House Financial Services Committee Holds Hearing on Rural Housing Needs

By Kayla Blackwell, NLIHC Housing Policy Analyst, and Kayla Springer, NLIHC Policy Intern 

On June 12, the U.S. House Committee on Financial Services Subcommittee on Housing Insurance held a hearing, “Housing in the Heartland: Addressing Our Rural Housing Needs.” Witnesses testified on the challenges of building rural housing, including high costs, regulatory burdens, low workforce capacity, and the need for greater rural housing supply and more effective rural housing programs. Witnesses included Richard Baier, President and CEO of the Nebraska Bankers Association; David Garcia, Policy Director of Up for Growth; Ian Maute, President of the Council for Affordable and Rural Housing (CARH) and Director of Development for the Buckeye Community Hope Foundation; and David Lipsetz, President and CEO of the Housing Assistance Council (HAC).  

Subcommittee Chair Mike Flood (R-NE) opened the hearing by highlighting the unique housing challenges facing rural communities, such as the added costs of longer supply chains, lack of local labor force, and regulatory burdens associated with federal housing funding streams. In particular, Chairman Flood pointed to several federal rules and regulations that impact the costs of federal housing projects, including environmental review requirements, Build America Buy America (BABA) rules that require parts used in construction to be built in the U.S., Davis Bacon wage laws, and Section 3 requirements to hire low-income workers.  

Next, Ranking Member Emanuel Cleaver (D-MO) highlighted in his opening statement the threats posed by the Trump Administration to USDA Rural Development staffing and programming. Representative Cleaver also highlighted his draft bill, the “Strategy and Investment in Rural Housing Preservation Act of 2025,” to preserve USDA rental housing and discussed the “Rural Housing Service Reform Act,” which would reform USDA rural housing programs.   

Richard Baier spoke of the challenges facing rural Nebraska, including an aging housing stock, a lack of local material vendors, contractors and subcontractors, and a scarcity of developable lots that has increased the risk for developers to build in rural areas. Baier also emphasized that misalignment in federal housing programs, such as differentials in income limits between the Low-Income Housing Tax Credit (LIHTC) and the National Housing Trust Fund, make it expensive and administratively difficult to stack the subsidies necessary for affordable housing development. In contrast, Baier highlighted the successes of the Rural Workforce Housing Task Force, a program created by the Nebraska Bankers Association, which operates a fund for nonprofit housing development that requires no income restrictions and no federal funding.  

David Garcia, Policy Director of Up for Growth, focused on housing supply shortages. While Garcia also mentioned the unique challenges of rural communities, such as low construction and planning capacity, he highlighted zoning restrictions and local resistance to new housing as barriers to increasing rural housing supply. To increase affordable housing production in rural communities, Garcia noted that Congress can adopt bipartisan solutions such as the 30% basis boost for rural housing projects proposed in the “Affordable Housing Credit Improvement Act” (AHCIA), Representative Cleaver’s “Rural Housing Service Reform Act,” and the “Neighborhood Homes Service Act” and suggested that HUD provisions that require permanent steel chassis for manufactured housing should be removed. He also advocated for targeted assistance for rural communities through the “Housing Supply and Frameworks Act,” as well as technical policy assistance through the upcoming “Housing Opportunities Made Easier Act,” which would allow rural communities to modernize outdated zoning. Notably, the rural basis boost from the AHCIA has been included in the budget reconciliation bill, which recently passed the House. NLIHC supports the bipartisan AHCIA, but opposes the harmful changes to Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and other vital anti-poverty programs (see Memo, 5/19 and Memo, 6/9).  

Ian Maute, President of CARH, discussed the imminent expiration of USDA Section 515 mortgages for rural multifamily housing, many of which are currently coupled with Section 521 Rural Rental Assistance. Without congressional action on “decoupling,” many rural households will lose their rental assistance as their buildings’ mortgages are paid in full. Maute advocated for the decoupling of these two programs, especially through the Stand-Alone Rental Assistance (SARA) program, which has already allowed for around 1,000 units’ mortgage assistance and rental assistance to be decoupled. Maute also noted the importance of LIHTC for rural multifamily housing and the challenges of Fannie Mae and Freddie Mac’s uncertain tax status for developers.  

Noting the agreement across witnesses, David Lipsetz, President and CEO of HAC testified that federal housing policies are at fault for deepening rural housing challenges. Specifically, Lipsetz noted that while housing programs like LIHTC, the mortgage interest deduction, Fannie Mae and Freddie Mac, and Opportunity Zones play important roles in housing finance, they also steer investment to already overpriced suburban and urban housing markets away from rural communities. To resolve the rural affordability crisis, Lipsetz advocated for more concentrated housing capital in small towns, greater support for the capacity of local housing providers, and decoupling USDA Section 515 from Section 521 rental assistance. He also highlighted the bipartisan momentum for rural public-private housing partnerships, expanding the role of CDFIs, and Rep. Cleaver’s “Rural Housing Service Reform Act.”  

Members of Congress questioned witnesses on a range of rural housing issues, from appropriations to manufactured housing and Native Americans’ housing access. Representatives Pettersen (D-CO), Bynum (D-OR), and Williams (D-GA) noted the impact of Trump budget cuts on rural housing. “The proposal in the president’s budget would be devastating for rural communities. To zero out the programs that are funding some of the only development happening in those towns would be an unconscionable move,” Lipsetz testified. Representatives Tlaib (D-WA) and Pressley (D-MI) discussed the lack of investment in rural communities and noted the similarities between urban and rural districts in terms of housing needs. For example, Representative Pressley highlighted criminal records as a barrier to housing, and showcased her “Housing FIRST Act,” which would reform tenant screening policies to support housing access for people with conviction records. Representatives Rose (R-TN), Timmons (R-SC), Fitzgerald (R-WI), and De La Cruz (R-TX) questioned witnesses on manufactured housing standards, permitting requirements, and zoning requirements. Finally, Representatives Downing (R-MT) and Nunn (R-IA) showcased the disparities in Native American homeownership and the need to reform and update the USDA’s Rural Housing Service.  

Watch the hearing and read testimony from the witnesses here.  

Learn more about USDA rental housing programs in NLIHC’s 2025 Advocate’s Guide Chapter 4: “USDA Rural Rental Housing Programs."