The Housing Assistance Council is an independent, non-partisan and regularly responds to Congressional committees, Member offices, federal agencies, and policy advocacy coalitions with the research and information needed to make informed policy decisions. Our research work, Rural Data Portal, and Veterans Data Central all provide valuable, educational context to frame the rural policy conversation. If you want to know how a new program or policy could impact America’s small towns and rural places, please don’t hesitate to contact us at policy@ruralhome.org.

Rural Provisions in the 21st Century ROAD to Housing Act

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The 21st Century ROAD to Housing Act, hailed by HAC CEO David Lipsetz as “an important step forward in addressing the nation’s housing affordability crisis,” includes a wide variety of provisions. The key provisions related to affordable housing in rural America are summarized below, followed by links to others’ analyses of the law’s other provisions.

It is important to note that many of the law’s provisions require further action by federal agencies and/or Congress before they will impact the U.S. housing supply. Some require agencies to develop regulations or conduct studies. Others – including some provisions related to preserving rural rental housing – will not be effective unless Congress adds funds in future appropriations bills.

It is still possible, though perhaps unlikely, that funds could be provided for fiscal year 2027. USDA FY27 funding has been approved by the House without any 21st Century ROAD to Housing provisions because the appropriations bill passed first. Similarly, the House Appropriations Committee approved a HUD funding bill before ROAD passed. The House has also supported a continuing resolution to take effect on October 1 for appropriations bills that are not completed, and continued FY26 spending would not include ROAD provisions. The Senate has not yet released draft text or voted on a continuing resolution, an FY27 USDA spending bill, or an FY27 HUD bill.

Rural Rental Housing Preservation

Decoupling: Usually Section 521 Rental Assistance can be provided only if a property has an active Section 515 or 514 loan. ROAD changes this by “decoupling” the Rental Assistance from the USDA loan in certain circumstances. The loan must be within four years of expiration. USDA must determine that the loan cannot be restructured, or the property owner must decline to restructure it. The property must have Rental Assistance already. If all these conditions are met, USDA can renew the existing RA contract for 20 years, subject to annual appropriations. USDA can also extend the RA to cover unassisted units at a property where existing RA is being decoupled. (ROAD Section 502(e))

Preservation and Revitalization Program: The Multifamily Preservation and Revitalization Program (MPR) is permanently authorized with a number and a revised name: the Section 545 Housing Preservation and Revitalization Program. (ROAD Section 502(e))

Preservation Technical Assistance: USDA may make grants to nonprofits, coops, and public housing agencies to provide technical assistance for preservation. (ROAD Section 502(e))

Notices to Owners and Tenants: USDA is required to send written notices every year to owners whose mortgages will mature within four years, and tenants who live in properties with mortgages that will mature within two years. (ROAD Section 502(e))

Regulations: USDA must publish a notice of proposed rulemaking within 180 days of the law’s enactment (approximately January 7, 2027) and an interim final rule by July 11, 2027. (ROAD Section 502(e))

Two-Step Transfers: When a nonprofit or limited partnership purchases a Section 515 property to preserve it, the ownership transfer may occur before rehabilitation. (ROAD Section 502(n))

Vouchers: By July 11, 2028 (within two years of ROAD’s enactment), USDA must issue regulations establishing a process for adjusting the amounts of rural housing vouchers annually and when tenants’ incomes change. (ROAD Section 502(k))

Other Rural Housing Provisions

Staffing and Technology: If Congress appropriates funds for these purposes, USDA may increase its staff and upgrade its information technology systems for the rural housing programs.

Section 502 Direct: Effective immediately, USDA has the authority to extend a Section 502 direct loan for a term up to 40 years after the date of loan refinancing or modification. (ROAD Section 502(o))

Section 502 Guaranteed: Child care providers who are licensed or regulated under state or Tribal law to run their businesses in their homes are eligible for Section 502 guaranteed loans. Properties that include Accessory Dwelling Units are eligible for Section 502 guaranteed loans. (ROAD Sections 502(q) and (r))

Section 504: Home repair loans and grants under Section 504 have been available for very low-income homeowners only. ROAD extends the eligibility for loans (but not grants) to include homeowners with low incomes. Also, for years, the law has required USDA to place a mortgage on any property receiving a Section 504 loan over $7,500. ROAD raises that minimum to $15,000. (ROAD Section 502(g))

Rural Community Development Initiative: The law authorizes the RCDI capacity building program with a $500,000 cap on grants. (ROAD Section 502(h))

Environmental Review

Exemption from Review: USDA-financed construction or modification on an infill site is exempt from environmental review. An “infill site” is defined as a site served by existing infrastructure including water lines, sewer lines, and roads. By July 11, 2031, USDA must submit a report to Congress on the impact of this exemption. (ROAD Section 103)

