USDA Rural Housing Programs: An Overview

USDA Rural Housing Programs: An Overview

USDA Rural Housing Programs: An Overview
March 8, 2022
While residents of rural areas are potentially eligible to participate in the full range of housing
programs administered by the federal government, the U.S. Department of Agriculture’s
Katie Jones
(USDA’s) Rural Housing Service (RHS) administers several housing programs targeted
Analyst in Housing Policy
specifically to residents of rural communities. These programs are authorized under Title V of the

Housing Act of 1949, as amended, and are usually referred to by the section of that act under
Maggie McCarty
which they are authorized. The definition of rural for the purposes of USDA housing programs is
Specialist in Housing Policy
established in statute and is based on population thresholds and, in some cases, other

characteristics.

Programs administered by RHS support both single-family and multifamily housing, generally
through grants, direct loans, or loan guarantees. The programs are generally targeted toward lower-income residents of rural
areas; specific income thresholds and other eligibility criteria vary by program. Single-family programs include loans to
purchase homes, loans and grants to repair homes, and grants to support self-help housing programs (i.e., programs where
families contribute their own labor to the construction of their homes). Multifamily programs include loans to develop or
rehabilitate rental housing, loans and grants to finance housing for farm laborers, and associated rental assistance.
Some have expressed growing concern about preserving the affordability of the existing stock of rental housing properties
subsidized by some RHS programs. This is because when USDA mortgages on rural rental properties mature or are paid off
early, affordability restrictions (agreed to by property owners benefitting from favorable USDA mortgage terms) end and the
properties are eligible to convert to market-rate housing. Various policies to preserve USDA-assisted affordable rental
properties have been implemented, and additional policies have been proposed.
There are sometimes questions raised about the role of the USDA rural housing programs in relation to other federal housing
programs. Given the relatively small size of the rural housing programs and some similarities to other programs, there have
been proposals over the years to eliminate certain rural housing programs or to move some or all of the programs to the
Department of Housing and Urban Development (HUD). Rural housing advocates have generally opposed such proposals,
arguing that rural housing programs serve needs that are not addressed through other programs and that factors such as
USDA’s field office structure and its expertise in rural areas provide advantages in reaching rural residents.

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Contents
Background ..................................................................................................................................... 1
Defining Rural .......................................................................................................................... 2
Housing Characteristics in Rural Communities ........................................................................ 3
RHS Rural Housing Programs......................................................................................................... 4
Homeownership Programs ........................................................................................................ 6
Section 502 Single Family Housing Direct Loans .............................................................. 6
Section 502 Single Family Housing Guaranteed Loans ..................................................... 7
Section 504 Very Low-Income Rural Housing Repair Loans and Grants .......................... 8
Section 523 Mutual and Self-Help Housing Grants ............................................................ 9
Section 523 Self-Help Housing Land Development Loans .............................................. 10
Section 524 Site Development Loans ................................................................................ 11
Multifamily Rental Housing Programs ................................................................................... 12
Sections 514 and 516 Farm Labor Housing Direct Loans and Grants .............................. 12
Section 515 Rural Multifamily Rental Housing Direct Loans .......................................... 13
Section 521 Rural Rental Assistance ................................................................................ 14
Section 538 Multifamily Housing Guaranteed Loans ....................................................... 15
Section 542 Rural Development Vouchers ....................................................................... 16
Multifamily Housing Preservation and Revitalization (MPR) Demonstration ................. 17
Other Programs ....................................................................................................................... 17
Section 533 Housing Preservation Grants ........................................................................ 17
Selected Issues and Trends ............................................................................................................ 18
Multifamily Rural Housing Preservation ................................................................................ 18
Background ....................................................................................................................... 19
Recent Policy Proposals .................................................................................................... 20
Trends in Section 502 Direct and Guaranteed Loans .............................................................. 21
Proposals to Consolidate or Streamline Administration of Rural Housing and HUD
Programs .............................................................................................................................. 23
Recent Appropriations ................................................................................................................... 24
Supplemental Appropriations .................................................................................................. 26

Figures
Figure 1. Number of New Section 502 Direct and Guaranteed Home Loans ............................... 22

Tables
Table 1. Section 502 Single Family Housing Direct Loans, Recent Program Activity ................... 7
Table 2. Section 502 Single Family Housing Guaranteed Loans, Recent Program Activity .......... 8
Table 3. Section 504 Very Low-Income Rural Housing Repair Loans and Grants,
Recent Program Activity .............................................................................................................. 9
Table 4. Section 523 Mutual and Self-Help Housing Grants, Recent Program Activity ............... 10
Table 5. Section 524 Site Development Loans, Recent Program Activity ..................................... 11
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Table 6. Sections 514 and 516 Farm Labor Housing Direct Loans and Grants,
Recent Program Activity ............................................................................................................ 13
Table 7. Section 515 Rural Multifamily Rental Housing Direct Loans, Recent Program
Activity ....................................................................................................................................... 14
Table 8. Section 521 Rural Rental Assistance, Recent Program Activity...................................... 15
Table 9. Section 538 Multifamily Housing Guaranteed Loans, Recent Program Activity............ 16
Table 10. Section 542 Rural Development Vouchers, Recent Program Activity ........................... 16
Table 11. MPR Demonstration, Recent Program Activity ............................................................. 17
Table 12. Section 533 Housing Preservation Grants, Recent Program Activity............................ 18
Table 13. Appropriations for Rural Housing Programs, FY2017-FY2021 ................................... 25

Contacts
Author Information ........................................................................................................................ 27

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USDA Rural Housing Programs: An Overview

Background
The U.S. Department of Agriculture’s (USDA’s) Rural Housing Service (RHS), part of USDA’s
Rural Development office, administers a number of federal housing programs1 designed to
support homeownership or rental housing primarily for lower-income families in rural areas.2
These programs are authorized by the Housing Act of 1949 (Title V of P.L. 81-171; 42 U.S.C.
§§1471 et seq.), as amended, and are usually referred to by the section of that act under which
they are authorized.
RHS housing programs are under the jurisdiction of the Senate Committee on Banking, Housing,
and Urban Affairs and the House Committee on Financial Services. Appropriations for the RHS
programs are provided through the annual appropriations acts that provide funding for the USDA,
which are under the jurisdiction of the Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies subcommittees of the Senate and the House Appropriations
Committees.
RHS housing programs are primarily grant and loan programs, including both guaranteed and
direct loans.3 For grant programs, annual appropriations acts specify the amount available for a
program in a given year. For loan programs, annual appropriations acts specify a total dollar
amount of loans that can be made or guaranteed (the loan authorization level), as well as provide
any appropriations necessary to cover the expected costs of those loans (credit subsidy/budget
authority).
USDA Rural Development (RD) operates through a national office (with headquarters in
Washington, DC and St. Louis, MO) and state offices led by presidentially appointed state
directors.4 These state offices administer the federal assistance programs, including accepting and
processing applications for direct loans and grants.
While the RHS housing programs are targeted specifically toward rural areas, rural communities
and residents may also benefit from other federal housing programs, most of which are
administered by the Department of Housing and Urban Development (HUD).5 For example,
among other things,
 qualified individuals in rural areas can apply for mortgages insured by HUD’s
Federal Housing Administration (FHA) or for HUD Housing Choice Vouchers,

1 The Rural Housing Service also administers several rural community facilities programs; those programs are not
discussed in this report. For more information on the community facilities programs, see https://www.rd.usda.gov/
programs-services/community-facilities.
2 The definitions of rural and rural area for the purposes of USDA rural housing programs are different than those
used by the U.S. Census Bureau and are established in statute, based on population thresholds and other characteristics
such as being “rural in character” or having a “serious lack of mortgage credit for lower and moderate income
families.” See 42 U.S.C. §1490. For a map of eligible and ineligible areas, see https://eligibility.sc.egov.usda.gov/
eligibility/welcomeAction.do?pageAction=sfpd.
3 Like other government-insured or -guaranteed mortgages, single-family and multifamily mortgages guaranteed by
RHS are eligible to be included in mortgage-backed securities guaranteed by Ginnie Mae. For more information on
Ginnie Mae’s role in facilitating a secondary mortgage market for government-backed mortgages, see
https://www.ginniemae.gov/about_us/who_we_are/Pages/funding_government_lending.aspx.
4 Information on states offices is available at https://www.rd.usda.gov/about-rd/state-offices.
5 For an overview of the major federal housing assistance programs, see CRS Report RL34591, Overview of Federal
Housing Assistance Programs and Policy.
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 housing developers in rural areas can compete for Low-Income Housing Tax
Credits (a U.S. Department of the Treasury program administered by states), and
 rural communities can benefit from HUD grant funds provided to states (such as
Community Development Block Grants).
In addition, some specific housing programs outside of the RHS programs may be largely used in
rural areas, such as those that provide funding to Indian tribes.6
Defining Rural
There are numerous definitions of rural used for different policies, programs, and purposes across
the federal government.7 The definitions of rural and rural area for the purposes of USDA rural
housing programs are established in statute. They are based on population thresholds and, in some
cases, other characteristics. Specifically,
the terms “rural” and “rural area” mean any open country, or any place, town, village, or
city which is not [ ... ]8 part of or associated with an urban area and which (1) has a
population not in excess of 2,500 inhabitants, or (2) has a population in excess of 2,500 but
not in excess of 10,000 if it is rural in character, or (3) has a population in excess of 10,000
but not in excess of 20,000, and (A) is not contained within a standard metropolitan
statistical area, and (B) has a serious lack of mortgage credit for lower and moderate-
income families, as determined by the Secretary and the Secretary of Housing and Urban
Development.9
Over the years, Congress has amended this definition to grandfather certain communities that
have had population growth that puts them at risk of losing eligibility for participation in USDA
rural housing programs. Most recently, the statutory definition was amended in 2018 (P.L. 115-
334) to extend these grandfather provisions until receipt of data from the 2030 decennial census.
Specifically,
any area classified as “rural” or a “rural area” prior to October 1, 1990, and determined not
to be “rural” or a “rural area” as a result of data received from or after the 1990, 2000,
2010, or 2020 decennial census, and any area deemed to be a “rural area” for purposes of
this subchapter under any other provision of law at any time during the period beginning
January 1, 2000, and ending December 31, 2020, shall continue to be so classified until the
receipt of data from the decennial census in the year 2030, if such area has a population in

