Housing policy in Washington is advancing rapidly, but its ultimate impact will depend not only on new legislation, but on effective program implementation and the stability of the broader housing finance system. Recent congressional action and federal oversight findings highlight both near-term operational challenges and longer-term structural shifts shaping affordable housing delivery. Key examples include the House’s decision to apply Build America, Buy America requirements to the HOME Investment Partnerships Program, as well as the continued rise of nonbank mortgage companies as dominant participants in federally backed lending and servicing.
HOME and the Impact of BABA Requirements
The House of Representatives recently passed the Housing for the 21st Century Act (H.R. 6644) by an overwhelming bipartisan vote of 390–9. The bill includes reforms to the HOME program and raises the public welfare investment cap to encourage greater investment in affordable housing initiatives, signaling strong congressional momentum around housing supply and affordability.
However, the final House version removed an earlier proposal to exempt HOME from Build America, Buy America (BABA) requirements, instead directing HUD to clarify implementation. Since BABA requires the use of domestically produced construction materials, its application to HOME-funded projects could increase costs, delay timelines, and complicate development, particularly for projects with tight margins and complex financing. As Congress and HUD continue shaping housing policy, how these requirements are implemented will remain a key issue for affordable housing delivery.
Nonbanks Take the Lead in Mortgage Lending and Servicing
While the HOME and BABA debate affects development in the near term, a deeper structural shift is reshaping the housing finance system. A newly released report from the U.S. Government Accountability Office finds that nonbank mortgage companies now originate and service the majority of loans backed by Ginnie Mae, Fannie Mae, and Freddie Mac, with their market share rising from 27 percent in 2014 to 66 percent in 2024. Nonbanks have played a critical role in expanding access to mortgage credit, particularly for first-time and lower-wealth borrowers using FHA and other government-backed channels, but they also rely more heavily on short-term funding than traditional banks.
GAO recommends stronger oversight, including improved procedures to assess nonbank data reliability, better evaluation of risks tied to short-term credit lines, and additional stress testing tailored to nonbank firms. Similar concerns have been raised by the Financial Stability Oversight Council, reflecting broader questions about liquidity and resilience during economic downturns. While the rise of nonbanks does not automatically signal instability, it does mean the mortgage market’s risk profile has changed, and future reforms to the GSE system will need to account for the central role these firms now play.
A Shared Theme: Delivery Depends on Systems Working Together
These two developments operate on different timelines, but they converge around the same core issue: housing policy success depends not only on legislative ambition, but on administrative feasibility and financial stability. If BABA compliance increases costs or delays for HOME-funded projects, production goals become harder to achieve, while the growing dominance of nonbank lenders may introduce new vulnerabilities into the mortgage servicing system that could affect access to affordable homeownership during periods of economic stress. In both cases, the challenge is balance, as policymakers seek to strengthen domestic manufacturing, expand housing supply, protect consumers, and safeguard financial stability at the same time.
For ProLink Solutions, staying closely attuned to these shifts is essential, as they shape the environment in which affordable housing is financed, developed, and delivered. ProLink plays an important role in helping partners navigate evolving federal requirements and ensuring policy changes translate into practical, sustainable housing solutions for communities.
