HUD and USDA roll back code
- Housing and Urban Development and the Agriculture Department rescinded a 2024 determination tying some new federally financed homes to tougher energy codes. - The agencies said the 2024 policy added at least $20,000 to construction costs and had required the 2021 IECC standard. - The rollback follows a Texas court ruling and returns programs to older standards. (hud.gov)
The Department of Housing and Urban Development and the Department of Agriculture rescinded a 2024 energy-code determination on April 28, restoring older standards for some federally financed new homes. (hud.gov) The move affects housing backed by Federal Housing Administration and U.S. Department of Agriculture loan programs that had been tied to the 2021 International Energy Conservation Code and ASHRAE 90.1-2019. (hud.gov 1) (hud.gov 2) HUD and USDA said the 2024 determination had made new construction ineligible for FHA or USDA-backed mortgages unless it met those newer standards. The agencies said the rule added at least $20,000 to the cost of building a home, and cited estimates as high as $31,000. (hud.gov) The 2024 policy had been published in the Federal Register on April 26, 2024, after the agencies concluded the 2021 IECC and ASHRAE 90.1-2019 would not hurt affordability or availability. The rule took effect on May 28, 2024, with compliance dates that varied by program. (rd.usda.gov) (hud.gov) Congress set this process up in the Energy Independence and Security Act of 2007, which tells HUD and USDA to consider updated national energy standards if they improve efficiency and do not undermine housing affordability or supply. (rd.usda.gov) HUD said it had already delayed the compliance deadline for its programs to December 31, 2026, and that both agencies sought more public comment in a July 2025 request for information before deciding to fully rescind the 2024 determination. (hud.gov) The rescission also tracks a March 2026 ruling from the U.S. District Court for the Eastern District of Texas, which blocked the agencies from enforcing the newer standards in a lawsuit brought by the National Association of Home Builders and 15 states. (hud.gov) (law.justia.com) Home builders cheered the reversal. The National Association of Home Builders said the standards could have added $9,600 to $21,400 to the price of a new home depending on climate zone. (nahb.org) Supporters of the 2024 rule had argued the newer codes would cut utility bills, improve comfort, and make homes more resilient, and HUD’s 2024 notice said the standards would produce annual and lifetime savings for owners and renters. (hud.gov) For now, HUD and USDA said their loan programs will use the energy-efficiency standards that were in place before the 2024 determination, ending a two-year fight over whether tighter codes would lower bills or raise the price of getting into a home. (hud.gov)
