Congressional leaders reintroduce bipartisan bill to protect rural housing

Key Takeaways

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

Why the Bill Matters to Counties

Counties play a central role in the rural housing ecosystem. While USDA administers federal rural rental assistance and loan programs, counties are often the first line of support for residents facing housing instability. Counties deliver emergency and human services, manage infrastructure and transportation and partner with nonprofits and developers to expand affordable housing. Many rural counties also oversee zoning, land use and local housing authorities.

With limited housing options and resources, rural communities are especially vulnerable to the loss of affordable units as USDA mortgages expire. The Rural Housing Service Reform Act would help preserve the rural housing stock and give counties and residents the necessary tools to pursue lasting housing solutions.

“Safe, affordable housing is the backbone of thriving rural communities,” said NACo Executive Director and CEO Matthew Chase. “The Rural Housing Service Reform Act modernizes USDA’s housing programs, preserves rural rental assistance and invests in housing infrastructure. This bipartisan bill supports millions of families and strengthens rural economies. Counties applaud Senators Rounds and Smith for their leadership and urge swift passage by Congress.”

To read the text of the Rural Housing Service Reform Act, click here.