Rural Housing Service Reform Act of 2025

This bill updates rural housing programs to keep homes affordable and make renting and buying in small towns easier. It protects rental assistance when loans on buildings mature or a property is in foreclosure, gives tenants clearer advance notice, and allows USDA home loans to stretch up to 40 years to lower monthly payments. It also supports Native community lenders, lets rental income from a small second home on your property (an accessory dwelling unit) count toward loan approval, and removes barriers for licensed home-based child care. It invests in staff and modern technology so applications move faster.

Key points

• Who is affected: rural renters in USDA-backed apartments, people using USDA home loans, Native families and Native community lenders, nonprofits that preserve affordable housing, and tenants who rely on rural housing vouchers.
• What changes:
  • Preserves and repairs aging rural rentals: restructures loans, extends rental help for up to 20 years, and gives tenants clear notices so they can plan.
  • Keeps rental help in place even if a property goes through foreclosure or if the owner no longer has a USDA loan.
  • Creates a set‑aside (up to $50 million a year) so Native community lenders can relend USDA mortgage funds to Native homebuyers, with added reporting, support grants, and outreach.
  • Lets USDA guarantee loans with accessory dwelling units and count ADU rent toward qualifying; also allows licensed home‑based child care under loan rules.
  • Extends USDA home loans up to 40 years and releases the original borrower when a guaranteed loan is assumed by a new eligible buyer.
  • Improves the rural voucher program: adjusts voucher amounts after income, family, or rent changes and expands who can get vouchers when properties prepay, are foreclosed, or the mortgage matures.
  • Eases transfers of rural rental properties to nonprofits to keep them affordable long‑term.
  • Updates rules for small home repair loans and grants and funds rural community development grants.
• When:
  • Funds to preserve rural rentals are authorized for 2026–2030; agencies must set up rules within a year.
  • New voucher rules must be issued within two years; tenants get updated voucher amounts on a set timeline.
  • USDA aims to decide loan and grant applications within 90 days and must report on timeliness each year.

What this means for you: more stable rural rentals, clearer rules and timelines, easier paths to homeownership (including with an ADU or a licensed home child‑care business), and better access to help if your building’s loan changes or ends.