One percent interest, forgivable terms, and a Ginnie Mae wrinkle
Three House members want to hand HUD a new toolkit for saving affordable housing - and it starts with 1 percent loans.
Representatives Brown, Gimenez, and Lawler introduced H.R. 10534 on September 24, 2026, a bipartisan bill that would let the Secretary of Housing and Urban Development offer direct loans - potentially forgivable - to owners of aging multifamily properties that are sliding toward disrepair. The bill, titled the Affordable Housing Preservation and Protection Act of 2026, has been referred to the House Committee on Financial Services.
The target: HUD-assisted multifamily projects with five or more units that are at risk of what the bill calls "physical obsolescence or economic non-viability." Properties where the rent coming in simply cannot cover the cost of fixing what is broken. Eligible projects span Section 8, Section 202, Section 811, Section 236, and properties converted under HUD's Rental Assistance Demonstration program.
The deal comes with strings. Borrowers would lock into a 30-year affordable housing use agreement and commit to renewing their rental assistance contracts on terms consistent with the Multifamily Assisted Housing Reform and Affordability Act of 1997. They would also need to bring at least 20 percent of the total rehabilitation cost from non-federal sources - though HUD could lower or waive that threshold if the applicant made "commercially reasonable efforts" and still came up short.
Loan terms are where it gets interesting. The interest rate would sit at 1 percent. And HUD would have broad discretion to waive due-on-sale or due-on-refinancing restrictions, allow subordination to new debt, extend the loan term, or forgive the balance entirely - as long as doing so preserves the property's affordability.
For anyone tracking HUD-insured multifamily mortgages, one provision deserves a closer look. The bill would authorize HUD to use program funds to cover the cost of modifying mortgages it holds or insures, including payments to issuers approved by the Government National Mortgage Association. That creates a funded pathway for Ginnie Mae-wrapped loan modifications on distressed affordable properties.
No dollar amount is attached. The bill authorizes "such sums as may be necessary," which means Congress would still need to open the checkbook before any capital flows.
For multifamily lenders, servicers, and mortgage insurers, the bill is worth watching. If it moves, it could reshape how the most distressed slice of HUD's portfolio gets recapitalized - and who carries the risk on the other side.
The bill remains in committee and has not been enacted.
