[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1260 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 1260
To reform rural housing programs, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 2, 2025
Ms. Smith (for herself, Mr. Rounds, Mr. Daines, Mr. Fetterman, Mr.
Crapo, Mr. Warner, Mr. Cramer, Mr. Warnock, Mrs. Shaheen, and Mr.
Moran) introduced the following bill; which was read twice and referred
to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To reform rural housing programs, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Rural Housing
Service Reform Act of 2025''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--STREAMLINING AND UPDATES
Sec. 101. Application of multifamily mortgage foreclosure procedures to
multifamily mortgages held by the Secretary
of Agriculture and preservation of the
rental assistance contract upon
foreclosure.
Sec. 102. Study on rural housing loans for housing for low- and
moderate-income families.
Sec. 103. Authorization of appropriations for staffing and IT upgrades.
Sec. 104. Funding for technical improvements.
TITLE II--RURAL HOUSING PRESERVATION AND REVITALIZATION
Sec. 201. Permanent establishment of housing preservation and
revitalization program.
Sec. 202. Rental assistance contract authority.
TITLE III--NATIVE CDFI RELENDING
Sec. 301. Native CDFI relending program.
TITLE IV--SECTION 504 LOANS AND GRANTS
Sec. 401. Modifications to loans and grants for minor improvements to
farm housing and buildings; income
eligibility.
TITLE V--RURAL COMMUNITY DEVELOPMENT INITIATIVE GRANTS
Sec. 501. Rural community development initiative.
TITLE VI--REPORTS
Sec. 601. Annual report on rural housing programs.
Sec. 602. GAO report on Rural Housing Service technology.
TITLE VII--RURAL HOUSING VOUCHER PROGRAM
Sec. 701. Adjustment to rural development voucher amount.
Sec. 702. Eligibility for rural housing vouchers.
Sec. 703. Amount of voucher assistance.
TITLE VIII--TRANSFERS TO NONPROFIT ORGANIZATIONS
Sec. 801. Transfer of multifamily rural housing projects.
TITLE IX--SECTION 502 LOANS AND GUARANTEES
Sec. 901. Extension of loan term.
Sec. 902. Release of liability for section 502 guaranteed borrower upon
assumption of original loan by new
borrower.
Sec. 903. Department of Agriculture loan restrictions.
TITLE X--ACCESSORY DWELLING UNITS
Sec. 1001. Loan guarantees.
TITLE XI--TIME FRAME FOR COMPLETING APPLICATION REVIEW
Sec. 1101. Application review.
TITLE I--STREAMLINING AND UPDATES
SEC. 101. APPLICATION OF MULTIFAMILY MORTGAGE FORECLOSURE PROCEDURES TO
MULTIFAMILY MORTGAGES HELD BY THE SECRETARY OF
AGRICULTURE AND PRESERVATION OF THE RENTAL ASSISTANCE
CONTRACT UPON FORECLOSURE.
(a) Multifamily Mortgage Procedures.--Section 363(2) of the
Multifamily Mortgage Foreclosure Act of 1981 (12 U.S.C. 3702(2)) is
amended--
(1) in subparagraph (D), by striking ``and'' at the end;
(2) in subparagraph (E), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(F) section 514, 515, or 538 of the Housing Act
of 1949 (42 U.S.C. 1484, 1485, 1490p).''.
(b) Preservation of Contract.--Section 521(d) of the Housing Act of
1949 (42 U.S.C. 1490a(d)) is amended by adding at the end the
following:
``(3) Notwithstanding any other provision of law in managing and
disposing of any multifamily property that is owned or has a mortgage
held by the Secretary, and during the process of foreclosure on any
property with a contract for rental assistance under this section--
``(A) the Secretary shall maintain any rental assistance
payments that are attached to any dwelling units in the
property; and
``(B) the rental assistance contract may be used to provide
further assistance to existing projects under 514, 515, or
516.''.
SEC. 102. STUDY ON RURAL HOUSING LOANS FOR HOUSING FOR LOW- AND
MODERATE-INCOME FAMILIES.
Not later than 6 months after the date of enactment of this Act,
the Secretary of Agriculture shall conduct a study and submit to
Congress a publicly available report on the loan program under section
521 of the Housing Act of 1949 (42 U.S.C. 1490a), including--
(1) the total amount provided by the Secretary in subsidies
under such section 521 to borrowers with loans made pursuant to
section 502 of such Act (42 U.S.C. 1472);
(2) how much of the subsidies described in paragraph (1)
are being recaptured; and
(3) the amount of time and costs associated with
recapturing those subsidies.
