HAC News: September 4, 2025

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TOP STORIES 

Government funding is priority as Congress reconvenes

Congress returned to work this week, facing the start of fiscal year 2026 on October 1. Legislators are expected to consider passing a continuing resolution to keep the government open because they will not be able to finish the 13 annual appropriations bills this month. A CR could last for a few months or for the entire fiscal year.

It is also possible that all or part of the federal government could shut down. There seems to be no new information to add to HAC’s web post from March summarizing what a shutdown could mean for rural housing. USDA’s January 2024 shutdown plans are still online, while HUD’s and Treasury’s plans have been removed and not replaced. OMB’s shutdown page is blank and its September 2023 FAQs remain online.

The full Senate has approved its FY26 appropriations bill for USDA, while the House’s USDA bill has passed the Appropriations Committee but has not yet been considered by the House itself. Transportation-HUD funding measures have passed the Appropriations Committees in both houses but have not been taken up by either body. Details are posted on HAC’s site for both USDA and HUD.

Comment deadline extended for USDA reorganization

Comments on USDA’s reorganization plan, which was announced in late July, will now be accepted through September 30. Members of Congress and others had urged the department to provide more time for feedback, as well as to make comments public and to share a more detailed proposal when available.

September is National Preparedness Month

FEMA encourages using the month to prepare for emergencies. The 2025 theme is Preparedness Starts at Home. HAC’s Rural Resilience website offers tools for readiness, response, and recovery, including HAC’s detailed guide, Prepare Your Organization to Respond and Recover from Natural and Man-Made Disasters.

September is National Recovery Month

The observance focuses on mental health and addiction recovery. The Substance Abuse and Mental Health Services Administration explains that the month is intended to promote and support new evidence-based treatment and recovery practices, the nation’s strong and proud recovery community, and the dedication of service providers and communities who make recovery possible. SAMHSA offers a digital toolkit and other resources.

RuralSTAT

Approximately 8.5% of mortgage loans originated in rural and small-town areas in 2024 were considered “high cost” loans compared to 6% nationally. A mortgage loan is classified as “high cost” if its interest rate is 1.5% (or more) higher than the prime rate for first lien loans. Source: HAC tabulations of 2024 Home Mortgage Disclosure Act Data.

Data from the 2024 Home Mortgage Disclosure Act is now available on Rural Data Central! Visit Rural Data Central to learn more about housing finance in your community.

OPPORTUNITIES

Rural communities grants up to $30,000 offered

The Laura Jane Musser Fund Rural Initiative has grant funding available to encourage collaborative and participatory efforts among citizens in rural communities that will help to strengthen their towns and regions in civic areas such as economic development, business preservation, arts and humanities, public space improvements, and education.  Eligible applicants are nonprofits and local units of government working in rural communities of 10,000 or less in Colorado, Hawaii, Minnesota, Wyoming, and select counties in New York, North Carolina, and Texas. Applications will be available from September 2 through October 2.

CAPITOL HILL

Farm Bill on congressional agenda this month

The 2018 Farm Bill has been extended twice and is now set to expire September 30. Some topics that are usually addressed in the five-year Farm Bill, including the Supplemental Nutrition Assistance Program and farm subsidies, were covered in July’s big budget reconciliation measure. Therefore there may be a lower sense of urgency about passing a “skinny” Farm Bill this month, resulting in another one-year extension.

REGULATIONS AND FEDERAL AGENCIES

Comments requested on energy efficiency standards for manufactured housing

The Department of Energy establishes energy conservation standards for manufactured housing based on the International Energy Conservation Code. Standards set by DOE in 2022 have not yet gone into effect. The IECC was updated in 2024 and costs have changed since 2022, so DOE is considering revisiting its analysis. Comments are due December 2.

Eligibility for Section 184 Indian Housing Loan Guarantees revised

A 2024 final rule made “non-permanent resident aliens” eligible for Section 184 loan guarantees, as well as U.S. citizens and “lawful permanent resident aliens.” HUD is now making “non-permanent resident aliens” ineligible. Explaining that only enrolled Tribal members can receive these guarantees and are almost always citizens, HUD states the change will have little impact, so it is publishing an interim final rule without taking comments or holding Tribal consultations first. The rule will be effective on October 6. Comments are due November 3.

HUD will test portal for documenting spending

HUD requests input on a demonstration program “designed to increase understanding of how enhanced recipient reporting can help reduce the risk of fraud, waste, and abuse across grant programs.” Nine voluntary recipients of funds from the public housing, CDBG-Disaster Recovery, and Continuum of Care programs will justify grant expenditures by uploading supporting evidence such as receipts, invoices, or pay records. Comments are due November 3.

Data sought on HUD residents’ legal status

HUD Secretary Scott Turner posted on X a letter asking public housing agencies to review the citizenship status of all residents in HUD-assisted housing, threatening loss of funding or program eligibility for PHAs that do not comply. HUD’s press office posted that the effort was aimed at preventing undocumented residents from receiving aid. HUD programs are already restricted to citizens and to noncitizens with specific statuses such as green card holders and refugees. Undocumented people may live with eligible family members in HUD-assisted housing and assistance is prorated according to the number of eligible and ineligible people in the household. A fact sheet on eligibility and information sharing requirements is available in English and Spanish from the National Housing Law Project. Turner’s announcement does not apply to the rural housing programs at USDA, which issued a notice in July about ineligibility based on legal status.

FEMA disaster aid linked to immigration enforcement

FEMA contracts for fiscal year 2025 tell states and disaster assistance groups their programs cannot assist undocumented people and must cooperate with immigration enforcement efforts. The Washington Post reports that aid groups and disaster experts believe these new requirements will be difficult to fulfill and may violate state and local laws. The FY25 contract terms also forbid advancement of diversity, equity, and inclusion.

More USDA Rural Development state directors named

On August 21, Agriculture Secretary Brooke Rollins announced presidential appointees for Rural Development and Farm Service Agency state director positions in several states.

PUBLICATIONS AND MEDIA

Mapping tool shows tracts likely to be eligible as new Opportunity Zones

A new Novogradac Opportunity Zones 2.0 Mapping Tool shows what census tracts are likely or unlikely to be eligible for designation as Opportunity Zones under the newly permanent OZ program. The process for nominating and designating the next set of OZs officially begins July 1, 2026.

