TOP STORIES

21^st Century ROAD to Housing becomes law

The bipartisan bill passed by both houses of Congress in June became law on July 11 without the president’s signature. HAC will post a summary of the measure’s rural housing provisions. Information is also available from many other housing organizations, including ROADmap: An Implementation Guide to the 21^st Century ROAD to Housing Act from the National Association of Affordable Housing Lenders and the Center for Affordable Housing Lending, and 21^st Century ROAD to Housing Act Impacts on Low-Income Households from the National Low Income Housing Coalition.

More USDA RD reorganization details available

On July 1, a group of unions, local governments, and others asked to add USDA-related claims to an existing lawsuit challenging the administration’s reorganizations and staff reductions at numerous federal agencies. Two 2025 documents comprising USDA’s Agency Reduction in Force and Reorganization Plan (ARRP) were made part of the public record in the case, providing more details than were previously released regarding the department or its Rural Development mission area. The ARRP is Exhibit A, pages 7-34, of this court filing. Pointing out that some of USDA’s proposals require congressional approval, it indicates that the department’s total staff will be reduced by 23% and RD’s staff by 47%. It says:

Rural Development will:

·         Consolidate the Rural Development subagencies into a single agency

·         Eliminate the State Office structure. As needed, State Office staff will be relocated to one of the five USDA Service Centers.

·         Rural Development plans to transform its Single-Family Housing program from a direct origination loan program to a guaranteed loan program. This can result in a decrease of 852 employees. In addition, Rural Development seeks to have delegated underwriting for all guaranteed loan programs, which will further reduce the number of employees required to deliver RD’s mission. However, Congressional authorization is required for this change.

·         USDA is also exploring transferring Rural Development loan programs to the Small Business Administration and/or the Department of Housing and Urban Development.

At some unspecified point in the future, the ARRP indicates, USDA hopes to consolidate the Farm Production and Conservation mission area with RD to create a single Farming and Rural Development Agency. It is not clear how that plan would fit with possibly transferring RD’s loan programs out of USDA entirely. The ARRP also does not mention that the 2018 Farm Bill requires USDA to have a Senate-confirmed Under Secretary for Rural Development. It does not provide estimates on the costs or consequences of any of the proposed actions. It does provide a timeline showing staff relocations complete in 2025 and congressional actions allowing completion of other changes in 2026, but to date neither the relocations nor the legislative changes have followed that schedule.

USDA rescinds notice on capacity building funds

USDA has rescinded the July 8, 2025 notice of funding opportunity for the FY25 Rural Community Development Initiative. The department will revise the NOFO “to ensure it reflects existing guidance as well as new policy and program priorities that have emerged since the original publication.” Applicants will be required to submit a new application when a new NOFO is issued.

RuralSTAT

Each Federal Home Loan Bank administers an annual competition for the majority of its Affordable Housing Program funds. In 2024, most of the $608 million awarded through these competitions provided gap financing to support the construction and rehabilitation of 26,863 housing units, 86.7% of them in urban or suburban places. Rental units accounted for 90.5% of the total and 94.8% in rural areas. Source: Urban Institute, The Value of the FHLBank System’s Housing and Community Mission-Oriented Programs.

OPPORTUNITIES

Native CDFI relending funds available

USDA’s Section 502 Native relending demonstration program makes loans to certified Native CDFIs which then lend the funds to homebuyers on eligible Native lands. Apply by August 14.

Native American home loan guarantee program expanded

In response to requests from Tribes, HUD has expanded the Section 184 guarantee program. A total of 356 counties and cities across six states are now eligible lending areas, including the entire states of Alabama, Georgia, Maryland, New York, and Virginia. Eligible places and loan limits are listed in Dear Lender Letter 2026-04.

Free technical assistance available to advance energy efficiency and electrification

Small and mid-sized communities (municipalities with populations under 250,000) are eligible for no-cost technical assistance from the Residential Retrofits for Energy Equity initiative to advance equitable residential energy efficiency and electrification initiatives. R2E2, led by the American Council for an Energy-Efficient Economy, is intended for local governments and community-based organizations that are actively planning or implementing efficiency programs that incorporate electrification, resilience, housing affordability, workforce development, or community engagement. Apply by July 24.

HUD offers fair housing funds

Four funding notices for the Fair Housing Initiatives Program have been posted, with significant changes from past eligible activities and other criteria:

·         Fair Housing Organizations Initiative, deadline August 6;

·         Administrative Enforcement Initiative, deadline August 6;

·         Private Enforcement Initiative, deadline November 2; and

·         Education and Outreach Initiative, deadline November 2.

