Department of Housing and Urban Development (HUD) Secretary Scott Turner and Department of Agriculture (USDA) Secretary Brooke Rollins announced on April 28 the recission of building code requirements that added “at least $20,000 to the cost of home construction.” The Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR) expressed their support for the effort to promote new construction and increase the housing supply.
Under a 2024 Final Determination, all new home construction was ineligible for a Federal Housing Administration (FHA) or USDA-backed mortgage loan unless the home met the “burdensome and expensive” 2021 International Energy Conservation Code (IECC), the announcement stated.
According to some estimates, enforcing the 2021 IECC as a mandatory nationwide standard would result in an increased home construction cost of between $20,000 and $31,000 and a decrease in new home production while lengthening permitting and inspection timelines, the agencies said.
“By rescinding this mandate, we are removing a significant regulatory barrier that added tens of thousands of dollars to the cost of a new home,” Turner said. “The Trump administration’s focus is to facilitate new housing supply and ensure that every American family has a path to homeownership without being sidelined by bureaucratic red tape.”
“Affordable rural housing is a top priority for the Trump administration, and we are focused on removing all the unnecessary restrictions that artificially drive up new home prices,” Rollins added.
HUD previously published an extension on Feb. 3 that delayed the compliance deadline for energy efficiency standards for HUD programs, including FHA-insured multifamily/single-family housing, the Public Housing Capital Fund and Section 8 project-based vouchers, until Dec. 31. In July 2025, HUD and USDA issued a request for information seeking additional comment from stakeholders to help inform the agencies’ review of the 2024 standard.
Following a review of these comments, HUD and USDA issued a Joint Determination on April 28 which rescinds the 2024 Final Determination in its entirety. As a result, the FHA and USDA loan programs will comply with the energy efficiency standards that were in effect prior to the publication of the 2024 Final Determination. This determination is also in alignment with a recent ruling from the U.S. District Court for the Eastern District of Texas which found that the determination would decrease housing availability.
In response to the announcement, MBA President and CEO Bob Broeksmit released the following statement:
“MBA welcomes today’s announcement from HUD Secretary Scott Turner and Secretary of Agriculture Brooke Rollins rescinding a burdensome and costly regulation that would have significantly increased the price of new home construction and limited access to FHA and USDA financing. We appreciate the agencies’ responsiveness to the concerns raised by our members about the real-world impact of this policy. This action reduces regulatory red tape that hinders new housing production and limits affordability — particularly for first-time and rural homebuyers.
“MBA has consistently emphasized that increasing housing supply is essential to improving affordability, and policies that unnecessarily raise construction costs work against that goal. We will continue to work with both agencies to advance policies that support sustainable homeownership, expand housing supply for owning and renting, and ensure that creditworthy borrowers across the country have access to affordable mortgage financing.”
NAR provided comments on the IECC requirements in August 2025.
“While NAR believes building high-performing energy efficient and quality homes nationwide is necessary to address the supply crisis, we are encouraged by the agencies’ desire and efforts to provide builders with the most flexibility in meeting energy efficiency measures,” 2025 President Kevin Sears wrote in a letter to HUD and USDA at the time. “NAR, along with other industry partners, previously urged against any proposals to attach specific energy efficient building code requirements to new construction. Now, we urge you to reconsider the impacts of new requirements on housing production and support voluntary efforts that promote energy efficiency without exacerbating America’s housing challenges.”
For more stories on housing supply, visit our Housing Inventory & Attainability Watch library.