Model helps to estimate budgets for supportive housing services

The CSH Supportive Housing Services Staffing and Budget Tool is intended to support agencies, communities, and project planners to estimate comprehensive costs for supportive housing services. It allows the user to model out scattered site and project-based programs and input their average staffing costs, budget assumptions, and productivity expectations to determine rates needed for a fiscally sustainable program.

California agriculture faces challenges amid ICE raids

An opinion essay published by the New York Times, Wilted Lettuce. Rotten Strawberries. Here’s What Happens When You Round Up Farmworkers, describes how California’s $60 billion farm economy depends on immigrant labor but is struggling amidst recent ICE raids in fields and packing houses that are driving workers away, leaving strawberries, lettuce, and other crops to rot. With as many as 70% of farmworkers not showing up, the ripple effects include higher grocery prices, more food waste, and lost jobs across the food supply chain. The authors argue that treating longtime, law-abiding farmworkers as criminals threatens not just families but America’s food security itself.

HAC

HAC is hiring

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

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).

Want to reprint a HAC News item?

Please credit the HAC News and provide a link to HAC’s website. Thank you!

  

HAC News: August 21, 2025

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TOP STORIES 

Funding awards must align with administration’s priorities, executive order says

President Trump issued an executive order on August 7 requiring federal agencies to ensure their grants fit the administration’s priorities, can be terminated at any time by the administration, and are controlled by senior political appointees. Existing awards must be revised “to permit immediate termination for convenience.” Awards may not support racial preferences, transgender people, illegal immigration, or “any other initiatives that compromise public safety or promote anti-American values.” The order instructs agencies to make grants “to a broad range of recipients rather than to a select group of repeat players.” It also requires OMB to “appropriately limit the use of discretionary grant funds for costs related to facilities and administration.”

HUD to offer services and materials in English only

HUD Secretary Scott Turner announced on X that “HUD will solely use English for all Departmental business and services. We are one people, united, and we will speak with one voice and one language to deliver on our mission.” HUD will continue to provide communications services to people with disabilities. The change to English-only aligns with an executive order President Trump issued in March, making English the official language of the U.S.

RuralSTAT

According to the Census Bureau’s most recent Community Resilience Estimates for Heat, approximately 82% of rural and small-town census tracts experienced “extreme” heat exposure in 2022. Source: HAC tabulations of U.S. Census Bureau Community Resilience Estimate for Heat data.

CAPITOL HILL

Housing provisions may be added to must-pass legislation

Several senators have proposed to attach housing-related bills as amendments to the National Defense Authorization Act, although they are not related to defense. NDAA is more likely to be passed by Congress than the housing provisions alone so, if these amendments are accepted, their chances of passage will increase. The ROAD to Housing Act, which incorporates the Rural Housing Service Reform Act and was approved by the Senate Banking Committee on July 29, is one of these amendments. Another is a package of provisions related to Community Development Financial Institutions, which includes authorization for USDA’s Section 502 Native CDFI relending program. The RHS Reform Act has also been recently reintroduced as a stand-alone measure in the House; it was reintroduced in the Senate in April.

REGULATIONS AND FEDERAL AGENCIES

FEMA now requires email addresses for disaster survivors

As of August 12, FEMA requires disaster survivors to have email addresses in order to register for aid, Wired reports. The agency will communicate through email and online accounts and will make payments electronically.

Appeals court allows CFPB layoffs

Reversing a lower court decision from several months ago, an appellate court held on August 15 that federal courts cannot yet consider challenges to Consumer Financial Protection Bureau staff cuts and other actions to halt the agency’s work. Staffing actions must go through the civil service review process, the court said. It decided that charges about other activities could be heard only if they were claimed to be unconstitutional or if harmful results had already occurred. Since the decision was made by a three-judge panel, the plaintiffs can now appeal the ruling to the full appeals court for the District of Columbia circuit. If layoffs proceed, they will impact about 90% of the agency’s staff.

Judge restores funds for FEMA resilience program

The administration ended FEMA’s Building Resilient Infrastructure and Communities program earlier this year, but several states filed suit challenging that decision. On August 5, the judge hearing State of Washington v. FEMA issued a preliminary injunction barring the agency from spending BRIC’s funding for other purposes while court proceedings continue.

Rollins announces more Rural Development appointments

Glen Smith, whose background is in farming and agri-business in Iowa, is nominated to serve as Under Secretary of Rural Development. He will need to be approved by the Senate. Neal Robbins will become Deputy Under Secretary for Rural Development, a position not requiring Senate review. He is from North Carolina with public and private sector experience in manufacturing, rural economic development, and financial transactions. Anthony Priest, appointed Chief of Staff for the Rural Housing Service, has worked in real estate development, product development, and education.

Fair Market Rents published

HUD has released Fair Market Rents for fiscal year 2026. Comments are due September 22.

Solar for All program ends

EPA Administrator Lee Zeldin announced on X and YouTube that his agency is ending the Solar for All program, one of three Greenhouse Gas Reduction Fund programs. The administration previously moved to terminate the GGRF’s National Clean Investment Fund and Clean Communities Investment Accelerator, and July’s big reconciliation bill repealed all three.

PUBLICATIONS AND MEDIA

High needs rural areas could be hit especially hard by reductions to Medicaid and SNAP

About 12 million households nationwide receive both Medicaid and Supplemental Nutrition Assistance Program benefits. The highest rates of dual enrollment are in Central Appalachia, the U.S.-Mexico border region, the Mississippi Delta, and parts of some large metropolitan areas, the Urban Institute reports. As a result, those areas are likely to be seriously impacted by the recently adopted budget reconciliation bill, which cuts both programs.

Brief advises funders on CDFIs’ role supporting affordable homeownership

The Asset Funders Network has released a new brief on the role of Community Development Financial Institutions in increasing homeownership. The brief and a related webinar provide an overview of the history and role of CDFIs in underserved communities, the ways in which CDFIs support clients through funding or other services, and a variety of strategies for philanthropy to help ensure the stability of CDFIs in the future as housing affordability continues to decrease and other funding streams become more limited. The materials include many rural examples.

Stories highlight the journey to retain property in rural Southeast

USA Today provides an in-depth look at the issue of heirs’ property and the challenges some families face in retaining and protecting their generational property. This two-part series describes Saul Blair’s efforts to preserve his family’s property in rural Georgia, purchased over 100 years ago by his great-grandfather following his emancipation from slavery.

