[Federal Register Volume 90, Number 127 (Monday, July 7, 2025)]
[Notices]
[Pages 29882-29885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-12522]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
DEPARTMENT OF AGRICULTURE
[Docket No. FR-6271-N-05]
Adoption of Energy Efficiency Standards for New Construction of
HUD- and USDA-Financed Housing; Notice for Comment
AGENCY: Department of Housing and Urban Development (HUD) and
Department of Agriculture (USDA).
ACTION: Notice; request for comments.
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SUMMARY: HUD and USDA (``the agencies'') published a Final
Determination on April 26, 2024, adopting the 2021 IECC and ASHRAE
90.1-2019 energy codes as minimum requirements for programs covered
under the Energy Independence and Security Act of 2007 (EISA). The
Final Determination found that adoption of the energy codes would have
no negative impact on the affordability and availability of EISA-
covered housing. The agencies plan to review the analysis contained in
the Final Determination and are seeking public comments to inform the
review.
DATES: Comment due date: August 6, 2025.
ADDRESSES: Interested persons are invited to submit comments regarding
this rule. Communications must refer to the above docket number and
title. There are two (2) methods for submitting public comments. All
submissions must refer to the above docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
HUD: Scott Knittle, Principal Deputy General Counsel, Department of
Housing and Urban Development, 451 7th Street SW, Room 10180,
Washington, DC 20410; telephone number 202-708-2244 (this is not a
toll-free number). HUD welcomes and is prepared to receive calls from
individuals who are deaf or hard of hearing, as well as individuals
with speech or communication disabilities. To learn more about how to
make an accessible telephone call, please visit: https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
USDA: Robert Bogan, Administrative Management Specialist, Program
Support Services, Rural Housing Service; Department of Agriculture,
1400 Independence Avenue SW, Room 6900-S, Washington, DC 20250;
telephone number 202-557-1000 (this is not a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
Statutory Requirements
Section 481 of the Energy Independence and Security Act of 2007
(``EISA,'' Pub. L. 110-140) amended section 109 of the Cranston-
Gonzalez National Affordable Housing Act of 1990 (Cranston-Gonzalez)
(42 U.S.C. 12709), which establishes procedures for setting minimum
energy standards for certain categories of newly constructed housing
financed by HUD
[[Page 29883]]
and USDA. In addition to these EISA-specified categories, EISA also
applies to new construction projects in the HOME Investment
Partnerships Program (HOME) and the Housing Trust Fund program through
their program statutes or regulations. Table 1 provides HUD and USDA
programs covered by EISA:
------------------------------------------------------------------------
Regulations or
HUD programs Legal authority notices
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Public Housing (Capital Fund). Section 9(d) and 24 CFR part 905.
Section 30 of the
U.S. Housing Act of
1937 (42 U.S.C.
1437g(d) and 1437z-2).
Capital Fund Financing Program Section 9(d) and 24 CFR part 905
Section 30 of the subpart E.
U.S. Housing Act of
1937 (42 U.S.C.
1437g(d) and 1437z-2).
*HOPE VI Revitalization of Section 24 of the U.S. FR-5415-N-07.
Severely Distressed Public Housing Act of 1937
Housing. (42 U.S.C. 1437v).
Choice Neighborhoods Section 24 of the U.S. Implementation
Implementation Grants. Housing Act of 1937 Grants notice
(42 U.S.C. 1437v). of Funding
Opportunity
(NOFO).
Project-Based Voucher Program. Section 8 of the U.S. 24 CFR part 983.
Housing Act of 1937
(42 U.S.C. 1437f).
Section 202 Supportive Housing Section 202 of the 24 CFR part 891.
for the Elderly. Housing Act of 1959
(12 U.S.C. 1701q), as
amended.
Section 811 Supportive Housing Section 811 of the 24 CFR part 891.
for Persons with Disabilities. Cranston-Gonzalez
National Affordable
Housing Act (42
U.S.C. 8013) as
amended.
Rental Assistance Consolidated and RAD notice
Demonstration (RAD). Further Continuing Revision 4 (H
Appropriations Act of 2019-09 PIH
2012 (Pub. L. 112- 2019-23), as
55), as amended by amended by RAD
Consolidated Supplemental
Appropriations Act, Notices 4B
2014 (Pub. L. 113-76) (H2023-08 PIH
and subsequent HUD 2023-19 (HA))
Appropriations Acts. and 4C (H2025-
01 PIH 2025-03
(HA).
