The FRAMER Act inserts a new subsection into Section 104 of the Housing and Community Development Act of 1974 that conditions certain HUD program funds on a State providing direct payments to builders for the additional cost of meeting that State's energy housing code when they construct covered dwelling units in Opportunity Zones. HUD will determine the difference between the State code cost and the Department of Housing and Urban Development’s (HUD) Minimum Energy Standard; if the State code is more expensive, the State must pay the gap to the builder within 30 days after occupancy inspection.
If the State code is cheaper, no payment is required.
The bill also requires builders who receive or expect such reimbursement to disclose the cost difference and any reimbursements (and any portion used to lower the sale price) to the first buyer using a HUD-established form; it tasks the Comptroller General with annual reporting on payments and differences by jurisdiction and sunsets the provision after seven years. For developers, state regulators, HUD officials and affordable-housing stakeholders, the measure creates a new federal-state finance mechanism that changes incentives around energy-code stringency, administration, and housing costs in designated Opportunity Zones.
At a Glance
What It Does
The bill amends 42 U.S.C. 5304 by adding subsection (n), which requires a State seeking certain HUD funds to pay builders the monetary difference between complying with the State energy housing code and complying with HUD’s Minimum Energy Standard for covered dwelling units in Opportunity Zones. HUD will calculate the allowed difference and the payment must be made within 30 days after the unit passes inspection and is certified for occupancy.
Who It Affects
States (as conditional recipients of HUD funds), residential builders and developers constructing in Opportunity Zones, first buyers of new units, HUD (responsible for cost determinations and form standards), and the Comptroller General (charged with annual reporting).
Why It Matters
The provision effectively subsidizes builders facing higher state energy-code costs in Opportunity Zones and does so by conditioning federal HUD funding; that creates fiscal exposure for states, administrative obligations for HUD, and a policy lever that may alter state incentives to adopt or retain stricter energy codes.
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What This Bill Actually Does
The FRAMER Act adds a new, targeted federal requirement to Section 104 of the Housing and Community Development Act that ties states’ access to certain HUD funds to a payment obligation. Once in effect, a State that wants to remain eligible for those HUD amounts must reimburse the builder of a covered dwelling unit in an Opportunity Zone for the incremental cost of implementing the State’s energy code above what HUD calls its Minimum Energy Standard.
HUD is assigned the role of determining that difference and the statute lists types of costs the calculation should cover — labor, supplies, wages, inspections and broadly “any other cost realized by the person who built” the unit.
Timing and process are simple on paper but operationally consequential. The bill triggers 90 days after enactment for program eligibility; payments to builders are due within 30 days after a unit is inspected and certified for occupancy.
If a State’s energy code actually costs less than HUD’s Minimum Energy Standard, the State owes nothing. Builders who receive or expect reimbursement must deliver a HUD-prescribed disclosure to the first purchaser showing the cost difference and any reimbursement the builder has received or expects to receive, including any portion used to reduce the sale price.The bill also builds in oversight and temporariness.
The Comptroller General must produce yearly reports listing which States made payments, the amounts broken down by metropolitan and jurisdictional categories, totals by jurisdiction, and the measured difference between State codes and HUD’s Minimum Energy Standard. Finally, the new subsection automatically sunsets seven years after enactment.
That sunset, plus the annual reporting, frames the policy as a time-limited experiment to influence development patterns in Opportunity Zones while tracking fiscal and geographic effects.
The Five Things You Need to Know
The law conditions a State’s eligibility for amounts under Section 104 of the Housing and Community Development Act on the State providing reimbursement to builders for energy-code cost gaps in Opportunity Zones.
Payments to builders must be made not later than 30 days after the covered dwelling unit has been inspected and certified for occupancy; HUD determines the amount of the allowable difference.
HUD’s cost calculation explicitly includes labor, supplies, employee wages, inspection costs, and “any other cost realized by the person who built” the covered dwelling unit.
Builders who receive or expect such reimbursement must give the first buyer a HUD-established disclosure showing the cost difference and any reimbursement received or used to reduce the sale price.
The Comptroller General must report annually with jurisdiction-level breakdowns of payments and cost differences, and the added Section 104(n) automatically sunsets seven years after enactment.
Section-by-Section Breakdown
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Short title
Provides the Act’s short title: the Freeing Residential Affordable Markets from Excess Regulation Act (FRAMER Act). This is a caption-only provision and carries no operative policy effect.
