CLPHA Advocacy

CLPHA supports the nation’s largest and most innovative housing authorities by advocating for the resources and policies they need to solve local housing challenges and create communities of opportunity. We frequently champion our members' issues, needs, and successes on the Hill, at HUD, and in the media. In these arenas CLPHA also advocates for legislation and policies that help our members, and the public and affordable housing industry as a whole, strengthen neighborhoods and improve lives.

Click below for links to congressional testimonies, statements for the record, action alerts, comments to HUD and other federal agencies, and the latest information about CLPHA's multi-pronged housing advocacy.

Action Alerts

7.11.25

ACTION ALERT: Urge Your Member of Congress to Fully Fund Rental Assistance

CLPHA, Industry Partners and Over 700 National, State and Local Organizations Send Letter Asking Congress to Fully Fund Rental Assistance

CLPHA urges our members to work with your representatives in the House and Senate to fully fund rental assistance. The House of Representatives is set to unveil their Transportation, Housing and Urban Development, and Related Agencies (THUD) Fiscal Year 2026 (FY26) bill next week, despite the House not releasing their total funding request.

What’s at Stake?

Critical affordable housing programs that help millions of households afford a place to live and maintain housing stability.

How Can You Help?

Share Two Important Materials with your Members of Congress:

Joint Industry Letter: This morning, CLPHA joined industry partners and over 700 national, state, and local organizations in sending a letter to Congress advocating for full funding of the Housing Choice Voucher program, project-based rental assistance, and continued assistance for Emergency Housing Voucher households. This letter is in response to the administration’s proposal to convert several federal rental assistance programs into a State Rental Assistance Program block grant, which would greatly destabilize the voucher program and put many families at risk of losing their housing assistance.
Joint Funding Request: Earlier this week, CLPHA and industry group partners sent a joint funding request that fully funds rental assistance to the House Appropriations Committee.

Stay on Top of the Appropriations Process

The House Appropriations THUD Subcommittee will meet on Monday, July 14 at 5:00 p.m. ET to consider the legislation. The House Appropriations Full Committee will then meet on Thursday, July 17 at 10:00 a.m. ET to consider the THUD legislation. The Senate is expected to release their bill and hold their markup shortly after the House. A markup is a formal meeting scheduled for members to review and provide amendments to their version of the bill before it is sent to the full chamber for a vote.

CLPHA will continue to monitor the 2026 appropriations process as it proceeds and will update members about key developments.

For questions, contact Madeline Morris, [email protected], or Cynthia Cuestas, [email protected].

7.8.25

ACTION ALERT: Urge Your Member of Congress to Fully Fund Rental Assistance In 2026 Federal Government Budget

Share CLPHA’s Budget Request before House Appropriations Committee Meets Next Week

The House of Representatives is set to unveil their Transportation, Housing and Urban Development, and Related Agencies (THUD) Fiscal Year 2026 (FY26) bill next week, despite not releasing the total amount of funding to be requested. CLPHA and our industry group partners have generated a joint funding request that fully funds rental assistance. We urge CLPHA members to share our joint FY26 HUD budget request to their representatives in both the House and Senate as Congress moves forward with the Appropriations process.

In response to President Trump’s FY26 budget proposal released last month, CLPHA, the Public Housing Authorities Directors Association, the National Association of Housing and Redevelopment Officials, the Local Housing Administrators Coalition, and the MTW Collaborative released our joint FY26 funding recommendations for HUD. Among other requests, we urge HUD to fully fund the Public Housing Fund, including $5 billion for the Capital Fund, $5.72 billion for the Operating Fund, and $580 million to address the Operating Fund shortfall. Furthermore, we requested $300 million for the Choice Neighborhoods Initiative, $37.487 billion for Housing Choice Voucher (HCV) Renewals, $3.622 billion for HCV Administrative Fees, and $500 million for Tenant Protection Vouchers.

House Appropriations Subcommittee on THUD will meet on Monday, July 14 at 6:00 p.m. ET to consider the legislation. The full House Appropriations Committee will then meet on Thursday, July 17 at 10:00 a.m. ET. The Senate is expected to release their bill and hold their markup shortly after the House. A markup is a formal meeting scheduled for members to review and provide amendments to their version of the bill before it is sent to the full chamber for a vote. The House and Senate Appropriations Committees held their FY26 HUD budget hearings last month. The House and Senate are now working to release their own FY26 THUD appropriations bills.

CLPHA will continue to monitor the 2026 appropriations process as it proceeds and will update members about key developments.