FHA Single Family Mortgage National Housing Act, 24 CFR part 203,
Insurance Programs. Sections 203(b) (12 subpart A;
U.S.C. 1709(b)), 203.18(i);
Section 251 (12 203.43i;
U.S.C. 1715z-16), 203.49;
Section 247 (12 203.43h.
U.S.C. 1715z-12),
Section 203(h) (12
U.S.C. 1709(h)),
Housing and Economic
Recovery Act of 2008
(Pub. L. 110-289),
Section 248 of the
National Housing Act
(12 U.S.C. 1715z-13).
FHA Multifamily Mortgage Sections 213, 220, 24 CFR parts
Insurance Programs. 221, 231, and 232 of 200, subpart A;
the National Housing 213; 220; 221,
Act (12 U.S.C.1715e, subparts C and
12 U.S.C.1715v, 12 D; 231; and
U.S.C.1715k, 12 232.
U.S.C.17151, 12
U.S.C.1715w)..
HOME Investment Partnerships Cranston-Gonzalez Final HOME Rule
(HOME) [By regulation]. sections 215(b)(4) at
and 215(a)(1)(F) (42 www.onecpd.info/
U.S.C. 12745(b)(4) home/home-final-
and 42 U.S.C. rule/ reserves
12745(a)(1)(F)) the energy
require HOME units to standard for a
meet minimum energy separate
efficiency standards rulemaking at
promulgated by the 24 CFR 92.251.
Secretary in
accordance with
Cranston-Gonzalez
section 109 (42
U.S.C. 12745).
Housing Trust Fund [By Title I of the Housing 24 CFR
regulation]. and Economic Recovery 93.301(a)(2)(ii
Act of 2008, Section ), Property
1131 (Pub. L. 110- Standards,
289, 12 U.S.C. 4568.). requires
compliance with
Cranston
Gonzalez
section 109 (42
U.S.C. 12709).
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* Program no longer funded or no longer funds new construction.
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USDA programs Legal authority Regulations
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Section 502 Guaranteed Housing Section 502 of Housing 7 CFR part 3555.
Loans. Act of 1949 (42
U.S.C. 1472).
Section 502 Rural Housing Section 502 of Housing 7 CFR part 3550.
Direct Loans. Act of 1949 (42
U.S.C. 1472).
Section 523 Mutual Self Help Section 523 of Housing 7 CFR part 1944
Technical Assistance Grants, Act of 1949 (42 subpart I.
homeowner participants. U.S.C. 1490c).
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EISA references two standards: the International Energy
Conservation Code (IECC) and American National Standards Institute/
American Society of Heating, Refrigerating, and Air-Conditioning
Engineers/Illuminating Electrical Society Standard 90.1 (ASHRAE 90.1).
The IECC standard applies to single family homes and multifamily low-
rise buildings (up to 3 stories), while the ASHRAE 90.1 standard
applies to multifamily residential buildings with 4 or more stories.
For both agencies, applicability is limited to newly constructed
housing and does not include the purchase or repair of existing
housing.
The IECC and ASHRAE 90.1 are industry-based consensus codes that
are typically updated on three-year cycles. Following each update, HUD
and USDA are required to adopt the new versions of the IECC and ASHRAE
90.1 within one year. If the agencies are unable to do so, the agencies
must ``make a determination that the revised codes do not negatively
affect the availability or affordability'' of the covered housing, and
the Secretary of Energy must determine ``that the revised code or
standard would improve energy efficiency'' in order for the agencies to
consider adopting the updated versions of the IECC and ASHRAE 90.1.
Preliminary and Final Determination
On May 18, 2023, HUD and USDA published a Preliminary Determination
(88 FR 31773) that the 2021 IECC and ASHRAE 90.1-2019 did not
negatively affect the affordability and availability of EISA-covered
housing. After receiving feedback during the public comment period, the
agencies published the Final Determination on April 26, 2024 (89 FR
33112) with an updated economic analysis and found that adoption of the
standards would not negatively impact the affordability and
availability of EISA-covered housing.
As outlined in Section I. F. of the Final Determination, changes to
the
[[Page 29884]]
Preliminary Determination based on public comments included updated
economic factors to reflect changes to the economic landscape due to
the COVID-19 pandemic and global supply chain issues, adjustments to
cash flow and financing factors to reflect typical financing factors
for HUD and USDA borrowers, updates to the energy codes adopted at the
state-level, more information on alternative compliance paths, and
adjusted implementation and compliance timelines.
