The American Housing and Economic Mobility Act of 2025 is a major federal effort to make housing more affordable across the country by investing billions of dollars and changing local rules that make housing expensive to build. The bill provides $2 billion annually from 2025-2029 for grants to cities and towns that reform their zoning laws and remove barriers to building affordable housing. These grants can be used to allow apartment buildings in single-family neighborhoods, reduce parking requirements, streamline building approvals, and create incentives for developers to build affordable units. The bill also funds tenant protections like legal help for evictions and prevents sudden rent spikes.

The legislation also creates a $4 billion "Middle Class Housing Emergency Fund" to help states where housing costs have skyrocketed relative to people's incomes. This money goes toward building or buying affordable rental homes and preventing people from losing their homes to eviction or harassment. Additionally, the bill dedicates massive funding to existing housing programs: $48 billion for the Housing Trust Fund, $3 billion for the Capital Magnet Fund, and $70 billion for public housing repairs over the next decade. It also provides $1.26 billion for rural housing programs.

A significant portion addresses what happens when homeowners fall behind on mortgages backed by federal agencies like FHA, Fannie Mae, and Freddie Mac. The bill requires that when these mortgages are sold, at least 75-90 percent of the resulting properties must go to owner-occupants or nonprofits that will keep them affordable, rather than to investors who might flip them for profit. Borrowers facing foreclosure get 90 days' notice before their loans are sold and must be offered loss mitigation options like payment reductions. The bill also requires that construction work funded by these grants pay prevailing wages, protecting construction workers' pay standards.