{"id":186879,"date":"2026-02-18T13:26:58","date_gmt":"2026-02-18T20:26:58","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=186879"},"modified":"2026-02-18T13:27:02","modified_gmt":"2026-02-18T20:27:02","slug":"higher-loan-limits-for-multifamily-properties-as-part-of-housing-for-21st-century-act","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/higher-loan-limits-for-multifamily-properties-as-part-of-housing-for-21st-century-act","title":{"rendered":"The Housing For the 21st Century Act Brings Game Changers For Multifamily Investors"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">There\u2019s nothing that unifies opposing political factions faster than seeing homeless encampments in American cities. That\u2019s why the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/bipartisanpolicy.org\/explainer\/whats-in-the-housing-for-the-21st-century-act\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Housing for the 21st Century Act<\/span><\/a><span data-preserver-spaces=\"true\"> has cleared the U.S. House of Representatives with an overwhelming 390-9 vote and <\/span><span data-preserver-spaces=\"true\">is now headed<\/span><span data-preserver-spaces=\"true\"> to the Senate.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Within the 200-page bill is a proposal of particular interest to real estate investors. Most significantly, it increases loan limits for small <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/guides\/buying-multifamily\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">multifamily<\/span><\/a><span data-preserver-spaces=\"true\"> properties, thereby enabling greater purchasing power and potentially higher returns on investment.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Reps. French Hill (R-AR) and Maxine Waters (D-CA), from opposite ends of the political spectrum, are two of the bill\u2019s main sponsors and worked to ensure it included provisions from both parties, <\/span><span data-preserver-spaces=\"true\">which<\/span><span data-preserver-spaces=\"true\"> has <\/span><span data-preserver-spaces=\"true\">been celebrated<\/span><span data-preserver-spaces=\"true\"> across the housing and construction industries.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">\u201cNAHB commends the House for passing the Housing for the 21st Century Act, bipartisan legislation that will reduce impediments to increasing the housing supply,\u201d said National Association of Home Builders Chairman Buddy Hughes <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nahb.org\/blog\/2026\/02\/house-passes-housing-act\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">in a press release<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">His sentiments were echoed by Shannon McGahn, National Association of Realtors executive vice president and chief advocacy officer, who stated <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/magazine\/real-estate-news\/bipartisan-housing-bill-passes-house-of-representatives\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">in a press release<\/span><\/a><span data-preserver-spaces=\"true\">: \u201cWith the nation facing a shortage of roughly 5 million homes and first-time buyers now entering the market at a median age of 40, bold action to expand supply and remove barriers to homeownership has never been more urgent.\u201d<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Amongst the broader initiatives that apply to investors are the following.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Modernizing Building Codes (Single-Stair Reform)<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Section 103 addresses one of the most significant provisions for small multifamily development: point-access block buildings (also known as single-stairway apartments).<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">National guidelines:<\/span><\/strong><span data-preserver-spaces=\"true\"> Requires HUD to establish federal guidelines and best practices for single-stair multifamily buildings up to five stories. Currently, many jurisdictions require double staircases for safety concerns. However, this makes it difficult and expensive to build multifamily buildings on narrow urban lots. <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/california-staircase-building-code-changes-could-shift-the-multifamily-market\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> is already under consideration in California and other states<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Pilot programs:<\/span><\/strong><span data-preserver-spaces=\"true\"> The Act authorizes competitive grants for pilot projects to test the safety and effectiveness of new designs, which could eventually lead to smaller, European-style apartment layouts.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Streamlining Environmental Reviews<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The federal National Environmental Policy Act (NEPA) has <\/span><span data-preserver-spaces=\"true\">been criticized<\/span><span data-preserver-spaces=\"true\"> for being prohibitively expensive and slow, especially for developers of small-scale projects. In a move similar to California Governor Gavin Newsom\u2019s <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2025\/06\/30\/us\/california-environment-newsom-ceqa.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">reform of the California Environmental Quality Act<\/span><\/a><span data-preserver-spaces=\"true\"> to speed up housing development, <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nlc.org\/article\/2026\/02\/13\/what-the-housing-for-the-21st-century-and-road-to-housing-acts-mean-for-local-governments\/#:~:text=Streamlining%20Federal%20Requirements,federal%20NEPA%20environmental%20review%20requirements.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">new measures<\/span><\/a><span data-preserver-spaces=\"true\"> aim to reduce the lag by bypassing some review processes.<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Categorical exclusions:<\/span><\/strong><span data-preserver-spaces=\"true\"> The expansion of \u201ccategorical exclusions\u201d exempts small-scale construction. Infill development and rehabilitation of residential buildings no longer require full environmental reviews.