Across rural America, hundreds of thousands of affordable homes are at risk of disappearing, often in communities with no viable alternatives. While housing challenges are often framed as urban issues, rural renters face severe pressures of their own.
For various historical reasons, rural housing does not specifically fall under the jurisdiction of the Department of Housing and Urban Development (HUD). Instead, the United States Department of Agriculture (USDA) has been the leading agency in meeting rural affordable housing needs. USDA’s Rural Housing Service administers both rental housing and affordable homeownership programs. The Section 515 program has financed more than 533,000 rental units across the country since it was created in 1963. These are often the only rent-restricted housing available in rural communities.
The program spurred rental housing construction by offering below-market-rate loans, for up to 30 years, amortized over 50 years, in exchange for long-term affordability restrictions. The construction of new properties was highest from the 1970s to the 1990s, with no new construction since 2011. In 1979, for instance, 38,000 new units were constructed. By 2012, that number had fallen to 0.
Most residents of these properties receive project-based rental assistance through USDA, which helps cover the difference between their limited income and project operating expenses. The average household income of Section 515 tenants was $17,188 in 2024, and most residents are older adults or persons with disabilities. These are among the poorest and most vulnerable residents to changes in their housing stability.
Section 515 loans are maturing each year and will increase substantially over the next two decades. It’s estimated that all loans will mature by 2050. When loans mature, properties lose their affordability restrictions and residents may lose their rental assistance. That’s because the program currently requires an active USDA Section 515 mortgage to receive ongoing rental assistance from the agency. The loss of this housing exacerbates affordability problems in small towns and leaves current tenants with few other options.
As a national community development organization that works in urban and rural places, the organization where I work, the Local Initiatives Support Corporation, understands that existing affordable housing is a critical and often irreplaceable resource, particularly in rural communities where housing options are limited.
So, what can be done to preserve these properties and better protect tenants? A congressional bill, the Rural Housing Service Reform Act (HR 4957) would modernize USDA’s multifamily preservation authorities and allow the agency to decouple their project-based rental assistance from the long-term mortgage. The legislation would also improve how USDA’s rental assistance can be used by generally aligning it with HUD. Lastly, it would authorize other important programs that have helped with Section 515 property repairs—and increase the Rural Housing Service’s capacity—to manage a long-term rental assistance and preservation program, in addition to making other improvements to its single-family programs.
Allowing USDA to administer a stand-alone, project-based rental assistance contract is critically important because owners could retain operating assistance and leverage that long-term contract with Low-Income Housing Tax Credit equity and other resources. This is a win-win: it would improve the physical condition of these aging properties, extend affordability restrictions, and keep tenants stably housed. It would also ensure these properties continue to serve the communities in which they are located.
This bill has been included in the 21st Century ROAD to Housing Act. It’s one of the most important affordable rental housing provisions in the legislation since there are still nearly 400,000 Section 515 multifamily housing units that provide homes for more than 750,000 people.
The status of federal housing legislation, however, remains uncertain, even though housing bills have passed both the U.S. House and Senate by overwhelming margins. Passing housing legislation that fully incorporates the Rural Housing Service Reform Act would make a powerful difference in rural residents’ lives.
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Wouldn’t it be more sustainable to invest in Section 9 public housing? Those units would remain truly affordable for life. They would also be coupled with tenant protections, and benefits that center economic empowerment and mobility.