USDA Loans Now Finance Rural Homes with Rental Add-Ons
Published Date: 3/31/2026
Proposed Rule
Summary
The USDA’s Rural Housing Service wants to update its loan program so people can get loans to buy homes with one or more income-producing Accessory Dwelling Units (ADUs). This means homeowners can finance properties that include rental units or spaces for home-based work. If you’re interested, make sure to send your comments by June 1, 2026!
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Finance Homes With Income-Producing ADUs
The USDA Rural Housing Service proposes to allow its Single Family Housing Guaranteed Loan Program to guarantee loans when funds are used to finance a single or multiple income-producing Accessory Dwelling Units (ADUs). The proposal updates 7 CFR 3555.102(b) and 7 CFR 3555.201(b)(2) so properties that include or will include income-producing ADUs can be eligible for guarantees.
Allow Financing For Home-Based Businesses
The Agency proposes to permit guarantees for otherwise qualifying single-family properties that contain design features to accommodate home-based businesses, such as childcare, product sales, or craft production, so long as they do not require commercial real estate features. This change revises 7 CFR 3555.102(c) to clarify eligibility for properties used for non-commercial home-based operations.
Formal ADU and Living Unit Definitions
RHS proposes to add formal definitions for 'Accessory Dwelling Unit' and 'Living Unit' to 7 CFR 3555.10. The Living Unit definition lists minimum requirements such as potable water, sanitary facilities, heating, electricity, at least one bathroom (water closet, lavatory, tub or shower), and kitchen or kitchenette facilities.
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Key Dates
Department and Agencies
Related Federal Register Documents
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