6 Federal funding for housing in tribal areas is provided primarily through HUD. While RHS programs can be used in
tribal areas, there have been various efforts and proposals to increase their use. For example, USDA has piloted a
program since 2018 that provides Section 502 Direct Loan funding to certain Native Community Development
Financial Institutions (CDFIs) to re-lend to eligible homebuyers in tribal areas. See USDA, “USDA Announces Pilot
Program to Increase Homeownership Opportunities on Native Lands,” press release, May 31, 2018,
https://www.usda.gov/media/press-releases/2018/05/31/usda-announces-pilot-program-increase-homeownership-
opportunities. In addition, a bill to reauthorize the Native American Housing Assistance and Self-Determination Act
that was ordered to be reported by the House Financial Services Committee in the 117th Congress (H.R. 5195) includes
a provision that would require USDA annually to set aside 5% of funds from specified RHS programs to be provided to
tribes.
7 See, for example, Alexander Hermann and Whitney Airgood-Obrycki, “In Search of Rural: How Varying Definitions
Shape Housing Research,” presentation slides, Freddie Mac Rural Research Symposium, Washington, DC, November
8-9, 2021, pp. 2-25, https://sf.freddiemac.com/content/_assets/resources/pdf/other/defining-rural-america.pdf. For a
review of definitions used by USDA Rural Development (RD), see USDA RD, “Report on the Definition of Rural,”
February 2013, https://www.rd.usda.gov/files/RDRuralDefinitionReportFeb2013.pdf.
8 The statute includes exceptions in the cases of Pajaro in California and Guadalupe in Arizona.
9 42 U.S.C. §1490
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excess of 10,000 but not in excess of 35,000, is rural in character, and has a serious lack of
mortgage credit for lower and moderate-income families.10
While the population thresholds are evaluated based on data from the U.S. Census Bureau, the
other factors considered—being “rural in character” and having “a serious lack of mortgage credit
for lower- and moderate-income families”—are less clearly defined in statute. According to
USDA guidance, Rural Development State Directors are to determine if an area is “rural in
character” by completing an analysis that considers population density per square mile,
accounting for factors such as economic vitality, universities, and prisons.11 Field offices must
review all areas under their jurisdiction every five years (or three years for areas experiencing
rapid growth).12 USDA’s handbook states that the assessment of “serious lack of mortgage credit”
is made jointly by USDA and HUD.13
(For a map of current eligible rural areas, see https://eligibility.sc.egov.usda.gov/eligibility/.)
Additional Geographic Targeting Provisions
A portion of funding from some rural housing programs is subject to additional targeting provisions that direct
funds to certain types of communities within rural areas. For example, 42 U.S.C. Section 1479(f) directs 5% of
lending authority for certain specified rural housing programs to be set aside for certain underserved counties, as
designated by USDA, and colonias. (Colonias are residential communities in the United States located close to the
border with Mexico that lack certain basic infrastructure, such as water or sewer facilities.14) In addition, annual
appropriations acts often direct USDA to set aside a specified amount of funds from particular rural housing
programs for certain designated areas, such as persistent poverty counties and Rural Economic Area Partnership
(REAP) zones. In Division A of the Consolidated Appropriations Act, 2021 (P.L. 116-260), for example, Section
736 set aside funding for persistent poverty counties and Section 750 set aside funding for REAP Zones.
Housing Characteristics in Rural Communities
While rural areas experience many of the same housing challenges that affect the rest of the
country, certain broad characteristics of housing in rural areas differ from housing in the United
States as a whole. For example, some features of housing in rural areas include the following:15
 homeownership rates are higher;16

10 42 U.S.C. §1490
11 For discussion of the “rural in character” designation, see USDA RD Handbook-1-3550, Chapter 5.3; and RD,
“2017-2018 Periodic Review of Rural Areas for Housing Programs,” unnumbered letter, October 19, 2017.
12 USDA RD Handbook-1-3550, Chapter 5.3, and RD, “2017-2018 Periodic Review of Rural Areas for Housing
Programs,” unnumbered letter, October 19, 2017.
13 A prior version of USDA RD Handbook-1-3550, Chapter 5.3 included the following statement “There is a serious
lack of mortgage credit readily available to families throughout rural America at rates and terms comparable to those
offered by the agency. Therefore, Agency officials do not need to determine if there is a serious lack of mortgage credit
available when determining whether an area is rural or in reviewing rural area designations.” This language had been
cited by GAO and in agency response to a GAO recommendation. See U.S. Government Accountability Office, Rural
Housing: Changing the Definition of Rural Could Improve Eligibility Determinations, GAO-05-110, December 3,
2004, https://www.gao.gov/products/gao-05-110. While this language does not appear in the 2021 revised version of
RD Handbook-1-3550, CRS could find no evidence of a change in policy.
14 While specific definitions can vary, the definition of colonia for the purposes of this set-aside is at 42 U.S.C. Section
1479(f)(8).
15 For data on these features of housing in rural areas, see Fannie Mae’s proposed Duty to Serve Underserved Markets
Plan 2022-2024, May 2021, p. 61, https://www.fhfa.gov/PolicyProgramsResearch/Programs/Documents/FNM-2022-
24-proposed-UMP.pdf.
16 For additional information, see Housing Assistance Council, Homeownership in Rural America, June 2020,
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 single-family homes (i.e., homes with one to four separate dwelling units)
account for a larger share of the housing stock;
 manufactured housing is more common;17
 A larger percentage of rental housing is in single-family and manufactured
homes, while a smaller percentage of rental housing is in multifamily properties
(those with five or more units);
 house prices are generally lower; however, rural areas also tend to have lower
incomes and higher poverty rates,18 contributing to housing affordability
challenges; and
 rural areas may face additional challenges—such as remote locations or
economic issues (e.g., limited employment opportunities)—that can impact
housing conditions, such as by increasing housing development costs or affecting
residents’ access to mortgage financing.19
These differences in the housing stock and housing conditions more generally can have
implications for rural housing needs and potential policy solutions. As noted earlier, however,
rural can be defined in many different ways, and the specific definition used has implications for
the characteristics of the rural housing stock and the magnitude of various housing challenges in
such areas.20 Furthermore, while rural areas in general exhibit these features, housing conditions
are not uniform across rural areas. Specific housing conditions and challenges can vary across
particular rural regions (e.g., Appalachia, the Lower Mississippi Delta), different market or
industry types (e.g., resort towns, natural resource boomtowns), or areas with certain distinctive
features (e.g., tribal areas, colonias).
RHS Rural Housing Programs
The rural housing programs administered by USDA are authorized by the Housing Act of 1949
(P.L. 81-171), as amended. That law declared a national goal of “a decent home and a suitable
living environment for every American family” and took a variety of actions related to housing.
Title V of the law authorized the Secretary of Agriculture to provide financial assistance to farm
owners to construct, improve, alter, repair, or replace dwellings or other farm buildings in order to
provide decent, safe, and sanitary living conditions and adequate farm buildings. In the 1960s,
Congress expanded eligibility for these programs to owners of other real estate in rural areas

https://ruralhome.org/wp-content/uploads/2021/05/Homeownership_in_Rura_America_web.pdf and Christopher
Mazur, U.S. Census Bureau, “Homeownership Higher in Rural Areas,” September 27, 2017, https://www.census.gov/
library/stories/2017/09/rural-home-ownership.html.
17 For additional information, see Housing Assistance Council, Manufactured Housing in Rural America, July 2020,
https://ruralhome.org/wp-content/uploads/2021/05/Manufactured_Housing_RRB.pdf.
18 See Fannie Mae’s proposed Duty to Serve Underserved Markets Plan 2022-2024, May 2021, p. 60.
19 See, for example, the discussions of housing challenges and needs in rural areas in Fannie Mae’s proposed Duty to
Serve Underserved Markets Plan 2022-2024, May 2021, p. 62; and Freddie Mac’s proposed Duty to Serve
Underserved Markets Plan 2022-2024, May 2021, pp. RH5-RH7, https://www.fhfa.gov/PolicyProgramsResearch/
Programs/Documents/FRE-2022-24-proposed-UMP.pdf.
20 Alexander Hermann and Whitney Airgood-Obrycki, “In Search of Rural: How Varying Definitions Shape Housing
Research,” presentation slides, Freddie Mac Rural Research Symposium, Washington, DC, November 8-9, 2021, pp. 2-
25, https://sf.freddiemac.com/content/_assets/resources/pdf/other/defining-rural-america.pdf.
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(rather than just farm owners),21 and then to rural residents more generally.22 Several other
financial assistance programs were added through amendments to Title V throughout the 1960s,
with additional programs added in the 1980s and 1990s. In 1994, a departmental restructuring
was statutorily authorized, which resulted in USDA establishing the RHS and assigning it
jurisdiction over these programs.23 Additionally, various programmatic and policy changes have
been enacted in appropriations acts or other laws, or implemented through regulations or other
administrative mechanisms over the years.
This section of the report describes RHS’s rural housing programs as they are currently
structured. It is organized by type of program: programs that support homeownership,24 programs
that support multifamily rental housing, and one program that can support either.
Eligibility for most RHS programs is restricted to very low- or low-income households,
depending on the specific program. These terms are defined as follows:25
 very low-income households are those with incomes at or below 50% of area
median income,
 low-income households are those with incomes at or below 80% of area median
income.
A few of the RHS programs can also serve moderate-income households. Moderate-income is
defined differently for the purposes of homeownership versus multifamily rental housing
programs:
 in the case of homeownership programs, moderate income is defined as income
at or below 115% of area median income;
 in the case of multifamily rental programs, moderate income is defined as income
above the low-income limit but not exceeding $5,500 more than that limit.
Program descriptions are provided below, followed by tables presenting program activity in
recent years. Program activity is measured by program obligations and the number of
units/loans/grants, as relevant. Obligations represent federal awards or commitments to spend
funds. A separate appropriations table displaying the past five years of budget authority and loan
authorization levels is provided at the end of this report (see Table 13). Budget authority and loan
authorization levels provide the authority for federal agencies to make obligations. (Note that
obligations in a given year frequently do not match amounts provided in the corresponding year’s