SEC. 103. AUTHORIZATION OF APPROPRIATIONS FOR STAFFING AND IT UPGRADES.
There is authorized to be appropriated to the Secretary of
Agriculture for each of fiscal years 2026 through 2030 such sums as may
be necessary for increased staffing needs and information technology
upgrades to support all Rural Housing Service programs.
SEC. 104. FUNDING FOR TECHNICAL IMPROVEMENTS.
(a) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary of Agriculture such sums as may be
necessary for fiscal year 2026 for improvements to the technology of
the Rural Housing Service of the Department of Agriculture used to
process and manage housing loans.
(b) Availability.--Amounts appropriated pursuant to subsection (a)
shall remain available until the date that is 5 years after the date of
the appropriation.
(c) Timeline.--The Secretary of Agriculture shall make the
improvements described in subsection (a) during the 5-year period
beginning on the date on which amounts are appropriated under
subsection (a).
TITLE II--RURAL HOUSING PRESERVATION AND REVITALIZATION
SEC. 201. PERMANENT ESTABLISHMENT OF HOUSING PRESERVATION AND
REVITALIZATION PROGRAM.
Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.) is
amended by adding at the end the following:
``SEC. 545. HOUSING PRESERVATION AND REVITALIZATION PROGRAM.
``(a) Establishment.--The Secretary shall carry out a program under
this section for the preservation and revitalization of multifamily
rental housing projects financed under section 514, 515, or 516.
``(b) Notice of Maturing Loans.--
``(1) To owners.--On an annual basis, the Secretary shall
provide written notice to each owner of a property financed
under section 514, 515, or 516 that will mature within the 4-
year period beginning upon the provision of the notice, setting
forth the options and financial incentives that are available
to facilitate the extension of the loan term or the option to
decouple a rental assistance contract pursuant to subsection
(f).
``(2) To tenants.--
``(A) In general.--On an annual basis, for each
property financed under section 514, 515, or 516, not
later than the date that is 2 years before the date
that the loan will mature, the Secretary shall provide
written notice to each household residing in the
property that informs them of--
``(i) the date of the loan maturity;
``(ii) the possible actions that may happen
with respect to the property upon that
maturity; and
``(iii) how to protect their right to
reside in federally assisted housing, or how to
secure housing voucher, after that maturity.
``(B) Language.--Notice under this paragraph shall
be provided in plain English and shall be translated to
other languages in the case of any property located in
an area in which a significant number of residents
speak such other languages.
``(c) Loan Restructuring.--Under the program under this section, in
any circumstance in which the Secretary proposes a restructuring to an
owner or an owner proposes a restructuring to the Secretary, the
Secretary may restructure such existing housing loans, as the Secretary
considers appropriate, for the purpose of ensuring that those projects
have sufficient resources to preserve the projects to provide safe and
affordable housing for low-income residents and farm laborers, by--
``(1) reducing or eliminating interest;
``(2) deferring loan payments;
``(3) subordinating, reducing, or reamortizing loan debt;
``(4) providing other financial assistance, including
advances, payments, and incentives (including the ability of
owners to obtain reasonable returns on investment) required by
the Secretary; and
``(5) permanently removing a portion of the housing units
from income restrictions when sustained vacancies have
occurred.
``(d) Renewal of Rental Assistance.--
``(1) In general.--When the Secretary proposes to
restructure a loan or agrees to the proposal of an owner to
restructure a loan pursuant to subsection (c), the Secretary
shall offer to renew the rental assistance contract under
section 521(a)(2) for a term that is the shorter of 20 years
and the term of the restructured loan, subject to annual
appropriations, provided that the owner agrees to bring the
property up to such standards that will ensure maintenance of
the property as decent, safe, and sanitary housing for the full
term of the rental assistance contract.
``(2) Additional rental assistance.--With respect to a
project described in paragraph (1), if rental assistance is not
available for all households in the project for which the loan
is being restructured pursuant to subsection (c), the Secretary
may extend such additional rental assistance to unassisted
households at that project as is necessary to make the project
safe and affordable to low-income households.
``(e) Restrictive Use Agreements.--
``(1) Requirement.--As part of the preservation and
revitalization agreement for a project, the Secretary shall
obtain a restrictive use agreement that is recorded and
obligates the owner to operate the project in accordance with
this title.
