McBride, Colleagues Urge USDA to Reverse Changes to Rural Housing Program, Expand Access to Rural Homeownership
WASHINGTON, DC — Delaware Congresswoman Sarah McBride (D-Del.), alongside Reps. Jim Costa (D-Calif.) and James Moylan (R-Guam), are urging U.S. Department of Agriculture (USDA) Secretary Brooke Rollins to reverse recent changes to the Section 502 Direct Loan Program – the only federal mortgage program specifically designed to help low-income households in rural areas, such as Sussex County, buy, build, repair, and rehabilitate a home. The changes to the program will make it more expensive for Americans to buy affordable homes.
In a letter sent to USDA, the lawmakers warn the revisions would create new administrative burdens, make the program harder to access in rural communities, and push homeownership further out of reach for working families.
“The cost of living is too high, and homeownership is slipping out of reach for too many Delawareans — especially families in Sussex County and other rural communities across the state,” said Rep. McBride. “At a time when too many families are struggling to afford a home, we need solutions rooted in dignity, affordability, and opportunity. The changes to the Section 502 Direct Loan Program do the exact opposite by adding more red tape and making it harder for families to buy a home. I’m committed to working with my colleagues to advance commonsense housing policies that make homeownership more accessible and affordable for all.”
In their letter, Rep. McBride and her colleagues highlight how the nationwide housing affordability crisis is impacting communities across the country, including rural communities like Sussex County, where rising costs and limited housing inventory continue to put homeownership out of reach for many working families.
“Under current law and regulation, the program serves low- and very low-income borrowers, provides payment assistance to increase repayment ability, and remains one of the most deeply targeted homeownership programs in the country. For many rural families, it is not simply one option among many; it is often the only realistic path to homeownership,” wrote the lawmakers.
Included in USDA’s recent revisions is a reduction from 80 percent to 60 percent of the maximum loan limit from the Federal Housing Administration — a change that could price more than 23 percent of the 3,143 counties with eligible rural communities out of the program. The revisions also add new approval requirements and exclude Supplemental Nutrition Assistance Program benefits from loan repayment calculations, making it harder for many working families to qualify for assistance.
“Among the most troubling changes are the reduction in the maximum loan limit from 80 percent to 60 percent of Federal Housing Administration (FHA) Section 203(b) area limits, new state director review requirements that add additional layers of approval, a sharp reduction in packaging fees relied upon by nonprofit intermediaries to help borrowers navigate the application process, and the exclusion of Supplemental Nutrition Assistance Program (SNAP) benefits from repayment calculations. Taken together, these changes will make it harder for USDA to move loans efficiently and harder for otherwise eligible rural families to qualify,” continued the lawmakers.
Delawareans and Americans across the country are facing growing obstacles to securing affordable housing. According to a June 2025 brief, rural home prices have risen more than six times faster than homeowner incomes since 2000, while rural homeownership rates have declined across multiple working-age groups. Sussex County alone is projected to need 19,180 new housing units by 2030, including 13,392 resident units and nearly 5,800 seasonal units. These affordability challenges have disproportionately impacted working people, lower-income families, and historically underserved communities, further limiting pathways to homeownership.
“For these reasons, we urge USDA to rescind the February 10, 2026, handbook revisions and work with Congress and relevant stakeholders to develop any future changes in a transparent and workable manner... these handbook changes move in exactly the wrong direction. They weaken a core federal rural homeownership program and make it harder for low-income rural families to buy, build, or keep a home at the very moment when rural housing affordability is under real strain. USDA should reverse course and ensure that the Section 502 Direct Loan Program remains a workable, reliable, and accessible path to homeownership for the rural communities we represent,” the lawmakers concluded.
Several organizations are supportive of the lawmakers’ efforts, including the National Rural Housing Coalition, the Delaware State Housing Authority, and Neighborgood Partners.
“The National Rural Housing Coalition is a national membership organization that supports programs and policies to improve housing opportunities in rural America. Among the most important federal programs that improve housing opportunity is the Section 502 direct loan program, administered by the U.S. Department of Agriculture’s Rural Housing Service (RHS). The Section 502 program provides direct low-cost loans to lower-income rural families. Earlier this year, RHS undermined the program by lowering loan limits, establishing an approval system with more red tape, and limiting the assistance non-profit organizations could provide to families in preparing loan applications. RHS made these changes without providing notice to Congress or interested organizations and, more importantly, to families with applications on file with RHS, many of whom were notified that RHS would not approve the loan. In all rural areas, Section 502 loan levels were reduced by $92,000 for Fiscal Year 2025 levels. As a result, 23% of all rural counties are priced out of the program. In Delaware, Kent, New Castle, and Sussex Counties are in the same position with FY 25 loan levels well above the new RHS limits. It is for this reason that we applaud the leadership of Rep. McBride and her colleagues in writing to Agriculture Secretary Rollins, pointing out in great detail the problems with RHS revisions and urging the Secretary to rescind these changes,” said National Rural Housing Coalition’s Legislative Director and Executive Secretary Bob Rapoza.
“We know that homeownership provides more than a roof and four walls. Owning a home creates generational wealth and ensures a sense of security and stability for families. The USDA’s Section 502 Direct Loan Program provides one more tool in our toolbox for families trying to achieve that dream. It is critical we maintain that assistance for working families in rural communities across our state. I thank Rep. McBride for advocating for affordable homeownership,” said DSHA Director Matthew Heckles.
“NeighborGood Partners provides access to affordable housing opportunities in rural communities through our homeownership counseling and loan packaging service. The recent changes to the USDA Rural Development Section 502 Direct Loan Program will have an extremely harmful impact on rural working families. By lowering the allowed loan limits and not allowing SNAP benefits to be counted as income, USDA has eliminated the ability of thousands of low-income rural households to be able to become homeowners. We at NeighborGood Partners applaud Congresswoman McBride’s leadership in advocating for affordable housing policy solutions such as this appeal for USDA to reverse the changes to the 502 Direct Loan Program,” said Neighborgood Partners CEO Karen Speakman.
Access to safe, stable, and affordable housing is essential to economic security and opportunity. Since coming to Congress, Rep. McBride has focused on advancing bipartisan solutions rooted in dignity to address the housing affordability crisis, including supporting legislation to incentivize the construction of more affordable housing, assist first-time homebuyers, and boost the overall supply of housing. She remains committed to lowering housing costs, expanding housing supply, and ensuring all Delawareans can have access to affordable housing opportunities.
The full text of the letter can be found here.
###