The Washington Report

NAR submitted a letter to the U.S. Commerce Department regarding the proposed rule seeking changes to the decennial census, which is conducted every 10 years. The proposed rule changes include the removal of race, ethnicity, and sexual orientation questions from the decennial questionnaire. Additionally, the Census Bureau (Bureau) is also proposing changes to the population enumeration to only include U.S. citizens and legal permanent residents. NAR also explained that census data is critical to understanding the housing industry. NAR uses census data to understand housing trends, household formation, homeownership rates, migration, and local housing needs. The real estate industry is reliant upon this data. NAR will continue to monitor updates regarding the decennial census, and the impact of any final rules.      

Earlier this month, HUD released its Next Generation Manufactured Housing Action Plan, laying out how the agency will update federal manufactured housing standards following enactment of the 21st Century ROAD to Housing Act. The new law removed the longstanding requirement that manufactured homes be built on a permanent chassis, opening the door to new designs and construction methods.

Under the plan, HUD intends to update energy efficiency standards, revise construction, foundation, and installation requirements for chassis-free homes, and explore a performance-based code for larger factory-built buildings. HUD also plans to develop resources on early chassis-free projects covering topics such as zoning, appraisal, lending, and insurance, and to help modular and other factory builders that now build to state and local codes start producing homes under the federal manufactured housing code.

The changes are not yet in effect, as HUD must first update its regulations. NAR supported the manufactured housing provisions in the 21st Century ROAD to Housing Act and will engage with HUD as it implements the plan.

The U.S. Department of Agriculture (USDA) Rural Housing Service (RHS) published a final rule expanding eligibility under the USDA Single Family Housing Guaranteed Loan Program to include properties with income-producing accessory dwelling units (ADUs) and clarifying eligibility for homes with features that accommodate home-based businesses. 

ADUs are a practical, cost-effective way to expand housing opportunities. They can support multigenerational living, provide additional housing flexibility, and help communities make more efficient use of existing residential properties, particularly in areas where new development can be constrained by land availability, infrastructure, or construction costs.  

NAR supported the proposal, noting that prior program restrictions prevented rural borrowers from purchasing or improving homes with ADUs that had previously generated rental income, even when the borrower had no intention of renting the unit. Those limitations reduced financing options and restricted access to housing in communities already facing limited inventory. 

For REALTORS®, the rule is significant because it expands the inventory of homes eligible for USDA financing and removes a financing barrier that may have sidelined otherwise qualified properties. As a result, eligible rural buyers may have access to a broader range of housing options, including homes with existing ADUs that were previously more difficult to finance through the program. 

USDA also clarified that under the rule prospective rental income from an ADU will not be considered in loan underwriting. While the rule broadens property eligibility, borrower qualification standards remain unchanged under existing USDA underwriting requirements. However, Congress addressed the issue in Section 502 of the recently enacted 21st Century ROAD to Housing Act. The NAR-supported bill allows USDA financing for a home with a leased ADU, with that rental income counting toward loan qualification. 

Overall, the final rule is a positive step toward expanding housing opportunities in rural America by recognizing ADUs as an important part of the housing stock and removing regulatory barriers that limit financing for otherwise eligible properties.