``(2) Term.--
``(A) No extension of rental assistance contract.--
Except when the Secretary enters into a 20-year
extension of the rental assistance contract for a
project, the term of the restrictive use agreement for
the project shall be consistent with the term of the
restructured loan for the project.
``(B) Extension of rental assistance contract.--If
the Secretary enters into a 20-year extension of the
rental assistance contract for a project, the term of
the restrictive use agreement for the project shall be
for the longer of--
``(i) 20 years; or
``(ii) the remaining term of the loan for
that project.
``(C) Termination.--The Secretary may terminate the
20-year use restrictive use agreement for a project
before the end of the term of the agreement if the 20-
year rental assistance contract for the project with
the owner is terminated at any time for reasons outside
the control of the owner.
``(f) Decoupling of Rental Assistance.--
``(1) Renewal of rental assistance contract.--If the
Secretary determines that a loan maturing during the 4-year
period beginning upon the provision of the notice required
under subsection (b)(1) for a project cannot reasonably be
restructured in accordance with subsection (c) because it is
not financially feasible or the owner does not agree with the
proposed restructuring, and the project was operating with
rental assistance under section 521 and the recipient is a
borrower under section 514 or 515, the Secretary may renew the
rental assistance contract, notwithstanding any requirement
under section 521 that the recipient be a current borrower
under section 514 or 515, for a term of 20 years, subject to
annual appropriations.
``(2) Additional rental assistance.--With respect to a
project described in paragraph (1), if rental assistance is not
available for all households in the project for which the loan
is being restructured pursuant to subsection (c), the Secretary
may extend such additional rental assistance to unassisted
households at that project as is necessary to make the project
safe and affordable to low-income households.
``(3) Rents.--
``(A) In general.--Any agreement to extend the term
of the rental assistance contract under section 521 for
a project shall obligate the owner to continue to
maintain the project as decent, safe, and sanitary
housing and to operate the development as affordable
housing in a manner that meets the goals of this title.
``(B) Rent amounts.--Subject to subparagraph (C),
in setting rents, the Secretary--
``(i) shall determine the maximum initial
rent based on current fair market rents
established under section 8 of the United
States Housing Act of 1937 (42 U.S.C. 1437f);
and
``(ii) may annually adjust the rent
determined under clause (i) by the operating
cost adjustment factor as provided under
section 524 of the Multifamily Assisted Housing
Reform and Affordability Act of 1997 (42 U.S.C.
1437f note).
``(C) Higher rent.--
``(i) In general.--Subparagraph (B) shall
not apply if the Secretary determines that the
budget-based needs of a project require a
higher rent than the rent described in
subparagraph (B).
``(ii) Rent.--If the Secretary makes a
positive determination under clause (i), the
Secretary may approve a budget-based rent level
for the project.
``(4) Conditions for approval.--
``(A) Plan.--Before the approval of a rental
assistance contract authorized under this section, the
Secretary shall require, through an annual notice in
the Federal Register, the owner to submit to the
Secretary a plan that identifies financing sources and
a timetable for renovations and improvements determined
to be necessary by the Secretary to maintain and
preserve the project.
``(B) Automatic approval.--If a plan submitted
under subparagraph (A) is not acted upon by the
Secretary within 30 days of the submission, the rental
assistance contract is automatically approved for not
more than a 1-year period.
``(g) Multifamily Housing Transfer Technical Assistance.--Under the
program under this section, the Secretary may provide grants to
qualified nonprofit organizations and public housing agencies to
provide technical assistance, including financial and legal services,
to borrowers under loans under this title for multifamily housing to
facilitate the acquisition or preservation of such multifamily housing
properties in areas where the Secretary determines there is a risk of
loss of affordable housing.
``(h) Administrative Expenses.--Of any amounts made available for
the program under this section for any fiscal year, the Secretary may
use not more than $1,000,000 for administrative expenses for carrying
out such program.
``(i) Authorization of Appropriations.--There is authorized to be
appropriated for the program under this section $200,000,000 for each
of fiscal years 2026 through 2030.
``(j) Rulemaking.--
``(1) In general.--Not later than 180 days after the date
of enactment of the Rural Housing Service Reform Act of 2025,
the Secretary shall--
``(A) publish an advance notice of proposed
rulemaking; and
``(B) consult with appropriate stakeholders.
``(2) Interim final rule.--Not later than 1 year after the
date of enactment of the Rural Housing Service Reform Act of
2025, the Secretary shall publish an interim final rule to
carry out this section.''.
