Rural Housing Service Reform Act of 2025
Sponsored By: Senator Tina Smith
Introduced
Summary
Preserve and revitalize affordable rural multifamily housing. This bill would expand foreclosure protections for Rural Housing Service (RHS) mortgages, create a permanent Housing Preservation and Revitalization program, and authorize new funding and technical help to keep rural rental properties safe and affordable.
Show full summary
- Families and tenants: Tenants would keep rental assistance contracts during foreclosure and gain stronger resident protections and occupancy rights. Rural housing vouchers would get a new review process and could be renewed or adjusted to reflect income, family changes, or rent.
- Owners, nonprofits, and purchasers: The bill would let owners restructure loans with tools like interest reductions, deferrals, and reamortization, and it would fund transfer and preservation grants to help nonprofits or public bodies buy and rehab properties. It also authorizes $200 million per year for the preservation and revitalization program for FY2026–FY2030.
- Native communities and community lenders: It would create a Native Community Development Financial Institution relending program with a $50 million annual set-aside and a 20 percent non-Federal cost share requirement, plus reporting and outreach rules.
*This bill would authorize new federal spending, including $200 million per year for FY2026–FY2030 and a $50 million annual set-aside, which would increase federal outlays.*
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Bill Overview
Analyzed Economic Effects
5 provisions identified: 4 benefits, 0 costs, 1 mixed.
Bigger small repair loans for rural owners
This bill would raise the maximum Section 504 small repair loan from $7,500 to $15,000. It would also require that at least 60 percent of loan funds go to very low-income applicants. The change would help low-income rural borrowers pay for needed home repairs.
Protect and preserve rural apartments
This bill would create a Housing Preservation and Revitalization program with about $200 million each year for FY2026–FY2030. It would let the agency restructure loans, pay for rehab, and renew rental assistance contracts for up to 20 years. Projects getting help would accept long-term use rules and rents would generally follow Section 8 fair market rents, with a budget-based exception. The bill would raise a statutory subsidy rate in one rule to 50 percent and extend established multifamily foreclosure procedures to certain rural mortgages. It would also let some low-income tenants get rural housing vouchers after a prepayment, foreclosure, or mortgage maturity (after Sept. 30, 2005) and require rules to let vouchers be adjusted and recertified.
More flexible rural mortgage rules
This bill would let the agency refinance or modify Section 502 loans so the total term after change does not exceed 40 years. It would define accessory dwelling units and let rental income from an ADU count to qualify for a guaranteed loan if the property was built before enactment. The bill would also allow an approved borrower who assumes a guaranteed loan to relieve the original borrower of liability.
Native lender loan set-aside
This bill would let the Secretary set aside up to $50 million each year for direct loans to Native community development financial institutions. Those Native lenders would make loans to tribal, Alaska Native, or Native Hawaiian borrowers who meet Section 502 rules, with priority for borrowers on priority Tribal land. Native CDFIs generally must provide a 20% non‑Federal match, but the Secretary must waive the match for loans made to qualifying tribal borrowers. Native CDFIs would report annually on lending and outreach.
Grants and IT upgrades for rural housing
This bill would create rural community development intermediary grants of up to $250,000 each to support local housing and community projects. Intermediaries would normally must match the grant dollar-for-dollar, but the Secretary could waive the match for persistently poor rural areas. It would also authorize staffing and information technology funding for the Rural Housing Service for FY2026–FY2030, with any FY2026 tech money remaining available for five years to modernize systems.
Sponsors & CoSponsors
Sponsor
Tina Smith
MN • D
Cosponsors
Mike Rounds
SD • R
Sponsored 4/2/2025
Steve Daines
MT • R
Sponsored 4/2/2025
John Fetterman
PA • D
Sponsored 4/2/2025
Mike Crapo
ID • R
Sponsored 4/2/2025
Mark Warner
VA • D
Sponsored 4/2/2025
Kevin Cramer
ND • R
Sponsored 4/2/2025
Raphael Warnock
GA • D
Sponsored 4/2/2025
Jeanne Shaheen
NH • D
Sponsored 4/2/2025
Jerry Moran
KS • R
Sponsored 4/2/2025
Catherine Cortez Masto
NV • D
Sponsored 4/30/2025
Pete Ricketts
NE • R
Sponsored 4/30/2025
Roll Call Votes
No roll call votes available for this bill.
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