Rural Housing Service Reform Act of 2025

This bill updates USDA rural housing programs to keep homes in small towns safe and affordable. It protects renters when buildings change hands or loans end, makes vouchers fairer, helps communities preserve housing, and pushes the agency to modernize its technology and speed up decisions .

• Who is affected

  • Rural renters in USDA‑backed properties, including farmworker housing; low‑income families; and tenants in buildings with older USDA loans.
  • Homeowners with USDA home loans and people buying homes with USDA loan guarantees.
  • Local nonprofits, tribes, and community groups working on housing and community projects.
  • Home‑based child care providers and homeowners with or adding small accessory dwelling units (ADUs).

• What changes

  • Protects rental help for tenants if a property is foreclosed, and lets USDA renew rental help for up to 20 years when loans are reworked or end; tenants get early, plain‑language notice before loans mature .
  • Creates a long‑term program to preserve and fix older USDA‑financed rentals, with tools like lower interest, deferred payments, or longer terms to keep buildings safe and affordable .
  • Makes rural housing vouchers adjust when income, family size, or rent changes; requires yearly check‑ins with flexibility for hardships; expands eligibility to families in properties whose USDA loans were prepaid, foreclosed, or matured after 2005; and requires USDA to update voucher amounts at least 60 days before a voucher expires .
  • Lets USDA home loans be stretched or refinanced up to 40 years to lower monthly costs; when a qualified buyer assumes a USDA‑guaranteed loan, the original borrower is released from the debt.
  • Supports local groups with grants (up to $250,000) to build capacity for housing and community projects; matching funds are required, but USDA can waive the match in persistently poor rural areas.
  • Allows licensed home‑based child care providers to use USDA‑guaranteed mortgages even if they run the business at home; supports ADUs and lets borrowers count ADU rent when applying for a USDA‑guaranteed loan.
  • Requires a public annual report with data on program health, why properties leave the program, and risk ratings, plus an independent study on outdated technology and needed fixes .

• When

  • USDA must write the voucher‑adjustment rules within 2 years of enactment.
  • Technology upgrades begin with 2026 funding and run for up to five years; staffing and IT upgrades are also authorized starting in 2026 .
  • Funding is authorized for preservation activities in fiscal years 2026–2030.
  • USDA is urged to decide loan and grant applications in about 90 days and must report to Congress on its progress.