The most significant update to the affordability analysis was the
application of a supply chain cost increase factor of 37 percent and an
energy price increase factor of 32 percent to reflect changes in costs
following the underlying cost-effectiveness analysis published by the
U.S. Department of Energy (DOE) in 2021. The supply chain cost increase
factor was determined using the Bureau of Labor Statistics' Producer
Price Index for inputs to residential construction less energy, as
reported by the National Association of Home Builders (NAHB). The
energy price increase factor was developing using data collected by the
U.S. Energy Information Administration. More detail on these factors
can be found in Sections I. F. and II. C. 4. of the Final
Determination. Other updated economic factors included the energy price
escalator, mortgage interest rate, and discount rate. Adjustments to
cash flow and financing factors included revisions to the down payment
rate, mortgage insurance premium, and home size.
Affordability and Availability Analysis
HUD and USDA's affordability analysis considered several metrics of
cost effectiveness, including life-cycle cost (LCC) savings,
incremental cost, years to positive cashflow, and simple payback
period, which combined to holistically assess affordability. More
information on each of these metrics is available in the Final
Determination. In the Final Determination, the affordability analysis
is primarily presented through the various scenarios in tables 9
through 20 for the 2021 IECC (89 FR 33137-33161) and tables 21 through
29 for ASHRAE 90.1-2019 (89 FR 33164-33175). For the 2021 IECC, the
analysis considers impacts at the national, climate zone, and state
levels; a high-interest rate scenario; and different housing types. It
also considers State adoption of energy codes. As of December 2023, 41
states and the District of Columbia (DC) had adopted a version of the
IECC that was equivalent to or higher than the prior HUD and USDA
standard of the 2009 IECC. The remaining 9 states had either adopted
standards that pre-date the 2009 IECC (1 state) or had no state-wide
codes (8 states). See Table 11 of the Final Determination (89 FR 33147)
for more information. As of December 2023, 33 states and DC had adopted
an ASHRAE 90.1 standard that was above the prior HUD and USDA standard,
while 17 states had adopted codes that were equivalent to or below the
prior HUD and USDA standard or had no statewide codes. See Table 23 of
the Final Determination (89 FR 33166) for more information.
Tables 13 (89 FR 33153) and 19 (89 FR 33158-33159) in the Final
Determination summarize the affordability analysis for adopting the
2021 IECC in single family dwelling units, breaking down incremental
costs by climate zone and by State. The agencies found the incremental
cost of adoption to be $7,229, with incremental costs ranging from
$3,662 to $8,845. Incremental costs for adoption of the 2021 IECC in
those states currently at the 2009 IECC or its equivalent range from a
low of $3,046 (Hawaii) to a high of $11,523 (Alaska), with most states
typically in the $6,000 range.
Additionally, Table 14 in the Final Determination (89 FR 33155)
summarizes the affordability analysis for adopting the 2021 IECC in
low-rise multifamily housing. The agencies found that the incremental
costs for this housing type, as well as associated savings, are
generally lower than for single family homes, as a result of both
differences in unit size and building type. Incremental costs average
$3,002/unit nationally.
HUD and USDA also analyzed the cost effectiveness of adopting
ASHRAE 90.1-2019 for mid- and high-rise buildings using methodology
adopted by DOE. Tables 26 (89 FR 33171) and 27 (89 FR 33172) in the
Final Determination provide incremental costs for a mid-rise
multifamily prototype building in various climate zones and for each
State. The agencies found that the national average additional
construction cost of adopting the ASHRAE 90.1-2019 is $574 per building
or $18 per unit. In some areas, construction costs were estimated to
decrease because the updated code allows for smaller and fewer fixtures
and appliances. Overall, given LCC savings and potential decreases in
construction costs, the agencies determined that the adoption of ASHRAE
90.1-2019 would not negatively impact the affordability of the
multifamily housing.
The agencies also determined that adoption of the 2021 IECC and
ASHRAE 90.1-2019 would not negatively impact the availability of
covered housing. Availability of housing is a measure associated with
whether builders will make such housing available to consumers at the
higher code level; i.e., whether the higher cost per unit as a result
of complying with the revised code will impact whether that unit is
likely to be built or not. The Final Determination, along with the
accompanying Regulatory Impact Analysis (RIA), looked at various
availability scenarios and determined that availability would not be
negatively affected.
