(a) Short title

This Act may be cited as the Rural Housing Service Reform Act of 2025.

(b) Table of contents

The table of contents of this Act is as follows:

Sec. 101. Application of multifamily mortgage foreclosure procedures to multifamily mortgages held by the Secretary of Agriculture and preservation of the rental assistance contract upon foreclosure

Sec. 102. Study on rural housing loans for housing for low- and moderate-income families

Not later than 6 months after the date of enactment of this Act, the Secretary of Agriculture shall conduct a study and submit to Congress a publicly available report on the loan program under section 521 of the Housing Act of 1949 (42 U.S.C. 1490a), including—

Sec. 103. Authorization of appropriations for staffing and IT upgrades

There is authorized to be appropriated to the Secretary of Agriculture for each of fiscal years 2026 through 2030 such sums as may be necessary for increased staffing needs and information technology upgrades to support all Rural Housing Service programs.

Sec. 104. Funding for technical improvements

Sec. 201. Permanent establishment of housing preservation and revitalization program

Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.) is amended by adding at the end the following:

545. Housing preservation and revitalization program

(a) Establishment

The Secretary shall carry out a program under this section for the preservation and revitalization of multifamily rental housing projects financed under section 514, 515, or 516.

(b) Notice of maturing loans

(1) To owners

On an annual basis, the Secretary shall provide written notice to each owner of a property financed under section 514, 515, or 516 that will mature within the 4-year period beginning upon the provision of the notice, setting forth the options and financial incentives that are available to facilitate the extension of the loan term or the option to decouple a rental assistance contract pursuant to subsection (f).

(2) To tenants

(A) In general

On an annual basis, for each property financed under section 514, 515, or 516, not later than the date that is 2 years before the date that the loan will mature, the Secretary shall provide written notice to each household residing in the property that informs them of—

(i)

the date of the loan maturity;

(ii)

the possible actions that may happen with respect to the property upon that maturity; and

(iii)

how to protect their right to reside in federally assisted housing, or how to secure housing voucher, after that maturity.

(B) Language

Notice under this paragraph shall be provided in plain English and shall be translated to other languages in the case of any property located in an area in which a significant number of residents speak such other languages.

(c) Loan restructuring

Under the program under this section, in any circumstance in which the Secretary proposes a restructuring to an owner or an owner proposes a restructuring to the Secretary, the Secretary may restructure such existing housing loans, as the Secretary considers appropriate, for the purpose of ensuring that those projects have sufficient resources to preserve the projects to provide safe and affordable housing for low-income residents and farm laborers, by—

(1)

reducing or eliminating interest;

(2)

deferring loan payments;

(3)

subordinating, reducing, or reamortizing loan debt;

(4)

providing other financial assistance, including advances, payments, and incentives (including the ability of owners to obtain reasonable returns on investment) required by the Secretary; and

(5)

permanently removing a portion of the housing units from income restrictions when sustained vacancies have occurred.

(d) Renewal of rental assistance

(1) In general

When the Secretary proposes to restructure a loan or agrees to the proposal of an owner to restructure a loan pursuant to subsection (c), the Secretary shall offer to renew the rental assistance contract under section 521(a)(2) for a term that is the shorter of 20 years and the term of the restructured loan, subject to annual appropriations, provided that the owner agrees to bring the property up to such standards that will ensure maintenance of the property as decent, safe, and sanitary housing for the full term of the rental assistance contract.

(2) Additional rental assistance

With respect to a project described in paragraph (1), if rental assistance is not available for all households in the project for which the loan is being restructured pursuant to subsection (c), the Secretary may extend such additional rental assistance to unassisted households at that project as is necessary to make the project safe and affordable to low-income households.

(e) Restrictive use agreements

(1) Requirement

As part of the preservation and revitalization agreement for a project, the Secretary shall obtain a restrictive use agreement that is recorded and obligates the owner to operate the project in accordance with this title.

