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Rounds, Smith Introduce Bipartisan Package to Create and Update Rural Housing Programs

Bill Results from Year-Long Subcommittee Effort, Including Constituent Visits, Stakeholder Meetings and Hearings

WASHINGTON, DC – U.S. Senators Mike Rounds (R-S.D.) and Tina Smith (D-Minn.), members of the Senate Committee on Banking, Housing, and Urban Affairs, introduced legislation to improve rural housing programs, cut red tape and increase the accessibility of affordable housing. The senators’ bipartisan legislation would be one of the most significant reforms of the U.S. Department of Agriculture’s (USDA) Rural Housing Service in years.  

“Homeownership is part of the American dream and a key to building wealth,” said Rounds. “Over the past year, Senator Smith and I have held hearings, met with stakeholders and visited with constituents in our states about the hurdles within the U.S. Department of Agriculture’s Rural Housing Service. This legislation makes important improvements and updates to the Rural Housing Service that will create and preserve affordable housing opportunities in South Dakota. As we face an affordable housing crisis across the nation, I look forward to working with my colleagues to get these important, bipartisan updates signed into law." 

“Without a safe, affordable place to live, nothing else in your life works,” said Smith. “Not your job, not your education, not your health. We know that the housing crisis is hurting communities across the country, and the problem is particularly acute in rural places. This legislation is the direct result of bipartisan hearings and conversations with stakeholders who helped identify ways we can make federal rural housing programs work better for people struggling to find a safe, affordable place to live.”  

A lack of affordable housing remains a barrier for many South Dakotans living in rural communities. As ranking member and chair of the Senate Subcommittee on Housing, Transportation, and Community Development, Rounds and Smith held several hearings looking at ways to improve federal rural housing programs.

The Rural Housing Service Reform Act of 2023 is the direct result of visiting with South Dakotans, meetings with stakeholders closest to the issue and hearings, including one with the USDA Undersecretary for Rural Development. This legislation would improve and build upon a number of USDA rural housing programs. Specifically, the bill would:

  • Fix a longstanding problem for properties (known as Section 515 properties) that were financed by the USDA decades ago and now have maturing mortgages by making it easier for non-profits to acquire those properties.
  • Expand an existing USDA pilot program, in partnership with Native Community Development Financial Institutions, to provide home loan assistance to Native American borrowers.
  • Bring the USDA’s outdated method of determining incomes in line with the U.S. Department of Housing and Urban Development’s practices.
  • Modernize the USDA’s foreclosure process to cut red tape, better protect homeowners and make certain USDA-owned properties stay affordable.
  • Update the rules for a home repair loan program to make it less burdensome to get smaller loans.
  • Make much-needed investments in IT so USDA can process loans more quickly and with less staff time spent on paperwork or manual data entry.


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