SEC. 202. RENTAL ASSISTANCE CONTRACT AUTHORITY.
Section 521(d) of the Housing Act of 1949 (42 U.S.C. 1490a(d)), as
amended by section 101(b), is amended--
(1) in paragraph (1)--
(A) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively;
(B) by inserting after subparagraph (A) the
following:
``(B) upon request of an owner of a project financed under
section 514 or 515, the Secretary is authorized to enter into
renewal of such agreements for a period of 20 years or the term
of the loan, whichever is shorter, subject to amounts made
available in appropriations Acts;'';
(C) in subparagraph (C), as so redesignated, by
striking ``subparagraph (A)'' and inserting
``subparagraphs (A) and (B)''; and
(D) in subparagraph (D), as so redesignated, by
striking ``subparagraphs (A) and (B)'' and inserting
``subparagraphs (A), (B), and (C)'';
(2) in paragraph (2), by striking ``shall'' and inserting
``may''; and
(3) by adding at the end the following:
``(4) In the case of any rental assistance contract authority that
becomes available because of the termination of assistance on behalf of
an assisted family--
``(A) at the option of the owner of the rental project, the
Secretary shall provide the owner a period of not more than 6
months before unused assistance is made available pursuant to
subparagraph (B) during which the owner may use such assistance
authority to provide assistance on behalf of an eligible
unassisted family that--
``(i) is residing in the same rental project in
which the assisted family resided before the
termination; or
``(ii) newly occupies a dwelling unit in the rental
project during that 6-month period; and
``(B) except for assistance used as provided in
subparagraph (A), the Secretary shall use such remaining
authority to provide assistance on behalf of eligible families
residing in other rental projects originally financed under
section 514, 515, or 516.''.
TITLE III--NATIVE CDFI RELENDING
SEC. 301. NATIVE CDFI RELENDING PROGRAM.
Section 502 of the Housing Act of 1949 (42 U.S.C. 1472) is amended
by adding at the end the following:
``(j) Set Aside for Native Community Development Financial
Institutions.--
``(1) Definitions.--In this subsection--
``(A) the term `Alaska Native' has the meaning
given the term `Native' in section 3(b) of the Alaska
Native Claims Settlement Act (43 U.S.C. 1602(b));
``(B) the term `appropriate congressional
committees' means--
``(i) the Committee on Agriculture of the
Senate;
``(ii) the Committee on Indian Affairs of
the Senate;
``(iii) the Committee on Banking, Housing,
and Urban Affairs of the Senate;
``(iv) the Committee on Agriculture of the
House of Representatives;
``(v) the Committee on Natural Resources of
the House of Representatives; and
``(vi) the Committee on Financial Services
of the House of Representatives;
``(C) the term `community development financial
institution' has the meaning given the term in section
103 of the Community Development Banking and Financial
Institutions Act of 1994 (12 U.S.C. 4702);
``(D) the term `Indian Tribe' has the meaning given
the term `Indian tribe' in section 4 of the Native
American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4103);
``(E) the term `Native community development
financial institution' means an entity--
``(i) that has been certified as a
community development financial institution by
the Secretary of the Treasury;
``(ii) that is not less than 51 percent
owned or controlled by members of Indian
Tribes, Alaska Native communities, or Native
Hawaiian communities; and
``(iii) for which not less than 51 percent
of the activities of the entity serve Indian
Tribes, Alaska Native communities, or Native
Hawaiian communities;
``(F) the term `Native Hawaiian' has the meaning
given the term in section 801 of the Native American
Housing Assistance and Self-Determination Act of 1996
(25 U.S.C. 4221); and
``(G) the term `priority Tribal land' means--
``(i) any land located within the
boundaries of--
``(I) an Indian reservation,
pueblo, or rancheria; or
``(II) a former reservation within
Oklahoma;
``(ii) any land not located within the
boundaries of an Indian reservation, pueblo, or
rancheria, the title to which is held--
``(I) in trust by the United States
for the benefit of an Indian Tribe or
an individual Indian;
``(II) by an Indian Tribe or an
individual Indian, subject to
restriction against alienation under
laws of the United States; or
``(III) by a dependent Indian
community;
``(iii) any land located within a region
established pursuant to section 7(a) of the
Alaska Native Claims Settlement Act (43 U.S.C.
