U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner said the agency is rescinding energy-efficiency requirements tied to loans backed by the Federal Housing Administration (FHA) and U.S. Department of Agriculture (USDA). Turner announced the move Tuesday at HousingWire’s The Gathering in Austin.
A 2024 rule under the Biden administration had made new homes ineligible for FHA or USDA mortgages unless they complied with the 2021 International Energy Conservation Code (IECC), which imposed stricter building standards.
The rollback will initially apply to new construction. The FHA and USDA loan programs will comply with the energy efficiency standards that were in effect prior to the publication of the 2024 rule.
“If a home was to receive an FHA or USDA mortgage, it was deemed ineligible if it did not comply with the IECC,” Turner said. “Today, I am rescinding this onerous rule because it literally can bring an increase of $20,000 to $31,000 per single family project.”
Turner added that while proponents argued the upfront costs would be offset over time, the payback period could be decades. According to him, the average price of a home in some areas is $300,000, but the median price is $400,000.
“During the Biden administration, they said: ‘Well, these upfront costs will be able to be recovered. But what they didn’t revise, or didn’t say, is that it is going to take 90 years to do that,” he added.
HousingWire Lead Analyst Logan Mohtashami welcomed the news.
“Deregulation, especially lowering the cost, is a positive in housing. The builders care about their profit margins. Any initiative to help with the cost is a benefit to anybody,” Mohtashami said.
“Things can like this can affect future production faster. And that’s the whole idea of deregulating some things and getting it back to the private sector,” he added. “Again, builders aren’t going to build unless they can make money on it. This is something that helps that process as fast as we can possibly get. There’s no magic touch. There’s no silver bullet in terms of getting construction going fast, but this is one of the things that can happen initially to get projects built out later on when they run the numbers.”
Under the Trump administration, HUD published an extension that delayed the rule deadline for its programs until December 31, 2026. In July 2025, HUD and USDA issued a Request for Information (RFI) seeking additional comment from stakeholders to help inform the agencies’ review of the 2024 standard.
According to the HUD and USDA, the move is in alignment with a recent ruling from the U.S. District Court for the Eastern District of Texas which found that the Biden-era determination would decrease housing availability. The standard had only been deployed in a few states.
“We are focused on removing all the unnecessary restrictions that artificially drive up new home prices,” said Secretary of Agriculture Brooke Rollins.
Editor’s note: This is a developing story and will be updated with more information.
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