Coordination with HUD: ROAD requires HUD and USDA to develop a memorandum of understanding by early January 2027 (180 days after the law’s enactment) to coordinate their environmental review processes for projects that receive funds from both departments. By July 11, 2027 they must report to Congress on ways to improve the review process for jointly funded projects. (ROAD Section 802)

Finance and Banking

Public welfare investment: The amount banks are permitted to use for public welfare investment, known generally as the PWI cap, is increased in Section 203 of the law. The provision applies to national banks (regulated by the Comptroller of the Currency) and to state banks that are regulated by the Federal Reserve. Previously they were permitted to invest up to 15% of their capital and surplus in public welfare activities, which can include Low-Income Housing Tax Credits, support for small businesses, and the like. ROAD to Housing raises the cap to 20%.

Rural lenders studies: The law requires two studies examining rural lenders. The federal bank regulators (the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve) must produce a joint study regarding the institutions they oversee, and the National Credit Union Administration must conduct a similar one for credit unions. Both studies will identify ways to “improve the growth, capital adequacy, and profitability” of institutions that primarily serve rural areas, then identify federal statutes or regulations that limit those lenders’ work or the establishment of new rural institutions. Both studies are due to Congress July 11, 2027. (ROAD Section 909)

Native American Housing

Tribes and Tribally Designated Housing Entities are specifically eligible for new and revised programs under the law, but it does not otherwise address Native housing programs.

Research and Reports

The 21st Century ROAD to Housing Act requires federal agencies to provide many reports to Congress about their progress in implementing the law’s provisions. Related to rural housing, these reports include:

Section 502 direct loans subsidy recapture: Within six months after the law’s enactment (mid-January 2027), USDA must submit a publicly available report to Congress on subsidy recapture. Homebuyers using the Section 502 direct mortgage program are required to repay a portion of their subsidy amounts when they sell their homes or pass away. The report to Congress must include information about the total subsidy amount provided, how much is being recaptured, and the amount of time and costs associated with recapturing those subsidies. (ROAD Section 502(b) (which refers to Section 521 but is not about Section 521 Rental Assistance)).

Annual report to Congress: USDA must prepare an annual report on the rural housing programs and publish it online. (ROAD Section 502(i))

GAO report: By July 11, 2027, the Government Accountability Office must provide a report to Congress analyzing the impact of outdated RHS technology on borrower services and costs and estimating the funding and staffing needed to modernize it. (ROAD Section 502(j))

Processing backlog report: By October 9, 2026, and every year after that, USDA  must report to Congress on the status of its processing backlog for Section 502 and 504 loan applications. (ROAD Section 502(s))

Resources for More Information

Comparison of Selected Versions of H.R. 6644, Congressional Research Service, July 2026.

Implementation Matrix for the 21st Century ROAD to Housing Act, National Association of Affordable Housing Lenders and the Center for Affordable Housing Lending, July 2026.

ROADmap: An Implementation Guide for the 21st Century ROAD to Housing Act, National Association of Affordable Housing Lenders and the Center for Affordable Housing Lending, July 2026.

The 21st Century ROAD to Housing Act is Now Law: What it Means for Tribal Housing, National American Indian Housing Council, July 11, 2026.

21st Century Road to Housing Act: Impacts on Low-Income Households, National Low Income Housing Coalition, July 2026.

HAC CEO Applauds Bipartisan Housing Bill, Calls For Further Action to Address Rural Housing Affordability Crisis

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UPDATE: President Trump had been scheduled to sign the bill at noon Eastern time on June 24, but at 10:30 am he posted on Truth Social, “Today’s Housing News Conference and Signing is hereby cancelled until such time as we pass the desperately needed SAVE AMERICA ACT, which I consider to be a National Emergency.” If he vetoes the bill within ten days, Congress will have the opportunity to override the veto. If he takes no further action, the measure will become law without his signature after ten days.  

*******

The Housing Assistance Council (HAC) welcomes Congress’s passage of the 21st Century ROAD to Housing Act. As housing challenges continue to affect communities across the country, this legislation reflects meaningful bipartisan progress. It has now passed both the House and the Senate and President Trump is expected to sign it into law.

“This legislation marks an important step forward in addressing the nation’s housing affordability crisis,” stated David Lipsetz, HAC’s President and CEO. “HAC thanks Banking Committee Chair Scott (R-SC) and Ranking Member Warren (D-MA) and Financial Services Committee Chair Hill (R-AR) and Ranking Member Waters (D-CA) for their remarkable collaboration and persistence.”