21 Section 803 of the Housing Act of 1961 (P.L. 87-70) amended Section 501 of the Housing Act of 1949 to allow
assistance to be provided “to owners of other real estate in rural areas to enable them to provide dwellings and related
facilities for their own use and buildings adequate for their farming operations” in addition to farm owners.
22 See Section 1001 of the Housing and Urban Development Act of 1965 (P.L. 89-117). This law also expanded
eligibility to allow for the purchase of previously occupied buildings and land for building sites.
23 See Section 233 of the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994
(P.L. 103-354), which authorized the establishment of a Rural Housing and Community Development Service that
could be assigned jurisdiction over the programs authorized by Title V of the Housing Act of 1949. USDA established
this office in 1995 and later that year renamed it the Rural Housing Service; see USDA, “Revision of Delegations of
Authority,” 60 Federal Register 66713, December 26, 1995, https://www.govinfo.gov/content/pkg/FR-1995-12-26/pdf/
95-31267.pdf.
24 Depending on the specific program, eligible properties under the homeownership programs can include property
types such as manufactured housing or individual condominium units.
25 Regulatory definitions for single-family direct loan and grant programs can be found at 7 C.F.R. Section 3550.10; for
single-family guaranteed loan programs at 7 C.F.R. Section 3555.10; for multifamily direct loan and grant programs at
7 C.F.R. Section 3560.11; and for multifamily guaranteed loan programs at 7 C.F.R. Section 3565.3.
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appropriations act for various reasons, including that appropriated funds may be used across fiscal
years.)
Homeownership Programs26
Section 502 Single Family Housing Direct Loans
Through this program, USDA makes direct loans to very low- and low-income individuals, who
do not currently own adequate housing, to purchase homes to be used as primary residences.
Loan funds can be used to buy, build, rehabilitate, improve, or relocate a home.27 The program
provides mortgages with fixed interest rates to qualified borrowers who are unable to obtain
credit elsewhere. Borrowers may qualify for payment subsidies that lower their monthly
payments to the greater of (1) a principal, interest, tax, and insurance payment of no more than
24% of the borrower’s income or (2) a loan payment based on a 1% interest rate, plus taxes and
insurance.28
Statutory Authority: Title V, Section 502 of the Housing Act of 1949; 42 U.S.C. §1472.
Financing: Direct loans are provided to home purchasers. Interest rates are fixed at rates set by
USDA,29 but payment subsidies can reduce effective interest rates to as low as 1%. Loan amounts
may be up to 100% of the property’s market value or an area loan limit, whichever is less.30 No
down payment is generally required.31 In general, the maximum loan term is 33 years; certain
borrowers with incomes below 60% of area median income may qualify for a loan term as long as
38 years.32

26 Certain single-family housing activities carried out by RHS are not described in this report; namely, single-family
credit sales and Section 509 construction defects funding. The single-family housing credit sales program allows RHS
to make Section 502 direct loans on non-program terms to certain purchasers of properties that USDA owns as a result
of foreclosures on RHS mortgages. The Section 509 construction defects program provides grants for certain Section
502 borrowers with newly constructed properties to address construction defects; new appropriations have not been
provided for the construction defects program in several years, but carryover funding has been available.
27 Eligible loan purposes are described at 7 C.F.R. Section 3550.52. Refinancing is also an eligible loan purpose in
certain specified circumstances. Current homeowners are generally not eligible for loans except under certain
circumstances described in 7 C.F.R. Section 3550.53(d).
28 7 C.F.R. §3550.68. Borrowers’ incomes are to be reviewed annually to determine continued eligibility for payment
subsidies, and the subsidies are subject to recapture when the borrower transfers title to the property or no longer
occupies the home. Different types of payment subsidies have been used in the past, but the type of assistance
described in the text has been used for borrowers who newly qualify for payment assistance since 2008. See USDA,
RHS, “Single Family Housing Loans, Payment Assistance,” 72 Federal Register 73252-73256, December 27, 2007.
29 7 C.F.R. §3550.66. Currently, the interest rate is set at 2.5%. See RD Instruction 440.1, Exhibit B,
https://www.rd.usda.gov/sites/default/files/04401_5.pdf.
30 7 C.F.R. §3550.63. In certain circumstances, the allowable loan amount may be higher or lower than 100% of market
value. The area loan limit is set as a percentage of the FHA’s maximum mortgage amounts as determined by RHS
(currently, 80% of the FHA maximum mortgage amounts for the area). For the dollar amounts of the loan limits in a
given area, see https://www.rd.usda.gov/files/RD-SFHAreaLoanLimitMap.pdf.
31 7 C.F.R. §3550.64. While no down payment is generally required, borrowers with assets above a certain threshold
are to use such assets for a down payment.
32 7 C.F.R. §3550.67. While loan terms can be less than the maximum allowed, the RHS loan originator must consider
the effect that a shorter repayment period would have on the amount of payment subsidy a borrower could be eligible to
receive (i.e., a shorter loan term could result in a higher payment subsidy). Loans with terms of less than 25 years
cannot receive payment subsidy. See USDA Handbook HB-1-3550, p. 6-14, https://www.rd.usda.gov/files/hb-1-
3550.pdf. Shorter maximum loan terms apply for smaller loan amounts and manufactured homes.
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Eligibility Criteria: Borrowers must be either very low-income or low-income when the loan is
approved.33 (At least 40% of loan funds each year must be made available for very low-income
households.34) Borrowers must also be unable to obtain credit elsewhere on reasonable terms, but
be able to demonstrate an ability to repay the Section 502 loan.35 The home purchased with the
loan must be modest in size, design, and cost,36 and the home must be used as the borrower’s
primary residence.37 Current homeowners are generally ineligible except under certain
circumstances, including if their current home is physically inadequate.38
Table 1. Section 502 Single Family Housing Direct Loans, Recent Program Activity
Fiscal Year
Loan Obligations ($ in millions)
Number of Loans
2021
$1,001.1
5,355
2020
$1,001.4
5,821
2019
$1,001.6
6,194
2018
$1,100.8
7,199
2017
$1,000.0
7,187
Source: Data are taken from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing
Activity monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS.
September reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/. HAC is a national
nonprofit organization that provides financial and technical assistance, research, and advocacy in support of rural
housing.
Section 502 Single Family Housing Guaranteed Loans
Through this program, RHS guarantees loans made by approved private lenders to eligible low-
and moderate-income households to purchase homes to be used as principal residences. Loan
funds can be used for costs of acquisition, repairs, or relocation of an existing home or
construction of a new home.39
Statutory Authority: Title V, Section 502(h) of the Housing Act of 1949; 42 U.S.C. §1472(h).
Financing: Loan guarantees are provided to private lenders making loans to eligible borrowers.
The federal government guarantees 90% of the loan principal40 as an encouragement to private
lenders to make loans to eligible rural residents who would otherwise be unable to obtain credit.
Borrowers pay upfront fees and annual guarantee fees, currently set at 1% and 0.35%,

33 7 C.F.R. §3550.53(a). The current low- and very low-income limits in specific areas are available at
https://www.rd.usda.gov/sites/default/files/RD-DirectLimitMap.pdf.
34 42 U.S.C. §1472(d).
35 7 C.F.R. §3550.53(g) and (h).
36 7 C.F.R. Section 3550.57 describes modest dwelling requirements, and, as noted earlier, the property value cannot
exceed an area loan limit as described at 7 C.F.R. §3550.63.
37 7 C.F.R. §3550.53(c).
38 7 C.F.R. §3550.53(d).
39 7 C.F.R. §3555.101. Refinancing is also an eligible loan purpose in certain specified circumstances.
40 42 U.S.C. §1472(h)(2).
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respectively.41 These fees help cover the costs of loan defaults.42 Loan terms cannot exceed 30
years and have fixed interest rates negotiated by the lender and the borrower.43 Loan amounts can
be up to 100% of the property’s market value or acquisition costs, whichever is less, plus the
guarantee fee.44 No down payment is required.
Eligibility Criteria: Borrowers must have incomes no higher than the moderate-income limit.45
The home must be modest, decent, safe, and sanitary,46 and used by the borrower as a principal
residence.47 Borrowers must be unable to obtain traditional mortgage credit, but be able to
demonstrate an ability to repay the Section 502 loan.48
Table 2. Section 502 Single Family Housing Guaranteed Loans,
Recent Program Activity
Fiscal Year
Loan Obligations ($ in millions)
Number of Loans
2021
$22,726.1
127,389
2020
$23,074.6
137,970
2019
$14,865.9
99,322
2018
$16,826.4
115,864
2017
$19,280.0
134,071
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Section 504 Very Low-Income Rural Housing Repair Loans and Grants
This program provides loans and grants to very low-income homeowners to make repairs or
improvements to their properties. To qualify for a grant (rather than a loan), applicants must also
be age 62 or older. Grant funds can only be used to remove health and safety hazards or to make
properties accessible to household members with disabilities, while loan funds can also be used
for more general repairs or improvements.
Statutory Authority: Title V, Section 504 of the Housing Act of 1949; 42 U.S.C. §1474.

