Federal Court Strikes Down HUD/USDA Energy Rule

TX Attorney General News Releases

Filed June 10th, 2024

Detected March 9th, 2026

Summary

A federal court has struck down a Biden-era rule from HUD and USDA that imposed stricter energy efficiency requirements on new home construction financed by federal programs. The court ruled the agencies lacked statutory authority and that the rule would negatively impact affordable housing availability.

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What changed

A federal court in the Eastern District of Texas has vacated a rule issued by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) in 2024. The rule mandated costly green energy requirements for new homes seeking federal financing, such as FHA-insured mortgages and USDA rural housing loans. The lawsuit, brought by 15 states and the National Association of Home Builders, argued the rule violated federal law by reducing the availability and affordability of housing and that the agencies exceeded their statutory authority.

This ruling effectively removes the energy efficiency mandates from federal housing programs, potentially lowering construction costs and increasing the availability of affordable housing. Builders and housing finance entities no longer need to comply with these specific HUD/USDA energy standards. The decision highlights the importance of statutory authority and the impact of federal regulations on housing affordability, serving as a precedent for future regulatory challenges concerning housing development.

What to do next

Review court ruling on HUD/USDA energy efficiency mandates
Confirm compliance with current building codes and federal housing financing requirements

Source document (simplified)

Attorney General Ken Paxton secured a major legal victory after a federal court struck down a Biden-era rule that threatened to reduce the availability of affordable housing by imposing costly green energy requirements for new home construction.

The lawsuit was brought by a coalition of 15 states and the National Association of Home Builders, which relied on Attorney General Paxton to argue the case in the U.S. District Court for the Eastern District of Texas.

In 2024, the U.S. Department of Housing and Urban Development (“HUD”) and the U.S. Department of Agriculture (“USDA”) issued a rule requiring that new homes be built with certain federal housing financing to comply with significantly stricter energy-efficiency building codes. The rule would have applied to housing financed through programs such as FHA-insured mortgages, USDA rural housing loans, and various federally assisted housing initiatives. These mandates required builders to install stronger insulation, higher-efficiency windows, tighter building envelopes, upgraded heating and cooling systems, and other costly requirements that would have increased construction costs and made affordable housing harder to build.

Attorney General Paxton successfully argued that the rule violated federal law because it would reduce the availability of affordable housing. Federal law allows adoption of new energy standards only if they do not negatively affect the availability or affordability of housing. The court also ruled that HUD and USDA lacked the statutory authority to impose the updated standards in 2024. As a result of the ruling, the woke 2024 energy standard has been vacated and is no longer in effect.

“The Corrupt Biden Administration’s radical policies were reducing the availability of affordable homes and making it harder for Americans to achieve the dream of homeownership,” said Attorney General Paxton. “This ruling is a major victory for homebuyers, builders, and families and helps protect access to affordable housing.”

To read the ruling, click here.