HAC is particularly pleased that the final bill includes specific provisions of the Rural Housing Service (RHS) Reform Act.  Championed by Senators Rounds (R-SD) and Smith (D-MN), and Representatives Nunn (R-IA) and Cleaver (D-MO), this bicameral, bipartisan bill makes commonsense improvements to the country’s housing programs for rural Americans with lower incomes.  Its broad support among rural stakeholders was demonstrated when over 200 national and local organizations signed on to a letter circulated by HAC supporting the inclusion of the RHS Reform Act in the final package. 

“USDA’s housing programs work. By investing in both rental housing and homeownership, millions of rural families, seniors, and workers have helped thousands of small towns across the country to thrive. This legislation modernizes and permanently authorizes a range of single-family, multifamily, and rural capacity building programs that have proved effective for decades,” noted Lipsetz.  “Most important, today’s bill provides USDA’s Rural Housing Service (RHS) with new and improved tools to preserve the Department’s ‘Section 515’ multifamily portfolio.  Two-thirds of this precious stock of apartments are rented by families with elderly or disabled members, and the average household income is barely $18,000. All too often a 515 apartment is the only affordable rental option in town, which makes it even more tragic that we’ve lost tens of thousands of the units originally financed by the program. The RHS Reform Act provisions of the 21st Century Road to Housing Act provide real options for local housing stakeholders to access new sources of financing to preserve the remaining 380,000 units.”

“The 21st Century Road to Housing Act is an important step forward, but it won’t end our housing crisis,” cautioned Lipsetz.  “Significant work remains to ensure that all Americans have access to a safe and affordable home.  In particular, Congress must move quickly to level the playing field for rural housing markets, which are often less well-served by the housing finance system’s policy and programs than their urban and suburban counterparts.”

“First, Congress must revisit key elements of the RHS Reform Act did not make it into today’s bill,” Lipsetz added. “This includes expanding a successful USDA RHS Section 502 Direct Loan pilot program that helps Native Community Development Financial Institutions offer more homeownership opportunities to Native Americans. The current pilot enjoys broad bipartisan support and is designed to address some of the worst housing situations in the U.S.” 

“Second, bipartisan tax legislation is needed to fully include rural America in the housing benefits of last year’s One Big Beautiful Bill Act (OBBA),” Lipsetz continued.  “Like the rest of the affordable housing industry, HAC was pleased that the OBBA substantially expanded the Low Income Housing Tax Credit (LIHTC).  But we were disappointed that the final package dropped a broadly-supported provision of the Affordable Housing Tax Credit Act that designated rural places and Tribal lands ‘Difficult Development Areas,’ thus able to attract LIHTC equity investments at a level enjoyed by other parts of the country. Rural America needs Congress and the Administration to handle this unfinished business.”  

“Notably, developers seeking to rehab or develop new affordable homeownership units lack a LIHTC-type tax credit to spur supply,” observed Lipsetz.  “While far from alone in this, rural communities suffer disproportionately from the ‘value gap’ – the term coined to describe situations where it costs more to fix or build a home than it will appraise for.  The Neighborhood Homes Investment Act (NHIA) is a bipartisan, broadly supported federal tax credit that would help make such transactions ‘pencil out’ to the benefit of low- and moderate-income homeowners and prospective homebuyers in communities that are not well served by current law.”

“Finally,” Lipsetz emphasized, “today’s legislation won’t have an impact if the Administration does not allow rural families and small towns to access the funds in a timely manner that Congress has already provided for rural housing programs. Millions of dollars rural America desperately needs for housing and community development are sitting at Treasury, HUD and USDA.  HAC urges the Administration to quickly allocate those funds and accelerate the nation’s response to the housing crisis. If the Administration delays further and Congress wants to keep its commitment to rural communities, it will be necessary to strengthen the language in agencies’ annual appropriations to compel allocation of the funding.”

“The 21st Century ROAD to Housing Act significantly improves our nation’s federal housing programs,” Lipsetz concluded. “We will continue to work with Congress and the Administration until every American – including those in small towns and rural places – is in a good quality home they can afford.”

House Committee Advances FY27 HUD Funding Bill With Policy Changes

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Update, June 11, 2026 – On June 3 the House committee passed its FY27 appropriations bill for HUD (H.R. 9170) with some amendments to the text of the version passed by the Transportation-HUD subcommittee on May 21. Adopted amendments would block HUD funding to jurisdictions that do not cooperate with immigration enforcement, maintain the full range of housing counseling programs, and direct HUD to continue assisting families with mixed citizenship statuses.

— Information about FY27 funding for the U.S. Department of Agriculture’s rural housing programs is available here. —

On May 21 the House Transportation-HUD Appropriations Subcommittee approved a fiscal year 27 funding bill that rejects many cuts proposed in the administration’s budget but would provide some programs with lower dollar amounts than they received in FY26. Details are shown in the table below.

