TOP STORIES

$180 million in Section 502 direct funds lost as fiscal year ends

When fiscal year 2026 ended on September 30, the Section 502 direct mortgage program had obligated $571 million for 2,115 loans, an average of $269,000 per loan. The program received a $1 billion appropriation, $250 million of which can be used in FY27. The rest of the unused funds, about $180 million, expired. The demand for Section 502 direct loans usually far exceeds the available funds; the National Rural Housing Coalition calculates that over the previous ten fiscal years, USDA used all of the program’s money, generating an average of more than 5,400 Section 502 direct loans worth $1.01 billion each year. NRHC, as well as members of Congress who expressed concerns in a letter to USDA, blamed the FY26 record on major changes USDA made to the program in February, which capped loan amounts, cut packaging fees, and added steps in the agency review process. A USDA news release focused on “record processing speed, improved credit quality, and full multi-year deployment” and said the reduced obligation rate was a result of the federal government shutdown at the beginning of FY26.

Judge temporarily halts pocket rescission of housing counseling funds

On September 25, President Trump informed Congress that he would rescind $810 million appropriated by Congress for several programs, including $56.1 million of the $57.5 million provided for HUD’s housing counseling program in FY25. The funds were due to expire at the end of FY26 on September 30. A group of housing organizations filed suit on September 29, asking a federal judge to protect the housing counseling funds. The judge acted on the same day, temporarily suspending the September 30 expiration. She asked the parties to provide complete written arguments by October 19. Separate suits have been filed challenging the rescissions of other funds.

New HAC report advances understanding of housing conditions and access for agricultural workers

A new research report from HAC, developed in partnership with UnidosUS, examines what is known and unknown about the housing conditions, options, and challenges facing agricultural workers across the United States. The report synthesizes existing research and expert insights while introducing and testing a framework for assessing agricultural worker housing across different geographies and community types. By identifying critical knowledge gaps and opportunities for further research, the publication provides a roadmap for strengthening housing policies, investments, and strategies that support the nation’s essential agricultural workforce.

RuralSTAT

While most farmworkers in the private market rent, farmworkers own homes at higher rates than ever before. Around 30% of farmworkers reported owning a home or manufactured home in the United States, compared to nearly two-thirds of all households in the United States. Source: HAC, The Housing Ecosystem for Agricultural Workers.

REGULATIONS AND FEDERAL AGENCIES

Pause in USDA staff relocations extended to October 13

In September a federal judge in California froze USDA’s relocation orders for staff in several of the department’s agencies, including Rural Development, until October 2. He has now lengthened that pause through October 13 while court proceedings move forward.

IRS requests comments on using Opportunity Zones on Tribal lands, with for-sale housing, and more

As it updates its Opportunity Zone regulations, the IRS asks for information on how the Opportunity Zone incentive has been used in Tribal and Alaska Native communities, as well as clarifications that might encourage such investment. It would also like analyses of ways to enable the OZ incentive to support HUD programs and to expand investment in single-family home construction, particularly through coordination with the New Markets Tax Credit. Input on other aspects of the OZ regulations is invited as well. Comments are due November 23.

USDA revises fees and categories for Section 538 multifamily guaranteed loans

USDA announced revised initial and annual guarantee fees for Section 538 multifamily housing guaranteed loans. Fees are reduced for workforce housing and for preservation of existing USDA-financed multifamily properties. A category designated as Section 538 New Construction/Substantial Rehabilitation of Properties Located in Qualified Opportunity Zones has replaced a former category for Section 538 New Construction/Substantial Rehabilitation with Green.

Final rule changes Rural Energy for America Program

USDA’s Rural Business-Cooperative Service issued a final rule on October 1 significantly changing the grant portion of the Rural Energy for America Program, which helps agricultural producers and rural small businesses to purchase and install renewable energy systems or make energy efficiency improvements. Under the new rule, projects must be fully built and operational for a year before the applicant applies, and some types of projects are now ineligible. This final rule follows a series of changes and delays that led to a lawsuit filed on September 28 by a group of farmer entities and solar energy advocates, charging that USDA could not cancel previous awards to revise the program retroactively. The final rule, which was issued without a proposed rule process, is effective October 16. USDA will accept comments through November 2.

