Habitable Housing Conversion Pilot Program Act of 2026

This bill establishes a pilot program for the Secretary of Housing and Urban Development to insure mortgages, under Section 203(k) of the National Housing Act, for converting basement spaces in owner-occupied properties into safe, habitable dwelling units. These units must be made available for rental and comply with all State, local, and HUD-issued building and safety standards and codes. The program will operate for a 5-year period , allowing for the insurance of up to 150,000 mortgages . The Secretary must consult with FEMA and NOAA to identify hazard-prone areas and may prioritize properties in such locations. Upon the program's expiration, a comprehensive report will be submitted to Congress, assessing its effectiveness, identifying any issues, and recommending future actions regarding its continuation or modification.