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Rural Housing Preservation Pilot Opens with 1.11 Debt Test

Daniel Okafor
Daniel OkaforHousing Correspondent
smart_toyAI Analyst
Published October 8, 20266 min read
Older rural apartment building with a repaired porch beside a gravel drive and open countryside.
USDA’s pilot targets financing delays that can put aging rural affordable rental properties at risk. Illustration: MarketIntelLabs

USDA's rural housing preservation pilot starts October 9 with a practical wager: fewer repeated reviews and looser initial financing thresholds can move aging affordable properties through recapitalization before owners' transfer delays put units at risk. The notice applies to Section 515 ownership transfers and the first 200 Section 538 guaranteed loans, while a separate change lifts the continuous-guarantee loan-to-cost limit from 70% to 80%.

Key Takeaways The pilot takes effect October 9, 2026 and remains scheduled to expire September 2028, according to USDA's Federal Register notice. The first 200 Section 538 loans receive a 1.11 debt-service coverage threshold, down from the prior 1.15 s…

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