The new housing laws taking effect in 2026 pull in two directions at once: the federal government is pushing to build more homes and to keep large investors out of the single-family market, while states and cities are doing most of the work on rent stabilization, eviction protections, zoning reform, and down payment help. What actually applies to you depends heavily on your state and, often, your city.
Federal Push to Build More Homes
In March 2026, the White House issued an executive order titled “Removing Regulatory Barriers to Affordable Home Construction.”1The White House. Removing Regulatory Barriers to Affordable Home Construction It directs federal agencies to review and strip out rules that raise the cost of building, with specific attention to stormwater and wetlands permitting, energy-efficiency mandates for new construction, and building codes the administration considers unnecessarily expensive.
The order also tells HUD to put together best practices for state and local governments. Those practices include capping permitting timelines, allowing by-right development for single-family homes, and limiting retroactive application of new building codes. Nothing in the order directly changes your local zoning rules, but it signals a federal preference for faster, cheaper approvals and encourages states to follow suit.
Restrictions on Large Investors Buying Single-Family Homes
A separate executive order from January 2026 targets institutional buyers of single-family homes.2The White House. Stopping Wall Street from Competing with Main Street Homebuyers The Treasury Secretary is directed to define “large institutional investor,” and once that definition is in place, federal agencies cannot insure, guarantee, securitize, or approve the acquisition of a single-family home by one of those entities when an individual buyer could purchase it instead. HUD, the VA, and the USDA are specifically named.
Owners and managers of single-family rentals in federal housing programs will have to disclose their ownership structure, including any affiliation with institutional investors. Build-to-rent communities that were planned and financed as rentals from the start are a narrow exception. If you’re a regular buyer who has been outbid by corporate cash offers, this is the most directly relevant federal action in years. How strong the effect is depends on where Treasury draws the line.
State Zoning Reforms and ADUs
The biggest shift in what you can actually build on your own lot is happening at the state level. More than a dozen states have passed laws overriding local zoning to allow denser construction on single-family lots. The laws take two main forms. Some require cities to allow accessory dwelling units on any single-family lot. Others require cities to allow duplexes, triplexes, or other “middle housing” in zones that used to be single-family only.
The strongest versions of these laws strip local planning boards of discretionary review. If your project meets the objective building standards, the permit gets approved administratively, without a public hearing. The March 2026 federal executive order encourages more states to adopt this approach.1The White House. Removing Regulatory Barriers to Affordable Home Construction
Before you plan a backyard cottage or a garage conversion, price out the fees. Municipal permit and impact fees for an ADU commonly run from $10,000 to $45,000 depending on location, and some jurisdictions tack on utility connection fees. Those costs can gut the financial case for building if you don’t check in advance.
Using ADU Rental Income to Qualify for an FHA Loan
FHA guidelines now let borrowers count projected ADU rental income when qualifying.3U.S. Department of Housing and Urban Development. Revisions to Rental Income Policies, Property Eligibility, and Other Updates For an existing ADU, lenders can count 75 percent of the estimated rent, using the lesser of the appraiser’s fair market rent estimate or the amount in an actual lease. For a new ADU built through an FHA 203(k) renovation loan, lenders can count 50 percent of projected rent.
There’s a ceiling: ADU rental income cannot exceed 30 percent of your total qualifying income. If you earn $5,000 per month from work, the most ADU income you can add is about $2,143, bringing total effective income to roughly $7,143. And on a cash-out refinance, ADU income cannot be used to qualify at all. Run the numbers before you count on rental income to carry your approval.
Rent Stabilization at the State and City Level
A handful of jurisdictions now have statewide rent control or stabilization, and the specifics vary a lot. Some cap annual increases at a fixed percentage above inflation. Others tie the cap to a regional consumer price index. A cap of “7% plus inflation” and a flat 5% limit behave very differently in practice, so the exact formula matters.
Beyond statewide rules, dozens of cities have their own stabilization ordinances, and city protections frequently go further than state ones. Many places require extended notice before a rent increase takes effect, often 60 or 90 days for increases above a set threshold. If you’re a renter, check both the state and city rules. If you’re a landlord, this is where most mistakes happen: a rent increase delivered with insufficient notice is typically void, and the clock has to restart.
Just Cause Eviction Rules
A growing number of states and cities require landlords to state a specific legal reason before terminating a tenancy. These “just cause” rules usually kick in after a tenant has been in the unit for at least 12 months. Acceptable reasons generally split into two groups. Fault-based reasons include nonpayment, lease violations, and property damage. No-fault reasons include the landlord moving in, substantial renovation, or withdrawing the unit from the rental market. No-fault evictions usually require relocation assistance or extended notice.
Written eviction notices must identify the specific legal justification. In many jurisdictions, boilerplate or vague language will get the filing dismissed, and landlords who skip procedural requirements can be ordered to pay the tenant’s legal fees. The direction is clearly toward more protection for longer-term tenants, but the rules differ enough from place to place that you have to check your own.
Anti-Retaliation Protections
Most states now prohibit landlords from raising rent, cutting services, or filing to evict in response to a tenant exercising a legal right, like reporting a code violation or joining a tenants’ organization. Many jurisdictions create a legal presumption that any negative landlord action within a set window after the tenant’s protected activity is retaliatory. That window runs from 90 days to six months depending on where you live.
If you file a complaint about mold and your landlord serves a rent increase two months later, the landlord may have to prove the increase was planned independently. You generally don’t have to prove the landlord’s intent. The timing can shift the burden on its own.