(2) Term

(A) No extension of rental assistance contract

Except when the Secretary enters into a 20-year extension of the rental assistance contract for a project, the term of the restrictive use agreement for the project shall be consistent with the term of the restructured loan for the project.

(B) Extension of rental assistance contract

If the Secretary enters into a 20-year extension of the rental assistance contract for a project, the term of the restrictive use agreement for the project shall be for the longer of—

(i)

20 years; or

(ii)

the remaining term of the loan for that project.

(C) Termination

The Secretary may terminate the 20-year use restrictive use agreement for a project before the end of the term of the agreement if the 20-year rental assistance contract for the project with the owner is terminated at any time for reasons outside the control of the owner.

(f) Decoupling of rental assistance

(1) Renewal of rental assistance contract

If the Secretary determines that a loan maturing during the 4-year period beginning upon the provision of the notice required under subsection (b)(1) for a project cannot reasonably be restructured in accordance with subsection (c) because it is not financially feasible or the owner does not agree with the proposed restructuring, and the project was operating with rental assistance under section 521 and the recipient is a borrower under section 514 or 515, the Secretary may renew the rental assistance contract, notwithstanding any requirement under section 521 that the recipient be a current borrower under section 514 or 515, for a term of 20 years, subject to annual appropriations.

(2) Additional rental assistance

With respect to a project described in paragraph (1), if rental assistance is not available for all households in the project for which the loan is being restructured pursuant to subsection (c), the Secretary may extend such additional rental assistance to unassisted households at that project as is necessary to make the project safe and affordable to low-income households.

(3) Rents

(A) In general

Any agreement to extend the term of the rental assistance contract under section 521 for a project shall obligate the owner to continue to maintain the project as decent, safe, and sanitary housing and to operate the development as affordable housing in a manner that meets the goals of this title.

(B) Rent amounts

Subject to subparagraph (C), in setting rents, the Secretary—

(i)

shall determine the maximum initial rent based on current fair market rents established under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f); and

(ii)

may annually adjust the rent determined under clause (i) by the operating cost adjustment factor as provided under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note).

(C) Higher rent

(i) In general

Subparagraph (B) shall not apply if the Secretary determines that the budget-based needs of a project require a higher rent than the rent described in subparagraph (B).

(ii) Rent

If the Secretary makes a positive determination under clause (i), the Secretary may approve a budget-based rent level for the project.

(4) Conditions for approval

(A) Plan

Before the approval of a rental assistance contract authorized under this section, the Secretary shall require, through an annual notice in the Federal Register, the owner to submit to the Secretary a plan that identifies financing sources and a timetable for renovations and improvements determined to be necessary by the Secretary to maintain and preserve the project.

(B) Automatic approval

If a plan submitted under subparagraph (A) is not acted upon by the Secretary within 30 days of the submission, the rental assistance contract is automatically approved for not more than a 1-year period.

(g) Multifamily housing transfer technical assistance

Under the program under this section, the Secretary may provide grants to qualified nonprofit organizations and public housing agencies to provide technical assistance, including financial and legal services, to borrowers under loans under this title for multifamily housing to facilitate the acquisition or preservation of such multifamily housing properties in areas where the Secretary determines there is a risk of loss of affordable housing.

(h) Administrative expenses

Of any amounts made available for the program under this section for any fiscal year, the Secretary may use not more than $1,000,000 for administrative expenses for carrying out such program.

(i) Authorization of appropriations

There is authorized to be appropriated for the program under this section $200,000,000 for each of fiscal years 2026 through 2030.

(j) Rulemaking

(1) In general

Not later than 180 days after the date of enactment of the Rural Housing Service Reform Act of 2025, the Secretary shall—

(A)

publish an advance notice of proposed rulemaking; and

(B)

consult with appropriate stakeholders.

(2) Interim final rule

Not later than 1 year after the date of enactment of the Rural Housing Service Reform Act of 2025, the Secretary shall publish an interim final rule to carry out this section.

