HUD Trims Review for Federally-Backed Multifamily Projects

The Trump administration is carving another layer out of the federal housing approval process, this time targeting environmental reviews tied to affordable housing deals.

The Department of Housing and Urban Development published an interim rule this month eliminating a final approval requirement for multifamily developments with more than 200 units or mortgages exceeding $5 million that receive federal support, Bisnow reported. The rollback takes effect June 22 and is expected to primarily affect affordable housing developers working with HUD-backed financing.

Under the old framework, projects cleared through environmental review still needed a final signoff from HUD clearance officers before moving forward. HUD argues the step was redundant, added delays and complicated already tight financing timelines.

In a filing, the agency said the requirement created a “duplicative technical assistance process” despite environmental reviews already being completed earlier in the pipeline.

The rule traces back to 1971, though the additional approval language at issue wasn’t added until 1996. HUD contends the extra oversight was never explicitly required by statute and has unnecessarily slowed projects for decades.

The change lands squarely within President Donald Trump’s broader deregulation push and his “Unleashing American Energy” executive order, signed on Inauguration Day as part of a wider effort to reduce federal permitting and environmental hurdles.

Housing developers and industry groups have long complained that layered environmental reviews can jeopardize project closings, particularly for affordable housing deals stitched together with tax credits, subsidies and agency financing.

HUD Secretary Scott Turner quickly turned the department into one of the administration’s more aggressive vehicles for rolling back housing regulations. Since taking office, Turner has moved to weaken eviction-related rules and scale back energy-efficiency standards while promising to cut bureaucratic barriers to development.

The agency also tied housing policy more closely to the administration’s immigration agenda. Earlier this year, HUD ordered landlords to verify tenant eligibility after flagging thousands of allegedly ineligible recipients on assistance rolls. The department later announced plans to remove mixed-status immigrant families from housing aid programs, drawing backlash from tenant advocates and housing groups.

Trump has simultaneously leaned on executive action to stimulate housing production. In March, he signed orders directing agencies to identify regulatory barriers to development and urging Congress to loosen banking rules so community lenders can originate more mortgages.

— Holden Walter-Warner