1.28.25

URGENT: Contact Your Members of Congress to Communicate How the Pause in Federal Funding Is Impacting Your PHA

Yesterday, the Office of Management and Budget (OMB) published a memorandum, which directs all federal agencies to pause all “federal financial assistance” (FFA) "to the extent permissible under applicable law." The temporary pause in funding will become effective on January 28, 2025 at 5:00 p.m. ET.

According to news reports, OMB distributed a questionnaire to federal agencies this morning asking them to provide information about whether their programs are in compliance with the Trump administration’s policy goals and executive orders. OMB’s questions for agencies concern undocumented immigration, environmental and climate justice programs, and diversity, equity, and inclusion policies and initiatives.

Capitol Hill staff, HUD staff, advocacy organizations, and other stakeholders appear uncertain about how the memo will be enforced, which programs are affected, and how long this pause will last.

Housing authorities are reporting that they are locked out of eLOCCS before the 5:00 p.m. deadline. We are investigating if this is a systemwide issue or if it is deliberate. We anticipate that PHAs will be locked out of eLOCCS after 5:00 p.m. ET today.

If you are locked out of eLOCCS, contact your member of Congress and Senators to make sure they are aware of the problem. Congress needs to hear how this pause is disrupting daily operations of public housing authorities.

When speaking with Members of Congress highlight the following points:

Highlight how the pause is affecting your daily operations, especially if you are locked out of eLOCCS. Your Member of Congress/Senator may not understand what exactly what eLOCCS is. Explain that it is the system that allows public housing authorities to access federal funds for key housing programs such as vouchers and public housing.
Highlight the breakdown of residents you serve who will be impacted by the pause: the number of seniors, children, veterans who could lose access to federal housing assistance at your PHA.
Highlight the economic impact that your public housing authority has in your community, such as jobs created, number of private landlords affected, and if the pause would halt any development deals.

Please share the outcome of your conversations with Members of Congress with CLPHA Legislative Manager Cynthia Cuestas at [email protected].

12.6.24

ACTION ALERT: Contact Your Member of Congress to Support Full Funding for Housing Choice Voucher Renewals in the FY25 Appropriations Bill

7.31.24

ACTION ALERT: TAX BILL EXPANDING HOUSING CREDIT HEADED TO SENATE FLOOR

4.15.24

ACTION ALERT: Urge the Senate to Pass the Tax Relief for American Families and Workers Act of 2024

In February, the House of Representatives passed H.R. 7024, The Tax Relief for American Families and Workers Act of 2024, which received overwhelming bipartisan support. The bill includes two Low-Income Housing Tax Credit (LIHTC) provisions that would restore the 12.5% allocation increase for 2023 to 2025 and lower the 50% bond financing threshold to 30% for Private Activity Bond allocations made in 2024 to 2025. The bill also includes a $33 billion expansion of the Child Tax Credit (CTC) for the next three years. While the CTC in this bill is not as generous as the 2021 provision included in the American Rescue Plan, this expansion and continuation of the program acknowledges that the benefits provided by the CTC should be continued.

The legislation faced various roadblocks in the Senate, including opposition from Senate Finance Committee Chair Mike Crapo (R-ID) due to the CTC provisions included in the bill. However, ongoing discussions are still happening to possibly move the bill forward for a floor vote. We strongly ask that CLPHA members continue to reach out to your Senators and urge them to pass H.R. 7024, the Tax Relief for American Families and Workers Act of 2024.

ACTION:

When asking your Senator to support the Tax Relief for American Families and Workers Act of 2024, mention the importance of, and share your support for, the two LIHTC and CTC related provisions in the bill and ask that the housing provisions are retained in the Senate:

LIHTC provisions:

Restore the 12.5% allocation increase for 2023 – 2025. This allocation increase was initially enacted in 2018 but expired in 2021.
Lower the 50% bond financing threshold to 30% for Private Activity Bond (PAB) allocations made in 2024 – 2025.

CTC provisions:

“Lookback rule” allowing families to use their earnings from the prior year to calculate their credit if they exceed the family’s earnings in the current year.
Increases the maximum refundable amount per child to $1,800 in tax year 2023, $1,900 in tax year 2024, and $2,000 in tax year 2025, along with the inflation adjustment described below.
Adjust the $2,000 value of the child tax credit for inflation in tax years 2024 and 2025, rounded down to the nearest $100.

The ACTION Campaign, where CLPHA is a Steering Committee member, has prepared background and advocacy materials about the Tax Relief for American Families and Workers Act of 2024.

