WASHINGTON, D.C. — The U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture announced they are rescinding a 2024 policy that tied eligibility for certain federally backed home loans to stricter energy-efficiency building standards.
Officials said the rule, issued during the Biden administration, required new homes financed through Federal Housing Administration or USDA loan programs to meet the 2021 International Energy Conservation Code. The agencies said that requirement will no longer apply.
The departments said the change removes a regulation they contend increased construction costs and limited housing availability.
“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,” said Secretary Scott Turner. “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,” said Secretary Brooke Rollins. “We launched the Rural Revival Agenda at USDA to bring rural communities to the forefront of our actions, and this joint determination restores common sense to our programs and ensures that we can continue bringing new affordable housing supply online for Americans.”
The 2024 determination had required compliance with the 2021 energy code, which sets standards for insulation, energy use and building efficiency. Federal officials said estimates suggested the rule could increase construction costs by $20,000 to $31,000 per home.
HUD and USDA had previously delayed implementation of the policy, most recently extending the compliance deadline to Dec. 31, 2026, while seeking additional public input.
Following that review, the agencies issued a joint determination rescinding the rule in full. As a result, FHA and USDA loan programs will revert to the energy-efficiency standards that were in place before the 2024 policy.
Officials said the decision aligns with a recent federal court ruling that found the earlier requirement could reduce housing availability.
