TOP STORIES

Big budget reconciliation bill becomes law, HAC issues statement

The House approved the Senate’s version of the budget reconciliation bill that cuts both taxes and spending and President Trump signed it into law on July 4. (The final is no longer officially named the One Big Beautiful Bill Act.) The law cuts taxes, cancels a number of energy-related programs including the Greenhouse Gas Reduction Fund and HUD’s Green and Resilient Retrofit Program, and will lead to large-scale losses of Medicaid and SNAP as well as closure of some rural hospitals. It does have tax provisions that will benefit affordable housing, including a permanent expansion of the Low Income Housing Tax Credit, continuation and refinement of Opportunity Zones, and continuation of New Markets Tax Credits. A National Low Income Housing Coalition factsheet explains the difference between reconciliation and appropriations. HAC has posted a summary of the reconciliation bill’s provisions and our recommendations for further improvements, as well as a statement.

Federal staff cuts can move forward after Supreme Court ruling

On July 8, the Supreme Court invalidated a preliminary injunction imposed by a lower court that had blocked the administration’s reductions in force (RIFs) and agency reorganizations. The decision allows many federal agencies including USDA, HUD, VA, and the Treasury Department to proceed with their plans while the court case, Trump v. American Federation of Government Employees, continues. The administration reportedly intends to resume layoffs immediately at many agencies. The VA, however, announced on the day before the Court’s ruling that it will not conduct RIFs but will instead reduce staff through attrition and voluntary departures. President Trump has also extended a hiring freeze for most of the government.

HUD and USDA funding bills expected soon

The House Appropriations Committee will mark up its proposed FY26 appropriations bills for HUD on July 17 but has not scheduled a subcommittee markup first. The Senate Appropriations Committee is also expected to release and mark up a HUD bill later this month. HAC will post details when they are available.

The Senate Appropriations Committee will mark up its FY26 USDA funding bill on July 10 without holding a subcommittee markup first. When the bill’s text becomes available, HAC will post a summary online. The House Appropriations Committee has already approved its USDA bill.

RuralSTAT

According to the most recent data, there were approximately 588,000 home purchase mortgage originations in rural and small-town areas in 2024. These rural loans accounted for 17% of all U.S. home purchase mortgages that year.  Source: Housing Assistance Council tabulations of the Consumer Financial Protection Bureau and FFIEC Home Mortgage Disclosure Act Data (HMDA).

To learn more about mortgage and housing finance activity in your community, visit Rural Data Central.

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OPPORTUNITIES

Lead Hazard Reduction and Healthy Homes grants available

These HUD programs fund states, local governments, and Tribes to undertake comprehensive programs to identify and control lead-based paint hazards in rental or owner-occupied housing, and to identify and address other health-related hazards in the same homes. Applications are due August 14.

Economic development funding available for recovery from 2023 and 2024 disasters

The Economic Development Administration offers grants to support economic recovery activities in areas that received major disaster declarations because of natural disasters that occurred in calendar years 2023 and 2024. Eligible applicants are district organizations of an Economic Development District, Tribes, state and local governments, institutions of higher education, nonprofits working with local governments, economic development organizations, and public-private partnerships for public infrastructure. A variety of construction and non-construction projects related to economic development are eligible for funding, though housing is not eligible. Applications for readiness or implementation projects are accepted on a rolling basis. Applications for industry transformation grants are due March 3, 2026.

USDA not accepting Rural Energy for America applications

USDA had announced the first FY26 grant application window for the Rural Energy for America Program (REAP) would be July 1 through September 30, 2025, but because of a backlog of applications it is not accepting new requests. USDA anticipates taking applications again starting on October 1.

REGULATIONS AND FEDERAL AGENCIES

More USDA programs unavailable to some non-citizens

Two different laws intersect to govern non-citizens’ eligibility for federal housing aid: the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and Section 214 of the Housing and Community Development Act of 1980. Section 214 limits eligibility to citizens and “qualified immigrants” in a number of USDA housing programs. Section 514/516 farm labor housing, Section 515 housing without Section 521 rental assistance, and Section 538 multifamily guaranteed housing have been available to non-citizens because Section 214 does not apply to those programs. Until recently, USDA had not provided guidance on PRWORA’s applicability to many of its programs, allowing them to be used by non-citizens with certain kinds of legal status. On July 10 USDA announced it has concluded that many of its programs, including Rural Development loans, loan guarantees, and grants, do fall under PRWORA. USDA’s press release about the change focused on SNAP, but this new interpretation also seems to mean that the department will consider certain non-citizens ineligible under PRWORA for housing supported by Sections 514/516, 515, and 538.

USDA proposes aligning tenant and income calculations with HUD and HOTMA

A proposed regulation would make changes required by the Housing Opportunity Through Modernization Act related to income calculation and net family assets for properties with Section 515 rental housing or Section 514/516 farm labor housing funding. The revisions are intended to align USDA’s regulations with HUD’s. Comments are due August 29.

