it's cash. REALTORS see firsthand how a lack of upfront funds keeps creditworthy Americans out of the market. We commend the leadership behind this legislation and look forward to supporting it as it moves through Congress."

The Department of Housing and Urban Development (HUD) published a Federal Register notice proposing to establish a uniform 25 basis point Multifamily Mortgage Insurance Premium (MIP) rate annually across all FHA multifamily programs. According to HUD, the proposal aims to lower financing costs and stimulate rental housing development.

The proposal would eliminate separate rate categories for market-rate, affordable housing, and green building properties. Under the current system, market-rate properties pay 60-70 basis points annually, affordable housing pays 45 basis points, and properties meeting green building standards pay 25 basis points. The proposal would replace this tiered structure with the uniform rate and eliminate associated program requirements.

HUD is accepting comments through July 28, 2025. Implementation is subject to final rule adoption.

The proposed rate changes could affect financing options for multifamily properties. NAR members working with multifamily clients should be aware of potential changes to FHA loan terms.

As part of its recent letter to the Justice Department’s Anticompetitive Regulations Task Force, NAR recommended several federal agency actions aimed at eliminating longstanding barriers that have impeded the development of a competitive private flood insurance market.

While the National Flood Insurance Program (NFIP) continues to provide essential coverage for the highest-risk properties, private insurers are unable to compete on a level playing field when outdated mapping, NFIP subsidies, and restrictive federal regulations effectively crowd out private market options. As a result, just 4% of U.S. homeowners currently carry flood insurance—far below the estimated 20 million homes at high flood risk.

To address these challenges, NAR recommends:

• Modernize FEMA’s maps to cover the full U.S. and show all flood risks with property-level detail, so buyers can make informed decisions inside and outside high-risk zones.
• Continue implementing Risk Rating 2.0 to ensure accurate, property-specific rates as subsidies phase out under the congressionally mandated glidepath.
• Expand mitigation grant programs to help homeowners reduce both flood risk and insurance costs.
• Reform the Write-Your-Own program to allow more qualified private insurers to participate and compete.
• Clarify continuous coverage rules so consumers can switch to private policies without penalty.

NAR emphasizes that consumers deserve choice and access to the best available coverage—whether public or private—to protect against the nation’s most costly natural disaster. We will continue advocating for federal solutions that support a more competitive private flood insurance market alongside the NFIP.

Read NAR's Comment Letter to DOJ's Taskforce

Click here for the Washington Report