Sec. 202. Rental assistance contract authority

Section 521(d) of the Housing Act of 1949 (42 U.S.C. 1490a(d)), as amended by section 101(b), is amended—

Sec. 301. Native CDFI relending program

Section 502 of the Housing Act of 1949 (42 U.S.C. 1472) is amended by adding at the end the following:

(j) Set aside for native community development financial institutions

(1) Definitions

In this subsection—

(A)

the term Alaska Native has the meaning given the term Native in section 3(b) of the Alaska Native Claims Settlement Act (43 U.S.C. 1602(b));

(B)

the term appropriate congressional committees means—

(i)

the Committee on Agriculture of the Senate;

(ii)

the Committee on Indian Affairs of the Senate;

(iii)

the Committee on Banking, Housing, and Urban Affairs of the Senate;

(iv)

the Committee on Agriculture of the House of Representatives;

(v)

the Committee on Natural Resources of the House of Representatives; and

(vi)

the Committee on Financial Services of the House of Representatives;

(C)

the term community development financial institution has the meaning given the term in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702);

(D)

the term Indian Tribe has the meaning given the term Indian tribe in section 4 of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4103);

(E)

the term Native community development financial institution means an entity—

(i)

that has been certified as a community development financial institution by the Secretary of the Treasury;

(ii)

that is not less than 51 percent owned or controlled by members of Indian Tribes, Alaska Native communities, or Native Hawaiian communities; and

(iii)

for which not less than 51 percent of the activities of the entity serve Indian Tribes, Alaska Native communities, or Native Hawaiian communities;

(F)

the term Native Hawaiian has the meaning given the term in section 801 of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4221); and

(G)

the term priority Tribal land means—

(i)

any land located within the boundaries of—

(I)

an Indian reservation, pueblo, or rancheria; or

(II)

a former reservation within Oklahoma;

(ii)

any land not located within the boundaries of an Indian reservation, pueblo, or rancheria, the title to which is held—

(I)

in trust by the United States for the benefit of an Indian Tribe or an individual Indian;

(II)

by an Indian Tribe or an individual Indian, subject to restriction against alienation under laws of the United States; or

(III)

by a dependent Indian community;

(iii)

any land located within a region established pursuant to section 7(a) of the Alaska Native Claims Settlement Act (43 U.S.C. 1606(a));

(iv)

Hawaiian Home Lands, as defined in section 801 of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4221); or

(v)

those areas or communities designated by the Assistant Secretary of Indian Affairs of the Department of the Interior that are near, adjacent, or contiguous to reservations where financial assistance and social service programs are provided to Indians because of their status as Indians.

(2) Purpose

The purpose of this subsection is to—

(A)

increase homeownership opportunities for Indian Tribes, Alaska Native Communities, and Native Hawaiian communities in rural areas; and

(B)

provide capital to Native community development financial institutions to increase the number of mortgage transactions carried out by those institutions.

(3) Set aside for Native CDFIs

Of amounts appropriated to make direct loans under this section for each fiscal year, the Secretary may use not more than $50,000,000 to make direct loans to Native community development financial institutions in accordance with this subsection.

(4) Application requirements

A Native community development financial institution desiring a loan under this subsection shall demonstrate that the institution—

(A)

can provide the non-Federal cost share required under paragraph (6); and

(B)

is able to originate and service loans for single family homes.

(5) Lending requirements

A Native community development financial institution that receives a loan pursuant to this subsection shall—

(A)

use those amounts to make loans to borrowers—

(i)

who otherwise meet the requirements for a loan under this section; and

(ii)

who—

(I)

are members of an Indian Tribe, an Alaska Native community, or a Native Hawaiian community; or

(II)

maintain a household in which not less than 1 member is a member of an Indian Tribe, an Alaska Native community, or a Native Hawaiian community; and

(B)

in making loans under subparagraph (A), give priority to borrowers described in that subparagraph who are residing on priority Tribal land.

