Congress restricts foreclosure sales, mandates affordable housing for 75% of properties

What it does

This bill restricts how the federal government and mortgage giants Fannie Mae and Freddie Mac can sell bundles of troubled mortgages. Before selling, they must exhaust loss mitigation (loan modifications, forbearance), give borrowers 90 days' notice, and prioritize sales to nonprofits and government agencies. Buyers must offer affordable loan modifications, cannot use predatory contracts-for-deed, and must ensure 75% of foreclosed properties go to owner-occupants, nonprofits, or affordable rentals. The bill also creates a "first look" program letting nonprofits and homebuyers purchase foreclosed properties before investors. Extensive quarterly reporting to Congress tracks outcomes by race, income, and geography.

Why we flagged it

The bill's operative mechanism is a conditional restriction on loan sales: sellers may not conduct bulk auctions unless they meet strict loss-mitigation, notice, and affordable-housing requirements. The core function is to protect borrowers and steer foreclosed properties toward affordable housing and owner-occupancy, not to deregulate or subsidize any sector.

What the text implies

• Quarterly demographic reporting (race, national origin, sex, disability, veteran status) creates a detailed dataset enabling fair-lending audits and potential discovery of discriminatory patterns in loan sales and servicer conduct.
• The 75% affordable-housing mandate may reduce the pool of investment-grade loans available to institutional investors, potentially raising capital costs for loan servicers and reducing secondary-market liquidity.
• The 10-year rent-cap requirement (30% of income) locks in affordability but may discourage nonprofit acquisition if rehabilitation costs are high relative to rental income; pricing and subsidy availability will determine uptake.
• Failure to comply with loss-mitigation guidelines becomes a foreclosure defense, shifting litigation risk to servicers and potentially delaying foreclosures on non-performing loans.
• The "first look" program for nonprofits and owner-occupants may reduce the number of properties available to institutional investors, concentrating ownership in nonprofits and government entities.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Borrowers facing foreclosure gain mandatory loss mitigation, 90-day notice, and a legal defense if servicers violate loan-modification rules. Homebuyers and nonprofits gain priority access to foreclosed properties at fair-market value. The 75% affordable-housing mandate and rent-cap rules (30% of income, 10-year affordability) protect low-income tenants. Extensive demographic reporting enables detection of discriminatory lending patterns. The primary cost is to loan investors and servicers, who

Who stands to gain

• nonprofit housing organizations
• community land trusts
• local and state government housing agencies
• homebuyers with income ≤120% of area median income
• low-income tenants (income ≤100% AMI)

Named in the bill

Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), Fannie Mae (Federal National Mortgage Association), Freddie Mac (Federal Home Loan Mortgage Corporation), Federal Housing Finance Agency (FHFA), nonprofit organizations, community land trusts, land banks, Federal, State, local, and Tribal governments

Where it stands

4 cosponsors: 4 Democrats.

• Jan 30, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• Jan 30, 2026 — Referred to Senate Committee on Banking, Housing, and Urban Affairs · Congress.gov: “Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $125,000 in lobbying spend. A filing names 16 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Jack Reed, the sponsor, reported $1,152,500 in PAC receipts in the 2026 cycle.

• Cerberus Capital Management, L.p. — $75,000 on 1 filing
• Firstkey Homes, LLC — $50,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.