The Preserving Homes and Communities Act of 2026 regulates how banks, the Federal Housing Administration, Fannie Mae, and Freddie Mac sell bundles of delinquent mortgages and foreclosed properties, with strict protections for struggling borrowers and distressed communities. The bill prioritizes sales to government agencies and nonprofits focused on affordable housing, requires lenders to exhaust loss mitigation options before selling loans, and mandates that loan purchasers offer borrowers modifications and payment relief programs at no cost. Properties resulting from foreclosures must ensure that 75 percent are either sold to owner-occupants, transferred to nonprofits or government agencies, or made available for affordable long-term rental, while predatory financing practices are prohibited. The legislation also establishes a "first look" program giving eligible buyers—including owner-occupants, affordable housing nonprofits, and government agencies—exclusive purchasing rights to federally foreclosed homes at fair market value. Lenders and loan purchasers must provide borrowers with 90-day advance notice of sales and submit quarterly data to federal agencies, with semiannual congressional reports tracking fair lending compliance, borrower outcomes, and compliance violations that carry penalties including loan forfeiture.
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