Census extends comment deadline on citizenship and race data

The Census Bureau has moved the deadline for commenting on changes it proposes for the 2030 decennial census. It suggests excluding people without legal status and prohibiting questions about race, ethnicity, or sexual orientation. Instead of October 13, comments are now due November 2.

DDAs and QCTs announced

HUD has posted its FY27 lists of Difficult Development Areas and Qualified Census Tracts for the Low-Income Housing Tax Credit program.

HUD releases plan for manufactured housing

A Next Generation Manufactured Housing Action Plan outlines HUD’s strategy to modernize and support updated codes and guidance. The department will update the HUD Code that governs manufactured housing construction, develop resources for chassis-free building as permitted under the 21^st Century ROAD to Housing Act, and more.

Input sought on inspection scoring

HUD proposes revisions to the scoring notice for the National Standards for the Physical Inspection of Real Estate (NSPIRE) and Associated Protocols, which it is required to review every three years. Comments are due November 30.

HUD set to transition emergency vouchers to tenant protection

The continuing resolution that funds the federal government through December 11 also requires HUD to transition over 40,000 families from Emergency Housing Vouchers to Tenant Protection Vouchers. HUD has issued Notice PIH-2026-25 to guide public housing agencies through the process, which should be completed by December 31.

Agencies agree to work together on environmental review and physical inspection

Fulfilling a requirement of the 21st Century ROAD to Housing Act, HUD and USDA have signed a Memorandum of Understanding committing to work together “to streamline standards related to environmental review, environmental impact, environmental regulations, and physical inspections tied to housing.” The departments will report to Congress on their activities by July 11, 2027.

Federal Housing Finance Administration inspector general objects to budget cut

On September 30 the Federal Housing Finance Administration announced a steep cut in the budget and staffing of its inspector general’s office, saying this would bring its OIG spending into line with that of other agencies. The acting inspector general responded with a letter to Congress charging the amount is “insufficient to support the effective execution of oversight and investigative duties of our office.” He argued that the responsibilities of FHFA’s OIG are greater than those of other OIGs and that the budget decrease “will result in the discontinuance of essentially all criminal investigations conducted by our Office of Investigations.”

EVENTS

HAC to hold webinars on rural rental preservation

HAC will present a new webinar series in October focused on some of the most pressing issues affecting the USDA rural rental housing portfolio. These sessions will provide practical information for nonprofit organizations, housing developers, community leaders, and others interested in preserving affordable rural housing. Webinar 1: Understanding the Section 515 Portfolio and Transfer Process is scheduled for October 14. Webinar 2: Stand-Alone Rental Assistance Explained will take place on October 21. Webinar 3: Owning and Operating Section 515 Properties will be held on October 28.

PUBLICATIONS AND MEDIA

Research shows characteristics of rural Opportunity Zones with more construction

Opportunity Zones: Analyzing the Tax Incentive’s Impacts, and How to Enhance Them by the Brookings Institution and AmericaFWD, reports on an analysis of data that indicated where construction occurred annually, but not whether the structures built were multifamily, single-family, or commercial. Increases of at least 15% in building activity occurred in 46% of Opportunity Zones, though rural zones were disproportionately likely to see lower rates of increase. A closer look at rural places, the authors write, found that rural tracts had more activity when they had lower poverty, were closer to activity centers in metropolitan areas, and were more racially diverse.

Rural wealth building strategies identified

The Aspen Institute reports that rural households’ median net worth in 2022 was $146,400, which was 24% less than the national median of $192,900, and that rural wealth is less diversified. Rural residents are more likely to be homeowners than others, but rural workers are less likely to have workplace retirement plans and they hold more of their wealth in small businesses. In a publication titled Innovations to Accelerate Rural Wealth Building, Aspen suggests three strategies: expand access to investing, improve housing quality and reduce operating costs, and grow employee ownership.

HAC

Need capital for your affordable housing project?

HAC’s loan fund provides low interest rate loans to support single- and multifamily affordable housing projects for low-income rural residents throughout the U.S. and territories. Capital is available for all types of affordable and mixed-income housing projects, including preservation, new development, farmworker, senior and veteran housing. HAC loan funds can be used for pre-development, site acquisition, site development, construction/rehabilitation and permanent financing. Contact HAC’s loan fund staff at hacloanfund@ruralhome.org, 202-842-8600.

Please note: HAC is not able to offer loans to individuals or families. Borrowers must be nonprofit or for-profit organizations or government entities (including Tribes).

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