Market studies could be required for Section 538 guarantees on new rental housing construction

USDA requires that a lender applying for a Section 538 guarantee on new construction must document market feasibility for new affordable rental housing. The agency is proposing to require that documentation to be in the form of a market study. Comments are due August 29.

USDA and HUD seek input on previously adopted energy efficiency standards

HUD and USDA are requesting comments to inform a new review of their 2024 finding that adopting minimum energy codes for some new housing construction would have no negative impact on the housing’s affordability and availability. The covered programs include USDA’s Section 502 direct and guaranteed loans, Section 523 self-help loans, and HUD’s Section 202, Section 811, HOME, and Housing Trust Fund programs. Both departments recently delayed implementation of the efficiency standards for some programs. Comments are due August 6.

Energy standards for manufactured homes delayed

The Department of Energy is postponing the deadline for multi-section manufactured homes to comply with new energy conservation standards. Rather than complying by July 1, 2025, manufacturers of these homes will now need to meet the standards 180 days after DOE publishes its final enforcement procedures. Compliance for single-section homes will be required 60 days after enforcement procedures are published.

USDA suggests changes to environmental protection requirements

On February 25 the Council on Environmental Quality rescinded its regulations implementing the National Environmental Policy Act. Several USDA agencies, including Rural Development, had their own sets of NEPA regulations. Now USDA has issued an interim final rule removing the agencies’ provisions, including RD’s regulations in 7 CFR 1970, and setting uniform procedures for the department. Comments are due July 30.

Changes proposed to rule protecting H-2A farmworkers

After announcing on June 20 that it would pause enforcement of a 2024 rule that strengthened protections for farmworkers with H-2A visas, the Department of Labor now proposes to amend the regulations. Comments are due September 2.

USDA agencies remove race- and sex-based provisions in regulations

USDA issued a final rule on July 10, effective immediately, to remove “unconstitutional preferences based on race and sex” from a number of programs. Rural Development’s Rural Economic Development Loan and Grant Program, the Rural Energy for America Program, the Rural Microentrepreneur Assistance Program, and Rural Business Development Grants are included, as are business loan guarantee programs and farm direct loans and guarantees.

EVENTS

HUD offers webinars on environmental streamlining for Tribes

HUD will present a series of four webinars for Tribes beginning on July 24 with Simplified and Streamlined Environmental Reviews, which will provide training on PIH Notice 2024-24: Programmatic Part 50. Log in online here or dial in by phone at 1-202-735-3323 with access code 5126150#. Additional webinars on related topics will be held August 5, August 12, and August 14. Details and links are posted online here.

Housing industry webinar will discuss impacts of shifting FEMA support

From Risk to Return: FEMA’s Policy Shift and the Real Estate Opportunity, a July 15 webinar from First Street, will cover the impact on the real estate, insurance, and financial markets of shifting disaster recovery responsibilities from FEMA to states, local governments, property owners, and lenders.

Webinar to highlight reducing flood risk

Central Appalachian Network and ReImagine Appalachia are hosting a webinar on July 17 titled Nature Based Hazard Mitigation: How Nature-based Approaches Can Reduce Flood Risk. The event’s goal is to help communities understand the region’s vulnerability to disaster, the importance of disaster readiness, and the overall resilience of these communities. It is part of a webinar series on disaster resiliency in Central Appalachia.

PUBLICATIONS AND MEDIA

Survey shows impact of USDA housing staff reductions

To gauge the effect of layoffs and departures among USDA Rural Development field staff, the National Rural Housing Coalition and partner organizations, including HAC, surveyed local rural housing organizations around the country in early May. The survey found that, in the 27 states covered by the responses, RD staff was reduced by an average of 41%. Section 502 loan processing times have slowed significantly, respondents reported. Long-term staff with institutional knowledge were lost, impairing program functioning. When local offices were closed, increased travel time posed a serious barrier to meeting rural needs.

Report discusses asset-based development for community well-being

Aspen Institute’s New Report, Four Principles for Fostering Community Well-Being with Asset-Based Development, highlights the importance of rural development hubs in maintaining trusted cross-sector alignment and collaboration, discusses addressing the community capacity gap for leaders, provides steps towards sustainable individual and community wealth building through homeownership and business development, and the emphasizes the use of holistic measures of well-being and success.

Family homesteads affect rural housing conditions

Family Homesteads with Tangled Titles are Contributing to Rural America’s Housing Crisis, a recent article written by Auburn University faculty including HAC board member Rusty Smith, explains the precarious nature of heirs’ property, which can be a barrier to conventional housing finance, disaster relief, and insurance policies. There are also potential benefits of shared land ownership in the Black Belt region of the U.S., and a “housing-first” approach can help mitigate the rural housing crisis while supporting families who choose to live collectively.

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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