Rural Housing Service Reform Act of 2025

This bill reforms rural housing programs administered by the U.S. Department of Agriculture. It makes changes to loan and grant programs, establishes new programs, and requires reports and studies.

Title I, Streamlining and Updates: Applies multifamily mortgage foreclosure procedures to certain USDA-held mortgages and requires rental assistance contracts to be maintained during foreclosure. Directs a study on subsidies for section 502 loans. Authorizes appropriations for staffing and IT upgrades for the Rural Housing Service, and for technical improvements to be made within five years.

Title II, Rural Housing Preservation and Revitalization: Permanently establishes a program to preserve and revitalize multifamily rental housing projects financed under sections 514, 515, or 516. Requires annual notices to owners and tenants about maturing loans. Amends rental assistance contract authority to allow 20-year renewals and gives owners a 6-month period to use unused assistance for other eligible families.

Title III, Native CDFI Relending: Amends section 502 of the Housing Act of 1949 to create a set-aside for Native community development financial institutions, defining terms such as Native CDFI and Indian Tribe.

Title IV, Section 504 Loans and Grants: Modifies the loan and grant program for minor improvements to farm housing. Allows loans to eligible low-income applicants, reserves at least 60% of loan funds for very low-income applicants, and increases the maximum loan amount from $7,500 to $15,000.

Title V, Rural Community Development Initiative Grants: Establishes a Rural Community Development Initiative to provide grants (up to $250,000) to eligible intermediaries, who must provide matching funds, to help eligible entities improve housing, community facilities, and economic development in rural areas.

Title VI, Reports: Requires an annual report to Congress on rural housing programs, including loan performance data, housing stock information, and risk ratings. Directs the Government Accountability Office to report on how outdated technology impacts program participants, and to estimate funding and staffing needed for modernization.

Title VII, Rural Housing Voucher Program: Directs the Secretary to issue regulations for adjusting voucher amounts after interim or annual reviews. Allows interim reviews for changes in income, family composition, or rent. Requires annual recertification of income and family composition. Expands voucher eligibility to households in certain projects that have been prepaid, foreclosed, or matured after September 30, 2005. Specifies that voucher amounts are determined under existing law, including interim and annual reviews.

Title VIII, Transfers to Nonprofit Organizations: Allows nonprofit or public body purchasers to buy section 515 properties at market value without addressing rehabilitation needs at purchase, if they commit to addressing those needs and accept long-term use restrictions. Increases the percentage for certain transfers from 9% to 50%.

Title IX, Section 502 Loans and Guarantees: Allows the Secretary to refinance or modify the term of any section 502 loan, with a maximum total term of 40 years from the refinance or modification. Relieves the original borrower of liability upon transfer and assumption of a guaranteed loan by an approved eligible borrower. Directs the Secretary to revise regulations to exclude licensed child care providers from certain loan restrictions.

Title X, Accessory Dwelling Units: Defines accessory dwelling units and clarifies that nothing prohibits leasing such a unit or using rental income to qualify for a loan guarantee, for properties constructed before enactment.

Title XI, Time Frame for Completing Application Review: Expresses the sense of Congress that the Secretary should review applications for section 502 or 504 loans or grants within 90 days. Requires the Secretary to submit annual reports on the timeliness of eligibility determinations and recommendations to shorten the timeline.