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Faster timelines: <\/span><\/strong><span data-preserver-spaces=\"true\">By reducing federal administrative burdens, the bill aims to <\/span><span data-preserver-spaces=\"true\">reduce<\/span><span data-preserver-spaces=\"true\"> construction timelines and lower <\/span><span data-preserver-spaces=\"true\">the<\/span><span data-preserver-spaces=\"true\"> per-unit <\/span><span data-preserver-spaces=\"true\">cost<\/span><span data-preserver-spaces=\"true\"> for modest multifamily projects.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Incentivizing \u201cMissing Middle\u201d Zoning<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The <\/span><span data-preserver-spaces=\"true\">Act<\/span><span data-preserver-spaces=\"true\"> uses federal guidance to push local governments toward friendlier zoning for small multifamily units (Section 102):<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">By-right development:<\/span><\/strong><span data-preserver-spaces=\"true\"> Encourages localities to fast-track duplexes, triplexes, and quadplexes \u201cby right,\u201d meaning they can <\/span><span data-preserver-spaces=\"true\">be constructed<\/span><span data-preserver-spaces=\"true\"> without a lengthy permitting process.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Pattern books:<\/span><\/strong><span data-preserver-spaces=\"true\"> It provides grants for local governments and tribes to create \u201cpattern books\u201d\u2014preapproved architectural designs for ADUs, duplexes, and townhouses. If a builder uses a preapproved design, the permitting process is accelerated.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Financial and Programmatic Support Updates<\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">FHA loan limits:<\/span><\/strong> <a class=\"editor-rtfLink\" href=\"https:\/\/financialservices.house.gov\/news\/documentsingle.aspx?DocumentID=410959\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Section 106<\/span><\/a><span data-preserver-spaces=\"true\"> updates the statutory maximum loan limits for FHA (mortgage insurance) multifamily dwellings. These limits are adjusted to reflect modern construction costs, making it easier for developers of small and mid-sized buildings to secure federal financing.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">HOME program flexibility: <\/span><\/strong><span data-preserver-spaces=\"true\">The <\/span><span data-preserver-spaces=\"true\">act<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nlc.org\/article\/2026\/02\/13\/what-the-housing-for-the-21st-century-and-road-to-housing-acts-mean-for-local-governments\/#:~:text=The%20House%20bill%20goes%20further,improvements%20necessary%20for%20new%20housing.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> reforms the HOME Investment Partnerships Program<\/span><\/a><span data-preserver-spaces=\"true\"> to allow funds to <\/span><span data-preserver-spaces=\"true\">be used<\/span><span data-preserver-spaces=\"true\"> for \u201cworkforce housing\u201d and infrastructure improvements (like water and sewer) specifically for new housing developments.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Streamlined inspections:<\/span><\/strong><span data-preserver-spaces=\"true\"> For properties with multiple federal funding sources <\/span><span data-preserver-spaces=\"true\">like<\/span><span data-preserver-spaces=\"true\"> Low Income Housing Tax Credit (LIHTC) and Section 8, the bill allows a <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.naco.org\/news\/house-passes-bipartisan-housing-21st-century-act#:~:text=Streamline%20unit%20inspection%20requirements%20for,rather%20than%20requiring%20duplicative%20inspections.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">single passed inspection<\/span><\/a><span data-preserver-spaces=\"true\"> to automatically meet Housing Choice Voucher (HCV) inspection requirements, reducing <\/span><span data-preserver-spaces=\"true\">the<\/span><span data-preserver-spaces=\"true\"> administrative <\/span><span data-preserver-spaces=\"true\">headache<\/span><span data-preserver-spaces=\"true\"> for small landlords.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">How These Laws Help Small Investors<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Although many of these proposals <\/span><span data-preserver-spaces=\"true\">are geared<\/span><span data-preserver-spaces=\"true\"> toward developers, some specific aspects will appeal to landlords. Increased FHA loan limits for small multifamily properties can help newbie investors leverage the power of <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/house-hacking\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">house hacking<\/span><\/a><span data-preserver-spaces=\"true\"> and rental income to jump-start their investing careers.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">An FHA loan, which allows a buyer to put as little as 3.5% down, mandates that a buyer live in one of the units for at least 12 months, which means after the one-year mark, they are free to move out and buy another property, renting out the initial FHA loan property in its entirety. FHA rules state that a buyer can have only one FHA loan at a time (unless the other is in another state); however, investors can <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/guides\/how-to-refinance-your-mortgage\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">refinance<\/span><\/a><span data-preserver-spaces=\"true\"> the first home into a conventional mortgage, allowing them to buy the second with an FHA loan.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">By living in one unit and having the tenant\u2019s rent cover most, if not all, of the mortgage, an owner-investor puts themselves in <\/span><span data-preserver-spaces=\"true\">prime<\/span><span data-preserver-spaces=\"true\"> position to save for the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/down-payment\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">down payment<\/span><\/a><span data-preserver-spaces=\"true\"> on their next investment property. The <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/rental-property-cash-flow-analysis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cash flow<\/span><\/a><span data-preserver-spaces=\"true\"> from the initial FHA home and the second property could also provide the down payment for a third home, and so on. Eventually, the timeline between property purchases reduces.