41 42 U.S.C. Section 1472(h)(8) allows USDA to charge an upfront fee of no more than 3.5% and an annual fee of no
more than 0.5%. The current fees are described in RD Instruction 440.1, Exhibit K, https://www.rd.usda.gov/sites/
default/files/04401_5.pdf.
42 Since FY2011, no budget authority has been required to cover the costs of Section 502 loan guarantees in annual
appropriations acts, as the fees charged to borrowers are expected to cover the costs of loan defaults under the program.
43 42 U.S.C. §1472(h)(7).
44 42 U.S.C. §1472(h)(7)(C) and 7 C.F.R. §3555.103.
45 42 U.S.C. §1472(h)(3). 7 C.F.R. Section 3555.10 defines moderate income as the greater of (1) 115% of the U.S.
median family income, (2) the average of the statewide and state non-metro median family income, or (3) 115/80ths of
the low-income limit for the county or metropolitan statistical area where the housing is located. The current moderate-
income limits in specific areas are available at https://www.rd.usda.gov/files/RD-GRHLimitMap.pdf.
46 7 C.F.R. §3555.151(d). Specific requirements that new and existing dwellings must meet are described at 7 C.F.R.
Section 3555.202.
47 7 C.F.R. §3555.151(c).
48 7 C.F.R. §3555.151(h) and (j).
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Financing: Direct loans and grants are provided to eligible homeowners. Loan and grant amounts
cannot exceed maximum amounts set by RHS.49 Loans have interest rates of 1% and have loan
terms of 20 years.50
Eligibility Criteria: Very low-income rural residents who own and occupy a dwelling in need of
repair are eligible for assistance. A homeowner must be unable to obtain affordable credit
elsewhere, but must demonstrate a reasonable ability to repay the Section 504 loan.51 Grants are
limited to very low-income homeowners age 62 and older52 and support the removal of health or
safety hazards.53
Table 3. Section 504 Very Low-Income Rural Housing Repair Loans and Grants,
Recent Program Activity

Loans
Grants
Loans Obligated
Number of
Obligations
Number of
Fiscal Year
($ in millions)
Loans
($ in millions)
Grants
2021
$14.8
2,289
$24.6
3,709
2020
$16.6
2,739
$31.5
4,842
2019
$17.4
2,735
$24.8
3,908
2018
$19.8
3,225
$28.2
4,585
2017
$19.6
3,431
$28.9
4,763
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Section 523 Mutual and Self-Help Housing Grants
This program provides grants to eligible nonprofit or government organizations to provide
technical assistance to groups of low- and very low-income households that work cooperatively
to build their houses using the self-help method. The self-help method involves homebuyers
contributing their own labor—sweat equity—to the construction of the home to reduce the costs
of homeownership. Mutual self-help refers to groups of families working together to build each
other’s homes. Homebuyers who participate in the mutual self-help programs supported by

49 7 C.F.R. §3550.112. Previously, the maximum outstanding loan amount was $20,000 and the maximum lifetime
grant amount was $7,500. A final rule published by RHS on February 7, 2022, with an effective date of March 9, 2022,
revises these maximums to be an amount determined by RHS, up to certain specified percentages of the national
average area loan limit. In the final rule, RHS states that it will use an initial loan maximum of $40,000, and an initial
grant maximum of $10,000, in the program handbook. See USDA, RHS, “Direct Single Family Housing Loans and
Grants Programs,” 87 Federal Register 6768, 6773, February 7, 2022, https://www.federalregister.gov/documents/
2022/02/07/2022-02470/direct-single-family-housing-loans-and-grants-programs.
50 7 C.F.R. §3550.113. Previously, the maximum loan term was 20 years, though the regulations specified that loan
terms should be as short as possible based on the borrower’s ability to repay the loan. The final rule published by RHS
on February 7, 2022, with an effective date of March 9, 2022, revises this section of the regulations to provide that all
Section 504 loans will have a term of 20 years. See 87 Federal Register 6768, 6773.
51 7 C.F.R. §3550.103.
52 7 C.F.R. §3550.103.
53 7 C.F.R. §3550.102.
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Section 523 grants often use Section 502 direct loans to purchase the homes,54 although other
types of mortgages are also used.
Statutory Authority: Title V, Section 523 of the Housing Act of 1949; 42 U.S.C. §1490c.
Financing: Grants are provided to eligible organizations, and uses of grant funds include rent,
other office expenses, and other qualifying costs of the participating organizations, as well as the
purchase or rental of power or specialty tools for participating households to use.55 Funds may not
be used to purchase real estate or other property for participating families, hire personnel to
perform construction work, or pay costs or debts of participating families, among other prohibited
uses.56
Eligibility Criteria: Private and government nonprofit organizations (including Indian tribes)
with relevant capacity are eligible.57 Grantees provide technical and supervisory assistance in
support of mutual self-help homeownership programs for very low- and low-income households.
Table 4. Section 523 Mutual and Self-Help Housing Grants, Recent Program Activity
Fiscal Year
Obligations ($ in millions)
Number of Grants
2021
$31.9
51
2020
$32.8
55
2019
$29.0
37
2018
$34.8
47
2017
$36.6
52
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Section 523 Self-Help Housing Land Development Loans
This program provides funds to eligible private and public nonprofit organizations to purchase
and develop building sites for housing for participants in self-help housing programs. The
nonprofit organizations resell these improved sites to program participants or eligible
organizations at cost.58 The interest rate on the loans is 3%, and the nonprofit organizations repay
the loans when they sell these properties.
Statutory Authority: Title V, Section 523(b)(1)(B) of the Housing Act of 1949; 42 U.S.C.
§1490c(b)(1)(B).
Financing: Two-year direct loans with 3% interest rates are provided to eligible organizations
that purchase and develop building sites.59

54 A share of Section 502 direct loan funds are typically set aside to be used for participants in these self-help housing
programs.
55 14 C.F.R. §1944.405.
56 7 C.F.R. §1944.406.
57 7 C.F.R. §1944.404 and 7 C.F.R. §1944.403(j).
58 7 C.F.R. §1822.275.
59 42 U.S.C. §1490c(b)(1)(B).
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Eligibility Criteria: Qualified private and public nonprofit organizations are eligible.60 Public
nonprofit agencies include municipal corporations and other corporate agencies of state or local
governments.61 Section 523 loans are made to acquire and develop sites only for housing
constructed by the self-help method.
Despite the continued availability of loan authority and appropriations to support Section 523 site
loans, no loans have been made under this program for the past five fiscal years (FY2017 to
FY2021).62 In the past, USDA has suggested that demand for the program is low in part because
of the two-year loan term and the requirement that loans be used to support self-help
homeownership.63
Section 524 Site Development Loans
This program is similar to the Section 523 land development loan program but is used to purchase
and develop building sites for low- or moderate-income households more generally, not just self-
help participants.
Statutory Authority: Title V, Section 524 of the Housing Act of 1949; 42 U.S.C. §1490d.
Financing: Two-year direct loans64 with interest rates set by RHS are provided to eligible
organizations that purchase and develop building sites.65
Eligibility Criteria: Like Section 523 loans, qualified private and public nonprofit organizations
are eligible.66 Section 524 loans can be used to acquire and develop sites for housing for low- or
moderate-income households, and are not restricted to those participating in self-help housing
programs.67
Like the Section 523 site loan program, the Section 524 program is not in high demand; as of the
date of this report, there have been two loans made under this program in the last five fiscal years
(FY2017 to FY2021).
Table 5. Section 524 Site Development Loans, Recent Program Activity
Fiscal Year
Loan Obligations ($ in millions)
Number of loans
2021
$0
0
2020
$0
0
2019
$1.9
1
2018
$0
0
2017
$0.4
1

60 7 C.F.R. §1822.264.
61 7 C.F.R. §1822.263.
62 USDA, 2022 USDA Explanatory Notes – Rural Housing Service, p. 31-16, https://www.usda.gov/sites/default/files/
documents/31RHS2022Notes.pdf.
63 For example, see page 29-27 of USDA’s FY2015 budget justification, https://www.usda.gov/sites/default/files/
documents/29rhs2015notes.pdf.
64 42 U.S.C. §1490d(a)(1).
65 42 U.S.C. §1490d(a)(1) and 7 C.F.R. §1822.268(a). Currently, the interest rate is set at 2.5%. See RD Instruction
440.1, Exhibit B, https://www.rd.usda.gov/sites/default/files/04401_5.pdf.
66 7 C.F.R. §1822.264.
67 42 U.S.C. §1490d(a)(1).
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Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Multifamily Rental Housing Programs
Sections 514 and 516 Farm Labor Housing Direct Loans and Grants
This is the only federal program to subsidize housing specifically for domestic farm laborers,
including permanent, year-round, migrant, or seasonal farm laborers. Unlike other RHS
programs, the funding for the Farm Labor Housing Programs may be used for housing
development in non-rural areas, in order to house nearby agricultural labor.68 Section 514 loans
may be used to buy, build, improve, or repair housing (including furnishings and related
facilities)69 for farm laborers. Loans may be used for on-farm housing (i.e., loans taken out by
owners of farms to build housing on their properties for their laborers), but the majority of
Section 514 funds are used for off-farm housing (i.e., loans to organizations that build housing in
a community for local farm laborers).70 Section 516 grants are awarded in conjunction with
Section 514 loans to finance affordable, off-farm rental housing to low-income farm laborers.71
Farm Labor Housing properties may also receive rental assistance through the Section 521
program.
Statutory Authority: Title V, Sections 514 and 516 of the Housing Act of 1949; 42 U.S.C.
§148472 and §1486.
Financing: Section 514 direct loans are provided to eligible borrowers for the development of
on-farm or off-farm housing for farm laborers. The loans have an interest rate capped at 1%73 and
a maximum repayment term of 33 years.74 Section 516 grants are awarded to recipients of Section
514 loans for off-farm properties and are capped at no greater than 90% of development costs for
Section 514 properties.75
Eligibility Criteria: In order to be eligible to live in farm labor housing, a person must be a
domestic farm laborer,76 immediate family of a farm laborer, or a retired or disabled farm
laborer.77 They must be U.S. citizens, permanent residents, or legally admitted to the United