1606(a));
``(iv) Hawaiian Home Lands, as defined in
section 801 of the Native American Housing
Assistance and Self-Determination Act of 1996
(25 U.S.C. 4221); or
``(v) those areas or communities designated
by the Assistant Secretary of Indian Affairs of
the Department of the Interior that are near,
adjacent, or contiguous to reservations where
financial assistance and social service
programs are provided to Indians because of
their status as Indians.
``(2) Purpose.--The purpose of this subsection is to--
``(A) increase homeownership opportunities for
Indian Tribes, Alaska Native Communities, and Native
Hawaiian communities in rural areas; and
``(B) provide capital to Native community
development financial institutions to increase the
number of mortgage transactions carried out by those
institutions.
``(3) Set aside for native cdfis.--Of amounts appropriated
to make direct loans under this section for each fiscal year,
the Secretary may use not more than $50,000,000 to make direct
loans to Native community development financial institutions in
accordance with this subsection.
``(4) Application requirements.--A Native community
development financial institution desiring a loan under this
subsection shall demonstrate that the institution--
``(A) can provide the non-Federal cost share
required under paragraph (6); and
``(B) is able to originate and service loans for
single family homes.
``(5) Lending requirements.--A Native community development
financial institution that receives a loan pursuant to this
subsection shall--
``(A) use those amounts to make loans to
borrowers--
``(i) who otherwise meet the requirements
for a loan under this section; and
``(ii) who--
``(I) are members of an Indian
Tribe, an Alaska Native community, or a
Native Hawaiian community; or
``(II) maintain a household in
which not less than 1 member is a
member of an Indian Tribe, an Alaska
Native community, or a Native Hawaiian
community; and
``(B) in making loans under subparagraph (A), give
priority to borrowers described in that subparagraph
who are residing on priority Tribal land.
``(6) Non-federal cost share.--
``(A) In general.--A Native community development
financial institution that receives a loan under this
section shall be required to match not less than 20
percent of the amount received.
``(B) Waiver.--In the case of a loan for which
amounts are used to make loans to borrowers described
in paragraph (5)(B), the Secretary shall waive the non-
Federal cost share requirement described in
subparagraph (A) with respect to those loan amounts.
``(7) Reporting.--
``(A) Annual report by native cdfis.--Each Native
community development financial institution that
receives a loan pursuant to this subsection shall
submit an annual report to the Secretary on the lending
activities of the institution using the loan amounts,
which shall include--
``(i) a description of the outreach efforts
of the institution in local communities to
identify eligible borrowers;
``(ii) a description of how the institution
leveraged additional capital to reach
prospective borrowers;
``(iii) the number of loan applications
received, approved, and deployed;
``(iv) the average loan amount;
``(v) the number of finalized loans that
were made on Tribal trust lands and not on
Tribal trust lands; and
``(vi) the number of finalized loans that
were made on priority Tribal land and not
priority Tribal land.
``(B) Annual report to congress.--Not later than 1
year after the date of enactment of this subsection,
and every year thereafter, the Secretary shall submit
to the appropriate congressional communities a report
that includes--
``(i) a list of loans made to Native
community development financial institutions
pursuant to this subsection, including the name
of the institution and the loan amount;
``(ii) the percentage of loans made under
this section to members of Indian Tribes,
Alaska Native communities, and Native Hawaiian
communities, respectively, including a
breakdown of loans made to households residing
on and not on Tribal trust lands; and
``(iii) the average loan amount made by
Native community development financial
institutions pursuant to this subsection.
``(C) Evaluation of program.--Not later than 3
years after the date of enactment of this subsection,
the Secretary and the Secretary of the Treasury shall
conduct an evaluation of and submit to the appropriate
congressional committees a report on the program under
this subsection, which shall--
``(i) evaluate the effectiveness of the
program, including an evaluation of the demand
for loans under the program; and
``(ii) include recommendations relating to
the program, including whether--
``(I) the program should be
expanded to such that all community
development financial institutions may
make loans under the program to the
borrowers described in paragraph (5);
and
``(II) the set aside amount
paragraph (3) should be modified in
order to match demand under the
program.
``(8) Grants for operational support.--
``(A) In general.--The Secretary shall make grants
to Native community development financial institutions
that receive a loan under this section to provide
operational support and other related services to those
institutions, subject to--
``(i) the satisfactory performance, as
determined by the Secretary, of a Native
community development financial institution in
carrying out this section; and
``(ii) the availability of funding.
