The Biggest Housing Bill in 30 Years Just Passed

In this episode, Jennifer talks about the highly publicized "biggest housing bill in 30 years" and what it *actually* means for homebuyers. Jennifer, a seasoned mortgage lender, explains that despite the hype, the bill won't bring lower rates or significant first-time homebuyer subsidies. She dissects its real provisions, including a corporate investor cap, some improvements for VA loans, and efforts to simplify building. Jennifer clarifies why this complex legislation won't dramatically lower home prices soon, suggesting its impact will unfold over years, not months.

Transcript

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The biggest housing bill in 30 years just passed. What does this actually mean for home buyers? There's been a lot of hype about this bill in the news, and I'll be honest, guys, I was waiting to do a big video on it to see if it actually passed. And it did end up passing. Not because the president signed it, but because an expiration date was hit. Gotta laugh. So the biggest housing bill, there's gotta be some good stuff for homebuyers, right? Right? There's 60 pieces of legislation. That's a lot. Now, if you're new to this channel, I've been a mortgage lender for close to 20 years. My team's one of the top teams in America for helping people buy homes. That's all we do all day is we talk to you guys about getting pre-approved and buying that house. This bill does not address many of the issues that I hear from home buyers at all, at all. My initial read of this bill, honestly, was wow, this gives a lot of money to local governments, but no one's policing it. And there's a lot of incentives for builders, but there's no guarantee those savings got passed on. That was my overview takeaway. But I'm gonna go through a couple pieces of the legislation that actually have some level of benefit. You know, as a lender, what was I hoping for? If they could do something with mortgage rates, of course, that's on every single home buyer's number one wish list. Please, we need lower rates. Yeah, they can't do that. That didn't happen. There's no subsidy for first-time homuers. That would have been exciting. Nothing like that. Okay, first-time home buyer programs, like better programs, grants, really good stuff to help people get into houses. Yeah, there's none of that either. So let's talk about what there is. Number one, they're gonna be pushing to understand why lenders don't do a ton of loans under $100,000. Okay. Uh, they're going to be cutting the chassis requirement on manufactured homes. That's gonna save five to ten thousand dollars on the build of a manufactured home. Okay. The corporate investor cap. This one I actually do like. I do like this one, guys. I saw between 2020 and 2022, institutional investors eat up specific markets. And housing, what do we want to call them? National housing enthusiasts love to say, oh, institutional investors are just a really small part of the big pie. Yeah, that's that's not true in all towns. What we saw with institutional investors, it's not like what they bought was spread out around the country. We saw them go into places like Phoenix. I remember that. That was brutal. Um, you know, New Jersey parts of there's parts around the country where there is a lot of investor ownership. So capping it to 350 homes, that's a step in the right direction. Now, there's two things that I thought were very interesting about this. Number one, to be considered a single family home, it has to be two or less units, and it has to be an actual house. And they actually carved out that a manufactured home is not part of this limit. So let's say I am a big corporation, I already have 350 single-family houses, I can't buy any more because there are serious penalties for that. I can go buy all the manufactured that I want. At the same time, manufactured homes are becoming less expensive for companies to produce. Okay, we'll see what happens with that. That's interesting. You know, there has been an argument for a long time that as housing costs become more and more expensive, that manufactured homes are the next layer or level of affordability. So, not including them in the investor cap, I thought was interesting. Okay. What else about the investor cap? Um, they can still do build-to-rank communities. So if you're in one of those areas where you saw 100, 200 houses being built, you are excited because you're like, there's new homes, finally, there's gonna be supply, which will help prices come down. If it's a build-to-rank community, the investors are still buying those. That's totally okay. Look, my husband loves ice cream, like to the point where it's ridiculous. If there's a gallon of ice cream in the house, he will eat the entire thing in a night. If he only eats half of it, I literally am like, you did a good job. You did a good job. That's what this is. Look, we got an investor cap of some level. It's not exactly what we all wanted, but you did a good job. It's progress. We'll take it where we can get it. Uh, let's see here. Uh in the VA space, and I did a separate video on this a couple weeks ago, there's two things. Number one, every single application is gonna ask if you're a