Delayed Compliance Dates
On March 10, 2025, HUD published a notice delaying outstanding
compliance dates by six months for HUD programs (90 FR 11622). On April
4, 2025, USDA similarly published a notice delaying compliance dates
for USDA programs by six months (90 FR 14775). The extension was
intended to provide additional time for HUD and USDA to review
questions of fact, law, and policy supporting the Final Determination
and determine the need for HUD to develop further technical assistance.
For compliance dates that had already gone into effect, such as the
HOME Investment Partnerships program and Housing Trust Fund program,
HUD encouraged entities struggling to meet the requirement to contact
HUD.
To allow for more flexible compliance with the 2021 IECC and ASHRAE
90.1-2019 requirements, HUD and USDA adopted a list of acceptable
alternative compliance paths for certifications that meet or exceed the
energy efficiency of the adopted standards. These alternative
compliance path options include specific versions of the Environmental
Protection Agency's ENERGY STAR program and DOE's Zero Energy Ready
Homes program; third-party high performance building standards
including Enterprise Green Communities, LEED, National Green Building
Standard, Phius, Passive House Institute, Earth Advantage, Earthcraft,
Living Building Challenge, Pearl Certification, Green Globes, BREEAM,
and GreenPoint Rated; and the 2024 IECC and ASHRAE 90.1-2022. The
agencies received multiple public comments from various stakeholders
that specifically requested the 2024 IECC be accepted as an alternative
compliance path. The full list of alternative compliance paths is
available by request at [email protected].
[[Page 29885]]
II. This Notice
HUD and USDA are considering reexamining the analysis in the Final
Determination and are seeking public comment to inform a potential
review, consistent with the Executive Action, ``Delivering Emergency
Price Relief for American Families and Defeating the Cost-of-Living
Crisis.'' The public has had time to begin planning and implementing
the Final Determination's requirements. With that perspective, HUD and
USDA would like to better understand how the adoption of the updated
codes is working in practice. The agencies welcome comments on any
aspect of the Final Determination and also specifically seek comments
on the following matters.
1. In the Final Determination, HUD and USDA updated several
economic and cash flow factors. The affordability analysis included in
the Final Determination reflected the economic landscape around the
time of publication. Have any of these factors changed since the
publication of the Final Determination? If so, which specific economic
factors should be reconsidered and how are they different from the
analysis included in the Final Determination?
2. As of April 17, 2025, nine states have adopted the 2021 IECC and
15 states have adopted ASHRAE 90.1-2019 based on DOE's State Energy
Code Adoption map. For builders and developers operating in States that
have already adopted the 2021 IECC or ASHRAE 90.1-2019, are you facing
any challenges to implementing these building codes?
3. The agencies are interested in feedback from builders who are
already building to higher energy performance standards listed on the
alternative compliance paths list. What advantages or disadvantages
have you seen in the construction of higher performance homes? Please
be specific as to the type of housing--owner-occupied single family or
entity-owned multifamily rental housing.
4. The agencies seek to provide builders with the most flexibility
in meeting current baseline energy performance measures. This includes
the list of alternative compliance paths, which responds to the public
comments of industry that the IECC 2024 is a preferred code for
builders and it meets or exceeds IECC 2021. The agencies seek to keep
this list of alternative compliance paths updated as industry evolves.
What other codes or standards are builders and industry aware of beyond
the list of proposed alternative compliance paths that meet or exceed
the baseline of IECC 2021 that are active in markets and ready for
inclusion in the list of alternatives?
III. Electronic Access and Filing
Comments submitted electronically through the http://www.regulations.gov website can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
All comments and communications properly submitted to HUD will be
available for public inspection and copying between 8 a.m. and 5 p.m.
weekdays at the above address. Due to security measures at the HUD
Headquarters building, an advance appointment to review the public
comments must be scheduled by calling the Regulations Division at (202)
708-3055 (this is not a toll-free number). HUD welcomes and is prepared
to receive calls from individuals who are deaf or hard of hearing, as
well as from individuals with speech or communication disabilities. To
learn more about how to make an accessible telephone call, please visit
https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
David C. Woll Jr.,
Principal Deputy Assistant Secretary for Community Planning and
Development, U.S. Department of Housing and Urban Development.
Todd Lindsey,
Deputy Under Secretary, Rural Development, U.S. Department of
Agriculture.
[FR Doc. 2025-12522 Filed 7-3-25; 8:45 am]
BILLING CODE 4210-67-P