State payment obligation and HUD cost determination
Creates the core obligation: to remain eligible for certain amounts under the statute, a State must provide each person who built a covered dwelling unit in an Opportunity Zone a payment equal to the difference between the State energy-code implementation cost and HUD’s Minimum Energy Standard cost. The payment is due within 30 days after occupancy inspection and certification. Practically, this makes a State’s receipt of federal HUD funds conditional on creating and operating a reimbursement mechanism for builders.
Exception when State code is cheaper
Specifies that no payment is required if the State energy code costs less to implement than HUD’s Minimum Energy Standard. That exception limits reimbursements to situations where State codes are more expensive, meaning the provision does not subsidize lower-cost State codes or alter incentives when the State’s standard is already less costly.
Mandatory disclosure to first buyer
Requires the builder to provide a HUD-prescribed disclosure to the first purchaser that identifies the cost difference and any reimbursement received or expected — including any portion used to reduce the sale price. The statute delegates form and procedural specifics to HUD, making HUD responsible for standardizing the disclosure but not for enforcement of private sales pricing beyond transparency.
Definitions and scope
Defines ‘covered dwelling unit’ by cross-reference to the term ‘residential building’ in 42 C.F.R. 6832 and uses the statutory definition of Opportunity Zone from the Internal Revenue Code. The cross-reference to a CFR definition may require implementers to reconcile regulatory language and could limit or expand coverage depending on that definition’s contours.
Annual GAO reporting and seven-year sunset
Charges the Comptroller General with annual reporting that lists States required to make payments and provides jurisdiction-level breakouts of payment amounts and measured code-cost differences. Subsection (c) repeals the added provision after seven years, framing the measure as a temporary policy and providing Congress visibility into fiscal and geographic impacts during the experiment period.
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Explore Housing in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Residential builders and developers in Opportunity Zones — they receive reimbursement for higher state energy-code costs, lowering their upfront construction expense and reducing the financial barrier to building under stricter state codes.
- Opportunity Zone investors and project sponsors — by lowering marginal construction costs in designated zones, the policy can increase the attractiveness and pace of investment and development projects.
- First purchasers of new units (potentially) — if builders choose to pass through reimbursements as price reductions, buyers could see lower purchase prices; they also receive a mandated disclosure about energy-code cost differences and reimbursements.
- Smaller developers competing with larger firms — the reimbursement narrows cost differentials that often advantage larger firms with thicker capital buffers when complying with more stringent codes.
Who Bears the Cost
- State governments — the statute conditions receipt of HUD program funds on the State making the payments, so States must cover the reimbursements from their budgets or risk losing federal funds intended for community development.
- HUD and federal agencies — HUD must establish the Minimum Energy Standard, determine allowed cost differences, and create disclosure forms and procedures, generating administrative work and potential litigation risk over methodology.
- Taxpayers and federal stakeholders indirectly — the conditional framework could shift programmatic funding dynamics and spur administrative costs; if States fail to comply and lose HUD funds, communities may forfeit federal support.
- Energy-efficiency advocates and long-term ratepayers — by reducing the effective marginal cost of stricter codes to builders in Opportunity Zones, the bill may weaken the local political incentive to adopt stronger codes, potentially increasing lifetime energy consumption versus upfront-focused affordability goals.
Key Issues
The Core Tension
The central dilemma is between reducing upfront housing costs and preserving state authority and incentives for stronger energy-efficiency standards: the bill lowers builders’ short-term compliance costs in Opportunity Zones by socializing the gap with State funds (and conditioning federal aid), but doing so risks undercutting long-term energy savings, shifting fiscal burdens to States, and creating complex administrative and measurement challenges that the statute does not fully resolve.
The statute leaves open several practical and legal questions that will shape its real-world effects. HUD is charged with determining the cost difference but the bill does not prescribe a detailed methodology; the listed categories (labor, supplies, wages, inspection and “any other cost realized by the person who built”) are broad and invite dispute over what counts as attributable to code compliance.
Without clear audit rules or caps, States and HUD could face contested claims or inflationary pressures on reported costs. The cross-reference to a CFR definition for “residential building” and the undefined process for establishing HUD’s Minimum Energy Standard create additional implementation ambiguity.
The conditionality tool raises policy trade-offs. Tying federal funds to a State payment obligation is a powerful incentive that could discourage States from adopting more stringent energy codes in order to avoid recurring reimbursement liabilities, thereby shifting the long-term costs of energy use and emissions from builders and homeowners to state budgets.
Conversely, the explicit exception where State codes cost less than HUD’s standard preserves upside alignment in some locales. The bill’s seven-year sunset and GAO reporting suggest Congress expects to monitor outcomes, but reporting alone will not resolve disputes over measurements, program integrity, or whether reimbursements actually lower buyer prices versus increasing developer margins.
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