federal programs Archives

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

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

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

Rural Rental Housing Preservation

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

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

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

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

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

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

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

Other Rural Housing Provisions

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

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

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

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

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

Environmental Review

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

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

Finance and Banking

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

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

Native American Housing

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

Research and Reports

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

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

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

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

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

Resources for More Information

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

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

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

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

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

In response to reports of extensive cuts in federal programs and staff that serve rural and small town interests at the Department of Housing and Urban Development (HUD) and U.S. Department of Agriculture (USDA), Housing Assistance Council CEO David Lipsetz made the following statement.

After this fall’s election, I observed that urban and rural voters had come closer together, as their shared frustration with the economy put a new Administration in the White House. It seemed this would lead to a rebalancing of public and private investment in housing—one where small towns finally get their fair shot at prosperity. One-quarter of all rural families—5.6 million rural households—are paying more than they can afford for housing. Rural communities are experiencing unprecedented levels of homelessness, with rents outpacing household income, and a housing market that puts the American Dream of homeownership out of reach for many young working families. I expressed hope that the outcome of the election would finally bring national attention to the severe housing crisis facing rural communities.

However, this glimmer of hope is now fading. The public frustration that I thought would drive positive changes to an imperfect system is instead fueling an indiscriminate effort to dismantle the very programs and professionals we need. Recent cuts at USDA and HUD are setting small towns back.

Millions of rural Americans can rent decent apartments and buy good homes in places that banks and builders do not serve because we the people believe everyone deserves a chance. Hundreds of thousands of rural families—many elderly and disabled—live in HUD’s publicly supported housing or rely on HUD and USDA rental programs to find a place they can call home. These public programs sustain rural communities as they cycle through tough times.

When the market doesn’t generate enough good housing in small towns, mortgages from USDA and rent vouchers from HUD fill the gap. Yet, these are not simple programs to run. For these programs to ensure that good housing is built and maintained, we need experienced professionals in the administration. Plans to terminate half of HUD’s workforce and dismiss employees at USDA threaten to severely disrupt these vital investments in rural housing. A bank would never tell its shareholders it plans to fire half its underwriters and still expects to make good quality loans.

We cannot afford this kind of disruption to programs that rural communities depend on. Congress has appropriated funding for these programs, rural families need them, and they cannot operate effectively without adequate, experienced staff to administer them.

HAC has been in small towns for 54 years and plans to be here for 54 more. We stand ready to work with the President and everyone else who wants to build up rural communities. We look forward to partnering with new leaders at HUD and USDA to make sure they have the resources to address rural America’s pressing housing challenges. But one thing is clear: the affordable housing crisis in rural America requires more capacity and attention, not less.

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Rural Provisions in the 21st Century ROAD to Housing Act