Historic Bipartisan Housing Law Expands ADU Financing, Modernizes Manufactured Housing, and Creates New Opportunities to Increase America's Housing Supply

WASHINGTON, July 11, 2026 /PRNewswire/ -- As of midnight on June 10th, the 21st Century ROAD to Housing Act became law, enacting one of the most significant federal housing packages in decades and marking a major shift toward policies designed to increase housing supply, expand attainable homeownership, and remove barriers to building lower-cost homes.

The legislation includes 45 housing provisions that modernize federal housing policy, improve access to financing, strengthen manufactured and modular housing, and make it easier for homeowners, builders, and communities to add new housing.

Among those reforms are landmark changes to Accessory Dwelling Unit (ADU) financing that Casita Coalition helped shape over the past year alongside congressional leaders, lenders, housing practitioners, and national partners.

"Housing affordability begins with housing supply," said Noerena Limón, CEO of Casita Coalition. "For decades, our housing policies have made it harder to build homes than it needed to be. This law reflects a growing bipartisan recognition that we cannot solve America's affordability crisis unless we make it easier for homeowners and communities to create more housing."

Unlike many federal housing bills that focus primarily on subsidizing demand, the 21st Century ROAD to Housing Act focuses on expanding supply by addressing barriers that have prevented lower-cost housing options—including ADUs, manufactured homes, modular housing, starter homes, and other forms of middle housing—from reaching their full potential.

Why This Matters

For homeowners, builders, lenders, and communities, the new law removes or begins addressing several longstanding barriers that have limited housing production.

Among its most significant provisions, the law:

• Expands opportunities for second-position financing for ADUs, allowing more homeowners to build additional housing without refinancing historically low-interest first mortgages.
• Removes outdated federal barriers affecting manufactured housing, helping create more pathways to lower-cost homeownership.
• Advances financing and regulatory improvements that support modular and off-site housing construction.
• Includes dozens of additional reforms intended to increase housing production, improve affordability, and modernize federal housing programs.

Together, these reforms have the potential to expand attainable homeownership while increasing the nation's housing supply.

Why California Should Pay Attention

California has spent nearly a decade demonstrating that removing barriers to small-scale housing works.

Since 2017, California has permitted more than 144,000 accessory dwelling units, transforming ADUs from a niche housing product into one of the state's fastest-growing sources of new housing. The federal reforms build on that momentum by addressing one of the most significant remaining barriers: financing.

Today, many homeowners with low-interest mortgages face a difficult choice: refinance into a much higher interest rate to finance an ADU or abandon the project altogether. The law's ADU financing provisions create new opportunities to broadly expand second-position lending, allowing more homeowners to add housing while preserving their existing mortgage.

"This legislation has the potential to fundamentally change how homeowners finance ADUs," said Dan Hardcastle, Vice Chair of Casita Coalition's Board of Directors, who helped develop the coalition's recommendations on ADU financing. "Millions of homeowners have been effectively locked out of building an ADU because they couldn't justify giving up a low-interest mortgage. Addressing that barrier could unlock thousands of additional homes."

The law also includes important reforms for manufactured housing by removing the permanent chassis requirement—a longstanding policy change sought by housing advocates to reduce cost, improve financing opportunities and enable more flexible uses, including two-story designs.

"The housing shortage has reached a point where every practical solution deserves serious attention," said Katherine Peoples, Chair of Casita Coalition's Board of Directors. "This legislation demonstrates what is possible when Republicans and Democrats come together around one shared goal: making it easier to build more homes. It is an important step toward expanding homeownership opportunities for the next generation of Americans."

The Work Begins Now

While today's signing represents a historic milestone, implementation will determine the law's ultimate success.

Casita Coalition will continue working with federal agencies, financial institutions, state leaders, local governments, and industry partners to help implement the legislation, expand financing opportunities for ADUs and middle housing, and identify additional reforms needed to address America's housing shortage.

"The conversation about housing is changing," Limón said. "Communities across the political spectrum increasingly recognize that we cannot solve an affordability crisis without building more homes. This law won't solve the housing shortage by itself, but it gives homeowners, lenders, builders, and communities important new tools to do exactly that."

About Casita Coalition

Casita Coalition is a California-based nonprofit organization advancing practical solutions to the housing shortage through middle housing, including accessory dwelling units (ADUs), starter homes, manufactured housing, modular housing, townhomes, and other housing types that expand attainable homeownership and increase housing supply.

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SOURCE Casita Coalition