68 7 C.F.R. §3560.1(a)(2).
69 42 U.S.C. §1484(f)(1)-(2).
70 According to email communication between CRS and USDA, RHS does not currently have a specific set-aside for
on-farm loans, and any applications are reviewed as they are received. From FY2017 to FY2021, on-farm loans
accounted for between 0% and 9% of Section 514 loan dollars obligated in a given year.
71 42 U.S.C. §1486.
72 42 U.S.C. §1484 authorizes the Secretary of Agriculture to make guaranteed loans under the Farm Labor Housing
program. However, 42 U.S.C. Section 1487(b), which governs the Rural Housing Insurance Fund (the account used to
fund the program), authorizes the Secretary to make direct loans under the program.
73 42 U.S.C. §1484(a)(2).
74 7 C.F.R. §3566(a).
75 42 U.S.C. §1486(a)(2).
76 Domestic farm laborers are defined as persons who receive a substantial portion of their income from the primary
production of agricultural and aquacultural commodities and the handling and processing of such commodities in the
United States or its territories; 42 U.S.C. §1484(f)(3) and 7 C.F.R. §3560.11. (The 2008 farm bill amended the law to
include aquaculture workers and workers in commodity processing facilities.)
77 42 U.S.C. §1484(f)(3).
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States and authorized to work in agriculture (i.e., H-2A visa holders).78 If there is a diminished
need for farm labor housing, off-farm labor housing properties may serve tenants who would be
eligible under the Section 515 program (see below).79
Section 514 direct loans are available to farm owners, Indian tribes, farmer associations, public
bodies, and nonprofit organizations.80 Section 516 grants are available only to governments,
Indian tribes, or nonprofit organizations and are awarded in conjunction with Section 514 loans.81
Table 6. Sections 514 and 516 Farm Labor Housing Direct Loans and Grants,
Recent Program Activity

Section 514
Section 516
Loans Obligated
Number of
Obligations
Number of
Fiscal Year
($ in millions)
Loans
($ in millions)
Grants
2021
$3.1
2
$1.6
1
2020
$20.1
15
$8.9
7
2019
$20.0
17
$8.7
7
2018
$35.5
19
$17.2
12
2017
$34.9
21
$8.2
6
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Note: Section 514 data include both on-farm and off-farm loans. According to an email from USDA to CRS, on-
farm loans and obligations during this period were as fol ows: FY2021: one loan, $84,000; FY2020: five loans,
$1.8 mil ion; FY2019: five loans, $1.3 mil ion; FY2018: zero loans funded; FY2017: two loans, $253,056.
Section 515 Rural Multifamily Rental Housing Direct Loans
The Section 515 multifamily housing program offers direct loans for the development of new, or
rehabilitation of existing, rental housing for low-income individuals and families in rural areas.
The properties developed with these loans often also receive rental assistance, commonly through
the Section 521 Rental Assistance Program and in some cases through HUD’s Section 8 project-
based rental assistance program. With rental assistance, tenants pay a maximum of 30% of their
income toward rent and utilities; without assistance, tenants pay a “basic rent,” which is based on
the amount needed to cover expenses in the project’s approved budget (including the Section 515
loan payment).82 RHS has not issued loans for the development of new units of Section 515
housing since FY2011; instead, all loan authority each year is used to support the preservation of
existing Section 515 properties, through either refinancing existing loans or facilitating purchases
of existing properties by entities committed to preserving them as affordable housing.

78 Temporary agricultural workers were ineligible for Farm Labor Housing until 2018, when P.L. 115-141 revised the
statutory definition of eligibility to include them.
79 7 C.F.R. §3560.576(e).
80 42 U.S.C. §1484(a).
81 42 U.S.C. §1486(a).
82 7 C.F.R. §3560.203.
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Statutory Authority: Title V, Section 515 of the Housing Act of 1949; 42 U.S.C. §1485.83
Financing: This program provides direct subsidized interest loans to eligible borrowers at a 1%
interest rate, amortized over the lesser of the economic life of the property being financed or 50
years, and repaid over a 30-year term, with the remaining balance due in a lump sum at the end of
the repayment term.84
Eligibility Criteria: Very low- to moderate-income families are eligible; some properties may be
designated specifically for persons who are elderly. Assistance for very low-income households
must be prioritized.85 Loans are offered to for-profit and nonprofit organizations, as well as state
and local government entities and Indian tribes.86
Table 7. Section 515 Rural Multifamily Rental Housing Direct Loans,
Recent Program Activity
Fiscal Year
Loan Obligations ($ in millions)
Number of Loans
2021
$37.4
44
2020
$40.0
40
2019
$101.5
85
2018
$42.6
35
2017
$35.0
31
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Section 521 Rural Rental Assistance
This program provides rental assistance to Section 515 and Section 514 off-farm properties to
subsidize the rents of eligible tenants. Tenants living in units with Section 521 assistance pay 30%
of their income towards their rent and the program pays the property owner an amount to cover
the difference between the tenant contribution and the basic rent for the unit.
Statutory Authority: Title V, Section 521(a)(2) of the Housing Act of 1949; 42 U.S.C. §1490a.
Financing: RHS makes rental payments under the terms of contracts it has with property owners.
Funding is first directed to renewing existing rental assistance contracts. Remaining funds are
then awarded for expansions of existing contracts to cover additional units in existing properties
and new contracts for newly constructed or acquired properties.87
Eligibility Criteria: Owners of properties with Section 515 and Section 514 off-farm loans may
request rental assistance funding from RHS to the extent appropriations are available. Tenants
who are eligible to live in the properties are eligible for rental assistance. In cases where rental

83 42 U.S.C. Section 1485 authorizes the Secretary of Agriculture to make guaranteed loans under the Rural Rental
Housing program. However, 42 U.S.C. Section 1487(b), which governs the Rural Housing Insurance Fund (the account
used to fund the program), authorizes the Secretary to make direct loans under the program.
84 7 C.F.R. §3560.67. Until 1997, Section 515 loan terms were 40 to 50 years.
85 42 U.S.C. §1485(p); 7 C.F.R. §3560.154.
86 42 U.S.C. §1485(b); 7 C.F.R. §3560.55.
87 7 C.F.R. §3560.255.
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assistance in a property is limited (i.e., not all units receive rental assistance), owners must offer
priority for assistance to very low-income tenants.88
Table 8. Section 521 Rural Rental Assistance, Recent Program Activity
Fiscal Year
Obligations ($ in millions)
Units
2021
$1,507.8
283,781
2020
$1,375.0
241,208
2019
$1,331.4
252,319
2018
$1,345.3
268,514
2017
$1,365.0
302,451
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Section 538 Multifamily Housing Guaranteed Loans
This program provides a federal guarantee for certain loans to finance the construction,
acquisition, and rehabilitation of multifamily housing for low- to moderate-income residents.
Borrowers of Section 528 guaranteed loans are restricted in the rents they can charge to tenants.89
Loans are commonly used to revitalize existing Section 515 properties; such use has accounted
for approximately half of all loans in recent years.90
Statutory Authority: Title V, Section 538 of the Housing Act of 1949; 42 U.S.C. §1485.
Financing: The program provides loan guarantees on eligible loans issued to eligible borrowers
by certified lenders.91 For nonprofit and public borrowers, the program covers 97% loan-to-value
(LTV) ratios; for for-profit entities, the maximum LTV is 90%.92 The cost of the program is
supported by guarantee fees, currently set at 1% upfront and 0.5% annually thereafter.93
Eligibility Criteria: Tenants must be low- to moderate-income households upon initial
occupancy.94 Borrowers may be for-profit or nonprofit entities, public bodies, or Indian tribes.95

88 7 C.F.R. §3560.257.
89 “The rent for any individual housing unit, including any tenant-paid utilities, must not exceed an amount equal to 30
percent of 115 percent of area median income, adjusted for family size. In addition, on an annual basis, the average rent
for a project, taking into account all individual unit rents, must not exceed 30 percent of 100 percent of area median
income, adjusted for family size”; 7 C.F.R.§3565.203.
90 See 2022 USDA Explanatory Notes – Rural Housing Service, pg. 31-15, available at https://www.usda.gov/sites/
default/files/documents/31RHS2022Notes.pdf.
91 7 C.F.R. §3565.52(c).
92 7 C.F.R. §3565.204.
93 Previously, these fee amounts were set in regulation. In December 2020, USDA published a final rule amending its
regulations to remove the specific fee levels and to allow the agency to establish fees periodically via notice published
in the Federal Register. See USDA, RHS, “Guaranteed Rural Rental Housing Change in Initial Guarantee Fee and
Annual Guarantee Fee,” 85 Federal Register 77985-77987, December 3, 2020.
94 7 C.F.R. §3565.202.
95 42 U.S.C. §1485(b); 7 C.F.R. §3565.151.
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Table 9. Section 538 Multifamily Housing Guaranteed Loans,
Recent Program Activity
Fiscal Year
Loan Obligations ($ in millions)
Number of loans
2021
$230.0
96
2020
$228.5
150
2019
$160.4
90
2018
$185.6
132
2017
$177.0
106
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Section 542 Rural Development Vouchers
This program, first funded in 2006, provides rental assistance vouchers to eligible tenants facing
displacement from Section 515 properties that have exited the program (via prepayment or
default) before their loan maturity date. Modeled after HUD’s Housing Choice Voucher (HCV)
program, the vouchers subsidize the difference between tenants’ rent contributions and the market
rent for the area.96 The voucher can be used to allow the tenant to remain in the existing (formerly
subsidized) property or to move to a different property selected by the tenant.97
Statutory Authority: Title V, Section 542 of the Housing Act of 1949; 42 U.S.C. §1490r.
Financing: RHS directs rental payments to landlords on behalf of voucher recipients. Vouchers
are issued to eligible tenants by RHS based on Section 515 prepayment requests by property
owners and property foreclosures, as applicable.
Eligibility Criteria: Tenants must be low-income (income at or below 80% of median income for
the area) and residing in a Section 515 property on the date of prepayment or foreclosure.
Table 10. Section 542 Rural Development Vouchers, Recent Program Activity
Fiscal Year
Obligations ($ in millions)
Vouchers
2021
$34.6
7,261
2020
$34.5
7,489
2019
$28.6
6,559
2018
$26.7
6,353
2017
$22.0
5,609

