HR4957-119

What This Bill Does

The Rural Housing Service Reform Act is a broad USDA rural housing modernization bill. It requires a study of section 521 subsidy recapture, authorizes staffing and IT funding for fiscal years 2026 through 2030, and funds technology improvements for loan processing and management. It permanently establishes a preservation and revitalization program for section 514, 515, and 516 multifamily properties, including owner and tenant notices before loan maturity, loan restructuring tools, financial incentives, rental-assistance decoupling, and preservation of housing for low-income residents and farm laborers. It allows 20-year rental assistance renewals, reserves at least 60 percent of section 504 loan funds for very low-income applicants, raises a grant amount from $7,500 to $15,000, creates a Rural Community Development Initiative with grants up to $250,000 and matching requirements, and requires annual reports on loan performance, housing stock, program exits, and risk ratings. It directs GAO to study RHS technology, creates processes for adjusting rural housing vouchers after income, family, or rent changes, expands voucher eligibility after prepayment, foreclosure, or mortgage maturity, allows nonprofit and public body purchasers to buy section 515 properties with long-term use restrictions, permits section 502 loan refinancing or modification up to 40 years, releases original borrowers from liability when guaranteed loans are assumed by approved borrowers, excludes home-based child care from certain USDA loan restrictions, allows accessory dwelling unit rental income in guaranteed-loan qualification for older properties, and requires annual reports on 90-day application review timeliness.

Who Benefits and How

Rural low-income families benefit from stronger voucher eligibility, adjusted voucher amounts, preservation notices, and continued federally assisted housing options. Farm laborer families benefit because the preservation program targets section 514, 515, and 516 properties that serve farmworker and rural rental housing needs. Nonprofit housing organizations benefit from authority to acquire section 515 properties with long-term use restrictions before addressing rehabilitation needs. Rural community development organizations benefit from grants up to $250,000 for housing, community facilities, and economic development capacity. Home-based child care providers benefit because USDA loan restrictions must exclude licensed or applicant child care businesses.

Who Bears the Burden and How

USDA Rural Housing Service staff must implement new preservation, voucher, rental-assistance, loan, technology, reporting, and rulemaking duties. Rural rental property managers must respond to maturity notices, preservation options, restructuring terms, and tenant protections. Eligible intermediary organizations must provide matching funds unless USDA waives the requirement for persistently poor rural regions. GAO staff must estimate RHS technology funding needs and staffing needs within one year. Federal taxpayers bear the cost of staffing, IT upgrades, technical improvements, preservation assistance, grants, and voucher expansion.

Key Provisions

• Authorizes staffing and IT funding for Rural Housing Service programs from fiscal years 2026 through 2030.
• Establishes a permanent preservation and revitalization program for section 514, 515, and 516 multifamily properties.
• Extends rental assistance renewal authority and adjusts rural housing voucher eligibility and payment reviews.
• Creates Rural Community Development Initiative grants of up to $250,000 with matching requirements.
• Expands section 515 nonprofit transfers, section 502 refinancing up to 40 years, child-care loan flexibility, and accessory dwelling unit loan-guarantee treatment.
• Requires annual USDA and GAO reports on loan performance, technology needs, risk ratings, and application timeliness.