Episode 139: HUD Rolls Back Energy Standards for HOME and HTF

HUD has issued revised energy efficiency standards for HOME Investment Partnerships Program and Housing Trust Fund new construction, rolling the baseline back to the 2009 International Energy Conservation Code and ASHRAE 90.1-2007. The change follows a federal court ruling in March that found HUD and USDA's adoption of the 2021 IECC mandate violated the Cranston-Gonzalez National Affordable Housing Act — and it carries direct cost implications for affordable housing developers and participating jurisdictions nationwide. Key Takeaways: HUD's new baseline for HOME and HTF new construction is the 2009 IECC and ASHRAE 90.1-2007 — a significant rollback from the 2021 IECC and ASHRAE 90.1-2019 standards. A federal court sided with NAHB and 15 state attorneys general in March, ruling the 2021 IECC mandate violated the Cranston-Gonzalez National Affordable Housing Act. Unlike FHA programs, the stricter 2021 IECC standards actually took effect for HOME and HTF new construction in late 2024 — meaning projects completed or started under those standards face a different compliance calculus than pipeline deals. NAHB estimates the 2021 IECC and ASHRAE 90.1-2019 standards could add $9,600 to $21,400 to the cost of a new home. The buyer payback period for those added upfront costs could stretch up to 90 years, undermining the affordability case for mandatory adoption in subsidized programs. HUD has published updated FAQs formally clarifying the applicable standards for all HOME- and HTF-assisted new construction projects. Developers and participating jurisdictions should verify that project specifications and lender requirements align with the 2009 IECC baseline and seek field office guidance on any deals designed under the 2021 standards. This rollback closes a real cost exposure for affordable housing pipelines — but the fact that the 2021 standards were in effect for HOME and HTF new construction during late 2024 means practitioners cannot treat this as a clean slate. Any project that was scoped, bid, or completed under the stricter standards needs a careful compliance review before funds are drawn or deals are closed. Watch for additional HUD guidance as participating jurisdictions update their own program requirements in response. Subscribe to The Spring Street Brief for daily updates on affordable housing in America.