96 Section 542 voucher subsidy amounts are established differently than those in HUD’s HCV program. They are set
based on a tenant’s rent contribution at the time of prepayment or foreclosure of the Section 515 property and market
rents at the time. Thereafter, the amount is fixed and will not increase based on decreases in tenant incomes or increases
in rent (although RD may reduce the voucher amount if the tenant moves to a lower cost rental unit). See Chapter 4 of
USDA RD’s “Rural Development Voucher Program Guide,” September 2010.
97 USDA has not published regulations governing this program. Program guidance is included in USDA, RHS, “Rural
Development Voucher Program,” 82 Federal Register 21972, May 11, 2017; and USDA RD, “Rural Development
Voucher Program Guide,” September 2010.
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Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Multifamily Housing Preservation and Revitalization (MPR) Demonstration
The Multifamily Housing Preservation and Revitalization (MPR) Demonstration program was
created in the FY2006 annual appropriations law (P.L. 109-97) to support the preservation of
Section 515 and Section 514 off-farm properties as affordable housing as they age or near the end
of their loan terms and affordability restrictions. The program provides RHS with preservation
funding tools including debt deferral, subordinate or soft second loans, 0% loans, and grants to
address an existing Section 515 or Section 514 project’s health and safety needs. Properties
receiving this assistance agree to extended affordability periods.
Statutory Authority: The program has never been formally authorized; authority is provided in
annual appropriations acts.
Financing: RHS makes grants and loans, including loan modifications, to restructure the debt of
existing Section 515 and Section 514 borrowers.
Eligibility Criteria: Owners of properties financed with Section 515 or Section 514 loans can
apply for assistance; RHS maintains a waiting list for assistance.
Table 11. MPR Demonstration, Recent Program Activity

MPR Loans
MPR Grants
Loans Obligated
Obligations
Number of
Fiscal Year
($ in millions)
Number of Loans
($ in millions)
Grants
2021
$89.2
142
$0.4
3
2020
$57.1
80
$0.3
5
2019
$130.3
205
$1.0
3
2018
$116.0
186
$0.3
2
2017
$26.8
33
$0.1
3
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Other Programs
Section 533 Housing Preservation Grants
This program provides funding to qualified entities to provide housing repair and rehabilitation
assistance to very low- and low-income homeowners and to rental property owners whose tenants
are very low- and low-income households. Eligible repair and rehabilitation activities include, but
are not limited to, installing or repairing water and waste disposal systems, replacing a roof,
repairing or replacing heating systems, energy conservation measures, alterations to provide
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greater accessibility for people with disabilities, and housing replacement activities (for
homeowners only) under certain circumstances.98
Statutory Authority: Title V, Section 533 of the Housing Act of 1949; 42 U.S.C. §1490m.
Financing: Grants are provided to nonprofit organizations and other eligible entities. Grantees
provide assistance through loans or grants to qualified homeowners or rental property owners.99
Eligibility Criteria: Grants are made to nonprofit organizations, government entities, Indian
tribes, and consortia of eligible grantees that meet certain conditions, including having relevant
background and experience.100 Assisted homeowners must be low- or very low-income, own a
property in need of assistance, and have owned the property for at least one year and intend to
continue residing in it.101 Assisted rental or cooperative property owners must own a property in
need of assistance where the current or intended tenant is very low- or low-income.102
Table 12. Section 533 Housing Preservation Grants, Recent Program Activity
Fiscal Year
Obligations ($ in millions)
Number of Grants
2021
$13.5
115
2020
$15.6
126
2019
$14.5
130
2018
$10.8
143
2017
$4.9
107
Source: Data are from the Housing Assistance Council’s (HAC’s) USDA Rural Development Housing Activity
monthly obligation reports. These reports contain HAC’s tabulations of data reported by RHS. September
reports for each year were used to reflect activity for the ful fiscal year. Reports are available at
https://ruralhome.org/information-center/usda-information-and-data/rd-recent-obligations/.
Selected Issues and Trends
Multifamily Rural Housing Preservation
Over time, the multifamily housing financed through the Section 515 and Section 514 programs
may be at risk of loss to the affordable housing stock. This can happen because the mortgage is
ending through early prepayment, agency enforcement actions, or natural maturation—any of
which can terminate affordability restrictions, leading to tenant displacement and loss of
affordable housing in a community.103

98 Eligible activities are listed at 7 C.F.R. Section 1944.664. Additional requirements related to replacement housing are
at 7 C.F.R. Section 1944.659.
99 42 U.S.C. §1490m(b).
100 7 C.F.R. §1944.658 and 7 C.F.R. §1944.656.
101 7 C.F.R. §1944.661.
102 7 C.F.R. §1944.662.
103 Not all owners have the right to prepay their loans. Congress amended the law to prohibit prepayment of loans made
after December 15, 1989. (P.L. 101-235 §206).
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Background
Initial rural housing preservation concerns centered on owners’ ability to prepay their loans and
exit the programs. Up until the late 1970s, there were no restrictions on loan repayment and there
were concerns particularly about for-profit owners exiting the programs before the end of their
40- to 50-year loan terms, at which point affordability restrictions ended. In response, several
laws were enacted to restrict borrowers’ ability to prepay, and change the terms of the programs
so that later loans (those made after 1989) were ineligible for prepayment. For properties at risk
of prepayment, these laws directed USDA to offer incentives to owners to remain in the programs
or sell to preservation-focused purchasers; enacted various notification and first purchase right
requirements; and authorized and then funded rental housing vouchers, under the Section 542
program, for tenants facing displacement upon owner prepayment (or mortgage foreclosure).104
Over time, concerns began to grow about the physical and financial condition of aging rural
multifamily assisted housing properties. A report issued by USDA in 2004 found that no Section
515 properties had adequate reserves or sufficient cash flow to do needed repairs or meet
maintenance needs over time.105 These properties risk falling into physical disrepair, which can
both threaten the health and safety of residents, and put the property at risk of foreclosure. In
response to these concerns, the FY2006 appropriations law (P.L. 109-97) created a new
demonstration program for the preservation and revitalization of USDA multifamily rental
housing properties (see the “Multifamily Housing Preservation and Revitalization (MPR)
Demonstration” section above). The MPR program is intended to preserve Section 515 and
Section 514 projects by funding their physical revitalization and extending their affordable use
agreements. Under MPR, RHS can restructure existing loans, using debt deferral, soft second
loans, 0% loans, and grants to preserve existing properties.
More recently, federal policymakers have focused attention on the issues of maturing Section 515
and Section 514 mortgages. When these loans mature, their affordability restrictions end and any
Section 521 rental assistance contracts terminate. RHS has adopted some policies to encourage
owners to refinance or otherwise re-amortize their mortgages in order to prevent maturations and
extend use agreements, and to notify tenants when a loan is reaching maturation.106 However,
under current law, USDA lacks authority to renew Section 521 rental assistance contracts on
properties that have matured mortgages, and Section 542 vouchers are only available for tenants
facing displacement due to owner prepayment or default, not mortgage maturation.
Both Section 515 direct loans and Section 538 guaranteed loans have been used for preservation
purposes, to refinance and/or fund the rehabilitation of existing Section 515 and Section 514
properties. As noted previously, since FY2012 RHS has used all of its new Section 515 direct
loan authority each year to support the preservation of existing Section 515 properties, either
through refinancing existing loans or facilitating preservation purchases of existing properties. In
recent years, half of all new Section 538 authority has been used for Section 515 property
preservation. These preservation transactions have increasingly involved the use of other federal
resources, including the Low Income Housing Tax Credits (LIHTCs).

