Notice2026-05595
Single Family Housing Section 502 Home Loan Program-Self-Help and Affordable Housing
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 23, 2026
Effective
March 23, 2026
Issuing agencies
Agriculture DepartmentRural Housing Service
Abstract
The Rural Housing Service (RHS or the Agency), a Rural Development (RD) agency of the United States Department of Agriculture (USDA), is issuing this notice to announce a pilot for the Single Family Housing Section 502 direct loan program (Section 502) to test alternative values of modest housing for self-help housing and when affordable housing products are provided. The Agency intends to evaluate the impact of authorizing the value of properties constructed through the self-help program to exceed the maximum area loan limit under RHS's current regulations; and permitting grants and other affordable housing products to exceed the area loan limit for all Section 502 loans. This notice outlines the pilot parameters and provides contact information for additional details about the pilot.
Full Text
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<title>Federal Register, Volume 91 Issue 55 (Monday, March 23, 2026)</title>
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[Federal Register Volume 91, Number 55 (Monday, March 23, 2026)]
[Notices]
[Pages 13816-13817]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05595]
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DEPARTMENT OF AGRICULTURE
Rural Housing Service
[Docket No. RHS-26-SFH-0133]
Single Family Housing Section 502 Home Loan Program--Self-Help
and Affordable Housing
AGENCY: Rural Housing Service, USDA.
ACTION: Notice.
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SUMMARY: The Rural Housing Service (RHS or the Agency), a Rural
Development (RD) agency of the United States Department of Agriculture
(USDA), is issuing this notice to announce a pilot for the Single
Family Housing Section 502 direct loan program (Section 502) to test
alternative values of modest housing for self-help housing and when
affordable housing products are provided. The Agency intends to
evaluate the impact of authorizing the value of properties constructed
through the self-help program to exceed the maximum area loan limit
under RHS's current regulations; and permitting grants and other
affordable housing products to exceed the area loan limit for all
Section 502 loans. This notice outlines the pilot parameters and
provides contact information for additional details about the pilot.
DATES: Pilot Duration: The effective date of this pilot program is
March 23, 2026 and will continue until March 23, 2028.
FOR FURTHER INFORMATION CONTACT: Sunceri Dade, Finance and Loan
Analyst, Special Programs and Initiatives Branch, Single Family Housing
Direct Division, Rural Development, U.S. Department of Agriculture,
Email: <a href="/cdn-cgi/l/email-protection#2d7e58434e485f4403494c49486d585e494c034a425b"><span class="__cf_email__" data-cfemail="dd8ea8b3beb8afb4f3b9bcb9b89da8aeb9bcf3bab2ab">[email protected]</span></a>; Phone: (202) 720-1485.
SUPPLEMENTARY INFORMATION:
Authority
The RHS Single Family Housing direct program is authorized under
Section 502 of the Housing Act of 1949, as amended, and is codified in
the U.S. code at 42 U.S.C. 1472(h); it is implemented under 7 CFR part
3550. Demonstration programs for the Section 502 program are authorized
by the Housing Act of 1949 in section 506(b) (42 U.S.C. 1476(b)) and 7
CFR 3550.7. Program requirements that are not addressed in this notice
will remain in effect.
[[Page 13817]]
Background
The RHS offers a variety of programs to build or improve housing
and essential community facilities in rural areas. The Agency offers
loans, grants, and loan guarantees for single- and multifamily housing,
community facilities, such as, child-care centers, fire and police
stations, hospitals, libraries, nursing homes, schools, first responder
vehicles and equipment, multifamily housing for farm laborers, and much
more. RHS also provides technical assistance loans and grants in
partnership with non-profit organizations, Indian tribes, state and
federal government agencies, and local communities.
The RHS administers the Section 502 program with the objective to
assist very-low and low-income applicants obtain decent, safe and
sanitary housing in eligible rural areas by providing payment
assistance to increase an applicant's repayment ability. The purpose of
this pilot program is to evaluate the impact of authorizing the value
of properties constructed through the Section 502 self-help program to
exceed the maximum area loan limit at 7 CFR 3550.63(a)(1); and
permitting grants and other affordable housing products to exceed the
area loan limit for all Section 502 direct loans. This pilot program is
necessary to ensure that any new area loan limits do not prohibit new
construction under the self-help housing method and allows for other
affordable housing financing products to successfully supplement gaps
in financing.
