The U.S. Department of Agriculture's Rural Housing Service, part of the Rural Development mission area, published a final rule on February 25, 2026, rescinding a regulatory requirement that mandated a minimum 30-day notice period for tenants facing eviction due to nonpayment of rent in certain multi-family housing properties. This rule affects properties under Sections 515 and 514 of the Housing Act of 1949, which provide direct loans and grants for rural rental housing. Effective immediately upon publication, the change eliminates provisions added in a 2024 rule, citing redundancy with existing federal laws like the CARES Act and longstanding agency guidelines that already protect tenants. The move aims to streamline operations for property owners, or borrowers, while ensuring tenant rights remain intact through other mechanisms. This development reflects ongoing efforts to balance regulatory oversight with practical management in affordable rural housing, amid low eviction rates in these programs.
Background on the Rescinded Provisions
The rescinded requirements originated from a final rule effective April 24, 2024, titled '30-Day Notification of Nonpayment of Rent in Multi-Family Housing Direct Loan Programs.' That rule incorporated elements of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, passed in 2020 to address housing instability during the COVID-19 pandemic. Under the CARES Act, landlords of 'covered dwellings'—including those with federally backed multifamily mortgage loans—must provide at least 30 days' notice before evicting tenants for nonpayment of rent, as outlined in 15 U.S.C. 9058.
Properties under RHS Sections 515 (rural rental housing loans) and 514 (farm labor housing loans) qualify as covered dwellings. However, the 2024 rule added explicit language to RHS regulations at 7 CFR Part 3560, requiring borrowers to include this 30-day notice in leases and provide additional details during eviction processes. It also mandated that borrowers distribute information on federal emergency funding during presidentially declared national emergencies. The Rural Housing Service now views these additions as unnecessary, noting that the CARES Act's protections apply directly without needing separate regulatory codification. Agency officials, including Michael Resnik from the Multi-Family Housing Asset Management Division, emphasized in the Federal Register entry that compliance is already embedded in broader project management requirements.
Key Changes in the Final Rule
This final rule amends specific sections of 7 CFR Part 3560 to remove the targeted provisions. In Section 3560.156(c)(18)(xvi), which governs lease requirements, the rule eliminates the explicit mandate for a 30-day notice in lease violation procedures, reverting to a general requirement that borrowers follow notice procedures compliant with state and local laws. Section 3560.159(a)(3), under termination of occupancy, is entirely removed, stripping away the 30-day notice and the obligation to include emergency funding information in eviction notices.
Additionally, Section 3560.160(c)(4), related to tenant grievances, no longer requires borrowers to disseminate federal funding details during national emergencies. Instead, the agency states it will handle such notifications directly, reducing administrative burdens on borrowers. The rule justifies these changes by referencing data from 2024, where evictions in multi-family housing units averaged just 0.54 percent overall, with only 0.04 percent due solely to nonpayment of rent. This low rate underscores the effectiveness of pre-existing tools, such as interim income recertifications allowing tenants to adjust subsidies for financial changes of $50 or more.
Legal and Policy Context
The CARES Act remains a cornerstone, ensuring 30-day notices for nonpayment evictions in covered properties irrespective of this rule change. As noted in the Federal Register, 'The CARES Act 30-day notice requirement for nonpayment of rent is still in effect for MFH properties regardless of whether the CARES Act wording is specifically included in the MFH's regulation.' This aligns with broader federal housing policies under the Housing Act of 1949, which prioritize affordable rural housing while requiring compliance with state eviction laws.
Key players include the Rural Housing Service, led by Administrator George Kelly, and the broader USDA Rural Development agency. No formal public comment period preceded this rule, as it was deemed a non-significant regulatory action under Executive Order 12866. It also complies with other executive orders, such as 13175 on tribal consultations, with the agency determining no substantial tribal implications. Perspectives vary: tenant advocates might express concern over reduced explicit protections, arguing it could lead to inconsistencies across states with varying eviction laws. Borrowers and property managers, however, welcome the simplification, as the 2024 rule reportedly caused confusion between federal regulations and state requirements, per the agency's analysis.
Implications for Stakeholders
For tenants in RHS multi-family properties, existing safeguards continue to mitigate eviction risks. Borrowers must adhere to state laws, which often provide notice periods, and work with tenants on repayment plans when subsidies are pending. The rule highlights that borrowers 'generally work with tenants on developing a repayment plan when there is not an additional lease violation,' reflecting a collaborative approach.
Borrowers benefit from reduced regulatory overlap, potentially lowering compliance costs without altering core obligations under the CARES Act. Policymakers and legal professionals may see this as part of a deregulatory trend, emphasizing efficiency in federal housing programs. Academics could analyze it against eviction trends, noting the rule's reference to low nonpayment-based evictions as evidence of robust protections. From a broader viewpoint, this change underscores tensions between federal mandates and state autonomy in housing policy, without endorsing any side.
In summary, this rule rescission streamlines RHS regulations while relying on established laws to protect tenants. Potential next steps include monitoring eviction rates post-implementation to assess impacts. Ongoing debates may focus on whether additional federal oversight is needed during future emergencies, or if state-level variations adequately address tenant needs. Challenges could arise if state laws provide shorter notices than the CARES Act minimum, prompting calls for uniform standards. The agency plans to distribute emergency funding information directly, ensuring tenants receive timely updates without borrower intermediation.