The HOME program would be reduced from $1.25 billion in FY26 to $500 million in FY27, while Community Development Block Grants would remain at $3.3 billion. Native American housing would receive a moderate increase overall. The Continuum of Care program would not be eliminated, as the administration’s budget proposed, but its funding would be reduced. Fair housing would also be cut back, but the bill would not eliminate the Fair Housing Initiative Program, which was targeted in the budget proposal. Similarly, it would shrink but not zero out funding for housing counseling.

The bill would eliminate Build America, Buy America requirements for the HOME, CDBG, Public Housing Operating and Capital Funds, the Self-Help Homeownership Opportunity Program, and Native American programs in FY27 and prior years.

The full House Appropriations Committee is scheduled to mark up the bill on June 3. The Senate committee has not yet released a bill or announced a schedule for considering one.

Table: HUD Funding Levels

Program ($ in millions)

FY26 Final

FY27 Budget

FY27 House (H.R. 9170)

FY27 Senate*

FY27 Final*
CDBG

$3,300

0

 $3,300
HOME

1,250

0

 500
PRICE Manuf. Hsg. Prsrv.

0

0

 0
Self-Help Hmownrshp (SHOP)

12

16**

 12
Veterans Home Rehab

0

0

 0
Rural Cap’y Bldg (RCB)

7

0

 6
Tenant-Based Rental Asst.

38,439

38,846

 38,083
     VASH

15

0

 0
Project-Based Rental Asst.

18,143

17,640

 18,975
Public Hsg. Capital Fund

3,200

3,200

 2,286
Public Hsg. Operating Fund

5,024

5,377

 4,737
202 Hsg. for Elderly

1,031

959

 1,062
811 Hsg. for Disabled

287

266

 296
Native Amer. Hsg.

1,354

887

 1,400
     Native Hawaiian

22.3

0

 15
     Tribal HUD-VASH

10

10

 10
Homeless Asst. Grants total

4,417

4,024

 4,161
     Emergency Solutions Grants

290

4,024

 290
     Continuum of Care

4,010

0

 3,779
      Permanent Supportive Housing

52

0

 52
Hsg. Oppties for Persons w/ AIDS (HOPWA)

529

0

 529
Fair Hsg.

86.4

26

 48.5
Healthy Homes & Lead Control

296

110

 296
Hsg. Counseling

57.5

0

 26

* These columns will be filled in as the appropriations process moves forward.

**The budget proposes $16 million to be earmarked for Habitat for Humanity’s SHOP and Section 4 technical assistance activities. Other SHOP grantees such as HAC would receive no funding.

HUD Budget Would Eliminate Several Programs, Cut Others

April 3, 2026 – As it did last year, the administration proposes to eliminate the HOME and Community Development Block Grant programs at the Department of Housing and Urban Development. Its budget request for fiscal year 2027, released on April 3, would also cut funding for Native American and Native Hawaiian housing, defund capacity building programs including the Rural Capacity Building program, earmark all Self-Help Homeownership Opportunity funds to Habitat for Humanity, and completely revamp the federal approach to aiding people experiencing homelessness.

A recording of a HAC webinar held on April 8 is available here. Panelists covered what the budget includes for rural housing programs at USDA, HUD, and the CDFI Fund, and what the rest of the funding process will look like.

Consistent with changes the administration has proposed for the FY24-26 Continuum of Care program, which have been challenged in court, the budget would direct its entire $4.02 billion in homeless funding to the Emergency Solutions Grants program and none to Continuums of Care. ESG funds, $290 million in FY26, are distributed to state and local governments. The budget proposes language to prioritize this ESG spending on transitional housing, to allow preferences for elderly people or those with disabilities, and to give HUD special flexibility in administering the program.

Native American housing funds would be reduced by one-third. Fair housing would also see a large cut: the Fair Housing Assistance Program, which funds state fair housing activities, would receive $26 million, slightly below its $26.4 million level in FY26. No funding would be provided for the Fair Housing Initiative Program, fair housing training, or assistance for people with limited English proficiency.

Public housing agencies would be required to impose work requirements for most people receiving rental assistance, and households would be limited to five years of aid.

A new $30 million program would combat fraud, waste, and abuse in federally assisted housing.

Next Steps

This budget represents the first step in a lengthier process to set appropriations for FY27. 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.

For ongoing news on appropriations and other topics related to rural housing, subscribe to HAC emails, which include the free biweekly HAC News.

 

House Approves FY27 Funding Bill for USDA

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Update June 11, 2026 – The full House passed its FY27 USDA appropriations bill (H.R. 8646) on June 4, making no changes in the rural housing provisions passed on April 29 by the House Appropriations Committee.

— Information about FY27 funding for the Department of Housing and Urban Development is available here. —

April 30, 2026 – The House Appropriations Committee approved its FY27 funding bill for USDA on April 29. There is no indication yet when the bill might be considered on the House floor or when the Senate may begin work on its version of the measure.

