Rural Housing Reform Act Proposes Faster Loans, Preservation Funds, and New Native CDFI Program

The Rural Housing Service Reform Act of 2025 aims to overhaul how federal housing support works in rural America. It's designed to streamline the often clunky processes of the Rural Housing Service (RHS), boost efforts to preserve existing affordable housing, channel specific support to Native communities, and invest in much-needed technology and staffing upgrades to make the system work better for everyday people.

Less Waiting, More Doing: Streamlining Rural Housing Aid

Nobody likes waiting, especially when it comes to housing. This bill tackles delays head-on. It mandates the USDA to review applications for key homeownership and repair loans (Section 502 and 504 programs) within 90 days (Sec. 1101). Think getting an answer on that home repair loan application in three months instead of an indefinite wait. To make this happen, the bill authorizes funding specifically for more staff and critical IT upgrades from FY2026-2030 (Sec. 103, 104), acknowledging that the current tech is creaking. It also calls for annual reports on how well RHS programs are doing (Sec. 601) and a separate GAO report digging into the tech issues and what's needed to fix them (Sec. 602), adding layers of transparency.

Keeping Homes Affordable: Preservation and Flexibility

Keeping existing affordable housing affordable is a major focus. Title II establishes a permanent Housing Preservation and Revitalization Program, authorizing $200 million annually (FY2026-2030) for things like restructuring existing USDA mortgages on multifamily properties to keep rents low (Sec. 201). If you live in a rural apartment building financed by USDA, this part includes requirements for owners and the USDA to give tenants advance notice about maturing loans and potential changes. The bill also gives the USDA more flexibility in renewing rental assistance contracts for up to 20 years (Sec. 202) and allows voucher amounts to be adjusted based on changes in tenant income or rent (Sec. 701, 703), offering more stability. For homeowners, Section 502 loans could potentially be extended up to 40 years (Sec. 901), and the bill explicitly allows loan guarantees for Accessory Dwelling Units (ADUs), potentially opening doors for homeowners to add rental units (Sec. 1001).

Targeted Boosts: Native Communities, Small Repairs, and Local Development

The Act carves out specific support for underserved groups and needs. Title III creates a Native Community Development Financial Institution (CDFI) Relending Program, setting aside up to $50 million annually from the main direct loan program for Native CDFIs to make home loans, particularly on Tribal lands (Sec. 301). It also includes grants to help these Native CDFIs with operational costs. For essential home repairs, the bill doubles the maximum loan amount under the Section 504 program from $7,500 to $15,000, prioritizing very low-income applicants (Sec. 401). The Rural Community Development Initiative (Title V) gets formalized, offering grants up to $250,000 to intermediary organizations that help local groups with housing and development projects (Sec. 501). And in a practical tweak, the bill clarifies that licensed home-based childcare providers generally won't be restricted from certain USDA loans just because they run a business from home (Sec. 903).

Overall, this legislation represents a significant attempt to modernize rural housing programs. While many details will depend on how the USDA writes the specific rules and whether the agency can effectively implement changes like the 90-day application review target, the bill lays groundwork for potentially faster, more flexible, and better-targeted housing support in rural areas.