• Key insight: Large institutional investors would still be able to buy single-family homes under a House-drafted housing bill that dropped a ban that had been included in the Senate version of the bill. 
• What's at stake: Lawmakers argued that restricting big-money investors would inadvertently stifle new home building and construction. 
• Forward look: Bankers remain wary of the bill due to concerns over long-term regulatory changes, which they say could have unintended consequences. 

House lawmakers have reached a bipartisan deal on a housing bill that does not include the Senate version's ban on institutional investors from purchasing single-family homes.

House Republican leadership posted the text of the bill Wednesday night and scheduled a floor vote for next week. House Financial Services Committee Chairman French Hill, R-Ark., had reportedly promised to post the text after winning the support of ranking member Maxine Waters, D-Calif. 

The House bill adds two exemptions that would continue to allow large institutional investors to buy single-family homes. A bipartisan group of lawmakers said a requirement for large investors to sell single-family homes after owning them for seven years would harm the development of rental housing. Large investors are defined as those that already own 350 homes or more. 

Hill said in prepared remarks that lawmakers "heard clear concerns from hundreds of members and stakeholders" over the past few months, and the bipartisan amendments reflected that feedback. 

The bill "cuts unnecessary barriers to new home construction, modernizes HUD programs, and allows banks to more freely deploy funding into their communities," Hill said. "We must get this right — and I am committed to working hard to do that."

The House added an extensive section aimed at strengthening community banks' role in housing by incorporating several bipartisan banking reform measures into the package. Those measures are designed to cut regulations of smaller banks, streamline the creation of new de novo banks, and support rural and minority depositories. 

Specifically, the House seeks to improve funding for community banks by exempting certain types of deposits from being classified as "brokered deposits," which are typically subject to more stringent regulation. The bill also includes provisions to streamline de novo applications and require annual reporting on reasons and timelines for denying new bank charters.   

The 21st Century Road to Housing Act passed the Senate 89 to 10 on March 12. It is unclear how the two chambers will sort out their differences given that the White House urged the House GOP to pass the Senate version, and President Trump supported the Senate's ban on large institutional investors. Lawmakers in either chamber could take up the other's version, or both chambers can form a conference committee to iron out the differences. The House plans to pass the bill under a fast-track procedure known as "suspension of rules" that requires a two-thirds vote, limits debate to 40 minutes and allows no floor amendments.

"I think the president urging the House to pass the Senate bill complicates things because it puts House Republicans in a position where they feel pressure to vote on a bill they don't like," said Ian Katz, managing director at Capital Alpha Partners. "Even though the Senate bill passed overwhelmingly, I think a lot of Senate Republicans don't like the investor restrictions part of it and were hoping the House would change them. So the president's words might end up working against the bill."

The House bill also explicitly prohibits the Federal Reserve from issuing or creating a Central Bank Digital Currency, or CBDC, either directly or indirectly through intermediaries. The push to ban CBDC reflects political concerns over government-issued digital money and privacy risks, but has no direct link to housing. 

Another major change was made to limits on multifamily Federal Housing Administration loans. The House version proposes massive, one-time statutory increases to catch up with decades of inflation while the Senate would make the transition based on inflation indices.

The House version also is focused heavily on changes to financial thresholds for federal housing programs and on expanding the types of housing eligible for federal support. The house text establishes higher thresholds for manufactured housing and general home repairs to account for higher construction costs. It also includes dozens of other technical adjustments to ensure the National Housing Act is updated, to maintain consistency across different federal insurance programs. 

The House added eight major provisions and dropped at least six provisions that were in the Senate version, including making reforms permanent to the Rental Assistance Demonstration program and making disaster recovery changes permanent. The House dropped the PRICE Act from its bills, which would have created a grant program to preserve and reinvest in manufactured housing. 

In addition, the House omitted a Senate effort to expand oversight with additional annual testimony and reporting requirements for Ginnie Mae, FHA, the Federal Housing Finance Agency and other agencies that guarantee federal loans. 

The House kept only part of the so-called VALID Act that aimed to beef up disclosure requirements for VA loans. The House also dropped an effort by the Senate to mandate oversight and evaluation of so-called Moving to Work policies that would allow additional public housing authorities to bypass federal rules on public housing and housing voucher programs.