The dollar amounts passed by the committee are shown in the table below. The bill also takes steps to undo the administration’s recent changes to the Section 502 direct program. First, it requires the Section 502 direct loan limit to remain at 80% of HUD’s limit unless USDA lowers it through a formal rulemaking procedure.

Second, the non-binding report that accompanies the bill “encourages” USDA to eliminate the new requirement for multiple reviews by State Directors and requests extensive reporting back to the committee:

The Committee notes that revisions to the Section 502 handbook issued by RHS on February 10, 2026, made substantial changes in the Section 502 direct loan program, including lower limits and review of eligibility and loan approval by State directors of all Section 502 loans. The bill includes language prohibiting RHS from implementing the loan limit change that has negatively impacted certain areas of the country and directs RHS to revert to the previous loan limit immediately. The Committee is also concerned that recent changes requiring multiple State Director reviews of individual loan applications may introduce unnecessary delays in program delivery and encourages the Department to revert to a single review pending any future changes developed through notice-and-comment rulemaking.
The Committee directs the RHS Administrator to provide monthly briefings on this program, including analyses and impact on rural families seeking homeownership loans. Briefings shall include, by State, information on the number and dollar amount of Section 502 loans made and the number and dollar amount of loan applications on hand. The Committee is also aware that over 1,000 loan applications were on file at RHS before implementation of the handbook revisions. RHS is directed to provide a report on those loan applications, the number approved, the number rejected due to the handbook revisions, and what measures RHS is taking to assist loan applicants who were rejected due to the handbook changes. RHS is also directed to provide information to the Committee on loan processing time by State and to provide a comparison with processing time for fiscal year 2025.

Neither the bill nor the report addresses USDA’s changes to loan packaging fees.

House Proposes to Hold Most Rural Housing Programs at FY26 Funding Levels

April 22, 2026 – The House Appropriations Committee has released its proposed FY27 funding bill for USDA. As shown in the table below, the bill would keep almost all of the rural housing and community facilities programs at their FY26 dollar levels. It would increase Section 502 guaranteed lending and Section 521 Rental Assistance, as requested in the administration’s budget. It would continue to allow decoupling of Rental Assistance from Section 515 or 514 mortgages when those mortgages end, with a limit of 5,000 units.

The House agriculture appropriations subcommittee will mark up this bill on Thursday, April 23. The full committee is scheduled to review it on April 28.

The process to set appropriations for FY27 is still in its very early stages. 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.

For ongoing news on appropriations and other topics related to rural housing, subscribe to HAC emails, which include the free biweekly HAC News.

Table: USDA Rural Housing Service Funding Levels

Program

($ in millions)

FY26 Final

FY27 Budget

FY27 House (H.R. 8646)

FY27 Senate*

 FY27 Final*
502 SF Direct Loans

$1,000

$983.2

 $1,000
     Nat. Amer. SF Demo

5

0

 6
502 SF Guar. Loans

25,000

20,000

 25,000
504 VLI Repair Loans

25

25

 25
504 VLI Repair Grants

21

20

 **
515 MF Direct Loans

50

50

 50
514 Farm Labor Hsg. Loans

15

15

 15
521 Rental Asst.

1,715

1,795

 1,795
523 Self-Help TA

25

25

 25
533 Hsg. Prsrv. Grants

6

6

 **
538 MF Guar. Loans

400

500

 400
542 Vouchers

48

0

 48
Rental Prsrv. Demo (MPR)

30

30

 30
Rental Prsrv. TA

2

0

 0
Rural Cmty. Dev’t Init.

5

0

 5
Cmty. Facil. Direct Loans

1,250

1,250

 1,250
Cmty. Facil. Grants***

13

0

 19.4
    Tribal Colleges CF Grants

8

0

 8
Cmty. Facil. Guar.

650

650

 650

*These columns will be filled in as the appropriations process moves forward.

**The House bill would provide a total of $26 million for Section 504 grants and Section 533 Housing Preservation Grants.

***The amounts shown here for CF grants are for competitive grants. The final FY26 appropriation and the House FY27 bill include significant additional funds for “Community Project Funding” or “Congressionally Directed Spending” — earmarks.

Abbreviations key

  • NA: Not Available
  • MF: Multifamily (Rental)
  • SF: Single-Family (Homeownership)
  • TA: Technical Assistance
  • VLI: Very Low-Income

USDA’s Rural Housing Budget Supports Most Programs

April 3, 2026 – The administration’s budget request for fiscal year 2027 was released on April 3. The proposals for USDA’s rural housing programs are slightly better than those in the FY26 budget.