(6) Non-Federal cost share

(A) In general

A Native community development financial institution that receives a loan under this section shall be required to match not less than 20 percent of the amount received.

(B) Waiver

In the case of a loan for which amounts are used to make loans to borrowers described in paragraph (5)(B), the Secretary shall waive the non-Federal cost share requirement described in subparagraph (A) with respect to those loan amounts.

(7) Reporting

(A) Annual report by Native CDFIs

Each Native community development financial institution that receives a loan pursuant to this subsection shall submit an annual report to the Secretary on the lending activities of the institution using the loan amounts, which shall include—

(i)

a description of the outreach efforts of the institution in local communities to identify eligible borrowers;

(ii)

a description of how the institution leveraged additional capital to reach prospective borrowers;

(iii)

the number of loan applications received, approved, and deployed;

(iv)

the average loan amount;

(v)

the number of finalized loans that were made on Tribal trust lands and not on Tribal trust lands; and

(vi)

the number of finalized loans that were made on priority Tribal land and not priority Tribal land.

(B) Annual report to Congress

Not later than 1 year after the date of enactment of this subsection, and every year thereafter, the Secretary shall submit to the appropriate congressional communities a report that includes—

(i)

a list of loans made to Native community development financial institutions pursuant to this subsection, including the name of the institution and the loan amount;

(ii)

the percentage of loans made under this section to members of Indian Tribes, Alaska Native communities, and Native Hawaiian communities, respectively, including a breakdown of loans made to households residing on and not on Tribal trust lands; and

(iii)

the average loan amount made by Native community development financial institutions pursuant to this subsection.

(C) Evaluation of program

Not later than 3 years after the date of enactment of this subsection, the Secretary and the Secretary of the Treasury shall conduct an evaluation of and submit to the appropriate congressional committees a report on the program under this subsection, which shall—

(i)

evaluate the effectiveness of the program, including an evaluation of the demand for loans under the program; and

(ii)

include recommendations relating to the program, including whether—

(I)

the program should be expanded to such that all community development financial institutions may make loans under the program to the borrowers described in paragraph (5); and

(II)

the set aside amount paragraph (3) should be modified in order to match demand under the program.

(8) Grants for operational support

(A) In general

The Secretary shall make grants to Native community development financial institutions that receive a loan under this section to provide operational support and other related services to those institutions, subject to—

(i)

the satisfactory performance, as determined by the Secretary, of a Native community development financial institution in carrying out this section; and

(ii)

the availability of funding.

(B) Amount

A Native community development financial institution that receives a loan under this section shall be eligible to receive a grant described in subparagraph (A) in an amount equal to 20 percent of the direct loan amount received by the Native community development financial institution under the program under this section as of the date on which the direct loan is awarded.

(9) Outreach and technical assistance

There is authorized to be appropriated to the Secretary $1,000,000 for each of fiscal years 2025, 2026, and 2027—

(A)

to provide technical assistance to Native community development financial institutions—

(i)

relating to homeownership and other housing-related assistance provided by the Secretary; and

(ii)

to assist those institutions to perform outreach to eligible homebuyers relating to the loan program under this section; or

(B)

to provide funding to a national organization representing Native American housing interests to perform outreach and provide technical assistance as described in clauses (i) and (ii), respectively, of subparagraph (A).

(10) Administrative costs

In addition to other available funds, the Secretary may use not more than 3 percent of the amounts made available to carry out this subsection for administration of the programs established under this subsection.

Sec. 401. Modifications to loans and grants for minor improvements to farm housing and buildings; income eligibility

Section 504(a) of the Housing Act of 1949 (42 U.S.C. 1474(a)) is amended—

Sec. 501. Rural community development initiative

Subtitle E of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009 et seq.) is amended by adding at the end the following:

381O. Rural community development initiative

(a) Definitions

In this section:

(1) Eligible entity

The term eligible entity means—

(A)

a private, nonprofit community-based housing or community development organization;

(B)

a rural community; or

(C)

a federally recognized Indian Tribe.

