This affects anyone using USDA Rural Development financing to build, repair, or develop rural housing or business facilities across OH/KY/WV/VA/PA/IL — a core funding source in these states. Removing the federal construction/repair standard changes what oversight applies on top of local building codes for RHS-financed housing projects.

ACTION TYPE: Proposed Rule
AGENCY: Rural Business-Cooperative Service (RBCS) and Rural Housing Service (RHS), USDA
DOCKET / RIN: RHS-26-ADMIN-0331 / RIN 0575-AD54
PUBLISHED: August 19, 2026 (91 FR 53540) — this is now the officially published version, not a Public Inspection filing
EFFECTIVE: Not applicable (proposed rule, not yet final)
COMMENT DEADLINE: October 19, 2026

The rule removes and reserves 7 CFR Part 1924 in its entirety. Part 1924 currently sets federal construction, site-development, and defect-resolution procedures for RD housing programs, including energy-efficiency and thermal-performance standards and environmental site-planning considerations. After rescission, RHS housing projects would be governed by state and local building codes and permitting requirements only, without the added federal layer. Separately, the rule makes conforming amendments to two RBCS regulations: § 4280.410(l) and § 4280.427(i) are revised to point business/industry loan and grant construction requirements to 7 CFR Part 1942, Subpart C (Community Facilities program standards) instead of the now-removed Part 1924. RBCS/RUS programs retain federal construction standards; only the RHS housing-side requirement is being eliminated.

The agency states that existing state and local building codes and permitting systems already ensure structural integrity, safety, and compliance, making the added federal layer in Part 1924 unnecessary for housing programs. It states that Part 1924's requirements create duplicative processes, additional paperwork, and extra processing steps, and that its energy-efficiency and environmental standards often exceed state and local requirements, increasing construction and compliance costs and delaying housing production and repair. The agency states these costs and delays are passed to borrowers through higher home prices, and that burdensome regulations reduce the number of developers willing to use RHS programs, which in turn reduces the number of loans RHS can make and restricts affordability. The agency states it is not making the equivalent change for RBCS programs because, unlike housing, RBCS projects lack the same "robust state and local standards," so federal construction standards remain necessary there.

Historical Law/Event: Balanced Budget Act of 1997 (P.L. 105-33)

Year:1997

Congress:105th Congress

Current Parallel: 2026 Appropriations Cycle / Continuing Resolutions

Official Source: GovInfo.gov - 105th Congress Public Laws

Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.), which the agency states authorizes it to ensure RHS-financed dwellings are "decent, safe, and sanitary" but does not itself mandate the prescriptive design standards found in Part 1924. The rule also cites three executive orders as supporting the action: Executive Order 14219 (Feb. 19, 2025, "Ensuring Lawful Governance and Implementing the President's Department of Government Efficiency Deregulatory Initiative"), Executive Order 14394 (Mar. 13, 2026, "Removing Regulatory Barriers to Affordable Home Construction"), and Executive Order 14192 (Jan. 31, 2025, "Unleashing Prosperity through Deregulation"). Statutory authority for Part 1924 itself is cited as 5 U.S.C. 301, 7 U.S.C. 1989, and 42 U.S.C. 1480.

RHS-financed borrowers building or repairing homes under RD housing programs (including manufactured housing, per the Part 1924 subject list); developers and lenders using RHS single-family and multi-family housing programs; RBCS Business & Industry (B&I) loan and grant applicants and Rural Business Development Grant (RBDG) construction project grantees, who will now be held to the Part 1942, Subpart C standard instead of Part 1924.

Comments can be submitted through the Federal eRulemaking Portal at regulations.gov. Search the docket number RHS-26-ADMIN-0331, locate "Rescission of Rural Development's Construction and Repair Regulation," and select "Comment." Comments are due by October 19, 2026.

Federal Register, Vol. 91, No. 159, pp. 53540–53542 (August 19, 2026) — https://www.federalregister.gov/d/2026-16914