104 While the authority for Section 542 was added to the law in 1992 (P.L. 102-550, Title VII, §706(2)), the program
was not funded until the FY2006 appropriations law.
105 USDA, Rural Rental Housing-Comprehensive Property Assessment and Portfolio Analysis: Final Study Report,
November 2004, prepared by ICF Consulting, available at https://peerta.acf.hhs.gov/sites/default/files/public/
uploaded_files/Rural%20Rental%20Housing_ICF.pdf.
106 USDA, “Management of Loan Payoffs in Multi-Family Housing Properties,” unnumbered letter, December 28,
2016, available at https://www.rd.usda.gov/files/RDUL-Payoffs.pdf.
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Despite the creation of MPR and other preservation tools, a 2018 Government Accountability
Office (GAO) report found that from 2014 to 2017, 60% of USDA rural rental properties (both
Section 515 and Section 514) with maturing mortgages exited the program.107 It further estimated
that between 2028 and 2050, over 90% of RHS’s assisted multifamily properties and units could
exit the program via loan maturation or prepayment.108 Additionally, the most recent capital needs
assessment from USDA estimated that the inventory of Section 515 and Section 514/516
properties will need an additional $5.6 billion to meet capital needs over the next 20 years.109
Recent Policy Proposals
There have been numerous proposals from rural housing advocates and some Members of
Congress to expand RHS’s suite of preservation tools. These have included the following:
 Addressing Section 521 contracts in properties with maturing Section 515 and
Section 514 loans. Currently, Section 521 rental assistance can only be provided
for units in properties with active financing through one of these programs. Thus,
when Section 515 or Section 514 mortgages mature, rental assistance contracts
are terminated. Because Section 542 vouchers can only be offered when a
mortgage is prepaid or defaults, tenants risk losing assistance when owners of
properties pay off their mortgages. As more properties approach maturity, there
has been interest in allowing Section 521 contracts to continue to prevent tenant
displacement. GAO recommended decoupling Section 521 from the loan
programs as one strategy to protect tenants, and legislation to allow for this
decoupling has been introduced in Congress.
 For example, in the 116th Congress both the Rural Housing Preservation Act
of 2019 (S. 2567) and the Strategy and Investment in Rural Housing
Preservation Act of 2019, which passed the House (H.R. 3620), proposed to
authorize Section 521 decoupling. The latter bill was reintroduced in the
117th Congress as the Strategy and Investment in Rural Housing Preservation
Act of 2021 (H.R. 1728).
 Modifications to Section 542 vouchers. There have been proposals to expand the
use of Section 542 vouchers to serve tenants facing displacement due to loan
maturation. Further, there have been calls to modify the assistance under Section
542 vouchers. Currently, appropriations provisions limit the value of the
vouchers so that, unlike Section 521 rental assistance and HUD’s HCV program,
the subsidies cannot increase if tenant incomes decrease or rents increase.
 For example, provisions to expand eligibility for Section 542 vouchers and
enhance their value were included in H.R. 3620 in the 116th Congress, which
was reintroduced in the 117th Congress (H.R. 1728).
 Authorize MPR and increase funding for it and/or other resources to address
physical deficits in aging multifamily properties. The MPR program has never

107 U.S. Government Accountability Office (GAO), Rural Housing Service: Better Data Controls, Planning, and
Additional Options Could Help Preserve Affordable Rental Units, GAO-18-285, May 17, 2018, https://www.gao.gov/
products/gao-18-285.
108 GAO, Rural Housing Service: Better Data Controls, Planning, and Additional Options Could Help Preserve
Affordable Rental Units, GAO-18-285, May 17, 2018, https://www.gao.gov/products/gao-18-285.
109 USDA, USDA Rural Development Multi-Family Housing Comprehensive Property Assessment, March 1, 2016,
available at https://www.rd.usda.gov/sites/default/files/USDA-RD-CPAMFH.pdf.
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been formally authorized and demand for its assistance exceeds available funding
each year.110
 The Build Back Better Act, as reported by the House Financial Service
Committee, proposed $4.36 billion in additional funding for new
construction and various preservation and revitalization activities in Section
515 and Section 514/516 programs. The amount was reduced to $1.8 billion
in the version passed by the House (H.R. 5376).
 Over the past several Congresses, rural housing preservation legislation has
been introduced that would formally authorize, and in some cases modify, the
MPR program.
 For example, see H.R. 3620 in the 116th Congress, which was
reintroduced in the 117th Congress (H.R. 1728); and S. 2567 in the 116th
Congress.
Trends in Section 502 Direct and Guaranteed Loans
Over the last several decades, the number of loans made through the Section 502 Guaranteed
Loan Program has increased while the number of loans made through the Section 502 Direct
Loan Program has declined. As shown in Figure 1, the number of Section 502 direct loans made
annually peaked in FY1976, at nearly 133,000, and then began to steadily decrease, falling further
since the guaranteed loan program became permanent in the early 1990s.111 Meanwhile, the
number of guaranteed loans made each year has increased, peaking at nearly 163,000 in FY2013.
In FY2021, USDA guaranteed about 127,000 Section 502 loans and made about 5,000 Section
502 direct loans.

110 During a hearing before the House Appropriations Committee, Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies Subcommittee, on May 6, 2021, acting RHS Administrator Chad Parker testified
that the agency had a backlog of 171 projects that were “shovel-ready” for MPR preservation if funding were available;
see https://appropriations.house.gov/events/hearings/usda-rural-development-mission-area (1:46:02).
111 Section 706 of the Cranston-Gonzalez National Affordable Housing Act of 1990 (P.L. 101-625) established the
Section 502 Guaranteed Loan Program on a permanent basis following a temporary demonstration program in the late
1980s.
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Figure 1. Number of New Section 502 Direct and Guaranteed Home Loans

Source: Figure created by CRS using data from the Housing Assistance Council’s USDA Rural Housing Programs
Historic Activity Report through FY2018, https://ruralhome.org/wp-content/uploads/storage/documents/
rd_obligations/historic/Historic.pdf; and its USDA Rural Development Housing Activity monthly obligation
reports for September of FY2019, FY2020, and FY2021, https://ruralhome.org/information-center/usda-
information-and-data/rd-recent-obligations/.
Notes: Loan counts exclude direct and guaranteed loans funded through supplemental appropriations provided
by the American Recovery and Reinvestment Act (P.L. 111-5) in 2009.
The growth in the number of guaranteed loans and decline in the number of direct loans in part
reflects the cost of each program. The guaranteed program has long had a lower cost to the
government than the direct loan program, and since FY2011 the guaranteed program has charged
borrowers fees that are estimated to be sufficient to cover the costs of loan defaults and therefore
has not required credit subsidy appropriations. (Appropriations are still provided for salaries and
expenses related to administering the program.) The direct loan program does require credit
subsidy appropriations, given the population it serves and the payment subsidy it provides. In
FY2021, $55.4 million in appropriations was provided to support up to $1 billion in Section 502
direct loans.
At times, there have been proposals to eliminate the Section 502 Direct Loan Program. Most
recently, Trump Administration budget requests proposed no funding for the direct loans, arguing
that technological advances have increased access to credit in rural areas and that the guaranteed
loan program could sufficiently serve rural needs.112 Rural housing advocates argue that the direct
loan program serves many borrowers who would not otherwise be able to qualify for a mortgage,

112 For example, USDA’s FY2021 budget justifications stated that “rural areas once isolated from easy access to credit
have shrunk as internet access and use has grown. Therefore, USDA is now in a position to utilize solely the guarantee
program, and still achieve the Administration’s goals for rural housing at a lower cost to taxpayers.” See 2021 USDA
Congressional Justification – Rural Housing Service, p. 31-26, https://www.usda.gov/sites/default/files/documents/
29rhs2021notes.pdf. Similar language was included in budget requests for FY2018-FY2020, which also proposed no
funding for Section 502 direct loans.
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even with a guarantee.113 Advocates point to differences between the programs—such as the
interest rate subsidy that many direct loan borrowers receive—as well as differences in the
populations served by the direct and guaranteed programs. For example, in FY2019 Section 502
direct loan borrowers had an average income of $35,220 compared to $63,240 in the guaranteed
loan program.114 The Biden Administration’s FY2022 budget request proposed a loan
authorization level of $1.5 billion for direct loans (an increase from $1 billion in FY2021), which
it described as the first requested increase for the program in 20 years.115
Proposals to Consolidate or Streamline Administration of Rural
Housing and HUD Programs
There have long been questions raised about the future of RHS programs and the role they play in
relation to each other and to other federal housing programs, particularly those administered by
HUD.116 Several RHS programs are structured similarly to corresponding HUD programs, though
the details of the programs differ. For example, Section 502 Guaranteed Home Loans and Section
538 Guaranteed Rural Rental Housing Loans are broadly similar to FHA’s single-family and
multifamily mortgage insurance programs. These other federal housing programs often serve a
larger number of rural residents than the relatively smaller RHS programs.117
In other cases, there are more significant differences between RHS programs and other federal
housing programs, including the types of assistance they provide and the activities they primarily
support. For example, USDA provides direct loans to borrowers through several programs; HUD
does not typically provide direct loans, but rather insures or guarantees loans made by private
lenders. In addition, while certain activities such as home repairs or farm labor housing could be
one of many eligible uses of some HUD program funds, there are RHS programs dedicated
specifically to these activities.
In response to questions raised about the role of RHS programs, there have been various
proposals to consolidate or streamline certain programs, including by moving them to HUD. For
example, a 2011 discussion draft bill, the FHA-Rural Regulatory Improvement Act of 2011,
included provisions to establish a Deputy Assistant Secretary for Rural Housing at HUD and
transfer all of the RHS programs and functions to HUD.118 While the bill was not formally