2.2.24

ACTION ALERT: Contact the Senate to Pass the Tax Relief for American Families and Workers Act of 2024

On February 1, 2024, the House of Representatives passed H.R. 7024, The Tax Relief for American Families and Workers Act of 2024 which includes two Low-Income Housing Tax Credit (LIHTC) provisions that were also included in the Affordable Housing Credit Improvement Act (H.R. 3238/S. 1557). According to Novogradac, the provisions which would restore the 12.5 percent allocation for 2023-2025 and lower the 50 percent bond financial threshold to 30 percent for 2024-2025, would finance more than 200,000 additional affordable homes.

The bill still needs to be considered by the Senate, which faces several challenges, including a busy legislative agenda for February. Members of the Senate have also floated the idea of scheduling a potential markup of the bill which could potentially amend the legislation and further delay any vote to bring the bill on the Senate floor. The Tax Relief for American Families and Workers Act may also be the last opportunity for Congress to pass any tax related provisions until 2025.

The ACTION Campaign, where CLPHA is a Steering Committee member, has prepared background and advocacy materials about the Tax Relief for American Families and Workers Act of 2024.

ACTION:

We strongly ask that CLPHA members reach out to your Senators and urge them to pass H.R. 7024, the Tax Relief for American Families and Workers Act of 2024.
When asking your Member of Congress to support H.R. 7024, mention the importance and share your support for the two LIHTC related provisions in the bill and ask that the housing provisions are retained in the Senate:
- Restore the 12.5 percent allocation increase for 2023 – 2025. This allocation increase was initially enacted in 2018 but expired in 2021.
- Lower the 50 percent bond financing threshold to 30 percent for Private Activity Bond (PAB) allocations made in 2024 – 2025.

For questions or additional information, contact Gerard Holder, CLPHA Legislative Director at [email protected]. or Cynthia Cuestas, CLPHA Legislative Assistant, at [email protected].

11.28.22

ACTION ALERT: Ask Congress to Pass a FY23 THUD Funding Bill Before the December 16 Deadline

Congress Needs To Increase Public And Affordable Housing Funding

Background:

The federal government is currently funded under a continuing resolution (CR) that expires December 16 this year. If the government does not take additional action it runs out of money and has to shut down. Given the uncertainty of what will happen in the appropriations process during the next Congress beginning in January, it is critical that the current Congress finish the work already begun and pass a full year FY23 appropriations bill. CLPHA is particularly concerned with the Transportation, Housing and Urban Development, and Related Agencies (THUD) proposed legislation currently in final negotiations between the House and Senate.

CLPHA and industry partners recently sent a letter and revised joint appropriations request to the leadership of the House and Senate appropriations committees asking for specific funding levels and authorizing language be included in the final THUD appropriations bill. Among our requests, we ask Congress to increase funding for the HUD defined shortfalls in the public housing operating fund program to $345 million to accommodate all eligible housing authorities. We ask the committees to accept the Senate-proposed level of $364 million in set-aside funding for tenant protection vouchers (TPVs) since HUD recently indicated that the current demand for TPVs has exceeded its initial projections for FY23 and they again anticipate not being able to fund replacement TPVs for vacant units in calendar year 2023 without additional funding. We also ask that HUD be directed to determine the impact of recent changes to the calculation of FY23 Fair Market Rents (FMRs), because of the recent extension of regulatory waivers increasing payment standards up to 120 percent of the FMR in local housing markets affecting the need for additional housing assistance payments (HAP) set-aside funding.

ACTION:

CLPHA is calling on members to:

1) Ask your Members of Congress to support the recommendations included in the public housing industry joint funding request and joint industry letter.

2) Ask your Members of Congress to support the THUD funding bill.

3) Ask your Members of Congress to support final passage of a full-year FY23 appropriations bill.

For questions or additional information, contact Gerard Holder, CLPHA Legislative Director at [email protected].

7.12.22

ACTION ALERT: Urge Congress to Reinsert Annual Contributions Contract (ACC) Language in the FY 2023 HUD Appropriations Bill

BACKGROUND:

CLPHA and our industry partners today sent a letter (and attachments Exhibit 1 and Exhibit 2) to House and Senate Appropriations Committee members asking to include legislative language that prevents HUD from implementing unilateral changes to the ACC in the forthcoming FY23 appropriations bill. This joint industry request was made by CLPHA, the MTW Collaborative, the National Association of Housing and Redevelopment Officials (NAHRO) and the Public Housing Authorities Directors Association (PHADA).

