To establish a pilot program for the Secretary of Housing and Urban Development to evaluate the effectiveness of insuring mortgages made to finance improvements to convert basement spaces into safely habitable dwelling units, and for other purposes.

Gregory W. Meeks

Democrat · NY · Representative

Source: Congress.gov · FEC

• Nydia M. Velázquez (D-NY-7)Original· 2026-05-15

Referred to the House Committee on Financial Services.

2026-05-15

Source: Congress.gov

The federal government would test a program to insure mortgages that help homeowners convert their basements into safe, livable apartments or rental units. This pilot program, run by the Department of Housing and Urban Development, would study whether this approach works well and could increase the housing supply by making use of existing basement spaces. Homeowners looking to add rental units or additional living space would be the main beneficiaries of this mortgage insurance option.

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[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 8854 Introduced in House (IH)] <DOC> 119th CONGRESS 2d Session H. R. 8854 To establish a pilot program for the Secretary of Housing and Urban Development to evaluate the effectiveness of insuring mortgages made to finance improvements to convert basement spaces into safely habitable dwelling units, and for other purposes. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES May 15, 2026 Mr. Meeks (for himself and Ms. Velazquez) introduced the following bill; which was referred to the Committee on Financial Services _______________________________________________________________________ A BILL To establish a pilot program for the Secretary of Housing and Urban Development to evaluate the effectiveness of insuring mortgages made to finance improvements to convert basement spaces into safely habitable dwelling units, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Habitable Housing Conversion Pilot Program Act of 2026''. SEC. 2. PILOT PROGRAM FOR INSURANCE OF CONVERSION LOANS. (a) Establishment.--The Secretary of Housing and Urban Development (in this section referred to as the ``Secretary'') shall carry out pilot program to insure mortgages, under section 203(k) of the National Housing Act (12 U.S.C. 1709(k)(2)), made to finance improvements necessary to convert space in the basements of owner-occupied properties, into safe and habitable dwelling units that are to be made available for rental, meet all State and local building and safety standards and codes, and comply with the regulations issued by the Secretary pursuant to subsection (c) of this section. (b) Scope.--The Secretary shall carry out the pilot program under this section during the 5-year period beginning on the date of the enactment of this Act and may insure not more than 150,000 mortgages under the program. (c) Consultation; Priority.--In carrying out the pilot program under this section, the Secretary shall consult with the Administrator of the Federal Emergency Management Agency and the Administrator of the National Oceanic and Atmospheric Administration to identify areas more likely to suffer hazards causing need for improvements financed under such program and may give priority in insuring mortgages under such program to eligible properties located in such areas. (d) Regulations.--The Secretary shall issue such regulations as may be necessary to carry out the pilot program under this section, including regulations to ensure the safety and habitability of spaces converted into dwelling units using mortgages insured under the program. (e) Report.--Upon the expiration of the 5-year period beginning on the date of the enactment of this Act, the Secretary shall submit a report to the Congress describing and assessing the pilot program under this section, identifying any successes of and problems with the program, identifying any current codes and regulations that prevent or inhibit conversion of basement space into dwelling units, and making recommendations regarding reauthorizing, reforming, or terminating the program. (f) Authorization of Appropriations.--There is authorized to be appropriated such sums as may be necessary to carry out the pilot program under this section. <all>

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