In an effort to unlock more housing production and lower costs, federal agencies are pulling back on Biden-era green building codes.

The U.S. Department of Housing and Urban Development and Department of Agriculture plan to roll back energy-efficiency standards that are part of the U.S. building code, the agencies announced Wednesday. HUD and USDA argue that the standards added at least $20K in costs to homebuilding.

"By rescinding this mandate, we are removing a significant regulatory barrier that added tens of thousands of dollars to the cost of a new home," HUD Secretary Scott Turner said in a statement. "The Trump Administration’s focus is to facilitate new housing supply and ensure that every American family has a path to homeownership without being sidelined by bureaucratic red tape."

The energy-efficiency standards were issued as part of a 2024 final determination under former President Joe Biden. The determination made all new housing construction ineligible for an FHA or USDA-backed mortgage loan unless the home was built according to the 2021 International Energy Conservation Code.

HUD and USDA argue that the mandatory standard increased home construction costs between $20K and $31K, making the final product less affordable for first-time homebuyers, decreasing the amount of new housing production and drawing out the permitting and inspection timelines.

The Biden administration adopted the 2021 IECC to establish a baseline energy-efficiency code for states to adopt. The 2021 code mandated lower energy use and reduced emissions and tightened standards for high-performance building envelopes.

An April report by the White House Council of Economic Advisers found that the U.S. is roughly 10 million houses short. The council's analysts argued that regulatory cuts could ramp up development.

Last month, President Donald Trump signed two executive orders that would loosen regulations on housing development and mortgage lending.

The first order calls on federal agencies to reduce their regulatory burdens that could be holding back development. The second order would make it easier for community banks and small lenders to dole out more mortgages.

Congress is also pushing a massive housing reform known as the Road to Housing Act, which could limit the build-to-rent market and single-family rental business.