Sponsors (9)
The bill makes it significantly easier for rural homeowners to transfer property and for eligible buyers to assume USDA Section 502 loans, improving rural housing mobility and access, but it introduces affordability risks from potential servicer fees and raises program credit exposure that could increase costs for taxpayers or future borrowers.
Homeowners in USDA Section 502 rural loan programs can transfer property and be released from remaining liability once an eligible transferee assumes the loan, reducing sellers' ongoing financial risk.
Prospective buyers who qualify for Section 502 assistance can assume existing guaranteed loans, making it easier and cheaper for low- and moderate-income households to buy homes in rural areas.
The Secretary of Agriculture gains flexibility to set assumption terms, allowing tailored solutions for loan performance and risk management that can preserve program sustainability.
Borrowers who assume loans may be charged new servicer/transaction fees, creating affordability barriers for low-income buyers in rural areas and increasing out-of-pocket costs for those assuming loans.
Releasing original borrowers from liability when a loan is assumed increases credit risk for guarantors and the program, which could raise costs for taxpayers or future borrowers if losses occur.
Based on analysis of 2 sections of legislative text.
Allows eligible buyers to assume USDA Section 502 guaranteed rural loans with transferors released from liability and authorizes servicer fees by rule.
Creates a clear, express authority allowing eligible buyers to assume USDA Section 502 guaranteed rural home loans when a property is transferred, and releases sellers (and co-borrowers/guarantors) from liability once the buyer assumes the loan. It also lets the Secretary of Agriculture issue a rule permitting loan servicers to charge borrowers fees to cover transaction costs related to assumptions. One other provision only records a short title for the Act. The changes apply to loans guaranteed on or after the law takes effect.
Introduced October 10, 2025 by Jim Costa · Last progress October 10, 2025