This article was originally published in Shelterforce, a national nonprofit publication covering housing. Sign up for their newsletter here.
On July 11, the 21st Century ROAD to Housing Act became law. The effects of the law, which comprises 47 components, including program reauthorization, new authorities, requirements for cabinet agency rulemaking, reporting, and interagency cooperation, largely depend on executive branch actions.
More precisely, ROAD includes some provisions that are self-executing, others that require guidance by a certain date, and others for which HUD has some flexibility. That said, even though it is not fully clear how the law’s provisions will be implemented, community members, as well as local and state governments, should prepare now for the opportunities ahead to advance their goals of developing and preserving more housing.
Shared-Equity Housing Gains Enhanced Federal Recognition
Notably, the legislation includes an updated definition of community land trust (CLTs). The previous definition, such as it was, was buried in appropriations language. The revised definition, contained in section 501 of the legislation regarding the HOME Investment Partnerships program, offers practitioners and jurisdictions greater certainty. ROAD gives the secretary of the U.S. Department of Housing and Urban Development (HUD) discretion to determine whether rulemaking is needed for this and other provisions in the subsection. However, the language is plain, and localities would benefit if HUD indicated that the definition and related authorities are effective immediately.
Specifically, the legislation defines a CLT as “a nonprofit entity, a State, a unit of local government, or an instrumentality of a State or unit of local government that—
‘‘(A) is not managed by, or an affiliate of, a for profit organization;
‘‘(B) has as a primary purpose of acquiring, developing, or holding land to provide housing that is permanently affordable to low- and moderate-income persons;
‘‘(C) monitors properties to ensure affordability is preserved;
‘‘(D) provides housing that is permanently affordable to low- and moderate-income persons using a ground lease, deed covenant, or other similar legally enforceable measure, determined acceptable by the Secretary, that—
‘‘(i) keeps housing affordable to low- and moderate-income persons for not less than 30 years; and
‘‘(ii) enables low- and moderate-income persons to rent or purchase the housing for home-ownership; and
‘‘(E) maintains preemptive purchase options to purchase the property if such purchase would allow the housing to remain affordable to low-and moderate-income persons.’’
Why is this new CLT definition important? One reason is its breadth. It will include both CLTs with the classic tripartite board structure of representatives from the local community, residents, and the public at large, as well as other CLTs that still serve housing preservation purposes. This is important because, according to a Grounded Solutions Network survey, only 30 percent of CLTs have the classic structure.
Funding Challenges
Often, federal funding for CLTs has come through the HOME Investment Partnerships Program. Section 501 of ROAD reauthorizes HOME. The program, established as part of the Cranston-Gonzalez National Affordable Housing Act of 1990, continues to serve as an important source of flexible housing dollars to states and localities.
The bill Congress passed, as widely noted, does not provide funding. Appropriators will need to address funding in a future Congress. Last year, Congress allocated $1.25 billion, rejecting a White House bid to eliminate funding. Nonetheless, over time, HOME funding has declined. Back in fiscal year 2010, Congress appropriated $1.8 billion (about $2.75 billion in 2026 dollars, according to the inflation calculator of the Bureau of Labor Statistics) for HOME.
The struggle to restore HOME and other HUD funding is ongoing, but the new legislative language will make it easier for new and growing CLTs to access HOME and other programs.
Other components of the ROAD legislation go further. The bill revisits which homeownership programs qualify for HOME, explicitly identifying models that “maintain long-term affordability through a shared-equity ownership model, a community land trust, a limited equity cooperative, a community development corporation, or other mechanism approved by the Secretary.”
The law’s language is important beyond allowing such models to access HOME funding. Congress’s inclusion of shared equity signals to other housing funders the value of this approach. State and local housing agencies that administer HOME dollars, for example, can deploy additional funds to support limited equity housing cooperatives or CLTs. Local nonprofits will have greater flexibility in program design, making it easier to attract lender and philanthropic support.
Next Steps
HUD has work to do. The statutory changes to HOME are already in effect, but HUD needs to issue program notices to operationalize them. A HUD spokesperson told Smart Cities Dive in an email that implementation is a priority and that the department “has the organizational capability to satisfy and meet all of its obligations under the law,” despite capacity constraints from firings, layoffs, and resignations. Implementation is critical, and HUD needs to comply with its statutory obligations for key provisions of ROAD so that they work as Congress intended.
Other challenges remain. For one, not all federal government cylinders are firing in the same direction. For example, the Federal Housing Financing Agency’s proposed rule that weakens Fannie Mae and Freddie Mac’s duty to serve underserved markets, including the affordable housing preservation market, threatens to stem the flow of capital to shared-equity homeownership.
Meanwhile, Congress also ordered HUD to address the shared-equity market. In its FY 2026 appropriations package, Congress directed the Federal Housing Administration “to consult with relevant stakeholders and conduct a review the regulatory and sub-regulatory policies that may … hinder the use of FHA programs to support shared–equity homeownership models.”
In recent years, Congress has made it clear that shared-equity homeownership plays a critical role in meeting housing needs. ROAD is the latest example. The law supporting CLTs and shared-equity housing is now clearer than ever, but federal implementation and follow-through remain critical, as always.
Congress’s decision to recognize a broader range of shared-equity models expands the tools available to communities for preserving long-term affordability. That flexibility is one of the Act’s greatest strengths, but it also shifts greater responsibility to the practitioners, lenders, local governments, and state agencies responsible for translating federal policy into local practice.
Housing organizations, local governments, lenders, and state agencies are navigating an increasingly complex environment shaped by changing interest rates, evolving financing tools, and growing demands on limited organizational capacity. As communities begin implementing ROAD through local funding decisions, program design, financing partnerships, and project development, they will inevitably identify successful approaches, persistent barriers, and opportunities for improvement. New regional coalitions and partnerships will be critical to navigating these challenges.
Practitioners benefit when lessons are shared across communities rather than remaining isolated within individual organizations. As housing providers implement ROAD, the field’s ability to share strategies, identify common challenges, accelerate solutions, and elevate local expertise into a broader policy conversation will be key to success.
Federal housing policy is strongest when it reflects the realities of implementation. Regional collaboration ensures that lessons learned by practitioners are not isolated within individual communities but instead become part of a broader conversation that informs future guidance, legislation, and investment.
As HUD implements ROAD and Congress continues to shape federal housing policy, coordinated regional networks can help preserve the flexibility Congress created while ensuring that future decisions are informed by the communities that put those policies into practice. Regional collaboration is the infrastructure that transforms policy into practice and local experience into better federal policy.
Header image by Awkwafaba, via Wikimedia Commons.
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