Update, November 14, 2025: USDA is one of several government entities that received appropriations for all of fiscal year 2026 in the compromise legislation that ended the federal government shutdown after a record 43 days. (The Department of Veterans Affairs, military construction, and the legislative branch also got funding for the full year.) Most agencies, including HUD, will continue to be funded at fiscal year 2025 levels through January 30, 2026, and then will need another continuing resolution or full-year appropriations.
— HAC’s post about the FY26 budget for HUD and some other housing finance programs is available here. —
The final agreement increases Section 502 direct homeownership loans to $1 billion rather than the $880 million provided in FY24 and FY25. Like most other rural housing and community facilities programs, however, Section 502 direct remains at levels below those of FY23, as shown in the table below.
The measure enlarges the demonstration program that allows some Section 521 Rental Assistance contracts to be decoupled from expiring Section 515 mortgages. In FY26 USDA can continue to support up to 5,000 RA units for tenants in properties where Section 515 mortgages have ended.
The continuing resolution/appropriations bill also provides full back pay for federal workers who were not paid during the shutdown. It cancels layoffs the administration announced during the shutdown, including the RIFs of all CDFI Fund staff and over 400 HUD employees, and prohibits further RIFs until after January 30. In addition, it extends the Farm Bill through September 30 and the National Flood Insurance Program through January 30.
Table: USDA Rural Housing Service Funding Levels
| Program ($ in millions) |
FY23 Final |
FY24 Final |
FY25 Final* |
FY26 Budget |
FY26 House, H.R. 4121 |
FY26 Senate, S. 2256 |
FY26 Final |
| 502 SF Direct Loans |
$1,250 |
$880 |
$880 |
0 |
$880 |
$1,000 |
$1,000 |
| Nat. Amer. SF Demo |
7.5 |
5 |
5 |
0 |
6 |
5 |
5 |
| 502 SF Guar. Loans |
30,000 |
25,000 |
25,000 |
25,000 |
25,000 |
25,000 |
25,000 |
| 504 VLI Repair Loans |
28 |
25 |
25 |
25 |
25 |
25 |
25 |
| 504 VLI Repair Grants |
32 |
25 |
25 |
20 |
*** |
25 |
21 |
| 515 MF Direct Loans |
70 |
60 |
60 |
50 |
60 |
50 |
50 |
| 514 Farm Labor Hsg. Loans |
20 |
15 |
15 |
11 |
15 |
15 |
15 |
| 516 Farm Labor Hsg. Grants |
10 |
7.5 |
7.5 |
6.2 |
7.5 |
7.5 |
6 |
| 521 Rental Asst. |
1,488 |
1,608 |
1,608 |
1,715 |
1,715 |
1,715 |
1,715 |
| 523 Self-Help TA |
32 |
25 |
25 |
0 |
20 |
25 |
25 |
| 533 Hsg. Prsrv. Grants |
16 |
10 |
10 |
0 |
** |
10 |
6 |
| 538 MF Guar. Loans |
400 |
400 |
400 |
400 |
400 |
400 |
400 |
| 542 Vouchers |
48 |
48 |
48 |
0 |
48 |
48 |
48 |
| Rental Prsrv. Demo (MPR) |
36 |
34 |
34 |
15 |
30 |
34 |
30 |
| Rental Prsrv. TA |
2 |
1 |
1 |
0 |
0 |
2 |
2 |
| Rural Cmty. Dev’t Init. |
6 |
5 |
5 |
0 |
6 |
5 |
5 |
| Cmty. Facil. Direct Loans |
2,800 |
2,800 |
2,800 |
1,250 |
1,000 |
1,250 |
1,250 |
| Cmty. Facil. Grants |
25 |
5 |
5 |
0 |
*** |
5*** |
13*** |
| Tribal Colleges CF Grants |
10 |
8 |
8 |
0 |
8 |
8 |
8 |
| Cmty. Facil. Guar. Loans |
650 |
650 |
650 |
650 |
650 |
650 |
650 |
Abbreviations key
-
- NA: Not Available
- MF: Multifamily (Rental)
- SF: Single-Family (Homeownership)
- TA: Technical Assistance
- VLI: Very Low-Income
* A full-year continuing resolution (CR), signed into law on March 15, 2025, funds the federal government through September 30, the end of fiscal year 2025. The CR provides flexibility for USDA to move funds among Rural Development programs to make their funding levels as near as possible to the levels in FY24, and specifically instructs the department to transfer $34 million from other RD programs to Section 521 Rental Assistance. The CR instructs agencies to submit plans to Congress by late April showing how they will divide their appropriated funds among programs, but USDA’s plan seems not to be publicly available. This table assumes that all programs have the same funding in FY25 as in FY24, although that may not be the case.
** The bill would provide $20 million for Section 504 grants and Section 533 grants combined.
*** The Community Facilities grants program amounts shown here exclude earmarked amounts. The final FY25 appropriation designates just over $659 million in CF grants funding for earmarks.
UPDATE, August 5, 2025: The full Senate passed a fiscal year 2026 funding bill for USDA on August 1. Like the version that has passed the House Appropriations Committee, the Senate’s measure rejects many of the cuts proposed by the administration’s budget. Details are in the table below.
The full House has not yet considered its bill, and Congress is on recess until after Labor Day. Before September 30, the House should pass a bill, the House and Senate should resolve any differences between their bills, and the final version should be signed by the president. If they do not meet that deadline, a continuing resolution would be needed to keep all or part of the government running. For updates, subscribe to HAC emails, which include the free biweekly HAC News.
