The U.S. Department of Agriculture'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 over 533,000 apartments, townhouses and multifamily rental homes in small towns and rural counties across America. The USDA stopped issuing new Section 515 loans 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 for low-income residents, generally restricting rent to about 30% of tenants' income. Residents in Section 515 housing typically pay around $325 per month, compared to rural market-rate rents of $800-$1,100 for modest homes.
Loans for about 90% of all remaining Section 515 homes will mature by 2045, according to the Housing Assistance Council. By 2050, nearly all properties currently in the program's portfolio will have paid off their mortgages, marking the complete phaseout of the program.
What the Left Is Saying
Progressive housing advocates and Democratic lawmakers argue that the phaseout of Section 515 represents a significant loss of critical affordable housing infrastructure for some of America's most vulnerable populations. The roughly 750,000 Americans living in Section 515 housing are among the nation's poorest, with an average household income of just $16,000 per year—about one-fifth of the national median. More than 60% of program participants are over 62, have disabilities, or both.
Housing advocates contend that the federal government has a responsibility to preserve and extend these affordability commitments. The bipartisan Rural Housing Service Reform Act, 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. Supporters say Congress should fully fund preservation efforts and reinvigorate the program to prevent the loss of hundreds of thousands of affordable units.
Progressive policy analysts note that properties owned by nonprofit housing organizations are 30% to 40% less likely to convert to market-rate housing after loans mature, compared to for-profit owners. They argue that accelerating transfers of Section 515 properties to nonprofit ownership could help preserve affordability, and that the USDA's preservation programs need significantly more funding than the tens of millions currently allocated annually.
What the Right Is Saying
Conservative critics of government housing programs argue that the Section 515 program represented federal overreach into the housing market and that its phaseout reflects a return to private sector dynamics. They note that the program stopped issuing new loans in 2011 during the Obama administration, and that the natural expiration of existing loans is simply the market reaching its conclusion after decades of government intervention.
Fiscal conservatives argue that the program's model—subsidizing rents through federal loans with long-term affordability restrictions—was inherently unsustainable and that property owners should have the freedom to set market rates once their mortgage obligations end. They contend that rent control-style mechanisms, even when government-backed, distort housing markets and discourage private investment in rural communities.
Some conservative commentators have noted that the phaseout occurs amid broader efforts to reduce federal spending on housing programs. They argue that rather than extending the Section 515 program, policymakers should focus on reducing regulatory barriers that prevent private development of affordable housing in rural areas. Others suggest that state and local governments, rather than the federal government, should take the lead in addressing rural housing needs.
What the Numbers Show
As of 2024, Section 515 loans were still supporting approximately 400,000 homes across nearly 13,000 properties in 87% of all U.S. counties. The average household income of residents in Section 515 housing was $16,000 in 2023, compared to the national median of roughly $76,600. Tenants pay an average of $325 monthly, while rural market-rate rents range from $800 to $1,100.
Research published in Housing Policy Debate in September 2025 found that for-profit owned buildings are significantly more likely to exit the affordability program after loans mature compared to nonprofit-owned properties. Buildings owned by larger property management companies and landlords with multiple residential properties are also more likely to convert to market-rate housing.
Approximately one-third of remaining 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 some incentives 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 gradual disappearance over the next two decades will eliminate a major source of affordable housing for low-income rural residents, particularly elderly and disabled Americans. What happens to the approximately 400,000 remaining units will depend largely on property owners' decisions—whether they continue charging affordable rents, convert to market rates, or sell their properties.
The Housing Assistance Council and other advocates are pushing for increased funding for preservation programs and passage of the Rural Housing Service Reform Act, which would extend affordability requirements beyond mortgage maturity. Without legislative action or significant preservation investment, analysts project that much of rural America's affordable rental housing stock could be converted to market-rate properties, potentially displacing hundreds of thousands of low-income residents.
What remains unclear is whether Congress will prioritize rural housing preservation in upcoming budget negotiations, and whether the incoming administration will seek to reinvigorate the Section 515 program or allow it to fade away entirely as loans continue maturing through 2050.