Lawmakers Urge USDA to Protect $232 Million in Rural Home Loan Funding
A bipartisan group of 14 members of Congress is urging the U.S. Department of Agriculture (USDA) to act now to protect about $232 million in funding for the Section 502 Single Family Housing Direct Loan Program, which is at risk of expiring at the end of Fiscal Year 2026. Rep. Jim Costa (D-CA) led the effort, which was outlined in a letter to USDA Secretary Brooke Rollins.
The program helps low- and very-low-income families buy homes in rural communities. According to the lawmakers, recent reports indicate USDA has obligated only a portion of the roughly $1 billion Congress provided for the program, leaving hundreds of millions of dollars at risk of going unused.
The letter also raises concerns about recent administrative changes that could limit access to the program and delay assistance to eligible families. The lawmakers asked USDA to:
- preserve the remaining funding;
- give Congress an accounting of unobligated balances;
- take steps to improve loan processing and prevent future funding from expiring.
David Lipsetz, President and CEO of the Housing Assistance Council, called the 502 direct mortgage program a flagship tool for rural homeownership. He said letting the funds expire while the program faces new and burdensome rules would be a real tragedy for rural families.
Why it matters
Rural buyers who rely on USDA direct loans could see fewer loan opportunities if the funds lapse. Lenders, agents and housing counselors working in rural markets may want to watch how USDA responds.
Source: Rep. Jim Costa (D-CA), October 1, 2026. Read the original release