veteran now. So if you're not a veteran and you're like, why is it asking me that? That's a new requirement. And that will help more veterans take advantage of their VA loan benefit, and it is a true benefit. The other thing for veteran is there'll be a comparison chart where it has VA loan versus conventional and FHA. This is really good as well because there unfortunately are lenders that try to tell veterans their VA benefit is not good when in fact it is fire. So VA benefits are amazing. These two things step in the right direction. We'll take it, we'll take it. Uh, let's see here, what else? Making building easier. That was a lot of legislation in this bill. It was reducing um environmental reviews, it was reducing the red tape to build a home in America. And the concept is that if buildings are easier to do, then builders will build more. And then the price of houses will go down. So if you're seeing stuff where it's like, oh, these new, these new regulations could save builders $50,000 to $100,000 on each house. Expecting that houses are gonna be $50 to $100,000 cheaper are it's not realistic. There's nothing in this bill that says that any savings the builder gets, they get they have to pass on to you. The only way we're gonna see the prices come down is if the builders build supply to a level where there's more supply than demand. That is where we see prices go down. Always more supply than demand. That is when pricings decrease. And that's what we see in certain markets in the country right now. In areas where you had five, six, seven builders go into one area, they all finished at once. The housing prices there right now in a lot of areas are lower because there's so much supply. So the theory on this is hopefully by reducing the cost, you'll get builders to build more. Look, I I think this is gonna be really interesting to watch. You know, I don't know that there's enough, I don't know that there's enough savings to make builders run at it, but I think it will be interesting to see nonetheless. Um the one I thought was really interesting is they started this grant competition. So cities, counties, there's a grant competition of $200 million a year, and it's based on who's building the most, who's coming up with affordable ideas, all of that fun stuff. And I'm curious to see how that plays out. And instead of just giving them money and saying go and build, they're actually making it a competition. So this is supposed to go on for a few years, and then the the amount can go up with inflation. So towards the end of this, it could be as much as $250 million a city or county could win based on if they meet the parameters of this competition. So if I was a local politician right now, it's obviously something I would be paying attention to because you would want to win that grant. Um, there's a lot of incentives to do stuff like turn commercial space into residential homes. There's some money allocated for that. Um, that one was interesting as well. We'll see how that turns out. If you guys have been following stories in New York City recently, unfortunately, there's a building that was one of the first ones that was really doing this. You should look it out. It's a crazy story. Midtown Manhattan, uh, commercial to residential, the entire building support is whacked. Like they had to evacuate thousands of people around the building. I'm laughing because it's so horrible. Um, because they thought the building was gonna come down. Really check it out. So curious to see how all of that goes. Now, I just want to make sure I'm not missing anything exciting for you guys. Oh, this is just so this is like the one piece of legislation that does not make sense with the rest. What this bill also did is it banned the Fed from doing a digital currency until 2030. And it doesn't mean in 2030 the US is going to a digital currency. It just means that until then it's totally off the table. So for all my rabbit hole lovers who love to go down a rabbit hole of like, well, why would this be in the bill? What's this about? Definitely check that out because that is one piece of legislation that is not like the others. So, overall, if you're like, Jen, are you telling me that this is not gonna lower prices anytime soon? Yeah, I'm telling I like, no, it's not, guys. We'll see, like maybe five, 10 years. If we see a huge surge of building and builders are building to the level that it pushes down housing prices, which usually is not a builder's goal, perhaps. You know, maybe if the commercial to residential goes better than what we just saw in Midtown, great. And look, when I saw that story, I was like, oh, it's new construction. Because there's a lot of red tape being cut. But what I hear from home buyers all the time is they wish there was more stuff being checked. So no lower rates, no magical first-time homebuyer programs. Look, we're gonna keep on keeping on like we have for years. If you're looking at buying a house, yes, it's still possible. Rates aren't that crazy. You can do it. If you were hoping that this bill was gonna have a magical pill or potion, it doesn't, guys. It's a lot of bureaucracy that we're not gonna understand how it actually plays out for probably close to a decade.