Internet availability not enough without uptake

The Billion-Dollar Remote Work Opportunity that Rural America Can’t Reach, commentary published by Fortune, points out that internet usage/subscription rates are low in rural communities, even those where broadband is now available. Many residents – most often older – do not understand its value, although they could benefit from remote work and services like telemedicine. The author recommends a “social strategy,” perhaps including temporary free access, to overcome reluctance.

New research proposes Community Reinvestment Act reform

A new book, Ending Redlining Through a Community-Centered Reform of the Community Reinvestment Act, explains how financial institutions can invest in and respond to the needs of underserved neighborhoods. The publication includes case studies on CRA in rural America and Native American areas.

HAC

Rural Housing Service Awards nominations open

At the 2025 National Rural Housing Conference in November, HAC will present its prestigious Rural Housing Service Awards. These awards recognize individuals whose exceptional leadership, commitment, and lasting contributions have significantly advanced affordable housing and community development in rural America. Submit nominations here by August 29.

HAC is hiring

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

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).

Want to reprint a HAC News item?

Please credit the HAC News and provide a link to HAC’s website. Thank you!

  

HAC News: August 7, 2025

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TOP STORIES 

Bipartisan housing bill gets unanimous committee approval 

The Renewing Opportunity in the American Dream (ROAD) to Housing Act, S. 2651, was approved unanimously by the Senate Banking Committee on July 29. The bill, which HAC supports, combines provisions from around 30 different housing bills, including the Rural Housing Service Reform Act (endorsed by HAC), the Streamlining Rural Housing Act, the HUD-USDA-VA Interagency Coordination Act, and the Whole-Home Repairs Act. It would reauthorize the HOME program, provide permanent authorization for the PRICE manufactured housing program and the CDBG-Disaster Recovery program, streamline FHA financing for modular/manufactured housing, and support affordable housing in numerous other ways. The ROAD to Housing Act does not include the RHS Reform Act’s provision to permanently authorize the Section 502 Native CDFI relending program, but in the committee markup Senator Tina Smith (D-MN) indicated that she and Senator Mike Rounds (R-SD) hope to prioritize moving that provision forward as a stand-alone bill. 

Senate passes USDA funding bill 

On August 1, the full Senate approved three FY26 appropriations bills, including the measure for USDA. It would hold many of the rural housing programs at their current funding levels while increasing Section 502 direct funding to $1 million from the current $880 million. Details are posted on HAC’s site. The House has not yet considered the USDA funding bill passed by its Appropriations Committee, which would provide lower amounts for several rural housing programs. Both houses are now in recess until after Labor Day. Fiscal year 2026 begins on October 1, 2025.  

HUD appropriations approved by Senate committee 

The FY26 Transportation-HUD funding bill approved by the Senate Appropriations Committee on July 24 would provide $1.25 billion for the HOME program, which would receive no funding under the House version of the bill. The Senate bill would also increase funding for housing vouchers, project-based rental assistance, homeless assistance grants, Section 202 elderly housing, and Section 811 housing for people with disabilities. SHOP would be set at $13 million, up from $12 million in FY25, and the Rural Capacity Building program would receive $8 million. It would provide $3.1 billion for CDBG compared to this year’s $3.3 billion. Details are available here. Neither the House nor the Senate would renew expiring Emergency Housing Program vouchers. The Center on Budget and Policy Priorities provides state-by-state and demographic estimates of the loss of Housing Choice Vouchers under the House and Senate THUD proposals.  

Executive order calls for changed approach to homelessness

President Trump issued an executive order on July 24 titled Ending Crime and Disorder on America’s Streets, calling for institutional treatment of people experiencing homelessness, prioritization of funding to states and cities that criminalize homelessness, and an end to Housing First policies and harm reduction approaches. Many of these policies are determined by state and local laws, however. The National Alliance to End Homelessness has published the first two of a series of blog posts explaining the order and its impacts.  

RuralSTAT 

Immigrants make up 14% of physicians and surgeons in rural areas, compared to 5% of the overall rural workforce. They are 28% of agricultural workers. Source: Kaiser Family Foundation, What Role Do Immigrants Play in the Rural Workforce?  

OPPORTUNITIES

Low Income Housing Tax Credit resources to increase

The Federal Housing Finance Agency has doubled the amounts Fannie Mae and Freddie Mac can invest per year in Low Income Housing Tax Credits from $1 billion each to $2 billion each. Half of the $4 billion total will be reserved for difficult to serve LIHTC markets and at least 20 percent of that half will be for Duty to Serve rural communities. HAC issued a statement applauding the move.  

USDA offers funds for housing repairs

Nonprofits, public agencies, and Tribes can apply by September 4 for the FY25 Section 533 Housing Preservation Grant program. The $13.1 million available includes $2.1 million for disaster assistance and $500,000 each for recovery from Hurricanes Fiona in Puerto Rico and Helene in Tennessee. Awardees can make grants or low-interest loans to repair or rehabilitate housing owned by or rented to low- or very low-income rural residents. A nonprofit cannot receive funds directly from USDA for a rental property it owns.  

HUD ordered to release fair housing funds, publishes new competition notices  

Applications are due August 21 for four Fair Housing Initiatives Program (FHIP) initiatives. A federal judge required HUD to reopen the competitions, issuing a temporary restraining order on July 28 in National Fair Housing Alliance v. HUD. The case, filed in June, challenges HUD’s failure to award FY24 FHIP funds under funding opportunity notices it published in September 2024 and its failure to disburse funds under previously awarded multi-year grants. The judge ordered HUD to explain its timeline and to file weekly reports on its progress in making the awards before September 30, when the funding expires. The reopened opportunities are: 

  • The FHIP Private Enforcement Initiative will enable experienced fair housing enforcement organizations to conduct testing, investigate violations, and enforce the Fair Housing Act and equivalent state and local laws.  
  • The FHIP Education and Outreach Initiative will fund fair housing organizations and other nonprofits that have, or partner with an entity that has, experience in media or public relations. Awardees will develop and implement media campaigns promoting fair housing. 

Green Communities Criteria comment period open  

Enterprise Community Partners has posted the first full draft of its 2026 Green Communities Criteria and requests public comment by August 27. It describes Green Communities as the only green building standard created with, and for, the affordable housing sector.  

CAPITOL HILL 

Senators ask OMB to release CDFI funding  

A bipartisan group of 26 senators has written to OMB director Russell Vought urging him to release monies appropriated for the Community Development Financial Institutions Fund in FY25. The letter points out that the CDFI Fund closed applications periods for five of its programs months ago but has not yet made awards, while applications for other programs have not yet been announced. The senators ask OMB to issue a spending plan outlining timelines for obligating its funds.  

