HUD Releases New HOME and HTF Energy Standards Following NAHB Win

Following key code victories secured by NAHB earlier this year, the Department of Housing and Urban Development has revised the energy standards that HOME Investment Partnerships Program (HOME) Participating Jurisdictions and Housing Trust Fund (HTF) grantees must meet for newly constructed housing.

In March, NAHB secured a legal victory when a federal court sided with NAHB and 15 state attorneys general, finding that HUD and the U.S. Department of Agriculture’s adoption of the 2021 International Energy Conservation Code (IECC) mandate violated the Cranston-Gonzalez National Affordable Housing Act.

This spring, in response to the court’s decision and NAHB advocacy efforts, HUD and USDA rescinded a requirement that would have made the 2021 IECC and ASHRAE 90.1-2019 the minimum energy-efficiency standards for certain single-family and multifamily housing programs. As a result, all HOME- and HTF-assisted new construction projects must now meet the following standards upon completion:

• 2009 International Energy Conservation Code
• American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) 90.1-2007

HUD’s policy clarification is important. Unlike the FHA single-family and multifamily mortgage insurance programs that received several extensions of their compliance deadlines and never actually took effect before HUD rescinded its 2024 final determination, the higher energy codes took effect for new construction assisted through HOME and the HTF in late 2024.

The less-stringent requirements will help improve housing affordability because the added efficiency gains under the 2021 IECC would have been outweighed by higher upfront costs for home buyers. NAHB estimates that building single-family and multifamily homes to the 2021 IECC and ASHRAE 90.1-2019 standards could add $9,600 to $21,400 to the price of a new home, take up to 90 years for buyers to recoup the added cost, and significantly increase multifamily production costs.

View HUD’s new frequently asked questions (FAQs) for all HOME- and HTF-assisted new construction projects.