REGULATIONS AND FEDERAL AGENCIES

Proposed change would allow subsequent loans for acquiring USDA rental properties

USDA proposes to amend its Section 515 regulations to allow subsequent loans to be used for acquisition of properties. This would allow owners of multifamily housing initially financed by USDA to help finance acquisition in preservation transactions. Comments are due August 31.

Treasury begins accepting Opportunity Zones nominations

Between July 1 and September 30 the Treasury Department is accepting governors’ nominations for OZ designations. For links to state websites with more details, visit the Economic Innovation Group’s State OZ 2.0 Resources map. Recommendations for making the OZ designations in a way that will drive investments into rural communities facing persistent poverty are provided in a guide and webinar produced by HAC in conjunction with Partners for Rural Transformation and HOPE Enterprise Corporation.

USDA guaranteed mortgage demonstration to expire

The two-year Payment Supplement Account demonstration program, which began on July 24, 2024, was intended to assist borrowers with Section 502 guaranteed mortgages who experienced hardship and could not make monthly payments. USDA is allowing the program to expire on July 24 this year.

Plaintiffs succeed in one Continuum of Care suit and begin another

On June 29, a federal judge cancelled HUD’s “arbitrary and capricious” funding opportunity notices for the FY25 Continuum of Care program. She did not rule on HUD’s authority to issue similar notices in future years. She also declined to rule on an effort to add the FY26 funding notice to this litigation, but noted that it could be challenged separately. On July 2 a similar group of nonprofits and local governments filed a complaint against HUD regarding the FY 2026 notice, launching a new suit.

HUD proposes to roll back floodplain regulations

Comments are due September 8 on a proposed rule that would rescind and replace most of a 2024 final rule on floodplain management. HUD explains that the change generally would return to the regulations in place before the 2024 rule, although it would maintain some newer flexibilities.

Fair housing guidance withdrawn

HUD has withdrawn several guidance documents related to fair housing enforcement. The documents were issued by its Office of General Counsel between 1990 and 2024.

CRA list of distressed or underserved nonmetro areas posted

The federal bank regulators have released their 2026 list of “distressed or underserved nonmetropolitan middle-income geographies” where banks’ revitalization or stabilization activities are eligible for Community Reinvestment Act credit.

Regulators discourage lending to people without work authorization

Interagency Guidance on Lending to Individuals Not Legally Authorized to Work in the United States, issued by the Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency, cautions lenders regarding the potentially elevated credit risk posed by borrowers who do not have work authorization. The statement refers to a similar warning published in June by the Consumer Financial Protection Bureau.

EVENTS

Free virtual training offered for heirs’ property programs

Results for America and Local Initiatives Support Corporation invite local and state governments and community-based organizations to apply for Saving Homes Before They’re Lost: Preventing Heirs’ Property Loss and Resolving Tangled Titles – a free seven-session virtual learning opportunity (called a “Solutions Sprint”) to launch or expand the implementation of heirs’ property prevention and resolution in their jurisdictions. Apply by August 3. Sessions will begin September 16. Find out more about the program and applications on Heirs’ Property Central.

PUBLICATIONS AND MEDIA

Nonprofits invited to answer survey on possible new insurance program

The Housing Partnership Network is working to develop a new insurance program aimed at helping nonprofit affordable housing owners respond to rising insurance costs, strengthen property operations, and preserve affordable housing in rural and underserved communities. This sector-level effort builds on the success of HPIEx, HPN’s member-based insurance model. HPN is seeks input from leaders across the field to assess whether a broader insurance solution supporting nonprofit organizations beyond HPN’s membership could deliver meaningful value to the sector. Learn more and participate in the survey here.

Guide provides resources for supporting homeowners who may be detained or deported

Housing Advocates Handbook: Working with Homeowners Facing Possible Detention or Deportation, developed by UnidosUS and the National Housing Law Project, is intended to equip housing counselors, attorneys, and advocates with legal and practical guidance, key resources, and action steps to help homeowners and their families prepare for and respond to detention or deportation while protecting housing stability.

Better USDA/EPA coordination recommended to help improve rural water infrastructure

A new Government Accountability Office report, Rural Water Infrastructure: Better Agency Coordination Could Help Unserved Communities Address Their Needs, notes that rural places without drinking water or wastewater utilities face difficulties accessing USDA and Environmental Protection Agency programs that offer financial and technical assistance. GAO recommends ways that USDA, EPA, and states could help rural communities access financial resources for water infrastructure.

HAC

HAC is hiring

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

·         Loan Officer

·         Communications Specialist

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!