Fair Housing Screening: What’s Still Enforced
The Fair Housing Act still prohibits housing discrimination based on race, color, national origin, religion, sex, familial status, and disability.4Department of Justice. The Fair Housing Act That law hasn’t changed. What has changed is federal guidance on screening.
In 2016, HUD had issued guidance explaining how blanket criminal-history bans in tenant screening could violate the Fair Housing Act through discriminatory effects. The current HUD Secretary has rescinded that guidance and has encouraged public housing authorities to adopt more restrictive screening policies. The underlying statute still applies. A landlord using criminal-history screening that disproportionately excludes a protected class can still face a discrimination claim, and the statutory penalties remain high: up to $50,000 for a first violation and $100,000 for repeat offenses when the Attorney General brings an enforcement action.5Office of the Law Revision Counsel. 42 USC 3614 – Enforcement by Attorney General HUD is no longer actively promoting the individualized-assessment framework the earlier guidance recommended, but private fair housing organizations and the Department of Justice still enforce the statute.
Algorithmic and AI-Based Screening
HUD has clarified that the Fair Housing Act applies to algorithmic and AI-driven tenant screening tools the same way it applies to manual screening. A landlord cannot shift liability to a software vendor. If a screening algorithm produces outcomes that disproportionately exclude applicants of a particular race or national origin, the landlord is still responsible. Landlords using these tools should be ready to document that their screening criteria are necessary and that no less discriminatory alternative would serve the same purpose.
Source of Income Protections (State and Local Only)
Federal fair housing law does not stop landlords from refusing tenants who pay with a housing choice voucher or other public assistance. Section 8 participation remains voluntary for private landlords under federal law. A majority of states and many cities, however, have passed their own source-of-income discrimination laws, and coverage is still expanding. Over half of all voucher holders now live somewhere with some form of protection.
Where these laws exist, a landlord cannot reject you solely because part of your rent would be paid by a government subsidy. Enforcement typically runs through state or local fair housing agencies. If you hold a voucher and a landlord turns you away, check your state and city rules before you assume you have no recourse.
Homebuyer Assistance Programs
At the federal level, the Downpayment Toward Equity Act has been reintroduced but is still in committee.6Congress.gov. H.R.4069 – 119th Congress – Downpayment Toward Equity Act No federal first-generation homebuyer program has been enacted as of mid-2026.
States are where the money actually is. Several states offer shared-equity programs: the state puts up part of the down payment and takes a share of the home’s future appreciation when you sell. Others offer forgivable second mortgages that are cleared after you stay in the home for a set period, usually two to ten years.7Federal Deposit Insurance Corporation. Affordable Mortgage Lending Guide – Down Payment and Closing Cost Assistance Eligibility usually involves income limits tied to the area median income and, in some programs, a requirement that you be a first-generation buyer, meaning your parents did not own a home.
Funding rounds often close within days or weeks. Sign up for notifications from your state housing finance agency. By the time a program is in the news, the application window may already be closed.
Repayment Triggers for Shared-Equity Loans
Shared-equity and deferred-payment programs carry repayment triggers. The usual ones are selling the home, transferring ownership, refinancing the first mortgage, or converting the property from a primary residence to a rental. If any of these happen before the forgiveness period ends, you owe back the original assistance plus the government’s share of appreciation.8Consumer Financial Protection Bureau. Issue Spotlight – Home Equity Contracts – Market Overview In a rising market, that share can be substantial. A homeowner who received $60,000 and sells after $200,000 of appreciation might owe $100,000 or more depending on the terms. The math only works in your favor if you stay long enough, so read the repayment provisions before you sign.
Taxes on Assistance and on Sale
Down payment assistance from government programs is generally not included in your gross income for federal tax purposes.9Internal Revenue Service. Down Payment Assistance Programs – Assistance Generally Not Included in Homebuyers Income One catch: if the assistance comes from a seller-funded program, the IRS treats it as a rebate on the purchase price. That lowers your cost basis in the home, which can raise your capital gains tax when you sell.
On the sale side, the federal capital gains exclusion still lets you exclude up to $250,000 in gain ($500,000 if married filing jointly) when you sell a primary residence, as long as you owned and lived in it for at least two of the five years before the sale.10Internal Revenue Service. Topic No. 701 – Sale of Your Home If the property includes an ADU you rented out, the portion of gain attributable to the rental unit may not qualify for the exclusion. The IRS has not published specific guidance on ADU allocation, so if you’ve been collecting rent from a secondary unit and you’re thinking about selling, talk to a tax professional. Getting it wrong can mean a five-figure tax bill at closing.
Rental Junk Fees: Proposed, Not Yet Law
The FTC has started a rulemaking on what it calls “unfair or deceptive” fee practices in rental housing, aimed at charges that are not disclosed upfront or that misrepresent mandatory costs.11Federal Register. Rule on Unfair or Deceptive Rental Housing Fee Practices As of mid-2026, the rule is still at the proposed stage. There are no binding requirements or penalty amounts yet.
On tenant screening reports, the CFPB has flagged inaccuracies in background and credit checks that have led to wrongful denials.12Consumer Financial Protection Bureau. CFPB Reports Highlight Problems with Tenant Background Checks If you find errors in a tenant screening report, your most reliable tool is the Fair Credit Reporting Act, which gives you the right to dispute inaccurate information regardless of federal enforcement priorities.