``(B) Amount.--A Native community development
financial institution that receives a loan under this
section shall be eligible to receive a grant described
in subparagraph (A) in an amount equal to 20 percent of
the direct loan amount received by the Native community
development financial institution under the program
under this section as of the date on which the direct
loan is awarded.
``(9) Outreach and technical assistance.--There is
authorized to be appropriated to the Secretary $1,000,000 for
each of fiscal years 2025, 2026, and 2027--
``(A) to provide technical assistance to Native
community development financial institutions--
``(i) relating to homeownership and other
housing-related assistance provided by the
Secretary; and
``(ii) to assist those institutions to
perform outreach to eligible homebuyers
relating to the loan program under this
section; or
``(B) to provide funding to a national organization
representing Native American housing interests to
perform outreach and provide technical assistance as
described in clauses (i) and (ii), respectively, of
subparagraph (A).
``(10) Administrative costs.--In addition to other
available funds, the Secretary may use not more than 3 percent
of the amounts made available to carry out this subsection for
administration of the programs established under this
subsection.''.
TITLE IV--SECTION 504 LOANS AND GRANTS
SEC. 401. MODIFICATIONS TO LOANS AND GRANTS FOR MINOR IMPROVEMENTS TO
FARM HOUSING AND BUILDINGS; INCOME ELIGIBILITY.
Section 504(a) of the Housing Act of 1949 (42 U.S.C. 1474(a)) is
amended--
(1) in the first sentence, by inserting ``and may make a
loan to an eligible low-income applicant'' after ``applicant'';
(2) by inserting ``Not less than 60 percent of loan funds
made available under this section shall be reserved and made
available for very low-income applicants.'' after the first
sentence; and
(3) by striking ``$7,500'' and inserting ``$15,000''.
TITLE V--RURAL COMMUNITY DEVELOPMENT INITIATIVE GRANTS
SEC. 501. RURAL COMMUNITY DEVELOPMENT INITIATIVE.
Subtitle E of the Consolidated Farm and Rural Development Act (7
U.S.C. 2009 et seq.) is amended by adding at the end the following:
``SEC. 381O. RURAL COMMUNITY DEVELOPMENT INITIATIVE.
``(a) Definitions.--In this section:
``(1) Eligible entity.--The term `eligible entity' means--
``(A) a private, nonprofit community-based housing
or community development organization;
``(B) a rural community; or
``(C) a federally recognized Indian Tribe.
``(2) Eligible intermediary.--The term `eligible
intermediary' means a qualified--
``(A) private, nonprofit organization; or
``(B) public organization.
``(b) Establishment.--The Secretary shall establish a Rural
Community Development Initiative, under which the Secretary shall
provide grants to eligible intermediaries to carry out programs to
provide financial and technical assistance to eligible entities to
develop the capacity and ability of eligible entities to carry out
projects to improve housing, community facilities, and community and
economic development projects in rural areas.
``(c) Amount of Grants.--The amount of a grant provided to an
eligible intermediary under this section shall be not more than
$250,000.
``(d) Matching Funds.--
``(1) In general.--An eligible intermediary receiving a
grant under this section shall provide matching funds from
other sources, including Federal funds for related activities,
in an amount not less than the amount of the grant.
``(2) Waiver.--The Secretary may waive paragraph (1) with
respect to a project that would be carried out in a
persistently poor rural region, as determined by the
Secretary.''.
TITLE VI--REPORTS
SEC. 601. ANNUAL REPORT ON RURAL HOUSING PROGRAMS.
Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.), as
amended by this Act, is amended by adding at the end the following:
``SEC. 546. ANNUAL REPORT.
``(a) In General.--The Secretary shall submit to the appropriate
committees of Congress and publish on the website of the Department of
Agriculture an annual report on rural housing programs carried out
under this title, which shall include significant details on the health
of Rural Housing Service programs, including--
``(1) raw data sortable by programs and by region regarding
loan performance;
``(2) the housing stock of those programs, including
information on why properties end participation in those
programs, such as for maturation, prepayment, foreclosure, or
other servicing issues; and
``(3) risk ratings for properties assisted under those
programs.
``(b) Protection of Information.--The data included in each report
required under subsection (a) may be aggregated or anonymized to
protect participant financial or personal information.''.
SEC. 602. GAO REPORT ON RURAL HOUSING SERVICE TECHNOLOGY.