REGULATIONS AND FEDERAL AGENCIES 

USDA accepting comments on reorganization plan 

On August 1, USDA announced it will accept comments on the reorganization plan it released on July 24. Input from “all stakeholders, including USDA employees, members of Congress, and agricultural and nutrition partners,” can be emailed to reorganization@usda.gov by August 26. Deputy Secretary Stephen Vaden told a congressional committee he believes a majority of employees who will be asked to relocate will accept transfers from Washington, DC to other parts of the country. He also said the reorganization will “leave the county-level footprint [which includes RD offices] alone.”   

Justice Department advises federal funding recipients on DEI discrimination 

A memo from the Attorney General offers guidance “to ensure that recipients of federal funding do not engage in unlawful discrimination,” including through diversity, equity, and inclusion programs. The memo’s examples of unlawful practices include prioritizing hiring candidates from “underrepresented groups,” establishing a Black Faculty Caucus, and favoring minority-owned or women-owned businesses. Recommended best practices include focusing on skills and qualifications in selection processes and including nondiscrimination clauses in contracts.  

Comments requested on ending Equitable Housing Finance Plans  

The Federal Housing Finance Agency proposes to repeal its Fair Lending, Fair Housing, and Equitable Housing Finance Plans regulation. The rule has required Fannie Mae and Freddie Mac to each adopt a plan every three years identifying barriers to sustainable housing opportunities faced by one or more underserved communities, goals and objectives with respect to the identified barriers, and meaningful actions to support accomplishment of the goals and objectives. Comments are due September 26.     

Funding stopped for technical assistance to address homelessness through SSI/SSDI 

The SSI/SSDI Outreach, Access, and Recovery (SOAR) model assists caseworkers to help clients who have a mental illness, medical impairment, or a substance use disorder and are experiencing or at risk of homelessness to access Supplemental Security Income and Social Security Disability Insurance. As of August 18, the Substance Abuse and Mental Health Services Administration is ending funding for technical assistance to SOAR caseworkers and the resource website at https://soarworks.samhsa.gov/ will become unavailable. Archived versions of the site should still be accessible through the Internet Archive. Policy Research Associates, which has run the SOAR TA Center since 2009, offers a recorded webinar explaining how organizations can continue using the SOAR model. 

Nominations open for USDA’s Tribal Advisory Committee 

USDA seeks nominations for four open positions on its Tribal Advisory Committee. Nominations can be submitted by representatives of Tribes, Tribal organizations, or national or regional organizations with relevant expertise such as national or regional Tribal serving organizations, land-grant institutions, and Native CDFIs. The deadline is September 22. 

Rural Development to begin using USDA’s environmental requirements 

On October 1, USDA RD will begin to evaluate compliance with the National Environmental Policy Act using a new interim final rule that applies throughout the department. RD’s announcement says that funding applications submitted before October 1 “will continue to be reviewed on a case-by-case basis under prior NEPA policies and procedures or [the interim final rule].”  

Guidance issued for HOPWA inspections 

A HUD notice offers guidance to grantees under the Housing Opportunities for Persons With AIDS program on implementing the National Standards for the Physical Inspection of Real Estate. It addresses how to inspect units for compliance with the NSPIRE rule and how to ensure corrections are made, as well as statutory requirements for carbon monoxide alarms or detectors and smoke alarms. The compliance date for these standards is February 2, 2026.  

EVENTS 

Webinar to consider disaster recovery for immigrants 

The National Low Income Housing Coalition, the Protecting Immigrant Families Coalition, and Just Solutions Collective will hold a webinar entitled Immigration & Disaster Recovery: Rights, Access, and Where We Go from Here, on August 12. This session, intended for advocates for immigrant communities and disaster recovery practitioners, will address protecting communities while navigating the disaster recovery system.  

PUBLICATIONS AND MEDIA 

New report shows home repair difficulties for lower-income homeowners 

A new report from the Harvard University Joint Center for Housing Studies, summarized in a blog posted titled Home Repairs Are Out of Reach for Many Lower-Income Homeowners, highlights the challenges of home repair and maintenance for lower-income households. In 2023, 2.9 million homeowners lived in homes classified as inadequate. Lower-income households, with less resources, spend more on maintenance of habitability rather than discretionary upgrades.  

HAC 

Rural Housing Service Awards nominations open 

At the 2025 National Rural Housing Conference in November, HAC will present its prestigious Rural Housing Service Awards. These awards recognize individuals whose exceptional leadership, commitment, and lasting contributions have significantly advanced affordable housing and community development in rural America. Submit nominations here by August 29.  

HAC is hiring

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

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). 

Want to reprint a HAC News item? 

Please credit the HAC News and provide a link to HAC’s website. Thank you! 

  

Policy News from the Administration

HAC CEO Applauds Rural LIHTC Equity Investment Announcement

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On August 5, the Federal Housing Finance Agency (FHFA) announced that the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, can now each double their annual investment in Low Income Housing Tax Credits (LIHTC) to $2 billion. In addition, FHFA is requiring one-half of their total $4 billion annual investment be invested in difficult to serve housing markets and of that $2 billion 20 percent ($400 million) be for housing in rural markets. The Housing Assistance Council (HAC) applauds this move and the significant impact that it will have on driving affordable housing investment to otherwise underserved small town and rural America.

“LIHTC is the biggest driver of affordable housing development in the country, but rural communities often struggle to access a fair and equitably priced share of LIHTC equity,” said David Lipsetz, President and CEO of HAC. “Twenty percent of our country’s population lives in rural places, so we applaud FHFA Director Pulte for requiring that a proportionate amount of GSEs’ LIHTC equity investments in difficult to serve markets target small town and rural America.”

The Housing and Economic Recovery Act of 2008 imposed on the GSEs a Duty to Serve obligation to facilitate a secondary market for mortgages on housing for low- and moderate-income families in three underserved markets: rural housing, manufactured housing, and affordable housing preservation. Starting in 2017, FHFA permitted Fannie Mae and Freddie Mac to reenter the LIHTC market as equity investors, bringing LIHTC investments into their Duty to Serve activities. But until now, no specific set-aside existed for LIHTC investments in Duty to Serve rural markets.