113 See, for example, Leslie Strauss, “Loan Guarantees Are Not Enough,” Shelterforce, September 14, 2012,
https://shelterforce.org/2012/09/14/loan_guarantees_are_not_enough/.
114 Housing Assistance Council (HAC), USDA Rural Development Housing Activity Fiscal Year 2019 Year-End
Report, https://ruralhome.org/wp-content/uploads/2022/03/USDA_Obligation_Report_FY_2019_Final_-
_Compressed_3-1.pdf. The 2019 report is the most recent one available as of the cover date of this report.
115 FY2022 USDA Explanatory Notes – Rural Housing Service, p. 31-13, https://www.usda.gov/sites/default/files/
documents/31RHS2022Notes.pdf.
116 For example, in 2018 the Chairman of the Senate Committee on the Budget requested reviews from several Offices
of Inspectors General, including USDA’s, “evaluating the economy, efficiency, and effectiveness of Federal
expenditures on housing assistance programs.” The letter is available at https://www.budget.senate.gov/imo/media/doc/
Chairman%20Enzi%20to%20HUD%20USDA%20VA%20Treasury%20OIG.PDF. The resulting USDA OIG report
was issued in August 2020; see USDA Office of Inspector General, Duplication of Housing Assistance Programs,
Inspection Report 04801-0001-23, August 2020, https://www.usda.gov/sites/default/files/audit-reports/04801-0001-
23_final_.distribution.pdf.
117 For example, a 2012 GAO report found that FHA’s single-family mortgage insurance program served more
borrowers than the Section 502 Guaranteed Loan Program in rural areas. Similarly, HUD provided rental assistance for
more housing units in rural areas than RHS. See GAO, Housing Assistance: Opportunities Exist to Increase
Collaboration and Consider Consolidation, GAO-12-554, August 2012, https://www.gao.gov/assets/gao-12-554.pdf.
118 See Section 13 of the discussion draft bill at https://web.archive.org/web/20110626062641/https://
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introduced, it was the subject of House Financial Services Committee subcommittee hearings.119
In 2018, a Trump Administration government reorganization proposal included a
recommendation to move the RHS single-family and multifamily loan guarantee and rental
assistance programs to HUD, arguing that such a move would help achieve operational
efficiencies by consolidating similar programs under one agency.120 In addition, GAO has
examined opportunities for increased collaboration or consolidation among housing assistance
programs in general,121 and the RHS and FHA single-family mortgage guarantee programs in
particular,122 as well as some of the challenges and policy considerations that would be
involved.123
Many of these proposals have been met with opposition from rural housing program stakeholders,
who argue that the RHS programs play a needed role in rural areas, and that moving the programs
outside of USDA would weaken their ability to serve rural needs. They note that, unlike HUD,
USDA has a focus and expertise on rural issues, that USDA RD’s network of local offices has
advantages in reaching rural residents, and that the specific features of some USDA programs
improve their ability to reach certain rural populations.124
Recent Appropriations
Table 13 provides five years of appropriations information for the USDA rural housing programs
discussed in this report. The table reflects budget authority (including credit subsidy) and loan
authorization levels, as applicable and labeled.
Budget authority is the amount of new funding an agency is authorized to spend, and is generally
set in an appropriations act. Loan authorization levels are the total dollar volume of new loans an
agency is authorized to issue (in the case of direct loans) or guarantee, and are also generally set

financialservices.house.gov/uploadedfiles/fha_rural.pdf.
119 U.S. Congress, House Committee on Financial Services, Subcommittee on Insurance, Housing and Community
Opportunity, Legislative Proposals to Determine the Future Role of FHA, RHS, and GNMA in the Single- and Multi-
family Mortgage Markets, 112th Cong., 1st sess., May 25, 2011, Serial No. 112-32 (Washington, DC: GPO, 2011),
https://financialservices.house.gov/uploadedfiles/112-32.pdf; and U.S. Congress, House Committee on Financial
Services, Subcommittee on Housing and Community Opportunity, Legislative Proposals to Determine the Future Role
of FHA, RHS, and GNMA in the Single- and Multi-family Mortgage Markets, Part 2, 111th Cong., 1st sess., September
8, 2011, Serial No. 112–57 (Washington: GPO, 2012), https://financialservices.house.gov/uploadedfiles/112-57.pdf.
120 See the Trump Administration’s Delivering Government Solutions in the 21st Century Reform Plan and
Reorganization Recommendations, p. 35, https://www.whitehouse.gov/wp-content/uploads/2018/06/Government-
Reform-and-Reorg-Plan.pdf.
121 GAO, Housing Assistance: Opportunities Exist to Increase Collaboration and Consider Consolidation, GAO-12-
554, August 2012, https://www.gao.gov/products/gao-12-554.
122 GAO, Home Mortgage Guarantees: Issues to Consider in Evaluating Opportunities to Consolidate Two
Overlapping Single-Family Programs, GAO-16-801, September 2016, https://www.gao.gov/products/gao-16-801.
123 See, for example, ibid. and the “Consolidation or Increased Coordination Presents Immediate Challenges and Has
Longer-Term Implications” section beginning on page 62 of GAO, Housing Assistance: Opportunities Exist to
Increase Collaboration and Consider Consolidation, GAO-12-554, August 2012, https://www.gao.gov/products/gao-
12-554.
124 See, for example, Leslie Strauss, “Why Keep Rural Housing Programs at USDA?”, Shelterforce, July 18, 2012,
https://shelterforce.org/2012/07/18/why_keep_rural_housing_programs_at_usda/; and U.S. Congress, House
Committee on Financial Services, Subcommittee on Housing, Community Development, and Insurance, The Affordable
Housing Crisis in Rural America: Assessing the Federal Response, 116th Cong., 1st sess., April 2, 2019, Serial No. 116-
13 (Washington, DC: GPO, 2019), available at https://www.govinfo.gov/content/pkg/CHRG-116hhrg37396/html/
CHRG-116hhrg37396.htm.
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in an appropriations act. The cost of providing that authorized loan amount, as determined by the
Congressional Budget Office, is reflected in the credit subsidy.
As noted earlier, obligation levels shown earlier in this report reflect commitments made by
federal agencies to spend funding and may not match appropriations information shown in this
table, as (among other reasons) appropriated funds may be obligated across fiscal years.
Table 13. Appropriations for Rural Housing Programs, FY2017-FY2021
(Dollars in millions)
FY2017
FY2018
FY2019
FY2020
FY2021

Rural Housing Insurance Fund Account

Section 502 Direct Home Loans

Loan Authorization
1,000.0
1,100.0
1,000.0
1,000.0
1,000.0

Credit Subsidy
67.7
42.4
67.7
90.0
55.4

Section 502 Guaranteed Home Loans

Loan Authorization
24,000.0
24,000.0
24,000.0
24,000.0
24,000.0

Section 504 Housing Repair Loans

Loan Authorization
26.3
28.0
28.0
28.0
28.0

Credit Subsidy
3.7
3.5
3.4
4.7
2.2

Section 514 Farm Labor Housing Loans

Loan Authorization
23.9
23.9
27.5
28.0
28.0

Credit Subsidy
7.1
6.4
6.9
8.7
5.1

Section 515 Rural Rental Housing Direct Loans

Loan Authorization
35.0
40.0
40.0
40.0
40.0

Credit Subsidy
10.4
10.5
9.5
12.1
6.7
Section 516 Farm Labor Housing Grants

8.3
8.3
10.0
10.0
10.0

Section 523 Self-Help Housing Land
Development Loans

Loan Authorization
5.0
5.0
5.0
5.0
5.0

Credit Subsidy
0.4
0.4
0.4
0.6
0.3

Section 524 Site Development Loans

Loan Authorization
5.0
5.0
5.0
5.0
5.0
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FY2017
FY2018
FY2019
FY2020
FY2021

Credit Subsidy
0.1
0.1
0.2
0.5
0.4

Section 538 Rural Rental Housing Guaranteed
Loans

Loan Authorization
230.0
230.0
230.0
230.0
230.0
Rural Rental Assistance Account

Section 521 Rental Assistance
1,405.0
1,345.0
1,331.0
1,375.0
1,410.0
Multifamily Housing Revitalization Account
Rural Housing Vouchers

19.4
25.0
27.0
32.0
40.0
Multifamily Housing Preservation and

Revitalization Program
22.0
22.0
24.0
28.0
28.0
Mutual Self-Help Grant Accounta
Section 523 Mutual Self-Help Grants

30.0
30.0
30.0
31.0
31.0
Rural Housing Assistance Grants Accountb
Section 533 Housing Preservation Grants

5.0
10.0
15.0
15.0
15.0
Section 504 Housing Repair Grants

28.7
30.0
30.0
30.0
30.0
Source: Figures taken from the subsequent fiscal year’s Comparative Statement of Budget Authority
accompanying annual appropriations acts.
Notes: Table is structured based on the most recent year’s appropriations legislation; in prior years, programs
may have been funded under different account structures.
a. While the Comparative Statement of Budget Authority tables for some years show Mutual Self-Help grants
funded within the Multifamily Housing Revitalization Account, in the legislation itself the program is shown
as funded in its own account, which is how it is displayed in this table.
b. While the Comparative Statement of Budget Authority tables for some years show Rural Housing
Assistance Grants funded within the Multifamily Housing Revitalization Account, in the legislation itself it is
shown as its own account, which is how it is displayed in the table. The specific amounts provided for each
of the programs within the Rural Housing Assistance Grants account—Section 533 Housing Preservation
Grants and Section 504 Housing Repair Grants—are specified in the relevant conference
agreements/explanatory statements.
Supplemental Appropriations
Table 13 reflects regular annual appropriations. Recently, several rural housing programs have
received additional supplemental funding in response to the COVID-19 pandemic. Specifically,
the American Rescue Plan Act (ARPA; P.L. 117-2) in FY2021 appropriated the following:
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 $39 million for direct loans through the Section 502 and Section 504 programs,
which RHS is using to refinance loans for certain Section 502 and Section 504
borrowers;125 and
 $100 million for Section 521, which RD is using to expand rental assistance to
unassisted tenants who are rent burdened.126

Author Information

Katie Jones
Maggie McCarty
Analyst in Housing Policy
Specialist in Housing Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
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125 USDA RD, “Temporary Authorization Single Family Housing Direct Programs,” unnumbered letter, May 12, 2021,
https://www.rd.usda.gov/sites/default/files/rdul-arp.pdf.
126 USDA RD, “The American Rescue Plan Act of 2021 Emergency Rental Assistance for Rural Housing,”
unnumbered letter, April 5, 2021, https://www.rd.usda.gov/sites/default/files/rdul-arpunit.pdf.
Congressional Research Service
R47044 · VERSION 1 · NEW
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