More tariffs hit homebuilders

The Trump administration added another set of tariffs expected to increase the cost of housing, this time targeting both lumber and timber imports as well as cabinets and furniture. An additional 10% tariff will be added for lumber and timber, and 25% on kitchen cabinets and furniture. They will go into effect on October 14. Further, the tariffs will rise to 30% for furniture and 50% for cabinets on January 1, 2026. According to the National Association of Homebuilders (NAHB), this action means that Canadian lumber duties will rise to 45%. The Trump administration has said that the tariffs are necessary for national security.

“NAHB believes that imposing new lumber tariffs that make housing more expensive is not the answer. We are urging the administration to continue its efforts to increase the supply of timber from public lands in an environmentally responsible manner, and to quickly enter into negotiations with Canada and other global trading partners to resolve ongoing trade issues in a fair and equitable manner that eliminates tariffs on lumber and other building materials,” they stated.

HUD to cut permanent housing funding

The Trump administration is preparing sweeping changes to federal homelessness programs, including a major overhaul of the Department of Housing and Urban Development’s (HUD) Continuum of Care (CoC) program. Internal budget documents, with information later confirmed by HUD, show the plan would shift CoC funding away from permanent housing and toward transitional housing with new work and service requirements. Currently, about 87% of CoC funds support permanent housing. The proposal would cut that share to roughly 30%, reducing allocations from $3.3 billion to $1.1 billion. Advocates warn the change could impact more than 170,000 people, many of them families, people with disabilities, or those with chronic illnesses. Rural areas that rely heavily on federal support face significant risks from the change. According to the National Alliance to End Homelessness, nearly every CoC in the country will be impacted, and the shift will “quickly and irresponsibly upend homelessness response systems.” Further, there will be a point deduction for organizations that use any racial preferences or recognize gender non-conforming or transgender people.

A HUD spokesperson responded to the reports, stating that “HUD is no longer in the business of permanently funding homelessness without measuring program success at promoting recovery and self-sufficiency.”

The change may carry legal implications due to compliance concerns from some HUD staff. Some sources said they were barred from consulting with agency attorneys or briefing community partners. The changes are expected in an upcoming Notice of Funding Opportunity.

“When the subsidy and the support that goes along with those subsidies is removed, it puts people at grave risk,” said an anonymous source to Politico. “And most of these folks without these supports will likely end up back in emergency shelters or back on our nation’s streets.”

FHFA issues reduced affordable housing goals

The Federal Housing Finance Agency (FHFA) issued an off-cycle change to Fannie Mae and Freddie Mac’s (the Enterprises) affordable housing goals reducing some of the goals for the Enterprises. Under the proposal, the minority census tract sub-goal would be eliminated, while both the single-family low-income home purchase goal and very low-income home purchase goal would be reduced. The Enterprises had previously been operating under goals established for 2025-2027, however, this proposal changes the cycle to 2026-2028. FHFA also released an impact analysis, arguing that while the deletion of the minority census tract sub-goal is projected to reduce qualifying loans in those areas by 16%, the effect is offset by an expected increase in qualifying loans within low-income census tracts.

“This week, FHFA proposed to reduce Fannie Mae and Freddie Mac’s targets for purchasing affordable mortgages. These goals help ensure that Fannie Mae and Freddie Mac are focused on lending to households with lower incomes – the likes of teachers and nurses and firefighters, not just the wealthiest borrowers,” said Sarah Brundage, President and CEO of the National Association of the Affordable Housing Lenders that leads the Underserved Mortgage Markets Coalition. “As the coalition dedicated to ensuring the Enterprises are supporting access to housing for all families and in every housing market, UMMC strongly believes that the Enterprises should be focused on supporting affordable homeownership for hard-working families. Without meaningful goals, the dream of homeownership could move even further out of reach.”

Agency websites stoke ethics concerns

Multiple federal agency websites sported unusual pop-up messages blaming Congressional Democrats for the government shutdown, prompting widespread concern of ethics violations. HUD was the first agency to add a large pop-up reading, “The Radical Left are going to shut down the government and inflict massive pain on the American people unless they get their $1.5 trillion wish list of demands. The Trump administration wants to keep the government open for the American people.” When the government did officially shut down, the message changed to “The Radical Left in Congress shut down the government. HUD will use available resources to help Americans in need.” The U.S. Department of Agriculture added a similar message, reading “Due to the Radical Left Democrat shutdown, this government website will not be updated during the funding lapse. President Trump has made it clear he wants to keep the government open and support those who feed, fuel, and clothe the American people.”