Join HAC on April 8 at 2:00 pm Eastern time to learn more about the budget. In this webinar, HAC policy staff will cover what the budget includes for rural housing programs at USDA, HUD, and the CDFI Fund, and what the rest of the funding process will look like. Register here.

Homeownership

Last year USDA proposed to defund the Section 502 direct program but this year it suggests a $983 million program level. USDA estimates this amount will finance 5,355 homes.

The budget would eliminate the $5 million relending program that enables Native Community Development Financial Institutions to provide mortgages for Native American homebuyers.

The budget would change the current mortgage requirement for homeowners obtaining Section 504 repair loans. It would allow loans of up to $15,000 – rather than the current $7,500 – to be secured by a promissory note rather than a mortgage.

The administration would continue to support local organizations administering self-help programs under Section 523, despite its recent defunding of technical assistance providers to help them.

Rental Housing

The budget includes support for some of the elements of USDA’s rental preservation work, proposing to hold the Section 515 and Multifamily Preservation and Revitalization (MPR) programs at their FY26 levels. It would not, however, provide returns on investment or asset management fees for nonprofit and public agency owners. And it would not fund technical assistance to help nonprofits and public agencies purchase properties in need of preservation; USDA explains that it expects carryover funding from prior years to be sufficient to satisfy the demand.

The budget again supports decoupling Section 521 Rental Assistance from Section 515 and Section 514 mortgages, allowing tenants in rental properties where USDA mortgages are ending to continue to receive Rental Assistance. There would be no limit on the number of these Stand-Alone Rental Assistance (SARA) units.

Relying on SARA to cover tenants, the budget would eliminate funding for Section 542 vouchers. As it did last year, it makes no provisions for renters currently relying on these vouchers, explaining without details that “between the set of current recipients whose income would not allow them to re-qualify, the value of the voucher diminishing over time, and natural attrition from the program, very few of the current recipients will be affected. For the remaining few, options would include vacancies at other USDA properties with rental assistance, applying for HUD funded housing assistance or other similar programs at the state and local level.”

Other Information

USDA’s document explaining its Rural Development budget to Congress provides some additional information:

  • the department’s request includes funding for a contract with a consultant to help implement the Build America, Buy America Act;
  • a breakdown of staffing by state shows that Rural Development had the equivalent of 4,409 full-time staff in FY24 and 4,452 in FY25, and is expected to have 3,057 in both FY26 and FY27. It does not indicate whether the figures are calculated at the beginning of the fiscal year or at the end.

The Rural Housing Service budget explanation includes information about how the housing programs’ funds were used in FY24 and FY25.

Next Steps

This budget represents the first step in a lengthier process to set appropriations for FY27. 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.

For ongoing news on appropriations and other topics related to rural housing, subscribe to HAC emails, which include the free biweekly HAC News.

 

Housing Assistance Council (HAC) Statement on Passage of House Housing Bill

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Housing is the largest monthly expense for American families, and the housing affordability crisis is as urgent in small town and rural America as it is in the nation’s cities and suburbs. Over one-third of rural households are considered housing cost-burdened—paying more than 30 percent of their income toward rent or a mortgage.

On May 20, the U.S. House of Representatives passed a revised bipartisan housing supply and affordability package that includes longstanding rural priorities. This is the much-anticipated next step in the nearly year-long bicameral, bipartisan process of negotiating a package of reforms to modernize federal housing programs. HAC applauds the House for this important step forward.

The House version of the 21st Century ROAD to Housing Act includes several bills that HAC strongly supports, most significantly the Rural Housing Service Reform Act, led by Congressmen Nunn (R-IA) and Cleaver (D-MO) and Senators Smith (D-MN) and Rounds (R-SD). This bill would provide the United States Department of Agriculture’s (USDA) Rural Housing Service (RHS) with new tools to address the preservation of its critical multifamily portfolio; authorize successful pilot programs; modernize the single-family housing programs; and improve USDA’s internal infrastructure, technology, and reporting.

“We are thrilled to see support for top rural housing priorities in the House as part of this revised bill,” said David Lipsetz, President and CEO of the Housing Assistance Council. “For decades, USDA’s RHS has been a lifeline for rural families, seniors, and workers, investing in both rental housing and homeownership. The revised House housing package would make sure these programs remain sustainable and well-run into the future.”

Other key provisions would help rural communities address their disproportionate repair needs generated by aging housing stock often coupled with low home values and confront less red tape around environmental reviews where USDA and HUD jointly fund a housing project.

This package began to come together at the initiative of the Senate Banking Committee in the summer of 2025 and has evolved through several iterations between the House and Senate since. Last month, over 200 national and local organizations signed on to a letter circulated by HAC supporting the inclusion of the RHS Reform Act in any final negotiated package.

