Habitable Housing Conversion Pilot Program Act of 2026
- Bill Number
- H.R. 8854
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Housing and Community Development
- Status
- Introduced
- Latest Action
- 2026-05-15: Referred to the House Committee on Financial Services.
- Last Updated
- 2026-06-24T16:47:47Z
AI-Generated Summary
Summary of H.R. 8854: Habitable Housing Conversion Pilot Program Act of 2026
Purpose
This legislation establishes a temporary pilot program to test the effectiveness of federal mortgage insurance for loans that fund the conversion of basement spaces in owner-occupied homes into safe, rentable living units. The goal is to evaluate whether this approach can help increase the supply of habitable housing while meeting building safety standards.
Key Provisions
- Pilot Program Establishment: The Secretary of Housing and Urban Development (HUD) must insure mortgages under the existing Section 203(k) rehabilitation loan program of the National Housing Act specifically for basement conversion improvements.
- Eligibility and Requirements: Conversions must occur in owner-occupied properties, result in units available for rental, comply with all state and local building and safety codes, and follow new HUD regulations on safety and habitability.
- Program Limits: The program runs for five years from the date of enactment and may insure no more than 150,000 mortgages.
- Priority Areas: HUD must consult with the Federal Emergency Management Agency (FEMA) and the National Oceanic and Atmospheric Administration (NOAA) to identify regions prone to hazards (such as flooding) and may prioritize properties in those areas.
- Regulations: HUD is required to issue rules ensuring converted spaces are safe and habitable.
- Reporting Requirement: After five years, HUD must submit a report to Congress assessing the program's successes and problems, noting any building codes or regulations that hinder conversions, and recommending whether to continue, modify, or end the program.
- Funding: Such sums as necessary are authorized to be appropriated to implement the program.
Significant Changes to Existing Law
This bill creates a new, targeted pilot within the longstanding FHA Section 203(k) mortgage insurance framework, which currently supports general home rehabilitation. It specifically expands eligibility to basement-to-rental-unit conversions and introduces a numerical cap, time limit, interagency consultation process, and mandatory reporting—elements not present in the base 203(k) authority.
Potential Impacts
- Government Agencies: HUD would administer the insurance program, issue regulations, and produce the required report. FEMA and NOAA would provide hazard data for prioritization but would not directly manage the loans.
- Citizens: Homeowners could access insured financing to create additional rental units, potentially generating income while increasing local housing availability. Renters might benefit from more options if conversions prove viable, though participation depends on individual property suitability and local approvals.
- International Relations: No direct effects identified.
- Broader Housing Market: The program could encourage basement conversions in eligible areas, but its scale is limited to 150,000 mortgages over five years, suggesting modest initial impact pending evaluation.
Main Stakeholders Affected
- Homeowners seeking to convert basement space.
- Potential renters in areas with limited housing supply.
- HUD and its FHA mortgage insurance operations.
- FEMA and NOAA (for consultation on hazard-prone zones).
- State and local governments responsible for building codes and permitting.
- Mortgage lenders and borrowers participating in the 203(k) program.
Notable Legal, Constitutional, or Political Implications
The bill operates within Congress's established authority to support housing finance through FHA programs and does not alter constitutional allocations of power. It emphasizes safety compliance and hazard awareness without mandating changes to existing building codes. Politically, the measure focuses on practical housing expansion through a limited experiment, with built-in evaluation to inform future decisions. No major legal conflicts with current law are apparent from the text.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Meeks, Gregory W. [D-NY-5]
Cosponsors (1)
Rep. Velázquez, Nydia M. [D-NY-7]
Recent Actions
- 2026-05-15: Referred to the House Committee on Financial Services.
- 2026-05-15: Introduced in House
- 2026-05-15: Introduced in House
Bill Versions
- Habitable Housing Conversion Pilot Program Act of 2026 — issued 2026-05-15 — PDF (3 pages)