The Washington Report

The Department of Housing and Urban Development (HUD) recently published two notices of proposed rulemaking that would alter eligibility and participation requirements for federally assisted housing programs.

Work Requirements and Term Limits

On March 1, 2026, HUD published a proposed rule that would authorize public housing agencies (PHAs) and owners of HUD-assisted multifamily properties to voluntarily impose term limits and work requirements on families receiving federal housing assistance. The policies would apply to non-elderly, non-disabled households receiving assistance through the Housing Choice Voucher (HCV) program, the Project-Based Voucher (PBV) program, Project-Based Rental Assistance (PBRA), or residing in public housing.

The rule would permit PHAs and owners to establish limits of at least two years on the duration of assistance, with flexibility to set different limits across program types to reflect local conditions. PHAs and owners that adopt term limits would be required to offer supportive services—such as referrals to workforce development programs—to help families prepare for the end of their assistance. PHA and owners could also require eligible adults to engage in qualifying work activities for up to 40 hours per week, including employment, job training, and work-related education. The public comment period for this rule closes May 1, 2026.

Mixed Immigration Status Households

HUD also published a proposed rule that would prohibit mixed-status households—families that include both members with and without eligible immigration status—from receiving HUD rental assistance, including HCVs and project-based assistance. Under current policy, mixed-status families are not barred from receiving housing assistance but receive a reduced amount to only cover eligible household members. The proposed rule would eliminate this policy and expand the use of immigration status verification. PHAs and owners of HUD-assisted multifamily properties are solely responsible for verifying household members' status—not private housing providers who accept HCVs. The public comment period closes April 21, 2026.

On February 26, 2026, the U.S. Department of Labor (DOL) issued a Notice of Proposed Rulemaking to assess how workers are classified under the Fair Labor Standards Act (FLSA). The previous Independent Contractor rule used a totality of the circumstances test, which consisted of several factors to assess a worker’s classification. The new proposed rule rescinds the prior rule and proposes a new economic reality test.

Under the economic reality test to determine whether a worker should be properly classified as an employee or independent contractor. Under the economic reality test, there are two core factors that are considered, “(1) the nature and degree of the worker’s control over the work; and (2) the worker’s opportunity for profit or loss based on initiative and/or investment.” The two-factor test is primarily to assess whether a worker is in business for themselves or whether the worker is economically dependent on a potential employer for work.

NAR is continuing to review the proposed rule to assess its impact on the real estate industry and its members. NAR will issue additional information about the proposed rule in the future.

Please find additional information about the rule here.