More agencies added the language to sites, and some sent out politically charged emails as shutdown notifications and templates for out of office messages for furloughed employees. Several groups and Democratic members of Congress have called the language and use of resources illegal, stating they are clear violations of the Hatch Act, which protects the federal workforce from being influenced by political coercion. Leaders of government unions have expressed that employees are furious with the actions, and Rep. Robert Garcia (D-Calif.), the top Democrat on the House Oversight Committee, has called for an investigation into the messaging.

“Federal agencies work for the American people, not a political party,” Garcia wrote in his request.

“The Far Left is barreling our country toward a shutdown, which will hurt all Americans. At HUD, we are working to keep critical services online and support our most vulnerable,” a HUD spokesperson told media outlets. “Why is the media more focused on a banner than reporting on the impact of a shutdown on the American people?”

Supreme Court halts Cook’s dismissal, for now

The Supreme Court has temporarily halted the Trump Administration’s effort to remove Federal Reserve (Fed) Governor Lisa Cook, allowing her to remain in her position while the case proceeds. Trump announced Cook’s dismissal in August, citing disputed allegations tied to mortgage filings. Cook’s attorneys challenged the decision, arguing the president lacks authority to oust a Fed governor except in limited cases of “cause” and argued she was denied due process.

A lower court sided with Cook, and the Supreme Court has now declined an emergency request to allow her removal. Oral arguments are scheduled for January, with the justices expected to weigh the balance between presidential power and the independence of the central bank. The outcome could have lasting implications for the Federal Reserve’s ability to set monetary policy free from political influence. For now, Cook remains on the Board and will participate in upcoming decisions on interest rates.

Further, the move comes at a time when crucial economic data that informs Federal Reserve Board decisions is at risk of being delayed due to the government shutdown. Monthly employment data and inflation data are both collected and released by the Bureau of Labor Statistics and used to determine any changes to the target federal funds rate. During the shutdown, this process will be paused, leaving the Fed relying on other data sources when making rates decisions. After weeks of uncertainty regarding the makeup of the Board and changing economic conditions, a lack of data is the latest in a series of challenges the Governors have faced. 

Senate Banking Committee advances nominees for key HUD and Treasury positions

The Senate Banking, Housing, and Urban Affairs Committee voted along party lines to advance two HUD and two Treasury nominees to the full Senate for consideration. For HUD, those nominees include Ben Hobbs for Assistant Secretary for Public and Indian Housing (PIH) and Ronnie Kurtz for Assistant Secretary of Community Planning and Development. At Treasury, the nominees are Christopher Pilkerton for Assistant Secretary for Investment Security and Jonathan Burke for Assistant Secretary for Terrorist Financing. 

Hobbs has been serving as the Principal Deputy Assistant Secretary for PIH since February. Kurtz was previously the Director of Planning and Community Development for the city of Grovetown, Georgia, before resigning that post in June 2024 to join President Trump’s reelection campaign.

Mr. Hobbs “understands how to turn federal resources into real opportunities for families and neighborhoods, particularly those often left behind,” said Chairman Tim Scott (R-S.C.). He continued that Mr. Kurtz “brings practical experience at the local level, where zoning, building codes, and development decisions directly shape the supply and affordability of housing.”

Trump nominates Hill to permanent role as FDIC chair

President Trump nominated Travis Hill, Acting Director of the Federal Deposit Insurance Corporation (FDIC), to serve permanently in the role. Hill has served in the role since January 20 and as Vice Chair of the FDIC prior. His background includes time as Deputy to the Chairman for Policy and Senior Advisor to the Chairman, as well as Senior Counsel on the Senate Banking, Housing, and Urban Affairs Committee under Senators Mike Crapo (R-Idaho) and Richard Shelby (R-Ala.). Prominent policymakers, including Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Scott (R-S.C.) touted the nomination.

“Travis Hill will continue to bring principled leadership and deep experience in banking policy to the position of Chairman of the Board of Directors of the Federal Deposit Insurance Corporation, a stark contrast to the toxic culture that persisted under the failed leadership of former Chair Gruenberg during the Biden administration. He has proven his commitment to fairness in our financial system, working towards removing reputational risk from bank supervision – essentially implementing my FIRM Act – to end debanking and ensure that banks cannot discriminate against federally legal businesses and law-abiding Americans. I look forward to continuing to work with him to strengthen our financial system, protect consumers, and ensure fairness, access, and accountability,” said Chairman Scott.

Treasury, IRS release OZ guidance

New guidance on Opportunity Zones (OZs) was released by the Department of the Treasury and the IRS, reflecting changes following the recent tax bill’s extension of the program. The guidance defines rural areas and lists 3,309 OZs that are comprised strictly of rural areas and further reduces the substantial improvement threshold for properties in rural OZs from 100% to 50%. Rural areas are defined as “any area other than a city or town with a population greater than 50,000, and any urbanized area contiguous and adjacent to a city or town with a population greater than 50,000.”