The Senate bill would raise Section 502 direct funding to $1 million, higher than the $880 million that has been appropriated in the last two years and is again proposed by the House. It would also hold the Section 523 self-help program at $25 million, above the $20 million proposed by the House. The administration would have eliminated support for both Section 502 direct and self-help.
Like the House and the administration, the Senate would set Section 521 Rental Assistance at $1.715 billion to support current tenants. The Senate bill would drop Section 515 to $50 million rather than $60 million, but would hold Section 514/516 farm labor housing loans and grants at their current levels. It would provide steady funding for vouchers and the MPR preservation program as well. Technical assistance for rental preservation would receive an increase to $2 million.
The bill also eliminates funding for the Rural Partners Network initiative, according to the Senate majority’s press release on the bill, and maintains “Buy America” provisions requiring the use of domestic products.
The House draft and the administration’s budget are early steps in the process of setting appropriations for FY26. Both the House and the Senate will develop their own appropriations bills, which may or may not resemble the President’s proposal. The House and Senate should resolve any differences between their bills and send final versions to the President for signature by September 30. If they do not meet that deadline, a continuing resolution would be needed to keep the government running.
The budget reconciliation bill to set future spending and taxation levels is a separate legislative process, though it could have an impact on FY26 appropriations if Congress agrees on a bill.
UPDATE: On June 23, the House Appropriations Committee approved H.R. 4121, its bill to fund USDA for FY26. The bill’s provisions related to rural housing and community facilities were the same as those included in the June 4 draft.
On June 4, the House Appropriations Committee released its draft funding bill for the U.S. Department of Agriculture for fiscal year 2026, which begins on October 1, 2025. A subcommittee will mark up the bill on June 5, and the full House committee will review it on June 11. The Senate Appropriations Committee has not yet released a draft bill or a markup schedule.
The White House’s FY26 budget request was published only a few days earlier, on May 30, providing numbers for individual programs that were not all included in the “skinny budget” issued on May 2.
The House draft bill proposes funding levels very similar to those in FY24/25, whereas the administration’s budget requests significant funding cuts. Details are provided in the table below.
USDA Homeownership Programs
The House bill would maintain the Section 502 direct and guarantee programs at their current levels, but would drop Section 523 self-help from $25 million this year to $20 million. The budget would eliminate funding for a number of USDA housing programs, including the Section 502 direct mortgage program and the Section 523 self-help program.
USDA Rental Housing Programs
Most of the rental housing programs would remain at current funding levels under the House bill, although it would reduce the Multifamily Preservation and Revitalization Program from $34 million this year to $30 in FY26. The administration’s budget, on the other hand, would reduce funding for Section 515 rental housing loans, Section 514/516 farm labor housing loans and grants, and MPR.
The administration’s budget would provide no funds for the Section 542 voucher program. Ending these vouchers has been proposed in the past – for example, last year’s budget request for FY25 would not have funded new USDA vouchers but it included funds to renew existing USDA vouchers. (Since the final appropriation for FY25 was a continuing resolution based on FY24 funding, it did provide money for new vouchers as well as renewals.) The FY26 budget, however, would not provide ongoing support for current voucher holders. According to a USDA budget summary, “the majority of the legacy voucher holders will be able to adjust without the continued assistance, or with alternative local, state and Federal programs.”
Both the House and the administration would protect some tenants in properties whose Section 515 or 514 loans end by “decoupling” Rental Assistance from Section 515 loans. USDA is currently running a demonstration program for such Stand-Alone Rental Assistance. The House would maintain current language that allows decoupled RA to be used regardless of the reason for the loan’s termination, but the budget would permit it only when a loan matures, not when the owner prepays the loan. Advocates have suggested it is inappropriate to continue RA when owners prepay, because they are required to keep the units affordable for tenants who remain, even if they do not receive the ongoing subsidy from RA. The administration’s budget does not explain whether it is adopting this reasoning.
The House’s request for Section 521 Rental Assistance seems to be taken directly from the budget request. While the budget does seek an increase for RA – which would be necessary to renew existing RA units, given inflation – it is unclear whether some tenants may lose RA. The official budget document says that amount is “for renewals of existing rental assistance contracts for maintaining a sustainable rental assistance program,” but does not explicitly say that all existing RA contracts will be renewed. A USDA Explanatory Statement says the agency expects this amount will renew about 280,000 units, but does not indicate whether that is the total number of contracts up for renewal. As this web page is posted on June 4, HAC is trying to verify the details; this page will be updated if we receive information.
The budget proposes to add language specifying that a portion of MPR preservation funds can be transferred to other programs – as is always permitted – but it would not require USDA to notify Congress before moving the funds.
USDA Rural Development Staffing
Government Executive, an independent publication, calculated that the administration’s budget would reduce USDA’s total staffing level by 22 percent. The budget document indicates that, with its requested dollar levels, USDA Rural Development staff (which includes personnel at the Rural Housing Service, the Rural Business-Cooperative Service, and the Rural Utilities Service) would fall by 31.7 percent from FY25 to FY26. It is not clear whether the stated FY25 staffing levels take into account some or all of the layoffs that have been attempted in calendar year 2025.
Technical Assistance and Other Provisions
The Rural Community Development Initiative, which provides technical assistance to rural housing and community development organizations, would receive $6 million in the House bill, but none under the administration’s budget. Neither the House nor the administration would support technical assistance for rental preservation, community facilities, or farm labor housing.
The House bill includes a provision that has been standard in USDA appropriations for several years, requiring 10 percent of the funding for many Rural Development programs to be used in persistent poverty counties. The administration’s budget does not include that language.
The House bill would preclude USDA’s housing programs from implementing energy efficiency standards that both USDA and HUD adopted in 2024 but have not yet put into effect. The administration’s budget does not include that language.
