The U.S. Department of Housing and Urban Development and U.S. Department of Agriculture announced they are rescinding a 2024 Federal Housing Administration and U.S. Department of Agriculture energy efficiency building code requirement that applies to new home construction.
Homes financed with FHA or USDA loans must still meet energy efficiency requirements, but they are no longer required to comply with the more stringent 2021 update to the International Energy Conservation Code (IECC).
HUD Secretary Scott Turner made the announcement about the regulation during HousingWire’s “The Gathering” conference in Austin, Texas, on Tuesday.
“If a home was to receive [a] FHA or USDA mortgage, it was deemed ineligible if it did not comply with the [2021] IECC, and so today I’m announcing that we are rescinding this onerous rule,” Turner said.
Turner said enforcing the national energy efficiency standard would have added about $20,000–$31,000 in additional costs.
“That is not sustainable in our country,” he said, noting that’s on top of an average of $100,000 in regulatory costs Americans already pay for a new single-family home.
“Affordable rural housing is a top priority for the Trump Administration, and we are focused on removing all the unnecessary restrictions that artificially drive up new home prices,” USDA Secretary Brooke Rollins said in a press release.
The 2021 edition of the IECC became the applicable energy efficiency standard for FHA and USDA loan programs in 2024. Federal housing agencies are required by law to periodically update their energy efficiency standards to align with new code editions. In 2025, HUD and USDA hit pause on the regulation’s enforcement and asked for stakeholder feedback to inform an internal review.
The National Association of REALTORS® provided comments last August.
“While NAR believes building high-performing energy efficient and quality homes nationwide is necessary to address the supply crisis, we are encouraged by the agencies’ desire and efforts to provide builders with the most flexibility in meeting energy efficiency measures,” 2025 President Kevin Sears wrote in a letterpdf to HUD and USDA. “NAR, along with other industry partners, previously urged against any proposals to attach specific energy efficient building code requirements to new construction. Now, we urge you to reconsider the impacts of new requirements on housing production and support voluntary efforts that promote energy efficiency without exacerbating America’s housing challenges.”
Importantly, today’s announcement does not eliminate all energy efficiency requirements—rather it reverts them back to an older standard.
“Following an extensive review of these comments, HUD and USDA are today issuing a Joint Determination which rescinds the 2024 Final Determination in its entirety,” HUD said. “As a result, the FHA and USDA loan programs will comply with the energy efficiency standards that were in effect prior to the publication of the 2024 Final Determination.”
