Rural Housing Program Fees Get a Routine USDA Overhaul
Published Date: 9/30/2026
Notice
Summary
Starting September 30, 2026, the USDA’s Rural Housing Service is updating the fees for its Section 538 Guaranteed Rural Rental Housing Program. This change affects lenders and developers working on rural rental housing projects by adjusting the initial and annual guarantee fees they pay. The new fee structure helps keep the program running smoothly while supporting affordable rural housing.
Analyzed Economic Effects
8 provisions identified: 4 benefits, 3 costs, 1 mixed.
Standard Section 538 Fees Set
Starting September 30, 2026, the Section 538 standard fee structure is set at an initial guarantee fee of 65 basis points and an annual guarantee fee of 35 basis points. These fees are paid by lenders/developers for loans guaranteed under the Section 538 Guaranteed Rural Rental Housing Program.
Qualified Opportunity Zone Fee Category
The Agency replaces the prior Green category with a new Section 538 category for New Construction/Substantial Rehabilitation of properties located in Qualified Opportunity Zones, setting the initial guarantee fee at 60 basis points and the annual guarantee fee at 25 basis points. Lenders must state and certify in the lender's narrative that the property will be located in a designated Qualified Opportunity Zone to qualify.
Workforce Housing Reduced Fees Retained
The Agency maintains a Workforce Housing reduced fee tier for projects with rents between 80% and 115% of area median income (AMI), set at an initial guarantee fee of 60 basis points and an annual fee of 25 basis points, effective September 30, 2026.
Preservation Projects Get Reduced Fees
Preservation of existing Section 515 and 514/516 Rural Development properties is assigned reduced guarantee fees of 60 basis points initial and 25 basis points annual, effective September 30, 2026.
Green Fee Grandfathering Limited
The Agency will continue to apply the further reduced Green category fee only to applications that it approved and obligated before the September 30, 2026 effective date. Applications that were eligible but not obligated before that date will not qualify for the further reduced Green fee.
Default Fee for Ineligible Applications
Applications that do not meet eligibility criteria for any further reduced fee will receive the standard reduced fee of 65 basis points initial and 35 basis points annual, effective September 30, 2026.
Advance Payment Requirement for Annual Fee
The Agency requires payment of the annual guarantee fee in advance; for example, a loan that closes on December 31, 2025 will incur the annual fee for 2026. This changes the timing of when developers/lenders must pay the annual fee.
Pre-effective Applicants Can Revise for QOZ Eligibility
Applicants who submitted applications before the implementation of the new fee category but whose applications were not yet obligated may revise those applications to demonstrate the property is located in a Qualified Opportunity Zone to obtain the further reduced fee for the new QOZ category.
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Key Dates
Department and Agencies
Related Federal Register Documents
2026-06173, Single Family Housing Guaranteed Loan Program-Income Producing Accessory Dwelling Unit (ADU) Provisions
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!
2026-05387, Single Family Housing Guaranteed Loan Program
The USDA’s Rural Housing Service is updating its Single Family Housing Guaranteed Loan Program to let approved lenders use automated systems for making loans and getting guarantees after closing. This change helps speed up the loan process for folks buying homes in rural areas. The new rules kick in June 17, 2026, with full use starting September 28, 2028, making it easier and faster for lenders and homebuyers alike.
2026-19659, Multifamily Housing Preservation Pilot and Multifamily Housing Guaranteed Loan Notice of Loan-to-Cost Percentage Change for Option 3 (Continuous Guarantee)
The USDA’s Rural Housing Service is launching a pilot to make it easier and faster to preserve affordable rural rental housing by changing rules for loan transfers and guarantees. This affects owners and residents of multifamily housing, especially those using Low Income Housing Tax Credits or guaranteed loans. The pilot starts now and aims to cut red tape, speed up transfers, and protect these homes for the long haul.
2026-16914, Rescission of Rural Development's Construction and Repair Regulation
The Rural Business-Cooperative Service (RBCS), Rural Housing Service (RHS), and Rural Utilities Service (RUS), together make up the Rural Development (RD or the Agency) mission area within the U.S. Department of Agriculture (USDA). RD is issuing this proposed rule to rescind its regulation regarding construction and repairs. RD found this regulation to be unnecessary and unduly burdensome. In addition, it makes changes to RBCS regulations by removing references to the construction and repair regulations. The plain language summary of the proposal is available on Regulations.gov in the docket for rulemaking.
2026-13455, Direct Multifamily Housing Subsequent Loans for Acquisition
The USDA’s Rural Housing Service wants to make it easier for owners of USDA-financed apartment buildings to get extra loans for buying those properties again. This change cuts red tape and helps keep affordable housing in good shape. If you’re involved, get your comments in by August 31, 2026, to have your say!
2026-13397, Notice of Recission of Funding Opportunity for the Rural Community Development Initiative (RCDI) for Fiscal Year 2025
The USDA’s Rural Housing Service is canceling the current funding opportunity for the Rural Community Development Initiative (RCDI) for 2025. This means anyone who applied before will need to reapply once the updated program details are ready. The change happens right away, so no applications from the old round will move forward.
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