The following twenty-four (24) States are selected to participate
in the pilot based on program usage, the wide geographic variation,
historic loan levels, and variety of construction and affordable
housing partners: Alaska, Arizona, California, Colorado, Delaware,
Florida, Hawaii, Idaho, Illinois, Maine, Maryland, Michigan, Minnesota,
Montana, New York, North Carolina, Ohio, Oregon, Pennsylvania, South
Dakota, Tennessee, Washington, Utah, and Virginia.
Maximum Loan Limit Pilot Program
The implementation of the Maximum Loan Limit Pilot Program is an
alternative approach to underwriting self help loans and all Section
502 direct loans with additional affordable housing financing from
third parties. Agency staff will inidicate in each individual Section
502 borrower file, that one or more of the approaches below were used
in approval of the loan.
1. The first approach is to remove the maximum loan limit for self-
help housing found at 7 CFR. 3550.63(a)(3). The purpose of this pilot
is to demonstrate the viability of allowing self-help loan amounts to
align with market realities, particularly in higher cost areas where
market values often exceed total financial assistance plus sweat equity
needed to complete the home's construction. The Agency's security
interest will still be protected as the maximum self-help loan amount
must still not exceed the area loan limit established in 7 CFR
3550.63(a)(1). Addtionally, the appraised value will continue to be
used to determine the value of sweaty equity as it relates to the
original equity amount shown on Form RD 3550-12, Subsidy Repayment
Agreement.
2. The second approach will address situations when an applicant is
receiving a housing grant or other form of affordable housing
assistance from a third party for purposes other than closing costs. In
these situations, the maximum loan limit may be exceeded by the third
party financing amount(s), as long as the agency loan itself remains at
or below the maximum loan limit. Using this process deviates from the
requirements set forth in 7 CFR 3550.63(a)(2)(ii) but is needed to
establish whether or not other affordable housing financial products
supplement gaps in financing. The Agency will not subordinate its first
lien position in these situations.
Paperwork Reduction Act
The regulatory exceptions for this pilot contain no new reporting
or recordkeeping burdens under OMB control number 0575-0179 that would
require approval under the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35).
Non-Discrimination Statement
In accordance with Federal civil rights law and U.S. Department of
Agriculture (USDA) civil rights regulations and policies, the USDA, its
Agencies, offices, and employees, and institutions participating in or
administering USDA programs are prohibited from discriminating based on
race, color, national origin, religion, sex, disability, age, marital
status, family/parental status, income derived from a public assistance
program, political beliefs, or reprisal or retaliation for prior civil
rights activity, in any program or activity conducted or funded by USDA
(not all bases apply to all programs). Remedies and complaint filing
deadlines vary by program or incident.
Persons with disabilities who require alternative means of
communication for program information (e.g., Braille, large print,
audiotape, American Sign Language, etc.) should contact the State or
local Agency that administers the program or contact USDA through the
Telecommunications Relay Service at 711 (voice and TTY). Additionally,
program information may be made available in languages other than
English.
To file a program discrimination complaint, complete the USDA
Program Discrimination Complaint Form, AD-3027, found online at <a href="https://www.usda.gov/about-usda/general-information/staff-offices/office-assistant-secretary-civil-rights/how-file-program-discrimination-complaint">https://www.usda.gov/about-usda/general-information/staff-offices/office-assistant-secretary-civil-rights/how-file-program-discrimination-complaint</a> and at any USDA office or write a letter addressed to USDA
and provide in the letter all of the information requested in the form.
To request a copy of the complaint form, call (866) 632-9992. Submit
your completed form or letter to USDA by:
(1) Mail: U.S. Department of Agriculture, Office of the Assistant
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC
20250-9410; or
(2) Fax: (202) 690-7442; or
(3) Email: <a href="/cdn-cgi/l/email-protection#0e5e7c61697c6f632047607a6f656b4e7b7d6a6f20696178"><span class="__cf_email__" data-cfemail="2e7e5c41495c4f430067405a4f454b6e5b5d4a4f00494158">[email protected]</span></a>.
USDA is an equal opportunity provider, employer, and lender.
Anthony Priest,
Chief of Staff, Rural Housing Service.
[FR Doc. 2026-05595 Filed 3-20-26; 8:45 am]
BILLING CODE 3410-XV-P
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</html>Indexed from Federal Register on March 23, 2026.
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