TOP STORIES 

Federal government shuts down many functions

With Congress unable to agree on appropriations bills or a continuing resolution, many government activities stopped at the end of September 30, the last day of fiscal year 2025.

What activities continue: The administration determines what federal agency functions must be continued during a shutdown. Staff who carry out those essential functions, as well as staff whose positions are not funded through annual appropriations and political appointees confirmed by the Senate, are required to work during the shutdown, but are not paid until the shutdown ends. Other staff are furloughed – they do not work during the shutdown but after it ends they are paid for the time they did not work. If a shutdown lasts more than a few days, determinations of crucial tasks and needed workers may shift. Overall, the current furloughs reportedly impact around 550,000 federal workers, 23% of the current workforce.

USDA shutdown plan: USDA’s contingency plan has one page devoted to Rural Development. It shows that nearly 83% of RD’s staff are furloughed, compared to 49% of the department’s total staff. “Limited” RD activities will continue, including making Section 521 Rental Assistance payments for contracts already in effect, for as long as the funding is available. RD staff have told stakeholders that available RA funds will cover the program at least until the end of October. RD does not have authority to renew RA contracts that expire during the shutdown. According to the plan, the agency will continue servicing loans “only as necessary to protect RD’s interest in properties.” This seems to imply what past RD plans stated explicitly – no new loans, grants, or loan guarantees will be issued during the shutdown.

HUD shutdown plan: HUD’s plan seems to indicate that almost 94% of its employees are furloughed, with 16% of them to be recalled intermittently, but that many of its programs are functioning. Programs such as HOME, CDBG, and Continuum of Care will continue to disburse funds when funds have been obligated and no further action by HUD employees is necessary. When HUD review or action is required, the department will recall employees “as necessary to avoid an imminent threat to the safety of human life or property.” Monthly subsidy programs such as public housing, housing choice vouchers, and multifamily assistance contracts will continue to operate for as long as funding is available. Unlike USDA, HUD does have the authority to renew Project-Based Rental Assistance contracts that expire during the shutdown.

National Flood Insurance Program expiration: The continuing resolution that funded the government from March 15 through September 30 authorized NFIP, so the program expired after September 30. FEMA can continue to pay claims so long as it has funds available, but it will stop issuing new policies or renewing existing policies.

More information and updates: HAC has posted some additional details on our website and will add more information as it becomes available.

Guidance issued for new rural Opportunity Zones

The big reconciliation bill enacted in July included provisions supporting investments in underserved rural census tracts. Notice 2025-50 from the Treasury Department and Internal Revenue Service offers guidance on two of those provisions. First, it addresses the law’s definition of “rural area”: any area other than a city or town with a population greater than 50,000, and any urbanized area contiguous and adjacent to a city or town with a population greater than 50,000. Second, it explains that as of July 4, 2025, the substantial improvement threshold for property located in an Opportunity Zone comprised entirely of a rural area was reduced to 50%. The notice identifies 3,309 of the 8,764 current OZs where the new threshold now applies. Guidance on the new round of OZs to be designated under the revised law will be issued in the future.

RuralSTAT

There are an estimated 4.3 million government workers in rural communities, comprising 17% of the rural workforce. Nationally, government workers make up 14% of the overall workforce. Source: HAC tabulations of the U.S. Census Bureau’s 2019-2023 American Community Survey Data.

Missing Census data during the shutdown? Visit Rural Data Central. We have data for suburban and urban communities too!

OPPORTUNITIES

Small grants available

The Community Heart & Soul Seed Grant Program provides $10,000 and requires a $10,000 cash match from the participating municipality or a partnering organization. Local governments (Tribal, town, or county), nonprofit organizations, and informal resident-led groups are eligible. Communities must have populations under 30,000. “Community Heart & Soul is a four-phase, step-by-step process that brings residents together to identify and honor the unique character of their town and the emotional connection of the people who live there. For most communities, completing the four phases takes about two years. But the completion of the Community Heart & Soul model is really just the beginning. It launches a new way of doing business that nurtures a more vibrant community far into the future.”

Project for Public Spaces’ Community Placemaking Grants for fall 2025 will offer three nonprofits or public agencies $100,000 each in direct funding, as well as placemaking technical assistance and capacity building, to transform a street or mobility hub into a lively community gathering place that improves street safety and mobility. Sites must be located in Georgia, Indiana, Kansas, Kentucky, Michigan, Missouri, New York, Ohio, Tennessee, or Texas. Applications are due October 13.

The Rural Schools Collaborative’s Grants in Place provide up to $2,500 to rural educators to carry out place-based education projects in their local communities. Covering all subjects and ages, these place-based efforts increase student engagement, elevate teacher leadership, and promote rural school and community connections. Applications are due October 24.