(2) Eligible intermediary

The term eligible intermediary means a qualified—

(A)

private, nonprofit organization; or

(B)

public organization.

(b) Establishment

The Secretary shall establish a Rural Community Development Initiative, under which the Secretary shall provide grants to eligible intermediaries to carry out programs to provide financial and technical assistance to eligible entities to develop the capacity and ability of eligible entities to carry out projects to improve housing, community facilities, and community and economic development projects in rural areas.

(c) Amount of grants

The amount of a grant provided to an eligible intermediary under this section shall be not more than $250,000.

(d) Matching funds

(1) In general

An eligible intermediary receiving a grant under this section shall provide matching funds from other sources, including Federal funds for related activities, in an amount not less than the amount of the grant.

(2) Waiver

The Secretary may waive paragraph (1) with respect to a project that would be carried out in a persistently poor rural region, as determined by the Secretary.

Sec. 601. Annual report on rural housing programs

Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.), as amended by this Act, is amended by adding at the end the following:

546. Annual report

(a) In general

The Secretary shall submit to the appropriate committees of Congress and publish on the website of the Department of Agriculture an annual report on rural housing programs carried out under this title, which shall include significant details on the health of Rural Housing Service programs, including—

(1)

raw data sortable by programs and by region regarding loan performance;

(2)

the housing stock of those programs, including information on why properties end participation in those programs, such as for maturation, prepayment, foreclosure, or other servicing issues; and

(3)

risk ratings for properties assisted under those programs.

(b) Protection of information

The data included in each report required under subsection (a) may be aggregated or anonymized to protect participant financial or personal information.

Sec. 602. GAO report on Rural Housing Service technology

Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit to Congress a report that includes—

Sec. 701. Adjustment to rural development voucher amount

Sec. 702. Eligibility for rural housing vouchers

Section 542 of the Housing Act of 1949 (42 U.S.C. 1490r) is amended by adding at the end the following:

(c) Eligibility of households in sections 514, 515, and 516 projects

The Secretary may provide rural housing vouchers under this section for any low-income household (including those not receiving rental assistance) residing for a term longer than the remaining term of their lease that is in effect on the date of prepayment, foreclosure, or mortgage maturity, in a property financed with a loan under section 514 or 515 or a grant under section 516 that has—

(1)

been prepaid with or without restrictions imposed by the Secretary pursuant to section 502(c)(5)(G)(ii)(I);

(2)

been foreclosed; or

(3)

matured after September 30, 2005.

Sec. 703. Amount of voucher assistance

Notwithstanding any other provision of law, in the case of any rural housing voucher provided pursuant to section 542 of the Housing Act of 1949 (42 U.S.C. 1490r), the amount of the monthly assistance payment for the household on whose behalf the assistance is provided shall be determined as provided in subsection (a) of such section 542, including providing for interim and annual review of the voucher amount in the event of a change in household composition or income or rental rate.

Sec. 801. Transfer of multifamily rural housing projects

Section 515 of the Housing Act of 1949 (42 U.S.C. 1485) is amended—

Sec. 901. Extension of loan term

Sec. 902. Release of liability for section 502 guaranteed borrower upon assumption of original loan by new borrower

Section 502(h)(10) of the Housing Act of 1949 (42 U.S.C. 1472(h)(10)) is amended to read as follows:

(10) Transfer and assumption

Upon the transfer of property for which a guaranteed loan under this subsection was made and the assumption of the guaranteed loan by an approved eligible borrower, the original borrower of a guaranteed loan under this subsection shall be relieved of liability with respect to the loan.

Sec. 903. Department of Agriculture loan restrictions

Sec. 1001. Loan guarantees

Section 502(h)(4) of the Housing Act of 1949 (42 U.S.C. 1472(h)(4)) is amended—

Sec. 1101. Application review