H.R. 8854: Habitable Housing Conversion Pilot Program Act of 2026

The Habitable Housing Conversion Pilot Program Act of 2026 aims to create a pilot program overseen by the Secretary of Housing and Urban Development (HUD). The primary focus of this program is to insure mortgages that finance improvements needed to convert basements in owner-occupied properties into safe and livable rental units. Here are the key components of the bill:

Establishment of the Pilot Program

The Secretary of HUD is tasked with launching a pilot program that will provide insurance for mortgages under section 203(k) of the National Housing Act. This insurance will help homeowners make the necessary modifications to transform basement areas into habitable living spaces that comply with state and local building and safety codes.

Scope of the Program

The proposed pilot program is designed to run for a five-year period and will have a limit of insuring up to 150,000 mortgages. This cap is intended to manage the program's reach and effectiveness during its trial period.

Consultation with Relevant Agencies

As part of implementing this program, the Secretary will consult with other federal agencies, including the Federal Emergency Management Agency (FEMA) and the National Oceanic and Atmospheric Administration (NOAA). This collaboration is to pinpoint areas more prone to hazards that necessitate basement improvements, potentially prioritizing those locations for mortgage insurance.

Regulations and Safety Requirements

The Secretary will create regulations to ensure that any basement conversions funded through the insured mortgages are safe and habitable. This includes setting guidelines that must be followed during renovations to protect the health and safety of future occupants.

Reporting and Assessment

After five years of the program’s implementation, the Secretary is required to submit a detailed report to Congress. This report will evaluate the pilot program’s performance, noting successes and challenges, and it will identify specific building codes or regulations that may complicate or restrict the conversion of basement spaces into living units. Recommendations may be included regarding potential reauthorization or adjustments to the program.

Funding Authorization

The bill allows for necessary appropriations to be allocated to support the pilot program, ensuring it has adequate financial resources to operate effectively.

Relevant Companies

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