Habitable Housing Conversion Pilot Program Act of 2026 in plain language
1: Short title
This section would let the Act be called the Habitable Housing Conversion Pilot Program Act of 2026.
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1. Short title This Act may be cited as the Habitable Housing Conversion Pilot Program Act of 2026 .
2: Pilot program for insurance of conversion loans
This section would direct the Secretary of Housing and Urban Development to run a pilot program insuring mortgages under section 203(k) of the National Housing Act. The mortgages would finance improvements needed to convert basement space in owner-occupied properties into safe, habitable dwelling units to be rented out. Those converted units would have to meet all state and local building and safety standards and codes and comply with regulations the Secretary issues under this section. The Secretary would run the pilot program for the 5-year period starting on the date the Act becomes law and could insure no more than 150,000 mortgages under the program during that time. The Secretary would have to consult with the Administrator of the Federal Emergency Management Agency and the Administrator of the National Oceanic and Atmospheric Administration to identify areas more likely to face hazards that create a need for these conversion improvements, and could give priority in insuring mortgages under the program to eligible properties located in those areas. The Secretary would have to issue whatever regulations are necessary to carry out the pilot program, including regulations to ensure the safety and habitability of spaces converted into dwelling units using insured mortgages. After the 5-year period ends, the Secretary would have to submit a report to Congress describing and assessing the pilot program, identifying its successes and problems, identifying any current codes or regulations that prevent or discourage converting basement space into dwelling units, and making recommendations on whether to reauthorize, reform, or terminate the program. This section would authorize the appropriation of whatever funds are necessary to carry out the pilot program.
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2. Pilot program for insurance of conversion loans (a) Establishment The Secretary of Housing and Urban Development (in this section referred to as the Secretary ) shall carry out pilot program to insure mortgages, under section 203(k) of the National Housing Act ( 12 U.S.C. 1709(k)(2) ), made to finance improvements necessary to convert space in the basements of owner-occupied properties, into safe and habitable dwelling units that are to be made available for rental, meet all State and local building and safety standards and codes, and comply with the regulations issued by the Secretary pursuant to subsection (c) of this section. (b) Scope The Secretary shall carry out the pilot program under this section during the 5-year period beginning on the date of the enactment of this Act and may insure not more than 150,000 mortgages under the program. (c) Consultation; priority In carrying out the pilot program under this section, the Secretary shall consult with the Administrator of the Federal Emergency Management Agency and the Administrator of the National Oceanic and Atmospheric Administration to identify areas more likely to suffer hazards causing need for improvements financed under such program and may give priority in insuring mortgages under such program to eligible properties located in such areas. (d) Regulations The Secretary shall issue such regulations as may be necessary to carry out the pilot program under this section, including regulations to ensure the safety and habitability of spaces converted into dwelling units using mortgages insured under the program. (e) Report Upon the expiration of the 5-year period beginning on the date of the enactment of this Act, the Secretary shall submit a report to the Congress describing and assessing the pilot program under this section, identifying any successes of and problems with the program, identifying any current codes and regulations that prevent or inhibit conversion of basement space into dwelling units, and making recommendations regarding reauthorizing, reforming, or terminating the program. (f) Authorization of appropriations There is authorized to be appropriated such sums as may be necessary to carry out the pilot program under this section.