Rural Housing Overhaul: Bill Boosts Home Repair Loans to $15K, Stretches Mortgages to 40 Years

The Rural Housing Service Reform Act of 2025 is a massive piece of legislation aimed at updating and stabilizing affordable housing in rural America. Think of it as a much-needed maintenance and modernization effort for the USDA’s housing programs. At its core, the bill does two big things: it protects existing affordable rental units from disappearing and tries to make it easier for people in the country to buy, fix, or keep their homes.

Protecting the Roof Over Your Head

If you live in a rural apartment complex that was built with USDA financing (under programs like Sections 514 or 515), this bill has your back. It creates a permanent Housing Preservation and Revitalization Program (SEC. 201). This means the government can now actively restructure loans for these properties to ensure they remain safe and affordable for low-income tenants. When a loan matures or the property faces foreclosure, the Secretary must offer to renew the rental assistance contract for up to 20 years, effectively “decoupling” the assistance from the original loan. The owner has to agree to a restrictive use agreement for at least 20 years, promising to keep the units affordable and in good shape.

Crucially, this bill makes sure that if the Secretary of Agriculture has to foreclose on one of these apartment buildings, any existing rental assistance contracts—the ones that keep the rent affordable for the people living there—must be maintained (SEC. 101). This is a huge win for tenant stability, ensuring that a financial hiccup at the ownership level doesn't immediately translate into a housing crisis for the people who live there.

Making Home Ownership and Repairs Possible

For rural homeowners, the bill offers two significant upgrades. First, for those who need minor home repairs via the Section 504 program, the maximum loan amount is doubled from $7,500 to $15,000 (SEC. 401). If you’re a very low-income homeowner struggling to replace a failing septic system or fix a leaky roof, that extra $7,500 can be the difference between a safe home and a condemned one. The bill also reserves at least 60 percent of these funds specifically for very low-income applicants.

Second, if you’re getting a Section 502 loan—the main program for rural home mortgages—the maximum repayment term that the Secretary can offer is being stretched up to 40 years (SEC. 901). This applies to new loans, refinances, and modifications. For a young family in a high-cost area, extending the term from the standard 30 years to 40 years could significantly lower the monthly payment, making homeownership attainable. The bill also clarifies that if you sell your home and a new, eligible buyer assumes your guaranteed Section 502 loan, you are completely released from liability (SEC. 902).

The Tech Upgrade and the 90-Day Goal

We all know government technology can be… slow. This bill finally addresses that, authorizing appropriations for increased staffing and information technology upgrades for the Rural Housing Service (RHS) (SEC. 103, 104). The GAO is required to report on exactly how much this modernization will cost and what kind of staff is needed to pull it off (SEC. 602).

More importantly for applicants, Congress is setting a clear target: the RHS should review, underwrite, and decide on Section 502 and 504 loan applications within 90 days of receiving them (SEC. 1101). While this is a goal and not a hard deadline, the Secretary has to report to Congress every year until they hit that 90-day mark consistently for five years, explaining why any application took longer. This is a crucial step toward speeding up the process for people waiting on housing decisions.

A Boost for Native Communities and Community Development

In a major move to support homeownership on Tribal lands, the bill creates a new Native CDFI Relending Program, setting aside up to $50 million annually in direct loan funds for certified Native Community Development Financial Institutions (CDFIs) (SEC. 301). This money is specifically for making mortgage loans to members of Indian Tribes, Alaska Native, or Native Hawaiian communities. The bill also includes a smart provision: the required 20% matching fund requirement for the CDFIs must be waived for loans made to these specific community members, lowering a significant barrier to capital.

Finally, the bill creates a new Rural Community Development Initiative grant program (SEC. 501) to help local nonprofits and community groups build capacity for housing and economic projects. The catch? Intermediaries must provide a 1:1 match for the grant, unless the project is in a “persistently poor rural region,” where the Secretary can waive the matching requirement. This gives the Secretary a lot of discretion, but it’s aimed at ensuring that the poorest areas aren't left out just because they lack immediate matching funds.