Not later than 1 year after the date of enactment of this Act, the
Comptroller General of the United States shall submit to Congress a
report that includes--
(1) an analysis of how the outdated technology used by the
Rural Housing Service impacts participants in the programs of
the Rural Housing Service;
(2) an estimate of the amount of funding that is needed to
modernize the technology used by the Rural Housing Service; and
(3) an estimate of the number and type of new employees the
Rural Housing Service needs to modernize the technology used by
the Rural Housing Service.
TITLE VII--RURAL HOUSING VOUCHER PROGRAM
SEC. 701. ADJUSTMENT TO RURAL DEVELOPMENT VOUCHER AMOUNT.
(a) In General.--Not later than 2 years after the date of enactment
of this Act, the Secretary of Agriculture shall issue regulations to
establish a process for adjusting the voucher amount provided under
section 542 of the Housing Act of 1949 (42 U.S.C. 1490r) after the
issuance of the voucher following an interim or annual review of the
amount of the voucher.
(b) Interim Review.--The interim review described in subsection (a)
shall, at the request of a tenant, allow for a recalculation of the
voucher amount when the tenant experiences a reduction in income,
change in family composition, or change in rental rate.
(c) Annual Review.--
(1) In general.--The annual review described in subsection
(a) shall require tenants to annually recertify the family
composition of the household and that the family income of the
household does not exceed 80 percent of the area median income
at a time determined by the Secretary of Agriculture.
(2) Considerations.--If a tenant does not recertify the
family composition and family income of the household within
the time frame required under paragraph (1), the Secretary of
Agriculture--
(A) shall consider whether extenuating
circumstances caused the delay in recertification; and
(B) may alter associated consequences for the
failure to recertify based on those circumstances.
(3) Effective date.--Following the annual review of a
voucher under subsection (a), the updated voucher amount shall
be effective on the 1st day of the month following the
expiration of the voucher.
(d) Deadline.--The process established under subsection (a) shall
require the Secretary of Agriculture to review and update the voucher
amount described in subsection (a) for a tenant not later than 60 days
before the end of the voucher term.
SEC. 702. ELIGIBILITY FOR RURAL HOUSING VOUCHERS.
Section 542 of the Housing Act of 1949 (42 U.S.C. 1490r) is amended
by adding at the end the following:
``(c) Eligibility of Households in Sections 514, 515, and 516
Projects.--The Secretary may provide rural housing vouchers under this
section for any low-income household (including those not receiving
rental assistance) residing for a term longer than the remaining term
of their lease that is in effect on the date of prepayment,
foreclosure, or mortgage maturity, in a property financed with a loan
under section 514 or 515 or a grant under section 516 that has--
``(1) been prepaid with or without restrictions imposed by
the Secretary pursuant to section 502(c)(5)(G)(ii)(I);
``(2) been foreclosed; or
``(3) matured after September 30, 2005.''.
SEC. 703. AMOUNT OF VOUCHER ASSISTANCE.
Notwithstanding any other provision of law, in the case of any
rural housing voucher provided pursuant to section 542 of the Housing
Act of 1949 (42 U.S.C. 1490r), the amount of the monthly assistance
payment for the household on whose behalf the assistance is provided
shall be determined as provided in subsection (a) of such section 542,
including providing for interim and annual review of the voucher amount
in the event of a change in household composition or income or rental
rate.
TITLE VIII--TRANSFERS TO NONPROFIT ORGANIZATIONS
SEC. 801. TRANSFER OF MULTIFAMILY RURAL HOUSING PROJECTS.
Section 515 of the Housing Act of 1949 (42 U.S.C. 1485) is
amended--
(1) in subsection (h), by adding at the end the following:
``(3) Transfer to nonprofit organizations.--A nonprofit or
public body purchaser, including a limited partnership with a
general partner with the principal purpose of providing
affordable housing, may purchase a property for which a loan is
made or insured under this section that has received a market
value appraisal, without addressing rehabilitation needs at the
time of purchase, if the purchaser--
``(A) makes a commitment to address rehabilitation
needs during ownership and long-term use restrictions
on the property; and
``(B) at the time of purchase, accepts long-term
use restrictions on the property.''; and
(2) in subsection (w)(1), in the first sentence in the
matter preceding subparagraph (A), by striking ``9 percent''
and inserting ``50 percent''.
TITLE IX--SECTION 502 LOANS AND GUARANTEES
SEC. 901. EXTENSION OF LOAN TERM.