“Over the past half century, federal housing policy—indeed federal policymaking writ large–has been designed with urban and suburban economies at its center,” noted Lipsetz. “Fannie and Freddie have played a positive role building wealth and opportunity through housing, but their business model falters with the low volumes and smaller loans that characterize most rural housing markets. Similarly, LIHTC works most seamlessly in multifamily projects of a size and income-mix that differ from the stock typical of rural communities. In this context, rural America only sees a fair share of investment when national leaders put a finger on the scale. HAC appreciates Director Pulte doing exactly that with regard to the GSEs’ Duty to Serve.”

“Today’s announcement comes on the heels of the passage of the One Big Beautiful Bill Act, which permanently expanded the 9 percent LIHTC allocation, but failed to include bipartisan priorities that would have leveled the playing field for rural and Tribal areas,” noted Lipsetz. “Adding a Difficult Development Area (DDA) designation to rural and Tribal would have provided a 30 percent basis boost that makes full the value of the credits in these underserved areas. Nor did the bill align Opportunity Zone (OZ) and LIHTC ‘substantial improvement’ standards to allow these programs to work well together to preserve and repair rural homes.”

“HAC hopes Congress will build on FHFA’s important action today and finish the job of making the nation’s largest housing and community development tax subsidies work just as well in small towns and rural places nationwide.”

Click here to see how HAC’s Loan Fund has helped our partners combine LIHTC equity and other resources to create and preserve rural affordable housing.

HAC CEO Applauds Markup of Bipartisan Senate Housing Legislation

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Housing Assistance Council (HAC) CEO David Lipsetz Applauds Markup of Bipartisan Senate Housing Legislation

The Senate Banking, Housing, and Urban Affairs Committee announced a markup of a broad, bipartisan housing bill on July 29. The ROAD to Housing Act of 2025 includes legislation from members across the committee, including several rural priorities.

“HAC applauds Chairman Scott and Ranking Member Warren for their remarkable work on the ROAD to Housing Act,” said David Lipsetz, President and CEO of HAC. “Housing is the largest monthly expense for American families, and the housing affordability crisis is as urgent in small town and rural America as in the nation’s cities and suburbs. That’s why it’s so important that the Committee is moving legislation forward on a comprehensive and bipartisan basis.”

The ROAD to Housing Act includes several bills that HAC has been supportive of, most significantly the Rural Housing Service Reform Act, led by 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 especially pleased that the bill centers the housing needs of rural communities and the essential role in addressing them played by the USDA’s rural housing programs,” noted Lipsetz. “In addition to the RHS Reform Act, the bill includes important provisions to improve program coordination and align regulatory action across USDA, Department of Housing and Urban Development (HUD), and Department of Veterans Affairs housing programs.”

Over the last several years, members of the Banking Committee have been crafting commonsense, bipartisan legislation to improve our federal affordable housing response, and many of these bills have been wrapped into the ROAD to Housing Act for this markup. HAC is glad to see the committee taking this action.

Bill text and a section-by-section summary can be seen here.

HAC News: July 24, 2025

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TOP STORIES

House and Senate committees advance USDA and HUD FY26 appropriations bills

On July 10, the Senate Appropriations Committee unanimously approved S. 2256, a fiscal year 2026 funding bill for USDA that would hold rural housing programs close to current funding levels. Like the House version of the bill, H.R. 4121, the Senate’s measure rejects many of the cuts proposed by the administration’s budget. Details are posted on HAC’s site. The Senate would raise Section 502 direct funding to $1 million, higher than the House’s $880 million, and would set the Section 523 self-help program at $25 million, above the $20 million proposed by the House. The administration’s budget requested no support for either Section 502 direct or self-help. Like the House and the administration, the Senate would fund Section 521 Rental Assistance at $1.715 billion to support current tenants.

On July 17, the House Appropriations Committee passed a Transportation-HUD funding bill, H.R. 4552. It does not adopt the administration’s proposal to combine numerous programs into a block grant to states, but does include some of the significant cuts proposed in the administration’s budget: it would provide no funding for HOME or housing counseling, would reduce SHOP from $12 million this year to $9 million, and would drop fair housing from $86.4 million to $29.5 million. It would hold CDBG and Native American programs at current levels. It would also decrease HUD staffing by 26%. The Senate Appropriations Committee passed its T-HUD bill on July 24. The text of that bill is not yet available but a summary indicates it provides $1.2 billion for HOME.

The bills passed by the two Appropriations Committees will next be considered by the full House and the full Senate. 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 House began its August recess on July 23. The Senate is scheduled to start its recess August 4. Both will return to Washington after Labor Day.

USDA announces reorganization plan without RD details

On July 24, Agriculture Secretary Brooke Rollins announced a reorganization of USDA but did not provide details about possible impacts on the Rural Development mission area or its field offices. The document says that staff in the Washington, DC area will be reduced from 4,600 to 2,000. Positions will be moved to five hub locations: Fort Collins, CO; Indianapolis, IN; Kansas City, MO; Raleigh, NC; and Salt Lake City, UT. Service centers and laboratories will remain in locations including St. Louis, MO. The plan also indicates that USDA will “consolidate tribal relations functions within mission areas and ensure the Office of Tribal Relations delivers all statutorily required tribal relations functions.” Deputy Secretary Stephen Vaden is charged with implementing the plan.

Rural Housing Service Awards nominations open

At the 2025 National Rural Housing Conference in November, HAC will present its prestigious Rural Housing Service Awards. These awards recognize individuals whose exceptional leadership, commitment, and lasting contributions have significantly advanced affordable housing and community development in rural America. Submit nominations here by August 29.

RuralSTAT

Use of the Supplemental Nutrition Assistance Program (SNAP) has increased in 14 states over the past 10 years while falling or holding steady elsewhere. Some of the largest declines in SNAP usage have been in rural states, including Arkansas, Iowa, Mississippi, South Carolina, and Tennessee. Interactive graphics are available online. Source: Investigate Midwest analysis of USDA data.

OPPORTUNITIES

Grants available for shelter, housing, and aid to domestic violence survivors and animals

The Justice Department’s Office for Victims of Crime offers grants for shelter, transitional housing, and other assistance to victims of domestic violence and their pets, service animals, emotional support animals, and horses. State, local, and Tribal governments and nonprofit organizations are eligible. Apply by August 15.

