Congressional leaders reintroduce bipartisan bill to protect rural housing
Senators Mike Rounds and Tina Smith reintroduced the Rural Housing Service Reform Act (S.2160), bipartisan legislation that would help preserve affordable housing and stabilize rental assistance for rural county residents across the country.
By: Owen Hart, legislative director, agriculture & rural affairs and Michael Matthews, legislative director, community, economic & workforce development
On April 7, Senators Mike Rounds (R-S.D.) and Tina Smith (D-Minn.) reintroduced the Rural Housing Service Reform Act (S.2160), bipartisan legislation that would help preserve affordable housing and stabilize rental assistance for rural county residents across the country.
The bill makes critical reforms to USDA’s Rural Housing Service programs, including allowing Section 521 Rental Assistance (RA) to continue even after a Section 515 mortgage matures. Section 515 provides long-term, low-interest loans to develop affordable rental housing in rural communities, while Section 521 offers rental assistance to low-income tenants living in those properties. Under current law, rental assistance is tied to the life of the Section 515 loan on the respective property; When a Section 515 mortgage expires, the associated rental assistance ends as well. Without reform, rural county residents could lose access to hundreds of thousands of affordable units as these mortgages mature in the coming years.
What the Rural Housing Service Reform Act Does
- Preserves rural rental assistance by decoupling it from expiring USDA Section 515 mortgages and protecting assistance during property foreclosures
- Strengthens USDA Rural Housing Service capacity through dedicated funding for staffing, IT modernization, and faster application processing
- Permanently authorizes rural housing preservation programs to rehabilitate and maintain USDA-financed multifamily housing, including expanded support for nonprofit transfers and property revitalization
- Enhances transparency and tenant protections by requiring annual notices of loan maturity and regular reporting on rural housing program performance, including a formal review of Rural Housing Service systems
- Expands access to rural affordable housing programs through updated eligibility for Section 504 home repair assistance, a new relending program for Native Community Development Financial Institutions (CDFIs), broader use of rural housing vouchers and new loan guarantees for accessory dwelling units (ADUs)
- Modernizes USDA single-family loan programs by extending loan terms, improving borrower protections and allowing greater flexibility in loan assumptions
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