(a) In General.--Section 502(a)(2) of the Housing Act of 1949 (42
U.S.C. 1472(a)(2)) is amended--
(1) by inserting ``(A)'' before ``The Secretary'';
(2) in subparagraph (A), as so designated, by striking
``paragraph'' and inserting ``subparagraph''; and
(3) by adding at the end the following:
``(B) The Secretary may refinance or modify the period of
any loan, including any refinanced loan, made under this
section in accordance with terms and conditions as the
Secretary shall prescribe, but in no event shall the total term
of the loan from the date of the refinance or modification
exceed 40 years.''.
(b) Application.--The amendment made under subsection (a) shall
apply with respect to loans made under section 502 of the Housing Act
of 1949 (42 U.S.C. 1472) before, on, or after the date of enactment of
this Act.
SEC. 902. RELEASE OF LIABILITY FOR SECTION 502 GUARANTEED BORROWER UPON
ASSUMPTION OF ORIGINAL LOAN BY NEW BORROWER.
Section 502(h)(10) of the Housing Act of 1949 (42 U.S.C.
1472(h)(10)) is amended to read as follows:
``(10) Transfer and assumption.--Upon the transfer of
property for which a guaranteed loan under this subsection was
made and the assumption of the guaranteed loan by an approved
eligible borrower, the original borrower of a guaranteed loan
under this subsection shall be relieved of liability with
respect to the loan.''.
SEC. 903. DEPARTMENT OF AGRICULTURE LOAN RESTRICTIONS.
(a) Definitions.--In this section, the terms ``State'' and ``Tribal
organization'' have the meanings given those terms in section 658P of
the Child Care and Development Block Grant Act of 1990 (42 U.S.C.
9858n).
(b) Revision.--The Secretary of Agriculture shall revise section
3555.102(c) of title 7, Code of Federal Regulations, to exclude from
the restriction under that section--
(1) a home-based business that is a licensed, registered,
or regulated child care provider under State law or by a Tribal
organization; and
(2) an applicant that has applied to become a licensed,
registered or regulated child care provider under State law or
by a Tribal organization.
TITLE X--ACCESSORY DWELLING UNITS
SEC. 1001. LOAN GUARANTEES.
Section 502(h)(4) of the Housing Act of 1949 (42 U.S.C. 1472(h)(4))
is amended--
(1) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively;
(2) by striking ``Loans may be guaranteed'' and inserting
the following:
``(A) Definition.--In this paragraph, the term
`accessory dwelling unit' means a single, habitable
living unit--
``(i) with means of separate ingress and
egress;
``(ii) that is usually subordinate in size;
``(iii) that can be added to, created
within, or detached from a primary 1-unit,
single-family dwelling; and
``(iv) in combination with a primary 1-
unit, single family dwelling, constitutes a
single interest in real estate.
``(B) Single family requirement.--Loans may be
guaranteed''; and
(3) by adding at the end the following:
``(C) Rule of construction.--Nothing in this
paragraph shall be construed to prohibit the leasing of
an accessory dwelling unit or the use of rental income
derived from such a lease to qualify for a loan
guaranteed under this subsection--
``(i) after the date of enactment of the
Rural Housing Service Reform Act of 2025; and
``(ii) if the property that is the subject
of the loan was constructed before the date of
enactment of the Rural Housing Service Reform
Act of 2025.''.
TITLE XI--TIME FRAME FOR COMPLETING APPLICATION REVIEW
SEC. 1101. APPLICATION REVIEW.
(a) Sense of Congress.--It is the sense of Congress, not later than
90 days after the date on which the Secretary of Agriculture receives
an application for a loan, grant or combined loan and grant under
section 502 or 504 of the Housing Act of 1949 (42 U.S.C. 1472, 1474),
the Secretary of Agriculture should--
(1) review the application;
(2) complete the underwriting;
(3) make a determination of eligibility with respect to the
application; and
(4) notify the applicant of determination.
(b) Report.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, and annually thereafter until the date
described in paragraph (2), the Secretary of Agriculture shall
submit to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives a report--
(A) detailing the timeliness of eligibility
determinations and final determinations with respect to
applications under section 502 and 504 of the Housing
Act of 1949 (42 U.S.C. 1472, 1474), including
justifications for any eligibility determinations
taking longer than 90 days;
(B) that includes recommendations to shorten the
timeline for notifications of eligibility
determinations described in paragraph (1) to not more
than 90 days.
(2) Date described.--The date described in this paragraph
is the date on which, during the preceding 5-year period, the
Secretary of Agriculture provides each eligibility
determination described in paragraph (1) during the 90-day
period beginning on the date on which each application is
received.
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