USDA has homeownership funds for Native CDFI relending

USDA’s Rural Housing Service will make loans to qualified Native Community Development Financial Institutions, which will then relend funds to low- and very low-income residents to acquire, build, rehabilitate, improve, or relocate dwellings on Tribal Land in rural areas. Applications are due August 29.

Funds offered for public-facing arts projects and activities in Midwestern U.S.

Arts Midwest’s GIG Fund will make grants of $2,000-$15,000 to help Midwestern organizations bring professional artists into their community and host creative, engaging public activities. Eligible applicants are nonprofits, hospitals, clinics, and Tribal organizations in Illinois, Indiana, Iowa, Michigan, Minnesota, North Dakota, Ohio, South Dakota, Wisconsin, or the Native Nations that share this geography. Activities must take place between December 2025 and June 2026. Mandatory Intents to Apply are due September 15 and final applications are due September 29.

REGULATIONS AND FEDERAL AGENCIES

Banking regulators propose to rescind Community Reinvestment Act rule

The federal bank regulatory agencies have suggested rolling back their 2023 regulations for the Community Reinvestment Act. The Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation explain that the 2023 rule has not yet gone into effect, so they do not expect lenders to have difficulty continuing to use the 1995 regulations that preceded the significant changes adopted in 2023. Comments are due August 18.

Separately, the regulators issued the fourth in a series of requests for input on outdated or otherwise unnecessary regulatory requirements, this one focusing on banking operations, capital, and CRA. Comments are due October 23.

HUD ends some FHA appraisal policies

On July 10, HUD and OMB announced they have terminated Federal Housing Administration policies introduced under the former administration’s Property Appraisal and Valuation Equity (PAVE) initiative. A PAVE task force, consisting of 13 departments and agencies including HUD and USDA, was established in 2021 to “evaluate the causes, extent, and consequences of appraisal bias and to establish a transformative set of recommendations to root out racial and ethnic bias in home valuations.” The recent announcement covers three FHA policies, saying that HUD now considers them to be “unnecessary regulatory hurdles imposed on lenders, appraisers, and other program participants.” They were formally terminated on March 19.

Lawsuit challenges conditions on HUD and HHS funding

A coalition of housing, homelessness, and other service providers has filed suit challenging conditions placed on federal grant funding from HUD and the Department of Health and Human Services. The group charges that new grantee requirements for programs including HUD’s Continuum of Care, HOME, and others target diversity, equity, inclusion, and transgender rights, putting life-saving services for survivors of domestic violence and sexual assault, LGBTQI+ youth, and unhoused communities at risk.

EVENTS

Rural Housing Preservation Academy to be held in Knoxville

Enterprise Community Partners will host a two-day, in-person Rural Housing Preservation Academy in Knoxville, TN, August 6-7. The event will feature conversations about affordable housing development and preservation in rural communities, highlighting federal, state, and local policies and innovations designed to address rural housing affordability challenges. Register by August 4.

Workshop to uplift rural artists’ and activists’ stories

The Department of Public Transformation is hosting a virtual session, Activate Rural Workshop: From Creative Spaces to Creative Ecosystems, on July 30. Participants will hear from rural artists and activists on how creative spaces have uplifted and supported rural places and economies.

PUBLICATIONS AND MEDIA

Housing costs still out of reach nationwide

As has been the case for years, in 2025 there is no state, metropolitan area, or county in the U.S. where a full-time worker earning the federal minimum wage, or the prevailing state or local minimum wage, can afford a modest two-bedroom rental home at Fair Market Rent. The National Low Income Housing Coalition’s annual Out of Reach report shows that a full-time worker needs to earn an hourly wage of $33.63 to afford the average modest, two-bedroom rental home in the U.S. and $28.17 to afford a modest one-bedroom rental home. The wages needed to rent a modest home far exceed not just the $7.25 federal minimum wage but also the median wages of workers in many of the country’s most common occupations, such as home health aides, food service workers, and administrative assistants. Almost half of all U.S. workers earn less than the hourly wage required to afford a modest one-bedroom rental home.

Public broadcasting funds more important for rural and Tribal stations than urban ones

The Corporation for Public Broadcasting, which lost more than $1 billion of its appropriated funding under the rescission recently passed by Congress, reports that 245 of its total 544 radio and TV station grantees serve rural audiences. CPB grants provide 17% percent of an average rural station’s revenue, compared to 9% for non-rural stations. Almost half of all rural grantees rely on CPB for at least 25% of their revenue while 33 rural stations – many on Native American reservations – rely on CPB funding for at least half of their revenue. Rural stations also have a harder time raising money from individual donors. A Daily Yonder story provides examples of the importance of public radio stations in some specific rural places and a Politico article points out these stations can be essential in notifying the public about emergencies.

Vermont bans housing discrimination based on citizenship or immigration status

A new state statute adds citizenship and immigration status to categories protected by fair housing law in Vermont. The measure was supported by representatives of undocumented farmworkers, Civil Eats reports, because they are not eligible for assisted housing and it is hard for them to find places they can afford to rent in the state.

HAC

HAC comments on proposal to outsource USDA single-family loan servicing

HAC submitted comments in response to a USDA RD request for input on its plans to hire a vendor to take over a portion of the single-family loan servicing functions currently handled by the Servicing Office in St. Louis. HAC opposes this privatization. Our comments highlighted that servicing for this portfolio is unique due both to the structure of the loan products and the needs of the borrowers served. Any external vendor would have a steep and costly learning curve. Given these unique and complex servicing needs, HAC suggested cost savings from privatization are highly unlikely and asked that any anticipated cost savings be made public before this process moves forward. HAC believes that a better solution lies in adequately staffing the Servicing Office and upgrading its servicing technology.

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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HAC Comments on Proposal to Outsource USDA Single-Family Loan Servicing

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USDA is collecting comments from stakeholders and potential vendors to take over a portion of the single-family loan servicing functions currently handled by the Servicing Office in St. Louis. The Servicing Office was established in 1996 in St. Louis, Missouri as part of USDA Rural Development’s national restructuring effort to centralize loan servicing functions. Over the last three decades, the office has become the core operational center for the single-family programs, managing more than 185,000 active loans and approximately $14.5 billion in outstanding debt. Comments and vendor proposals were due on July 16. HAC submitted comments opposing this privatization of single-family loan servicing. Our comments highlighted that:
  • Servicing for this portfolio is unique due both to the structure of the loan products and the needs of the borrowers served. Any external vendor would have a steep and costly learning curve.
  • Given these unique and complex servicing needs, cost savings of privatization are highly unlikely. Any anticipated cost savings need to be made public before this process moves forward.
  • A better solution lies in adequately staffing the Servicing Office and upgrading its servicing technology.
HAC’s full comment can be viewed here:

HAC News: July 10, 2025

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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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Please credit the HAC News and provide a link to HAC’s website. Thank you!