CDFI Fund revises funding notice to fit administration priorities

The Community Development Financial Institutions Fund is notifying some applicants for the CDFI Financial Assistance program that they can amend their applications by October 27 in order to be considered for funding. The notice of fund availability, originally published in January, has been revised. “Climate-focused financing” was eliminated as an eligible activity, categories based on race and ethnicity (except for Native Americans, Native Hawaiians, and Alaska Natives) were eliminated as “eligible markets,” and the definition of “healthy foods” was refined. The CDFI Fund announced awards under the Technical Assistance programs for CDFIs and Native American CDFIs on September 30 and said it expects to make additional awards later this winter.

REGULATIONS AND FEDERAL AGENCIES

Fair housing developments at HUD

Whistleblowers sue HUD on fair housing enforcement: On September 22, five attorneys who had worked in HUD’s Office of Fair Housing filed a suit charging HUD with violating fair housing law by curtailing their work, pressuring them to resign, and assigning them to different offices, leaving the fair housing office with six attorneys rather than its previous 22.

Fair housing enforcement to focus on intentional discrimination: HUD’s Office of Fair Housing and Equal Opportunity intends to prioritize its resources, focusing on cases with the strongest evidence of intentional discrimination, according to a recent memo. The document indicates that HUD will not consider discrimination based on neighborhood characteristics, disparate impact, redlining or reverse redlining, appraisal bias, environmental justice, or gender identity.

Some fair housing guidance documents withdrawn: Citing compliance burdens, inconsistency with governing law, and other reasons, OFHEO has formally withdrawn several guidance documents. The canceled notices related to a variety of topics including limited English proficiency, service animals, special purpose credit programs, criminal records, source of income testing, and advertising on digital platforms.

Housing goals proposed for Fannie Mae and Freddie Mac

The Federal Housing Finance Agency requests input on its housing goals for Fannie Mae and Freddie Mac for 2026-2028. Comments are due November 3.

HUD seeks comments on reverse mortgages

Explaining that its Home Equity Conversion Mortgage program and the related mortgage-backed securities program have faced challenges, HUD asks for information about their functioning and suggestions for changes. Comments are due December 1.

USDA names more RD state directors and rural housing senior advisor

A September 19 announcement identifies new Rural Development State Directors for Georgia, Hawaii, Iowa, and Montana and indicates that Monica Mason is now Senior Advisor for the Rural Housing Service. Her background includes financial services, real estate, marketing, and media.

DDAs and QCTs announced

HUD has posted its FY26 lists of Difficult Development Areas and Qualified Census Tracts for the Low-Income Housing Tax Credit program.

NSPIRE inspection rule compliance dates extended once more

Compliance dates for HUD’s National Standards for the Physical Inspection of Real Estate final rule have been extended several times. October 1, 2026 is now the compliance date for the Emergency Solutions Grants, Continuum of Care, HOME, and Housing Trust Fund programs. January 31, 2027 is the new compliance date for the Housing Choice Voucher, Project-Based Voucher, and Section 8 Moderate Rehabilitation programs.

FEMA should address extreme heat, report advises

Noting that extreme heat is the leading weather-related cause of death in the U.S., the Government Accountability Office examined FEMA’s support for states and localities experiencing extreme heat events. GAO recommends that FEMA should identify evidence for Tribal, state, and local governments to use in cost-benefit analyses for projects addressing extreme heat; establish a plan to incorporate additional extreme heat activities into its own benefit-cost analysis processes; develop examples modeling mitigation projects focused on extreme heat; and identify gaps in its programs for assisting Tribal, state, and local governments to address extreme heat events.

PUBLICATIONS AND MEDIA

Federal workforce departures calculated

September 30 was the last day of work for more than 100,000 federal workers who accepted the government’s “deferred resignation” offer. A total of about 275,000 workers are expected to leave under the various departure plans implemented in 2025 (including some through attrition), the White House told The Guardian. Lawsuits related to at least some of the policies are ongoing.

Coastal flooding risk to increase in rural communities also impacted by heirs’ property issues

An article in the Daily Yonder highlights rural communities along the Southeast coast that are disproportionately at higher flood risk. With a spotlight on heirs’ property owners in the Gullah Geechee Cultural Heritage Corridor, reporter Sarah Melotte estimates that 58,500 residents across Georgia, Florida, North Carolina, and South Carolina will be at risk for coastal flooding by 2050. Rural counties are 30% of the counties in the geographic focus area for this analysis, but they comprise 70% of the counties with the highest risk of coastal flooding.

HAC

HAC is hiring

HAC job listings and application links are available on our website.

• External Affairs Specialist
• Social Enterprise Manager
• Chief Financial Officer

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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