Rural Housing Service Amends Single Family Housing Guaranteed Loan Program Regulations

The Rural Housing Service, operating as an agency within the United States Department of Agriculture, published a final rule on November 9, 2026, updating the regulations governing the Single Family Housing Guaranteed Loan Program. The regulatory amendment addresses 7 CFR part 3555, specifically modifying the definition of seller concessions to explicitly exclude real estate commission fees from the standard six percent limitation. This administrative action follows a proposed rule issued on April 20, 2026, and takes effect immediately upon publication.

Background and Statutory Authority

The Single Family Housing Guaranteed Loan Program operates under the authority of Section 502(h) of Title V of the Housing Act of 1949. The program aims to assist low- and moderate-income individuals residing in rural areas by providing loan guarantees. These guarantees facilitate affordable homeownership opportunities, which the agency asserts promote community prosperity and improve the quality of life in rural regions. Under the previous regulatory framework, confusion occasionally arose regarding whether real estate commissions counted toward the total interested party concessions cap, which restricts seller contributions to six percent of the property sales price.

Public Comment Process and Agency Response

The Rural Housing Service published a proposed rule earlier in the year and subsequently reviewed feedback from eleven respondents. Ten respondents expressed support for the initiative, noting that the exclusion of commission fees from concession caps is beneficial for the housing market. One respondent raised concerns that the policy could potentially be misused to provide improper financial rebates to homebuyers.

The agency addressed this concern by pointing to existing regulatory safeguards. Lenders participating in the program must adhere to consumer financial protection standards enforced by the Consumer Financial Protection Bureau. Furthermore, current agency regulations explicitly prohibit applicants from receiving cash back at closing beyond documented out-of-pocket expenses. Lenders are also bound to charge reasonable and customary fees that comply with established point and fee limitations.

Regulatory Impact and Compliance

The final rule was subject to routine administrative reviews under various executive orders and federal statutes. The Office of Information and Regulatory Affairs determined that the rule is not a significant regulatory action under Executive Order 12866 and not a major rule under the Congressional Review Act. Additionally, the agency concluded that the action carries no federal mandates under the Unfunded Mandates Reform Act, does not trigger formal tribal consultation under Executive Order 13175, and requires no environmental assessment under the National Environmental Policy Act.