The USDA's Section 515 program, which has been the primary federal mechanism for financing affordable rental housing in rural communities since 1963, is approaching its end. The program supported the construction of more than 533,000 apartments and townhouses for low-income residents in small towns and rural counties. The last new Section 515 loans were issued in 2011, and the program is now phasing out as existing loans mature.
The Section 515 program offered below-market-rate loans to private and nonprofit developers who agreed to keep rents affordable, generally restricting them to about 30% of tenants' income. Residents in these homes typically pay around $325 per month, compared to rural market-rate rents of $800-$1,100. As of 2024, roughly 400,000 homes across almost 13,000 properties in 87% of U.S. counties remain in the program.
What the Left Is Saying
Progressive advocates and housing policy experts say the phaseout of Section 515 represents a crisis for some of America's most vulnerable populations. The average household income for residents in Section 515 housing is approximately $16,000 per year—only about one-fifth of the national median. More than 60% of tenants are over 62, have disabilities, or both.
Housing advocates argue that Congress must act to preserve these homes. The bipartisan Rural Housing Service Reform Act, which was first introduced in 2023 and reintroduced in 2025, would modernize USDA rural housing programs and allow certain rental assistance contracts to continue after mortgages mature. Progressives have called for significantly increased funding for preservation efforts, including the Multifamily Housing Preservation and Revitalization pilot program.
The Center on Budget and Policy Priorities and other progressive organizations have warned that the loss of Section 515 housing will disproportionately harm elderly and disabled residents in rural communities, many of whom have limited options for affordable housing. Advocates argue that the federal government has an obligation to protect these residents from displacement.
What the Right Is Saying
Conservatives have raised concerns about the long-term viability of government-subsidized housing programs and argue that market-based solutions are more sustainable. Property rights advocates note that once loans mature, owners should have the freedom to set rents at market rates without government mandates.
Some Republican lawmakers have supported incremental reforms rather than wholesale program renewal. The discussion around the Rural Housing Service Reform Act has included provisions that balance affordability concerns with reducing federal spending on housing subsidies. Fiscal conservatives have argued that the $5.6 billion in repairs estimated to preserve all Section 515 properties represents a significant federal expenditure.
Free-market economists have suggested that encouraging private investment in rural housing, rather than relying on government programs, would provide more sustainable long-term solutions. They argue that local housing markets should determine rent levels rather than federal mandates.
What the Numbers Show
The Housing Assistance Council, a national nonprofit supporting affordable housing efforts in rural America, projects that loans for approximately 90% of all remaining Section 515 homes will mature by 2045. By 2050, nearly all properties currently in the program's portfolio will have paid off their mortgages.
A peer-reviewed study published in Housing Policy Debate in September 2025 analyzed nearly 15,000 Section 515 properties and found that ownership structure is the strongest predictor of whether buildings remain affordable after loans mature. Buildings owned by for-profit companies are significantly more likely to exit the program than those owned by nonprofit housing organizations. Nonprofit-owned buildings are 30% to 40% less likely to convert to market-rate housing after accounting for building age and local market conditions.
Approximately one-third of Section 515 properties also receive support from other programs, including Section 8 vouchers and low-income housing tax credits. Those properties are more likely to remain affordable even after their USDA loans expire. Researchers estimate that about $5.6 billion in repairs would be needed to preserve the affordable housing currently tied to the Section 515 program.
The Bottom Line
The Section 515 program's phaseout will reshape rural America's affordable housing landscape over the next two decades. Roughly 750,000 Americans—among the nation's poorest residents—live in these homes and face potential rent increases or displacement as properties exit the program.
Whether rural communities retain affordable housing will depend on federal policy decisions, property owners' choices, and local market conditions. The Rural Housing Service Reform Act remains under consideration as of early 2026, but its prospects for passage remain uncertain. Without congressional action to preserve existing units or restart new construction, much of rural America's affordable rental housing could gradually disappear as owners convert properties to market rates.
The USDA has funded preservation efforts through the Multifamily Housing Preservation and Revitalization pilot program, which provides grants and loan restructuring to help repair aging properties. However, these efforts spend only tens of millions of dollars annually and focus on maintaining existing buildings rather than constructing new affordable housing.