Housing Assistance Council Research Finds USDA Rural Rental Housing Stock Lost Nearly 15,000 Section 515 Units in 5 Years

By Kayla Blackwell, NLIHC Senior Housing Policy Analyst  

The Housing Assistance Council (HAC) released a new report finding that affordable rental housing funded by the U.S. Department of Agriculture (USDA)’s Section 515 program has decreased dramatically since 2021. The report, “Rural Research Brief: USDA's Section 515 Multifamily Housing Portfolio Continues to Shrink,” finds that an estimated 621 Section 515 properties containing 14,928 affordable apartments left the Section 515 portfolio from a sample period of June 2021 to March 2026. The report summarizes preservation efforts in the rural rental assistance program and highlights key areas of loss, notably the Midwest and Upper Great Plains areas.  

Background 

The USDA Section 515 Multifamily Housing Direct Loan Program has helped finance over 500,000 affordable rental housing units since its creation in 1963. In rural areas, USDA-financed housing is often the only source of affordable housing, and USDA has a wide reach; as the HAC brief notes, “there is at least one USDA multifamily property in 2,648, or 84% of all U.S. counties.” Section 515 properties provide crucial affordable housing for extremely low-income people in small towns and rural communities, particularly when combined with Section 521 Rental Assistance. Though declining, the USDA Section 515 portfolio included 12,014 properties, consisting of 379,894 rental units. Approximately 546,000 people live in Section 515 properties as of March 2026. Nearly 80% of Section 515 properties receive USDA’s Section 521 Rental Assistance, and two out of every three residents in Section 515 properties are elderly or disabled. 

Findings 

The Section 515 program has been in steady decline for decades, however, as mortgages mature and property owners choose to end their agreements with USDA through loan prepayment. When properties exit the USDA portfolio, residents in such properties can lose affordability requirements and other tenant protections. HAC analyzed USDA data published in 2021 and estimated that roughly 300 properties (containing 6,823 homes) were projected to leave the Section 515 portfolio between 2021 and 2026. HAC notes: “According to HAC's 2026 analysis, of these properties, only 117 actually left during this time frame. The other 189 properties identified for exit remained in USDA’s portfolio under revised terms. At the same time, 504 properties not identified for loan maturity exited the portfolio—departing earlier than the date of their final mortgage payment.” 

The recent analysis, however, found that 621 properties—containing 14,928 homes—departed the USDA portfolio during this period. Quantity and category were different than expected; in other words, more units were lost than previously anticipated and different properties left the portfolio than expected. From June 2021 to March 2025, nearly 15,000 rural housing units lost federal oversight and regulations, including affordability and minimum eviction notice requirements. Tenants in these properties may face higher rents or eviction.  

Several Midwestern states lost over 10% of their USDA Section 515 housing, including Nebraska, North Dakota, Michigan, South Dakota, Wisconsin, Indiana, and Iowa. Four states lost more than 10% of their total units through Section 515 property loss: Nebraska, North Dakota, Michigan, and South Dakota. Notably, the Section 515 program had early success in these states and faced mortgage maturity the earliest.  

As Section 515 properties continue to leave the USDA portfolio, and mortgages across the country continue to mature, rural renters will continue to lose a vital source of affordable housing. Currently, 16 states have more than 10,000 homes in the Section 515 portfolio. The HAC analysis predicts a sharp increase in the amount of Section 515 properties that will exit the portfolio, with all existing properties expected to age out and be “completely depleted” by 2056. However, as property owners choose to prepay their mortgages faster than loans mature, this analysis may be conservative. While rural housing advocates achieved a win in the “Rural Housing Service Reform Act” provisions included in the ‘21st Century ROAD to Housing Act,” there is much work to be done to preserve rural housing and make USDA multifamily housing data more accessible.  

Read the report and find an interactive map here.