Federal housing funds yanked from cities over squatting policy
H.R. 9472 — The Protecting Homeowners from Squatters Act · Filed by Michael Lawler (R-NY) · Introduced Jun 25, 2026 · Referred to committee
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What it does
This bill withholds federal Community Development Block Grant (CDBG) funding and federal mortgage support (FHA insurance, VA loans, USDA loans, Fannie Mae/Freddie Mac purchases) from municipalities that allow squatting—defined as occupying property without permission for 10+ consecutive days (CDBG) or 14+ days (mortgage support) without paying rent. The Secretary of HUD must publish an annual list of prohibited jurisdictions and allow them to take corrective action to regain eligibility.
Why we flagged it
The bill's operative mechanism is a conditional withholding of federal housing and community development funds tied to municipal squatting policy compliance. It is not a direct prohibition on squatting (which is already illegal) but rather a federal funding penalty for jurisdictions deemed non-compliant.
What the text implies
- The bill defines 'squatting' differently in two sections (10 days for CDBG, 14 days for mortgage support), creating regulatory ambiguity and potential for inconsistent enforcement across federal agencies.
- Municipalities with strong tenant-protection laws or limited law-enforcement resources may be unable to meet the bill's implicit compliance standard, losing federal housing support regardless of actual squatting prevalence.
The full analysis lists 5 implications of this text.
Who stands to gain
property owners and real estate investors (reduced squatting risk); mortgage insurers and lenders (reduced default risk on insured/guaranteed loans); federal agencies (reduced exposure on insured/guaranteed mortgages)