Costa Leads Bipartisan Effort to Protect $232 Million in Rural Homeownership Funding

FRESNO, Calif. – This week, Congressman Jim Costa (CA-21) led a bipartisan group of 14 members of Congress in urging the U.S. Department of Agriculture (USDA) to take immediate action to protect approximately $232 million in funding for the Section 502 Single Family Housing Direct Loan Program that is at risk of expiring at the end of Fiscal Year 2026.

In a letter to USDA Secretary Brooke Rollins, the lawmakers called on the department to preserve funding Congress provided to help low- and very-low-income families purchase homes in rural communities. Recent reports indicate that USDA has obligated only a portion of the approximately $1 billion Congress provided for the program, leaving hundreds of millions of dollars at risk of going unused.

“These resources were provided by Congress to help families in rural America purchase homes and strengthen the communities in which they live and work,” wrote the lawmakers. “Regardless of party, we should share the goal of ensuring that congressionally appropriated funds are administered efficiently and reach the rural families they were intended to serve."

“The USDA's 502 direct mortgage program has been a flagship tool for increasing homeownership opportunities in rural places,” said David Lipsetz, President & CEO of the Housing Assistance Council. “To have these critical funds expire at a time when the program has been challenged with new and burdensome rules would be a real tragedy for rural families looking to buy a home. We applaud Congressman Costa and his colleagues for their leadership on this issue.”

The lawmakers also raised concerns about recent administrative changes that could limit access to the program and delay assistance to eligible families. They urged USDA to preserve the remaining funding, provide Congress with an accounting of unobligated balances, and take steps to improve loan processing and prevent future funding from expiring.
 

BACKGROUND

The Section 502 Single Family Housing Direct Loan Program helps low- and very-low-income families purchase affordable homes in rural communities when conventional financing is otherwise out of reach.

Earlier this year, USDA implemented changes to the Section 502 program that reduced allowable loan limits and raised concerns among lawmakers about access to affordable rural housing. The lawmakers are seeking answers about whether these changes contributed to the unusually large amount of unobligated funding.

Read the full letter HERE.