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This often-used strategy to build wealth relies on a few basic tenets: meticulous <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/definitive-guide-tenant-screening\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">tenant screening<\/span><\/a><span data-preserver-spaces=\"true\"> and living low to the ground, not splurging on a fancy personal residence until your <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/passive-income-from-real-estate\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">passive income<\/span><\/a><span data-preserver-spaces=\"true\"> is considerable.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">FHA Multifamily Loan Limits<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The current 2026 FHA<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.fha.com\/lending_limits\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> multifamily loan limits<\/span><\/a><span data-preserver-spaces=\"true\"> are as follows:<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Two-unit (duplex)<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Low-Cost Area:<\/span><\/strong><span data-preserver-spaces=\"true\"> $693,050<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">High-Cost Area:<\/span><\/strong><span data-preserver-spaces=\"true\"> $1,599,375<\/span><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Three-unit (triplex)<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Low-Cost Area:<\/span><\/strong><span data-preserver-spaces=\"true\"> $837,700<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">High-Cost Area:<\/span><\/strong><span data-preserver-spaces=\"true\"> $1,933,200<\/span><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Four-unit (fourplex)<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Low-Cost Area:<\/span><\/strong><span data-preserver-spaces=\"true\"> $1,041,125<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">High-Cost Area:<\/span><\/strong><span data-preserver-spaces=\"true\"> $2,402,625<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">Limits are higher in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Effect on Housing Inspections<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">For anyone who has ever had the misfortune of dealing with an officious housing inspector, you know that they can make or break your cash flow. The less time you have to interact with them, the better. Thus, the streamlined inspections proposal will come as a massive relief for landlords who are used to standing on eggshells while an inspector looks for hairline cracks in outlet plates or a faucet that drips once every 30 seconds.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For clarification, <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.voucherrents.com\/blog\/section-8-inspection-checklist-guide-2025\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">here is the 2025 Section 8 inspection checklist<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Increasing FHA loan limits means more people will be able to buy more multifamily houses, putting as little as 3.5% down and potentially qualifying for financing with lower <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/why-credit-scores-matter-how-to-improve-them\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">credit scores<\/span><\/a><span data-preserver-spaces=\"true\"> than required for a conventional mortgage. Rinsing and repeating this formula works as long as interest rates and house prices are relatively low and rents are high. Two out of those three no longer apply, which means implementing this strategy invariably means leveraging a lot of borrowed money and hoping your tenants pay their rent on time.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">So, if you\u2019re planning to use this to boost your portfolio, be careful. It\u2019s not a technique that will allow you to quit your day job anytime soon. In fact, if you execute correctly, you should keep your day job as a cushion in case things go askew, which they usually do.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">FHA loans were invented to make it easier for owner-occupants to buy a house and, in the case of small multifamily homes, to allow homeowners to get a little help from their tenants with their payments. <\/span><span data-preserver-spaces=\"true\">As real estate investors, we <\/span><span data-preserver-spaces=\"true\">tend to<\/span><span data-preserver-spaces=\"true\"> think outside the box and have developed the concept of repeat house hacking to game the system.<\/span><span data-preserver-spaces=\"true\"> However, in the current high-rate, high-cost era, that\u2019s fraught with risks. Just because the FHA loan limits will increase, allowing you to borrow more, doesn\u2019t mean you should.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>There\u2019s nothing that unifies opposing political factions faster than seeing homeless encampments in American cities. That\u2019s why the Housing for the 21st Century Act has cleared the U.S. House of [&hellip;]<\/p>\n","protected":false},"author":613725,"featured_media":186883,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7384],"tags":[],"class_list":["post-186879","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics-policy"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/186879","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613725"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=186879"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/186879\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/186883"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=186879"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=186879"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=186879"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}