This revised House bill reflects significant bipartisan collaboration and a very positive step forward for this package. At a time when affordability, and especially housing affordability, is top-of-mind for most Americans, we urge Congress to continue moving forward to bring this package to the President’s desk.

FEMA Review Council Report Recommends Increasing State and Local Responsibility

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On May 7, the FEMA Review Council established by President Trump in January 2025 released its final report. The council’s ten key recommendations emphasize shifting responsibility for disaster preparation and mitigation to state, local, territorial, and Tribal governments, with the federal government playing a supporting role. Several suggestions are intended to improve FEMA’s efficiency and response speed. States would be required to spend a certain amount of their own funds, depending on size, before federal funds would be available. Individual assistance would consist of a single payment of no more than $150,000 to residents whose homes are uninhabitable after a disaster, with a focus on emergency and temporary housing. Private insurance companies would have primary responsibility for permanent housing. Private companies would also have a greater role in providing flood insurance. The report notes that many of its recommendations could be implemented only through legislation.

Download the report.

Policy News town

Over 200 Groups Sign on to Support the RHS Reform Act in Congressional Housing Package Negotiations

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Congress is currently negotiating a broad package of housing supply reforms. The Rural Housing Service Reform Act (S. 1260/H.R. 4957) is one of the provisions under consideration for inclusion. This bill is the result of years of significant bipartisan consensus-building and represents a critical opportunity to modernize the U.S. Department of Agriculture’s Rural Housing Service programs. HAC led a sign-on letter to Congress supporting the inclusion of the RHS Reform Act in any final housing package, with more than 200 national and local groups joining to show their support. Thanks to everyone who signed for your partnership!
RHS Reform Act Sign on April 2026 Final
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HAC Comments Support USDA Housing Research

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In February, USDA requested comments on opportunities, challenges, and emerging areas in statistical data, analysis, and research produced by some of its offices, including the Economic Research Service (ERS). The department said the information it collects will help inform USDA as it considers future program direction, new initiatives, and potential funding opportunities.

HAC submitted a response to USDA emphasizing the following points, focusing on ERS because its work covers rural housing and community development.

  • ERS is an immensely valuable institution and resource for rural America.
  • USDA should invest more in housing data and research.
  • ERS should expand its relationship with Rural Development and specifically the Rural Housing Service to provide increased and better data on housing resources the agency administers.
  • USDA should provide more publicly available data to help inform strategies to address the “maturing mortgage crisis” within the Section 515 Rural Rental Housing Loan Program – especially data on why properties left the portfolio.
  • Data on properties and residents that are leaving the USDA Section 515 rental stock is vital to preservation efforts.
  • More detailed data on the ownership structure of USDA Section 515 properties would enhance production and preservation efforts for this key housing resource.
  • The Housing Assistance Council increasingly utilizes sub-county data for analyses when available.
  • ERS should continue its research and provide data on philanthropic investments to rural America.
  • USDA should coordinate with the Department of Labor and other federal agencies and institutions to develop much-needed data resources that inform an understanding of how agricultural workers obtain and access housing.
  • USDA should report Section 502 Direct Loan activity to the Consumer Financial Protection Bureau and the Federal Financial Institutions Examination Council through the Home Mortgage Disclosure Act.
  • USDA should work with HUD and the Census Bureau to put “rural” back into the American Housing Survey.

HAC CEO Responds to FY 2027 Budget Proposal

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On Friday, April 3rd, the White House released its full Fiscal Year (FY) 2027 Budget Proposal. While there are a few improvements over FY 2026 for housing affordability programs, the Housing Assistance Council (HAC) is gravely concerned about the number of programs that are slated for underfunding or elimination.

“The FY 2027 budget includes positive steps, such as restored support for USDA’s Section 502 Direct program,” said David Lipsetz, President & CEO of the Housing Assistance Council. “We welcome support for low-income homeownership during an affordability crisis. However, the proposal falls short of what is needed by failing to preserve the nation’s aging stock of rural rental housing and eliminating proven initiatives.”

At the U.S. Department of Agriculture (USDA), funding for both USDA’s Section 515 Rural Rental Housing and its Multifamily Preservation and Revitalization programs would remain at FY 2026 levels, but the budget fails to provide returns on investment or asset management fees for nonprofit and public agency owners.  Additionally, although the budget continues to support Stand‑Alone Rental Assistance to protect tenants when USDA mortgages mature, it proposes eliminating Section 542 vouchers without clearly addressing the impact on current households currently in the voucher program.

If enacted, the Administration’s budget proposal would be particularly damaging to people experiencing homelessness and unaffordable housing by eliminating a number of Department of Housing and Urban Development (HUD) programs that have a proven track record when it comes to serving Americans. The proposal eliminates the HOME Investment Partnerships Program, the Community Development Block Grant (CDBG), the Continuum of Care Program, the Housing Opportunities for Persons with AIDS (HOPWA) Program, Native American programs and Native Hawaiian Housing Block Grants, and fair housing activities.

