This article is part of the 2025 Mid-Year Housing Industry Update. Click here to read the full newsletter.
The 2025 ABA Forum on Affordable Housing & Community Development Law Annual Meeting, held in late May, brought together leading attorneys, policymakers, and housing advocates to examine how the new administration may shape national housing policy. The event reaffirmed the Forum's focus on advancing solutions to today's most pressing affordable housing challenges. Ballard Spahr attorneys Jennifer Beyerlein, Angela Christy, Mary Grace Folwell, and Amy McClain served as moderators and/or panelists across several sessions. Below are highlights from the insights they shared.
Heard From the Hill on the Department of Housing and Urban Development (HUD)
HUD and the Federal Housing Administration (FHA) are adapting to operational challenges. While no sweeping structural reforms have been announced, important tactical changes are underway that signal a more nimble, responsive agency posture.
Key Takeaways:
- Streamlined Decision-Making: The FHA is reviving the single-underwriter model to accelerate loan processing and improve efficiency amid staffing constraints.
- Focus on Flexibility: Local HUD offices are making efforts to be more responsive and adaptable, even as personnel shortages persist.
- Private Sector Opportunity: With federal leadership focused on incremental improvements, there's a unique opportunity for private-sector partners to offer input and help shape more consistent, coordinated processes across regions.
These changes indicate HUD's current emphasis on operational responsiveness over structural overhaul—and signal that developers and practitioners have an active role to play in shaping the agency's evolving practices.
Tribal Lands
Recent federal policy updates are expected to significantly enhance the financial viability of affordable housing projects in rural and tribal communities, areas long challenged by limited capital and high development costs.
Notable Insights:
- Permanent 30% Basis Boost: LIHTC developments in rural and tribal areas will now benefit from a permanent 30% basis boost, improving deal feasibility and unlocking stalled projects.
- 50-35% Bond Test Preserved: Maintaining this bond financing rule ensures continued access to critical private activity bond volume, supporting a broader range of tax credit deals.
- Corporate Tax Rate Holds Steady: By keeping the corporate tax rate unchanged, Congress has preserved investor interest in tax credit equity, offering much-needed stability in a volatile market.
Together, these measures mark a step forward in addressing persistent housing gaps in underserved geographies, particularly on tribal lands where capital has historically been the hardest to secure.
Post-Closing and Construction Concerns
This panel offered practical insights into the legal risks that developers, lenders, and property owners face related to construction issues before and during a project, as well as obligations after loan closing—particularly in affordable housing projects. Using a hypothetical development scenario, panelists walked through typical pitfalls in construction contracts and how they can escalate costs or delay timelines, and how to contract around certain risks.
Highlights:
- High-Risk Contract Clauses: The discussion focused on common areas of exposure in construction agreements, including tariffs, force majeure, consequential and liquidated damages, prompt payment and retainage, and jurisdictional issues like choice of law and anti-forum statutes.
- Risk Management Emphasis: Presenters emphasized the need for proactive risk management to address rising construction costs and project delays in today's volatile development environment.
- Protective Revisions: Speakers recommended updates to standard construction contract forms to better safeguard both owners and lenders, highlighting strategies to minimize disputes and mitigate financial exposure.
Overall, the session reinforced the importance of careful contract drafting and negotiation post-closing to preserve project viability and financial integrity.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