CLPHA and our industry partners remain concerned that HUD’s continued attempts to revise the ACC will circumvent the Administrative Procedure Act (APA), unilaterally change the contractual relationship between HUD and public housing agencies (PHAs), and strip PHAs of their ability to challenge HUD’s breach of contract actions, which PHAs have recently successfully litigated. Without the inclusion of the legislative language mentioned in our letter, we are concerned that HUD’s ability to make problematic changes to the ACC has been renewed.

This week the full House passed six appropriations bills including its version of the FY23 HUD bill. Since the Senate has not yet taken action on their bill version, we hope to have the ACC language included in the Senate bill, and we are seeking eventual conference committee action between the House and Senate to include the ACC language and committee report language.

ACTION:

We are asking housing authorities to sign and send a similar letter asking their representatives in both the House and Senate to reinstate the legislative language regarding the ACC in the General Provisions section of the FY23 HUD appropriations legislation.

We’ve drafted a sample letter as a guide for you.

Download the Letter Template

Once you’ve downloaded the sample letter, fill out the highlighted fields and personalize the letter as appropriate.
We recommend that you email the letter(s) to your representatives.

If you have any questions, contact Gerard Holder, CLPHA Legislative Director, at [email protected].

CLPHA Recent Comments

10.2.26

CLPHA Urges HUD to Use the Best Available Data to Calculate Fair Market Rents and Inflation, Keeping Vouchers Available for Families in Safe, High-Quality Housing

7.23.26

CLPHA Presses HUD for Regulatory Relief from BABA Requirements and Environmental Reviews

CLPHA Continues Sustained Advocacy against Costly, Duplicative Requirements That Slow Affordable Housing Development

7.16.26

CLPHA and Reno & Cavanaugh Call for the Immediate Withdrawal of OMB’s Proposed Changes to Federal Funding Rules

Rule Jeopardizes over $1.1 Trillion in Federal Discretionary Spending

5.20.26

House Appropriators Unveil FY27 HUD Appropriations Bill with Decrease of Nearly $6 Billion for HUD Programs

Final Numbers Can Still Change as Senate Appropriators Have Yet to Weigh In

5.1.26

CLPHA Urges HUD to Preserve Full Local Discretion While Raising Concerns about HUD’s Proposed Work Requirements and Term Limits Rule

CLPHA PHA Members Are Deeply Committed to Promoting Economic Self-Sufficiency

4.27.26

CLPHA Supports Interim Final Rule Revoking 30-Day Eviction Notice Requirement in Comments to HUD

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Latest News

10.2.26

CLPHA Urges HUD to Use the Best Available Data to Calculate Fair Market Rents and Inflation, Keeping Vouchers Available for Families in Safe, High-Quality Housing

Yesterday, CLPHA urged HUD to use the best available data to calculate Fair Market Rents (FMRs) and inflation in order to keep vouchers available for families in safe, high-quality housing in a letter sent to HUD. CLPHA asked HUD to make changes to FY 2027 FMRs methodology announced in the Federal Register on September 1, 2026.

CLPHA's analysis of member agencies found that two-bedroom FMRs rose just 2 percent on average from FY 2026 to FY 2027, and nearly a third of members saw their FMRs decline. Some of the steepest reductions hit high-cost markets, including Salt Lake City (–7.6 percent), Washington, DC (–6.9 percent), San Jose (–6.1 percent), and San Diego (–5.9 percent). Thirty member agencies now have FMRs below their FY 2025 levels, and 11 have seen declines two years in a row.

These cuts come as PHAs face historic funding shortfalls and have already halted voucher issuance and reduced payment standards at HUD's urging. In the letter, CLPHA laid out a clear, concrete, and compelling picture of how FMRs have fallen behind market realities—and how this gap has effectively reduced member area payment standards and program sizes, imperiling housing stability and opportunity for the low-income families and communities that PHAs serve. To support fair, adequate, and consistent funding using the best available data, CLPHA urged HUD to implement the following measures:

Explain and reconsider the reduced weight on private rental data in the notice and update high-volatility markets more frequently.
Validate and refine the new utility inflation factor.
Reassess the trend factor forecast models without delay.
Fund and streamline FMR reevaluations.
Protect PHAs and families from FMR decreases and align RFIFs with actual market conditions.
Restore local discretion to implement Small Area FMRs (SAFMRs).
Provide more time between publication of FMRs and effective dates in the future, so that there is adequate time for comments and thorough review prior to new methodology going into effect.

