Preserving Homes and Communities Act of 2026
The Preserving Homes and Communities Act of 2026 would place new federal conditions on the sale of non-performing single-family mortgage loans insured by FHA and on similar loan sales by Fannie Mae and Freddie Mac. The bill generally allows such bulk auctions, group sales, or direct sales only after loss mitigation options have been exhausted, borrowers and owners of record have received at least 90 days’ written notice, and the sale is structured to prioritize public entities and nonprofit organizations with housing expertise.
For FHA-insured loans, the bill would require purchasers to offer borrower protections at least as favorable as existing FHA loss-mitigation standards, including fee-free modifications and deferral options, and would prohibit certain transfer structures such as contract-for-deed or lease-to-own arrangements except to nonprofits. It also requires post-sale reporting on loan outcomes, borrower demographics, foreclosure activity, and fair-lending impacts, and directs HUD to issue regulations. For Fannie Mae and Freddie Mac, the bill imposes similar sale conditions, reporting requirements, and penalties for noncompliance, and it also creates a “Claims Without Conveyance of Title First Look” program giving eligible owner-occupants, nonprofits, and government entities an initial opportunity to buy foreclosed properties for affordable housing or community stabilization uses.
The bill would amend the National Housing Act and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to restrict and regulate how FHA, Fannie Mae, and Freddie Mac dispose of non-performing and re-performing single-family mortgage loans. It would add statutory requirements for notice, loss mitigation, purchaser obligations, property maintenance, data collection, and public reporting, while authorizing HUD and the housing enterprises to issue implementing regulations and impose penalties, including retaining loans or properties from noncompliant purchasers. The measure would primarily affect mortgage servicers, loan investors, nonprofits, local governments, borrowers facing default or foreclosure, and purchasers of distressed housing assets.
The available context shows the bill was introduced and referred to committee without recorded votes or committee debate, so there is no documented floor or committee sentiment in the provided materials. Based on the text, the bill is framed as a consumer- and community-protection measure aimed at preserving homeownership, preventing harmful bulk sales, and promoting affordable housing and neighborhood stabilization. The overall tone of the legislation is protective and regulatory rather than deregulatory or market-expansion oriented.
The main policy tension in the bill is between preserving flexibility for FHA, Fannie Mae, and Freddie Mac to dispose of distressed loans and imposing detailed borrower and community safeguards on those sales. Potential points of contention include the requirement that purchasers provide loss mitigation terms at least as favorable as federal guidelines, the limits on resale and transfer structures, the 75 percent disposition requirements after foreclosure, and the broad reporting of borrower demographic data for fair-lending analysis. Critics could view the bill as constraining secondary-market transactions and increasing compliance costs, while supporters would likely argue that those constraints are necessary to prevent displacement, predatory practices, and discriminatory outcomes.