If you’ve been trying to buy a home and feeling like the deck is stacked against you, Congress just passed legislation that could change the game. The 21st Century ROAD to Housing Act — set to be signed by the President — is one of the most comprehensive housing reform bills in decades. While much of the bill focuses on housing supply and government programs, several key provisions are directly aimed at making it easier, cheaper, and fairer for everyday Americans to buy a home.
Here’s what you need to know.
More Help for Small-Dollar Homebuyers (Section 105)
One of the most exciting provisions for buyers in affordable price ranges is the FHA Small-Dollar Mortgage Pilot Program. The bill directs HUD to create a program specifically designed to make it easier to get a mortgage on homes priced at $100,000 or less — a segment of the market that has been largely abandoned by lenders because the fees and fixed costs of originating a loan don’t pencil out at low loan amounts.
Under the pilot program, HUD could:
- Pay lenders directly to incentivize them to originate small-dollar mortgages
- Provide grants to buyers to help cover down payments, closing costs, appraisals, and title insurance
- Adjust FHA terms and costs to make these loans more viable
If you’ve been priced out of the market in higher-cost areas, or you’re looking at more affordable properties in smaller markets, this program could open a door that’s been closed for years.
Fairer Fees on Small Mortgages (Sections 401–402)
Here’s a problem most buyers don’t know exists: the rules around “points and fees” on mortgages were designed for larger loan amounts. On a $300,000 mortgage, the 3% fee threshold makes sense. On an $80,000 mortgage, it can actually prevent buyers from getting help because lenders can’t afford to originate the loan without running afoul of those thresholds.
The 21st Century ROAD to Housing Act requires regulators to evaluate and potentially revise those fee thresholds for mortgages under $100,000, making it more realistic for lenders to serve buyers in this price range. Alongside this, the CFPB is directed to study loan originator compensation practices and identify what’s preventing small-dollar mortgage lending from expanding.
For buyers of modest homes, this is a meaningful step toward getting lenders back in the game.
A Stronger Appraisal Process — Including Your Right to Challenge It (Sections 403 & 704)
Few things derail a home purchase faster than a bad appraisal, and the bill takes aim at two problems: appraisal quality and appraisal fairness.
Section 403 tightens appraiser standards for FHA loans, requiring appraisers to demonstrate verifiable education in FHA appraisal requirements. This means the person valuing your future home will need to meet a higher bar of competency.
Section 704 — the Appraisal Modernization Act — goes further, requiring federal mortgage programs (FHA, VA, USDA, and Fannie/Freddie) to implement a formal process for borrowers to request a reconsideration of value if they believe an appraisal is inaccurate. This is a big deal. If you’re under contract on a home and the appraisal comes in low, you’ll now have a clear, codified path to challenge it.
The bill also calls for studying a publicly accessible appraisal database, which could eventually help buyers and lenders better understand how their local market is being valued.
Better Counseling for Buyers — and a Safety Net if You Fall Behind (Section 101)
The bill strengthens the HUD housing counseling program in two important ways.
First, it raises the performance bar for HUD-certified housing counselors by tracking counselor outcomes against default rates in comparable markets. In plain terms: the counselors who help you prepare to buy a home will now be held accountable for whether their advice actually works.
Second — and this matters if life ever throws you a curveball — any borrower with an FHA, VA, or USDA loan who falls 30 or more days behind on their mortgage payments must be offered access to housing counseling. For FHA borrowers, that counseling is covered by the Mutual Mortgage Insurance Fund, meaning it won’t cost you anything out of pocket during an already stressful time.
Veterans: You May Qualify for More Than You Think (Sections 601–603)
If you have military service in your background, the bill includes several provisions specifically for you.
Section 601 requires that every Uniform Residential Loan Application include a notice just below the military service question that reads: “If yes, you may qualify for a VA Home Loan. Consult your lender regarding eligibility.” It sounds simple, but research has shown that many veterans don’t realize they qualify for a VA loan — often the best mortgage product on the market with no down payment required.
Section 603 goes further, requiring that when veterans are shown the FHA consumer choice disclosure (the side-by-side comparison of loan options), it must now include VA loan terms as one of the options. That means you’ll be able to see exactly how a VA loan compares to FHA before you choose your loan type.
Section 602 improves access to housing assistance for disabled veterans by ensuring VA disability benefits are excluded from income calculations when determining eligibility for certain housing programs — which could help more veterans access assistance they’ve earned.
Corporate Investors Won’t Be Competing With You for Single-Family Homes (Section 1001)
This one is significant. The bill bans large institutional investors — defined as entities that control 350 or more single-family homes — from purchasing additional single-family homes on the open market.
If you’ve been competing against cash offers from Wall Street-backed investment funds buying up houses in your neighborhood, this provision directly addresses that problem. For-profit investment entities of that scale will no longer be allowed to acquire additional single-family homes (with limited exceptions for new construction, build-to-rent programs, and foreclosure-related acquisitions).
This won’t solve every affordability challenge, but removing large corporate buyers from competing with families for existing homes is a meaningful shift in the market dynamics that have frustrated buyers for years.
The Big Picture for Homebuyers
The 21st Century ROAD to Housing Act isn’t a magic fix for a housing market that’s been under pressure for years. But it does address several real pain points — especially for buyers in the affordable price range, veterans, and anyone who’s been outbid by investors.
Here’s a quick summary of what’s most relevant to you as a buyer:
- FHA pilot program to make small-dollar mortgages (under $100,000) more accessible, including potential grants for down payments, closing costs, and appraisals
- Fee reform on small mortgages to bring more lenders into that market
- Stronger appraisal standards and a codified right to challenge a low appraisal
- Free housing counseling for FHA/VA/USDA borrowers who fall behind on payments
- Better VA loan disclosure so veterans don’t miss out on benefits they’ve earned
- A ban on large institutional investors purchasing additional single-family homes
If you have questions about how any of these changes might affect your home purchase — or if you’re ready to start the mortgage process — reach out to me at MJ Mortgage LLC. I’m here to help you navigate the process and find the right loan for your situation.
Sal Trapani, Mortgage Banker & Owner, MJ Mortgage LLC, 281-608-2846 cell, sal@mjmortgagellc.com, www.mjmortgagellc.com, Magnolia, TX 77354, NMLS 1055510 / NMLS 2381195
Sal Trapani is the owner of MJ Mortgage LLC. This blog is intended for informational purposes and does not constitute legal or financial advice. Program details are subject to implementation timelines and regulatory guidance.