HAC commends the Administration’s focus on rural-serving Community Development Financial Institutions (CDFIs) in its Treasury Department funding proposal. But our organization recognizes we live in a deeply interconnected nation. We have argued that if rural areas are left behind, the whole nation suffers. The opposite is true also; thus we cannot condone the Administration’s dramatic funding reduction and consolidation of the current CDFI grant programs into a single Rural Community Development Fund.

Perhaps most concerning, the proposal severely cuts funding for capacity building and technical assistance for rural communities. More than anywhere in America, small towns and rural places can struggle to maintain the expertise needed to succeed in the complex world of housing and community development. The budget calls for eliminating Rural Capacity Building at HUD and both the Rural Community Development Initiative and Preservation Technical Assistance at USDA. Such cuts to technical assistance and capacity building programs will prevent community organizations from getting new housing projects off the ground, while also limiting the critical resources they need to complete ongoing projects.

HAC urges Congress to strengthen the FY 2027 budget by restoring technical assistance for rural housing preservation, ensuring rental assistance transitions do not leave tenants behind, fully funding all programs at HUD, and providing nonprofit owners with the tools they need to sustain affordable housing over the long term. In addition, HAC also urges Congress to continue the efforts begun in the Fiscal Year 2026 appropriations bill by specifically adding language to compel the Administration to spend appropriated funding. Read HAC’s full analysis of the Administration’s Fiscal Year 2027 budget proposal for USDA and for HUD.

PRT, HAC, HOPE Release Opportunity Zone 2.0 Recommendations

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The Housing Assistance Council (HAC) in collaboration with Partners for Rural Transformation (PRT) and Hope Credit Union/Hope Enterprise Corporation/Hope Policy Institute (HOPE) Wednesday released recommendations for the Opportunity Zone 2.0 designations to drive investments into rural communities facing persistent poverty.

PRT President Farah Ahmad said: “Opportunity Zones hold tremendous potential to drive investment into rural communities facing persistent poverty across the country – if they are done correctly. This guide offers a framework for state policymakers and local practitioners to ensure that this once-in-a-decade opportunity is not missed in the rural communities millions of people call home.”

HAC President and CEO David Lipsetz said: “Investment in persistently poor rural places is an essential step to address our nation’s affordable housing crisis. State officials have an important opening this year to identify the right places for this investment. This guide explains what’s at stake and how they can take action.”

HOPE Senior Advisor for Policy and Advocacy Diane Standaert said: “With this upcoming round of Opportunity Zone selections, states have a once-in-decade chance to get it right for rural places. HOPE’s experience demonstrates how it’s possible to align community-driven solutions, private investors, and public policy to drive transformative change in rural communities, including those experiencing persistent poverty. With advance planning as recommended in this guide, states can ensure they do not overlook solutions for economic opportunity in the rural areas that need it most.”

Created by the Tax Cuts and Jobs Act of 2017, Opportunity Zones spur economic growth and job creation in low-income communities while providing tax benefits to investors. The first round of Opportunity Zones generated $120 billion in new investments across the country. However, only a fraction of that, about $6 billion, flowed into rural communities by 2022, and even less reached areas experiencing persistent poverty.

The program was amended in the One Big Beautiful Bill Act (OBBBA) and added new incentives for rural communities, including a 30% step-up in basis points for investments and a 50% threshold for showing substantial improvement to rehabilitation projects. However, an overly broad definition of “rural” risks funding being diverted away from targeted rural and Native communities. For example, Atlantic City meets the definition of a “rural Opportunity Zone” under the OBBBA.

Activating Rural Investments in the Next Round of Opportunity Zones: Recommendations for States  can be found here. The recommendations follow four guidelines:

  • Engage Rural Communities, Native Communities, and Practitioners: Hearing directly from rural communities through organizations like Community Development Financial Institutions and non-profit developers will help state and local leaders designate Opportunity Zones that will have the greatest impact.
  • Create a Map that Targets Unique Rural Needs and Development Goals: Mapping tools can assist state and local leaders in designating rural areas where investment is needed most and illuminate the opportunities to leverage additional investment incentives.
  • Create Priorities in State Funding Programs: States can take a more active role in driving investment into rural communities facing persistent poverty by prioritizing projects within preexisting state programs to attract additional resources and investors.  
  • Create an Assessment Tool: Establishing a clear decision-making rubric can ensure high-impact selections are made in a transparent manner.

PRT, HAC, and HOPE hosted a webinar on the guide for state policymakers, regional development hubs, and local non-profits on March 12. The recording is available here.   

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