Steps CLPHA Has Taken on FMR Reform

Yesterday's letter builds on CLPHA's FY 2026 comments, which also called for more frequent FMR updates, funded reevaluations, and local discretion over SAFMRs. Both letters stressed that FMRs also drive Renewal Funding Inflation Factors (RFIFs), so lagging FMRs mean inadequate renewal funding. In 2026, more than half of CLPHA members received a 0 percent inflation factor. Reforming FMRs and RFIFs is a key part of CLPHA’s 2026 Legislative and Regulatory Priorities.

CLPHA will keep pushing HUD for FMRs that reflect real local rents. Accurate FMRs help PHAs get the funding they need to keep serving families with vouchers. They also help families afford safe, quality homes in neighborhoods with good opportunities.

Read Comments

10.1.26

HUD to Convert All Leased Emergency Housing Voucher Families to Tenant Protection Vouchers

Major Win for CLPHA Members and the Families They Serve

After more than a year of unyielding advocacy by CLPHA and its partners, HUD announced yesterday that it will authorize Tenant Protection Vouchers (TPVs) for all families leased under Emergency Housing Vouchers (EHVs) as of September 30, 2026. This is a major win for CLPHA members and the residents they serve. Many of CLPHA’s members faced ending assistance for families who had only recently left homelessness. Yesterday’s announcement gives those households a path to stable housing. The rule implements provisions of the 2027 government funding law, which continues HUD funding of EHVs through December 11, 2026.

HUD will email each PHA its EHV-TPV award on October 1, and PHAs may submit corrections by October 15. Agencies must convert all eligible families to EHV-TPV by December 31. Awards include one month of December 2026 funding, so families aren't left without assistance between the end of the CR and new funding. Families already moved from EHV to HCV or PBV are not eligible. EHV-TPVs stay active while the family remains in place and renewal funding is available, but they cannot be reissued once the family leaves the program.

CLPHA encourages members to review the full notice for details on portability, payment standards, and administrative requirements. CLPHA will continue to keep members informed as implementation moves forward. Members with questions for HUD can contact [email protected] or their local HUD field office.

How CLPHA Achieved This Success for Its Members

Protecting EHV households has been a top CLPHA priority since it was announced that EHV funding would run out before the 2030 deadline. CLPHA’s 2026 Legislative and Regulatory Priorities called on Congress and HUD to “provide funding to support EHV households at risk of losing assistance” and to “fully fund Tenant Protection Vouchers and establish a clear process for EHV household transitions.”

In May 2025, CLPHA urged congressional appropriators to provide TPV authority for EHV families. CLPHA also joined a coalition of national housing organizations to advocate for this new authority. CLPHA then mobilized House and Senate appropriations staff and key Congressional offices to ensure Congress understood the dire need for sustainable funding and a clear path to stability for families with expiring EHVs. Congress agreed with CLPHA and our partners by allowing EHVs to transition to TPVs and be funded from $600 million that was made available to TPV program in the most recent government funding law.

In early May 2025, HUD released its annual HCV funding notice that included an incorrect reading of how TPVs should be funded. CLPHA and 12 other national organizations pushed back later in May in a joint letter to HUD Secretary Turner and Assistant Secretary Hobbs. The coalition stated plainly that “it is indisputable that these funds were appropriated for the purpose of issuing TPVs to families with EHVs and warned that HUD’s reading “would create a funding cliff that would leave tens of thousands of families without the assistance they rely on to stay stably housed.” The letter also reminded HUD that “TPV funds are not, and have never been, intended to fill agencies’ short-term financial gaps,” and urged the Department to “quickly publish guidance about how housing agencies can apply for TPVs for households that still have EHVs.”

HUD’s announcement yesterday reflects that the position held by CLPHA and our partners was a clear reading of the law. CLPHA has tracked every step of this effort, and members can find all prior alerts and resources on CLPHA's EHV resource page.

Key Dates

October 1, 2026: HUD will send notice by email of each PHA’s EHV-TPV award. These numbers are based on July 2025 VMS or current IMS/PIC data and include the same administrative fees as HCVs.
October 15, 2026: Deadline to email [email protected] to let HUD know if award numbers aren’t right. EHV-TPVs should equal the number of leased EHV families as of September 30.
December 31: Deadline for converting all eligible EHV families to TPV.

HUD will send final award notices ahead of the December EHV-TPV HAP disbursements. HUD will also announce details soon for a webinar that reviews the notice and walks PHAs through the conversion process and CLPHA will share the date and registration information with members as soon as they are available.

