NLIHC Submits Comment Expressing Concern on U.S. Department of Agriculture’s Proposal to Rescind Federal Construction and Repair Regulations for Rural Housing Programs

By Kayla Blackwell, NLIHC Senior Housing Policy Analyst and Lucas Eisenberg, NLIHC Policy Intern 

NLIHC submitted a comment on October 19 responding to the U.S. Department of Agriculture’s (USDA) Notice of Proposed Rulemaking (NPRM) to revoke federal construction and repair standards for projects funded by USDA Rural Development programs. The proposed rule rescinds rural development regulations in federal regulatory code, known as “7 CFR Part 1924,” and justifies the removal by claiming that existing state and local requirements are sufficient to ensure federal investments are well protected. 

NLIHC’s comment expresses concern that by rescinding this regulation, the NPRM fails to adequately account for the impacts on people with the lowest incomes. The proposed rule does not ground its assertion that state and local building codes are adequate to regulate developments in evidence. In the comment, NLIHC describes the scale at which rural housing residents suffer from poor conditions and critiques USDA’s view that removing regulations in communities with inadequate housing would not result in harm. USDA additionally did not identify any protections that could be lost if the final rule were to be finalized, nor were any possible drawbacks detailed. Finally, NLIHC finds that the proposed rule’s Civil Rights Impact Analysis is insufficient to prove that communities of color and people with disabilities would not disproportionately suffer from the change. 

Background on USDA Rural Development Programs and 7 CFR Part 1924 

USDA’s rural development programs typically come in the form of loans rather than direct management of property. These loans are given to private developers of rental housing for elderly people and families in rural areas and are conducted through the Section 515 program. Alongside Section 515, many other programs exist for similar purposes. Section 514 loans are given to rental housing for farm workers. Tenants of the rental housing can apply for Section 521 Rental Assistance. Finally, banks can have their loans to rural rental housing guaranteed by the government under Section 538. 

However, Section 515 has not been able to develop new rental properties since 2011. The appropriation for the program, at this moment, is entirely spent on preserving the housing stock under Section 515. Many properties will reach the end of their loan term in 2028, and more maturity is expected at a faster pace in future years. With these properties exiting Section 515, some even paying off loans early, many tenants across rural America will lose their rental assistance, as Section 521 is tied to the property overseen under Section 515. 

At a time when the Section 515 stock is dwindling (see Memo, 6/6), USDA is adding more uncertainty to the program by removing federal construction and repair standards. 7 CFR Part 1924, the federal regulation that could be removed if the proposal is finalized, defines the policies with which these properties must comply if they are to receive loans. Some of these policies include conduct related to inspection of buildings, contract terms developers must abide by, and a comprehensive review done by the district director. However, USDA’s proposal would cancel these regulations. 

NLIHC Comment to USDA’s NPRM 

NLIHC highlights in the comment letter that there are a significant number of rural homes in poor conditions. Citing 2021 American Housing Survey data, the comments note that more than 1.4 million homes in rural communities suffer “inadequate conditions,” with 368,000 homes deemed as “severely inadequate,” including a lack of heating, plumbing, and electricity. Additionally, low-income families in rural housing experience increased rates of overcrowding due to supply and income concerns. In total, 30% of rural households experience problems like cost burdens, physical deficiencies, or overcrowding in their housing. 

The decision to rescind 7 CFR Part 1924 from federal code could risk further deterioration of rural housing. USDA does not detail any estimates on what the impact of rescinding the federal standards may be. The NPRM assures that state and local standards are sufficient, but no study or research is shown proving that these lower-level jurisdictional requirements are enough to protect against poor conditions. No evaluation is conducted to prove that meaningful requirements would not be lost due to this rescission. The NPRM also provides little information on how USDA arrived at the conclusion that state and local protections are satisfactory. 

Another large problem is the potential civil rights impacts that could occur as a result of USDA’s proposal. Poor housing conditions in rural housing are prevalent among low-income families and renters, with 50% of households suffering from inadequate housing quality being renters. Beyond income, housing issues in rural America are most pervasive in geographic regions like the Lower Mississippi Delta, the southern Black Belt, Native American lands, and along the U.S.-Mexico border. Communities of color in rural regions could end up most impacted by the changes. USDA asserts a Civil Rights Impact Analysis was conducted to identify potential civil rights impacts but does not detail any findings from the analysis or how the insights prove disproportionate impact on minority communities is not a concern. 

Read NLIHC’s comment. 

Read the NPRM. 

Read NLIHC’s Rural Housing Needs Factsheet. 

Read about USDA Rural Rental Housing Programs in Chapter 4 of NLIHC’s 2026 Advocate’s Guide.