Policy News from the Administration

Housing Assistance Council Statement on Reconciliation Legislation

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On July 4, President Trump signed into law a sweeping reconciliation package that includes several important tax and housing provisions—some that mark long-sought progress for affordable housing in rural communities, and others that fail to address persistent gaps in federal support.

“The most positive provisions of this broad and complex bill are the tax incentives that aid community development and housing, including several that recognize the unique housing market dynamics and capital needs of rural communities,” said David Lipsetz, President & CEO of the Housing Assistance Council (HAC). “Unfortunately, these are coupled with measures that will dramatically increase the cost of food and doctor visits for poor, small town families while giving tax cuts to wealthy people living in high income areas and corporations headquartered in far off cities. That hardly seems like a good deal for people living in rural and Tribal areas.”

The reconciliation act’s improvements to the rural housing and community development landscape include:

  • Low-Income Housing Tax Credit (LIHTC) Improvements: The package makes permanent the 12 percent allocation increase for 9 percent LIHTC credits and lowers the private activity bond threshold from 50 percent to 25 percent. These are major wins for housing developers, helping to unlock more financing and expand project feasibility in high-cost or low-income regions, including in rural and Native communities.
  • Targeted Opportunity Zones (OZ) Reform: The bill revises the Opportunity Zones program by increasing basis percentages and reducing the substantial improvement test requirements to 50 percent. It also adds a marginal incentive to invest in small cities, exurban areas, and places with fewer than 50,000 people. Presumably this is to address the failure of the original OZ program to generate activity in rural communities.
  • Permanent Extension of New Market Tax Credit (NMTC): The bill makes the New Markets Tax Credit permanent, providing long-term certainty for lenders and investors in underserved rural areas. NMTCs have played an essential role in bringing grocery stores, health centers, and community facilities to areas where traditional financing does not reach.

 

The affordable housing and community development sector hoped several other broadly supported, bipartisan proposals would be adopted in the bill, but they were left out of the final version. These remaining gaps and challenges include:

  • No Rural Difficult Development Areas (DDAs) Provision: Although contained in the initial House-passed reconciliation bill, the final legislation failed to include a longstanding provision of the bipartisan Affordable Housing Credit Improvement Act that would designate rural and Native communities as Difficult Development Areas for LIHTC purposes. This denied a 30 percent basis boost that would have helped projects in these communities overcome historically lower credit pricing and tighter capital margins. This omission is significant and jeopardizes growth in rural areas.
  • Neighborhood Homes Investment Act (NHIA) Excluded: The Neighborhood Homes Investment Act, which would have supported rehab and construction of owner-occupied homes in distressed rural neighborhoods, was not incorporated into the final reconciliation act. This omission is a particularly painful loss for communities with aging housing stock and no clear source of gap financing.
  • Misaligned OZ and LIHTC Standards: While the Opportunity Zones reforms for rural areas are a step forward, the continued disconnect between the OZ and LIHTC substantial improvement tests leaves many rural revitalization efforts out of reach.
  • Food and Healthcare Made More Scarce and Expensive: Provisions in the bill restrict eligibility for SNAP and Medicaid while reducing resources to veterans and decimating access to rural These cuts will hurt rural families who earn less than is needed to buy food and go to the doctor while still paying their mortgage or rent. Some of these cuts are set to phase in over the course of several years.

“We are grateful to the Members of Congress who championed the housing and community development tax incentives in this massive, fast-moving legislation,” said David Lipsetz. “Hopefully Congress finishes the job on a bipartisan basis later this session, leveling the playing field for all Americans by identifying rural areas as DDAs, adopting NHIA, and aligning OZs with LIHTC.”

Read a more detailed HAC analysis of the final reconciliation act.

Policy News town

Reconciliation Law Supports Some Tax Provisions for Affordable Housing, But Broadly Damages the Safety Net

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The budget reconciliation bill, formerly known as the One Big Beautiful Bill Act, became law on July 4 with President Trump’s signature after a lengthy voting process in Congress. HAC’s review below focuses primarily on the bill’s positives for affordable housing and community development and offers some recommendations for improving them further in future legislation.

Major Non-Housing Provisions Will Impact Affordable Housing

Estimates indicate the law will have significant impacts on federal taxes, deficits, and spending. The nonpartisan Congressional Budget Office calculated that it will add $3.4 trillion to the federal debt over the next ten years. Analyses by the Penn Wharton Business Model, CNN, the Tax Policy Center, the Economic Policy Institute, and others show that the law will provide significant tax cuts for the highest income Americans, fewer benefits for middle-income households, and some negative impacts for those with the lowest incomes. Revisions to Medicaid and the Affordable Care Act mean millions will lose health insurance. Changes to the Supplemental Nutrition Assistance Program (SNAP) will remove food support for millions.

The law increases funding for immigration enforcement. It reduces funding for the Consumer Financial Protection Bureau (CFPB) but does not go as far as an earlier version of the bill passed by the House, which would have eliminated the CFPB entirely. It does not require that public lands be sold to create space for development of new housing, another provision that was in the House bill.

The law also repeals the Greenhouse Gas Reduction Fund and rescinds unobligated funds remaining for the program. It cancels funding for a number of other energy-related programs created in the 2022 Inflation Reduction Act, including HUD’s Green and Resilient Retrofit Program, and cancels a number of energy-efficiency tax credits. Last-minute changes temporarily reduced, but did not eliminate, some of the law’s negative impacts on wind and solar projects. Taken as a whole, these provisions are likely to increase energy costs, with a disproportionately high impact on the lowest-income families because they pay the largest proportion of their incomes for energy.

Some of the law’s negative impacts will be especially significant for rural Americans. For example, while it increases funding for the Rural Health Transformation Program from $25 billion to $50 billion, that will not replace the $87 billion cut from rural hospital funding under the law’s other provisions. Rural communities already face unique health challenges including limited access to care, and closing hospitals can only add to their difficulties.

