The Biden administration today plans to announce steps aimed at addressing the U.S. shortage of entry-level homes, including expanding federally backed financing for affordable housing and directing grants toward localities that encourage construction, the Wall Street Journal reported. Each regulatory move is technical and modest, though the administration hopes they will collectively dent the estimated shortage of millions of homes over the coming years. “While the policies cover a wide range of issues and agencies, most are intended to do one thing: Make it easier and more economical to build affordable housing,” said Jim Parrott, a former Obama administration housing adviser, who had reviewed the proposal. “The total effect should be considerable.” The changes include encouraging greater land-use improvements at the local level by favoring jurisdictions that promote “density and rural main street revitalization” for funding from last year’s infrastructure bill, according to a fact sheet distributed by the White House. Two government agencies, the Federal Housing Administration and the Federal Housing Finance Agency, will explore test pilots to boost financing for tiny homes to increase housing supply. In another move to encourage construction, government-controlled mortgage company Fannie Mae will consider purchasing loans made to builders prior to construction of multifamily housing. At present, Fannie generally only buys mortgages for homes already built and certified for occupancy, which is too late for smaller builders that lack access to affordable financing.
