Adaptive Reuse, Multifamily Financing, and Affordable Housing in the road act
The 21st Century ROAD to Housing Act became law on July 11, 2026. Intended to address the nation’s housing shortage, it is the most significant piece of federal housing legislation in roughly three decades. Notably, the House and Senate passed The ROAD Act with overwhelming bipartisan support, and the bill became law without the president’s signature. This post will summarize some of the Act’s sections relating to commercial real estate, specifically in the areas of adaptive reuse, multifamily financing, and affordable housing production.
ADAPTIVE REUSE
The RESIDE (Revitalizing Empty Structures Into Desirable Environments) Act, Section 210 authorizes a pilot grant program offering $1 million to $10 million grants to convert vacant commercial or industrial buildings into housing. The target stock is out-dated warehouses, dead strip malls, old office buildings, and aging hotels. Grants can be applied towards acquisition and demolition costs.
Grants prioritize economically distressed areas and Opportunity Zones, so projects that already qualify for OZ tax treatment may be able to layer these grants on top.
Importantly, units produced through RESIDE grants must qualify as "attainable housing." Attainable housing is defined as serving households at or below 120% of Area Median Income (AMI), with a majority of units at or below 60% AMI. That makes the program a strong fit for conversions to workforce and affordable units, and decidedly not a tool for market-rate repositioning.
Additionally, The BUILD Housing Act, Sections 205–206, simplifies and streamlines compliance with the National Environmental Policy Act (NEPA) for office-to-residential conversions. There are no grant dollars associated, but saving time is saving money.
MULTI-FAMILY FINANCING
The Federal Housing Administration’s (FHA) multifamily loan limits have long lagged actual construction costs and constrained what FHA-backed financing could support. The Housing Affordability Act, Section 211, requires FHA to raise those statutory loan limits and reform their underlying indexing formula so it tracks current construction costs going forward rather than falling further behind.
On the capital side, the Community Investment and Prosperity Act, Section 203, raises the public welfare investment cap for banks from 15% to 20% of capital. That's a direct expansion of the pool of bank capital eligible for investment in affordable and mixed-use housing deals..
Modular and off-site construction gets a smaller but notable nod. Section 302 directs FHA to review its construction financing draw schedules to better accommodate modular builds, whose payment timelines don't always match traditional stick-built draw structures.
AFFORDABLE HOUSING PRODUCTION
The ROAD Act reshapes several existing federal affordable housing programs. Section 501 reauthorizes and reforms the HOME Investment Partnerships program, streamlining NEPA review for small-scale and infill projects and giving jurisdictions more flexibility to spend HOME funds on housing-related infrastructure.
On the Community Development Block Grant (CDBG) side, Section 204 adds new construction as an eligible activity, a shift from the program's traditional rehab-heavy focus. Section 213 (the Build Now Act) ties a jurisdiction's CDBG funding formula to whether it's growing its housing supply, with funding bonuses for jurisdictions building faster and reductions for those lagging.
Another incentive for cities, Section 208 creates a $200 million-per-year Innovation Fund, offering flexible competitive grants through FY2031 to cities and tribes that demonstrate measurable increases in housing supply through reforms like streamlined permitting and density bonuses.
QUICK NOTE REGARDING SINGLE-FAMILY RESIDENTIAL
One of The ROAD Act’s big headlines has been regarding Section 1001: Homes are for People not Corporations. This section aims to minimize the number of single-family homes an institutional investor can own to 350. Investors who already own more than that don’t have to sell off assets, but they cannot buy more without facing a steep fine. There are several exceptions and a notable exemption for large institutional investors in the build-to-rent market.
Several of these programs, including RESIDE and the Innovation Fund, exist with defined funding levels but no guaranteed money until Congress appropriates it in future budget cycles. The regulatory changes, loan limit updates, and NEPA exclusions take effect on their own, but the grant programs will need to clear that additional hurdle before dollars start moving.
