April 30, 2026 – The House Appropriations Committee approved its FY27 funding bill for USDA on April 29. There is no indication yet when the bill might be considered on the House floor or when the Senate may begin work on its version of the measure.

— Information about FY27 funding for the Department of Housing and Urban Development is available here. —

The dollar amounts passed by the committee are shown in the table below. The bill also takes steps to undo the administration’s recent changes to the Section 502 direct program. First, it requires the Section 502 direct loan limit to remain at 80% of HUD’s limit unless USDA lowers it through a formal rulemaking procedure.

Second, the non-binding report that accompanies the bill “encourages” USDA to eliminate the new requirement for multiple reviews by State Directors and requests extensive reporting back to the committee:

The Committee notes that revisions to the Section 502 handbook issued by RHS on February 10, 2026, made substantial changes in the Section 502 direct loan program, including lower limits and review of eligibility and loan approval by State directors of all Section 502 loans. The bill includes language prohibiting RHS from implementing the loan limit change that has negatively impacted certain areas of the country and directs RHS to revert to the previous loan limit immediately. The Committee is also concerned that recent changes requiring multiple State Director reviews of individual loan applications may introduce unnecessary delays in program delivery and encourages the Department to revert to a single review pending any future changes developed through notice-and-comment rulemaking.
The Committee directs the RHS Administrator to provide monthly briefings on this program, including analyses and impact on rural families seeking homeownership loans. Briefings shall include, by State, information on the number and dollar amount of Section 502 loans made and the number and dollar amount of loan applications on hand. The Committee is also aware that over 1,000 loan applications were on file at RHS before implementation of the handbook revisions. RHS is directed to provide a report on those loan applications, the number approved, the number rejected due to the handbook revisions, and what measures RHS is taking to assist loan applicants who were rejected due to the handbook changes. RHS is also directed to provide information to the Committee on loan processing time by State and to provide a comparison with processing time for fiscal year 2025.

Neither the bill nor the report addresses USDA’s changes to loan packaging fees.

House Proposes to Hold Most Rural Housing Programs at FY26 Funding Levels

April 22, 2026 – The House Appropriations Committee has released its proposed FY27 funding bill for USDA. As shown in the table below, the bill would keep almost all of the rural housing and community facilities programs at their FY26 dollar levels. It would increase Section 502 guaranteed lending and Section 521 Rental Assistance, as requested in the administration’s budget. It would continue to allow decoupling of Rental Assistance from Section 515 or 514 mortgages when those mortgages end, with a limit of 5,000 units.

The House agriculture appropriations subcommittee will mark up this bill on Thursday, April 23. The full committee is scheduled to review it on April 28.

The process to set appropriations for FY27 is still in its very early stages. Both the House and the Senate will develop their own appropriations bills, which may or may not resemble the President’s proposal. 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.

For ongoing news on appropriations and other topics related to rural housing, subscribe to HAC emails, which include the free biweekly HAC News.

Table: USDA Rural Housing Service Funding Levels

Program ($ in millions)	FY26 Final	FY27 Budget	FY27 House	FY27 Senate*	FY27 Final*
502 SF Direct Loans	$1,000	$983.2	$1,000
Nat. Amer. SF Demo	5	0	6
502 SF Guar. Loans	25,000	20,000	25,000
504 VLI Repair Loans	25	25	25
504 VLI Repair Grants	21	20	**
515 MF Direct Loans	50	50	50
514 Farm Labor Hsg. Loans	15	15	15
521 Rental Asst.	1,715	1,795	1,795
523 Self-Help TA	25	25	25
533 Hsg. Prsrv. Grants	6	6	**
538 MF Guar. Loans	400	500	400
542 Vouchers	48	0	48
Rental Prsrv. Demo (MPR)	30	30	30
Rental Prsrv. TA	2	0	0
Rural Cmty. Dev’t Init.	5	0	5
Cmty. Facil. Direct Loans	1,250	1,250	1,250
Cmty. Facil. Grants***	13	0	19.4
Tribal Colleges CF Grants	8	0	8
Cmty. Facil. Guar.	650	650	650

*These columns will be filled in as the appropriations process moves forward.

