US Federal House Bill HB4568

US Federal 2025-2026 Regular Session

• Introduced: 7/21/25
• Refer: 7/21/25

Caption

Supporting Upgraded Property Projects and Lending for Yards (SUPPLY) Act

Summary

HB4568, the Supporting Upgraded Property Projects and Lending for Yards (SUPPLY) Act, would direct the Secretary of Housing and Urban Development to create a new insurance program for certain second liens used to finance the construction of accessory dwelling units (ADUs). The bill requires HUD to establish the program within two years of enactment and gives the Secretary discretion to set terms, conditions, and underwriting standards for insured second-lien loans tied to ADU construction. The bill also sets limits on the size of eligible loans, generally capping insured second liens at the lesser of 30 percent of the FHA one-unit loan limit or 100 percent of the projected post-construction value of the property, while allowing the Secretary to consider 50 percent of projected annual rental income from the ADU when determining the amount. Borrowers would need to certify ownership of the property, and HUD could charge an annual premium of up to 1 percent of the insured principal. The bill further requires annual reporting to Congress and authorizes HUD rulemaking to implement the program.

Impact

HB4568 would amend the National Housing Act by adding a new Section 259 focused on ADU construction insurance, creating a federal backstop for certain second-lien loans used to add, convert, or place an accessory dwelling unit on a single-family property. It would also require the Federal Housing Finance Agency to allow Fannie Mae and Freddie Mac to purchase and securitize these insured loans, unless the FHFA Director determines that market conditions create excessive and unmitigable risk and provides written notice to Congress. The measure would therefore affect HUD, FHA lending, and the secondary mortgage market, while potentially expanding financing options for homeowners, builders, and lenders involved in ADU development.

Sentiment

Based on the bill text and available context, the measure appears generally supportive of housing supply expansion and homeowner financing flexibility. The bipartisan list of original cosponsors suggests broad interest in encouraging ADU construction as a way to add housing units without large-scale new development. There is no recorded committee debate or vote history in the provided material, so no formal opposition or support statements are available beyond the bill’s structure and sponsorship.

Contention

The main points of potential contention are the federal government’s role in insuring second-lien debt, the exposure of HUD and the FHA insurance fund to new lending risk, and the requirement that FHFA permit Fannie Mae and Freddie Mac to purchase and securitize the insured loans. Critics could question whether the projected rental income and post-construction value assumptions are sufficient safeguards, while supporters are likely to emphasize the bill’s limits on loan size, premium cap, and FHFA’s ability to halt securitization if market risk becomes excessive. No specific objections or supporters are recorded in the provided committee materials.