8.17.26

CLPHA Monitoring the Administration’s Regulatory Proposals to Remove Rules Protecting Disadvantaged Communities and to Stifle Affordable Housing Lending

HUD's recent supplemental notice would remove rules protecting disadvantaged communities from its Title VI requirements, which bars PHAs and other federal funding recipients from discriminating on the basis of race, color, or national origin. These rules, known as disparate impact regulations, apply to policies that aren’t discriminatory by design, but produce discriminatory results. The supplemental notice follows HUD's January proposal to remove its disparate impact regulations under the Fair Housing Act and leave interpretation to the courts. The comment period is open through October 9, 2026. Four changes impact PHA operations:

Admissions and screening: Today, a screening policy can be challenged if it shuts out one group far more than others, even when the policy is written neutrally and applied the same way to everyone. Under the proposal, only a policy that was meant to discriminate could be challenged. These regulations apply to PHA policies on criminal records screening, credit screening, income requirements, occupancy standards, and preference systems.
Where PHAs build: Current rules bar site selection that is either chosen for a discriminatory reason or that produces a discriminatory result. The proposal would drop the discriminatory-result standard, leaving only intentional discrimination as a basis for challenge. The rule impacts decisions like where replacement units go after demolition or disposition, and where new development is built.
Outreach and remedial steps: The proposal would also eliminate the affirmative action regulations, which require recipients to take active steps to overcome the effects of past discrimination or of conditions that have limited a protected group's participation.
Hiring: HUD's argument, drawn from Executive Order 14281, is that disparate impact liability discourages employers from hiring on merit and skill, because even a fair, job-related process can produce uneven results and invite a lawsuit. HUD would remove the regulations that currently apply to PHA hiring. The practical effect is limited. Title VII, the employment section of the Civil Rights Act, still governs most employment claims against PHAs, and its disparate impact standard is written into federal statute, not agency rules. What the change removes is HUD's own authority to pursue these claims.

A larger concern is what would replace these rules, which are not detailed in the proposed rule. Repeal would not erase the underlying duties. The Fair Housing Act, the duty to affirmatively further fair housing, and state and local fair housing laws all remain, and disparate impact claims can still be brought against PHAs. What disappears is the framework for evaluating them. HUD’s 2013 rule established a three-part burden-shifting test that told housing providers how a claim would be analyzed: whether a policy caused a discriminatory effect, whether it served a substantial, legitimate, nondiscriminatory interest, and whether a less discriminatory alternative was available.

CLPHA made this argument in our February comments that rescinding regulations without replacing them creates a regulatory vacuum and ignores the decades PHAs spent building their policies around the existing standard.

OCC and FDIC Proposal Would Stifle Affordable Housing Lending by Rewriting How Banks Operate Under the Community Reinvestment Act

The Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation are proposing to rewrite how banks earn credit under the Community Reinvestment Act (CRA). This matters because CRA is a major reason banks invest in affordable housing development. This proposed rule decides which investments count toward a bank's rating, so narrowing them limits what banks are willing to fund. The comment period is open through October 13, 2026.

Three changes stand out:

New asset thresholds would raise the cutoffs that determine how a bank is examined under CRA. Under the proposal, small banks would be defined as under $1 billion in assets, intermediate banks from $1 to $10 billion, and large banks above $10 billion.

The classification matters because of the community development test. Federal banking regulators evaluate banks on how well they meet the credit needs of the communities they serve, and the community development test measures a bank's record of loans, investments, and services benefiting low- and moderate-income communities. Large and intermediate banks are examined on it. Small banks are not.

That test is a major driver of bank participation in affordable housing. It is why banks buy Housing Credit equity and lend to community development projects, including PHA mixed-finance deals and RAD conversions. Banks that move into the small category would face no CRA obligation to keep investing, and banks moving from large to intermediate would face a lighter one. Fewer investors competing for Housing Credits means weaker pricing and less equity per deal.

Grants: Banks would get credit only for funds used directly for community development in their local community, and for large banks no more than 15 percent could go toward the recipient's indirect costs. That cap would limit how much a large bank's grant could support general operating support for PHA affiliates, resident services groups, and counseling agencies.

Affordable housing definitions: Today's CRA rules do not offer a clear standard for when unsubsidized housing (known as naturally occurring affordable housing) counts as affordable, so banks have little incentive to invest in it. The proposal would define affordable housing as including both subsidized and unsubsidized units and spell out what qualifies as affordable. Broader eligibility gives banks more ways to meet their CRA obligations without buying Housing Credits.