**The House bill would provide a total of $26 million for Section 504 grants and Section 533 Housing Preservation Grants.

***The amounts shown here for CF grants are for competitive grants. The final FY26 appropriation and the House FY27 bill include significant additional funds for “Community Project Funding” or “Congressionally Directed Spending” — earmarks.

Abbreviations key

• NA: Not Available
• MF: Multifamily (Rental)
• SF: Single-Family (Homeownership)
• TA: Technical Assistance
• VLI: Very Low-Income

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USDA’s Rural Housing Budget Supports Most Programs

April 3, 2026 – The administration’s budget request for fiscal year 2027 was released on April 3. The proposals for USDA’s rural housing programs are slightly better than those in the FY26 budget.

Join HAC on April 8 at 2:00 pm Eastern time to learn more about the budget. In this webinar, HAC policy staff will cover what the budget includes for rural housing programs at USDA, HUD, and the CDFI Fund, and what the rest of the funding process will look like. Register here.

Homeownership

Last year USDA proposed to defund the Section 502 direct program but this year it suggests a $983 million program level. USDA estimates this amount will finance 5,355 homes.

The budget would eliminate the $5 million relending program that enables Native Community Development Financial Institutions to provide mortgages for Native American homebuyers.

The budget would change the current mortgage requirement for homeowners obtaining Section 504 repair loans. It would allow loans of up to $15,000 – rather than the current $7,500 – to be secured by a promissory note rather than a mortgage.

The administration would continue to support local organizations administering self-help programs under Section 523, despite its recent defunding of technical assistance providers to help them.

Rental Housing

The budget includes support for some of the elements of USDA’s rental preservation work, proposing to hold the Section 515 and Multifamily Preservation and Revitalization (MPR) programs at their FY26 levels. It would not, however, provide returns on investment or asset management fees for nonprofit and public agency owners. And it would not fund technical assistance to help nonprofits and public agencies purchase properties in need of preservation; USDA explains that it expects carryover funding from prior years to be sufficient to satisfy the demand.

The budget again supports decoupling Section 521 Rental Assistance from Section 515 and Section 514 mortgages, allowing tenants in rental properties where USDA mortgages are ending to continue to receive Rental Assistance. There would be no limit on the number of these Stand-Alone Rental Assistance (SARA) units.

Relying on SARA to cover tenants, the budget would eliminate funding for Section 542 vouchers. As it did last year, it makes no provisions for renters currently relying on these vouchers, explaining without details that “between the set of current recipients whose income would not allow them to re-qualify, the value of the voucher diminishing over time, and natural attrition from the program, very few of the current recipients will be affected. For the remaining few, options would include vacancies at other USDA properties with rental assistance, applying for HUD funded housing assistance or other similar programs at the state and local level.”

Other Information

USDA’s document explaining its Rural Development budget to Congress provides some additional information:

• the department’s request includes funding for a contract with a consultant to help implement the Build America, Buy America Act;
• a breakdown of staffing by state shows that Rural Development had the equivalent of 4,409 full-time staff in FY24 and 4,452 in FY25, and is expected to have 3,057 in both FY26 and FY27. It does not indicate whether the figures are calculated at the beginning of the fiscal year or at the end.

The Rural Housing Service budget explanation includes information about how the housing programs’ funds were used in FY24 and FY25.

Next Steps

This budget represents the first step in a lengthier process to set appropriations for FY27. Both the House and the Senate will develop their own appropriations bills, which may or may not resemble the President’s proposal. 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.

For ongoing news on appropriations and other topics related to rural housing, subscribe to HAC emails, which include the free biweekly HAC News.