While HUD and USDA housing assistance programs are not directly affected by the law, the people they serve will feel its effects. States were authorized to use Medicaid for health-related needs, including housing (although the current administration may be rethinking that flexibility). When the proportion of income needed for food and medical care rises, the amount remaining for housing is reduced. People who need Medicaid and SNAP assistance may also qualify for housing aid, so any reduction in support will increase the number of low-income people juggling insufficient dollars to cover basic expenses.

Research has also found that high proportions of people experiencing homelessness rely on Medicaid, that use of Medicaid to provide supportive housing helps people leave homelessness, and that a large-scale loss of Medicaid in Tennessee led to a 24.5 percent increase in completed evictions. Homelessness in rural places has already been growing, with HUD data showing a 12 percent increase in total rural homelessness and a 36 percent increase in unsheltered rural family homelessness from 2023 to 2024.

Low Income Housing Tax Credit Permanently Expanded

The positive news for housing begins with an expansion of the Low Income Housing Tax Credit, which incentivizes private investment in affordable rental housing. The reconciliation law increases the annual allocation for 9 percent tax credits by 12 percent. And it permanently reduces the financed-by test, which requires tax exempt private activity bonds to finance a certain portion of a project in order for that property to be fully eligible to generate 4 percent tax credits. The project proportion, formerly 50 percent, will now be 25 percent. Together, these provisions will expand the impact of the limited 9 percent credits and allow states to support more affordable housing developments within their maximum cap of Private Activity Bonds.

Unfortunately, the final law does not include a provision passed by the House that would have designated rural and Native American areas as Difficult Development Areas, providing projects there with a 30 percent basis boost from 2026 through 2029. HAC strongly supports adoption of this provision in future legislation.

Opportunity Zones are Permanent, With Mixed Results for Rural Places and Absence of Benefits that Target Affordable Housing

While the LIHTC program applies to financing for affordable housing developments, the Opportunity Zone (OZ) incentive is based on geography, offering support for both businesses and housing in underdeveloped census tracts. The OZ program has been successful in producing rental housing, but the units have not necessarily been affordable for low-income residents. OZs have also been used far more widely in urban and suburban areas than in rural places.

The law turns the program from a temporary investment incentive to a permanent one, with OZs to be redesignated every ten years. It establishes revised criteria for tracts to be eligible for designation. It takes steps to increase OZ financing in rural areas, including by providing investments in those tracts with a 30 percent step-up in basis after five years, but does not provide added incentives to support affordable housing. Unlike the Rural Opportunity Zone and Investment Act, a bill proposed in 2023, the reconciliation law does not incorporate persistent poverty measurements into the definition of rural OZs.

The program requires properties being rehabilitated with OZ investments to be “substantially improved.” That has been defined to require the improved value of the property to be 100 percent greater than its pre-rehab value. The reconciliation law drops the threshold to 50 percent. Notably, this is one of the few OZ provisions that is effective immediately.

Further improvements to the OZ program can be made through legislation in Congress next year. HAC recommends that such a bill should:

  • Add enhanced benefits for investments in rural affordable housing developments. While the new OZ legislation provides an enhanced benefit for all rural projects, further enhancements to basis, deferral, and timing benefits should be extended to projects that meet affordability levels similar to those required by the Low-Income Housing Tax Credit program.
  • Require that one-third of the OZs designated in each new round be rural. The first version of the law passed by the House would have included this provision.
  • Reduce the amount of added value in a rehabilitated property that is needed to qualify for OZ investments. While the reduction from 100 percent substantial improvement to 50 percent is significant, the LIHTC program’s requirement is only 20 percent. Rural areas would be well served by making the LIHTC and OZ programs consistent on this point so they could be used together for affordable rental housing preservation. A lower threshold in rural places could also help attract investments there.
  • Adopt a more precise definition of rural OZs than the one provided in the bill. The law’s definition of rural areas includes places with populations up to 50,000, does not take population density into account, and relies partly on a definition of “urbanized area” that is no longer used by the U.S. Census Bureau. HAC recommends use of the rural definition adopted in the Duty to Serve regulations of the Federal Housing Finance Administration (FHFA). FHFA’s rural definition is well suited to the OZ context for several reasons. Like the OZ program, FHFA’s definition is based on census tracts. It was crafted specifically to include rural residents living in outlying counties of metropolitan areas, to remain stable over time, and to be easy to implement and operationalize. Also, it has been adopted by other financing programs such as the Capital Magnet Fund administered by the Treasury Department’s CDFI Fund.
  • Create a State and Community Dynamism Fund to build the “last rural mile” of OZ delivery infrastructure. Recognizing the insufficient OZ activity in rural areas, states have leveraged federal programs, such as those from USDA and HUD, to attract and stimulate investments. These preexisting community development programs are already oversubscribed, however, and likely to be even more stressed if their funding is cut in fiscal year 2026 and beyond. To fill the gap, the bipartisan, bicameral Opportunity Zones Transparency, Extension, and Improvement Act proposes a new and specific $1 billion “Dynamism Fund” to promote OZ funds and projects in lower-income and rural communities. Funding would be distributed by formula to states to support technical and capacity-building assistance, outreach to investors, and other field building activities.
  • Make mission-driven intermediaries as well as state governments eligible for Dynamism Fund grants. The New Markets Tax Credit, which utilizes Community Development Entities (CDEs) to access the program, could provide a model. The Treasury Department’s Community Development Financial Institutions (CDFI) Fund could certify community-based OZ investment intermediaries through a process similar to CDE/CDFI certification. These efforts would strengthen the ecosystem for rural Opportunity Zone investments, ensuring more effective deployment in areas that need it the most.
  • Allow for investments through CDFI and similar mission-driven intermediaries as qualified investments, and remove barriers that would allow those entities to aggregate multi-project investments. Allowing for the placement of investment in CDFIs and CDEs would open the door for mission-focused funds to be developed. These funds could meet the needs of rural projects while offsetting the limiting characteristics of rural projects: scattered, smaller projects, with desperate timelines.

New Markets Tax Credit Gets Permanent Extension

The bill makes the New Markets Tax Credit (NMTC) permanent, providing long-term certainty for lenders and investors in underserved rural areas. NMTCs have played an essential role in bringing grocery stores, health centers, and community facilities to areas that traditional financing does not reach.

Neighborhood Homes Investment Act is Not Included

The final law did not include provisions from the Neighborhood Homes Investment Act (NHIA), which would create a federal tax credit to build and rehabilitate affordable homes. NHIA was introduced earlier in 2025 in both the House and Senate. HAC supports its enactment as a stand-alone bill.

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