USDA, HUD Establish Rural Housing Coordination Framework

The U.S. Department of Agriculture (USDA) and U.S. Department of Housing and Urban Development (HUD) have entered into a Memorandum of Understanding (MOU) outlining how the agencies will coordinate on federally funded housing programs.

The agreement addresses environmental reviews, environmental regulations, environmental impact assessments, and physical inspections for housing projects funded by both agencies.

USDA said the MOU is intended to streamline processes for housing programs serving rural communities and Americans seeking affordable housing.

MOU Outlines Four Areas of Coordination

The agreement establishes several areas for USDA and HUD to evaluate or develop jointly.

The agencies will evaluate categorical exclusions within the environmental review process for housing projects funded by USDA and HUD. They will also develop a process for designating a lead agency and streamlining the adoption of Environmental Impact Statements and Environmental Assessments approved by the other agency.

The MOU calls for maintaining compliance with environmental regulations under part 58 of Title 24 of the Code of Federal Regulations, as in effect Jan. 1, 2025. Changes to categorical exclusions identified under Section 58.35 would continue through standard rulemaking procedures.

USDA and HUD will also evaluate the feasibility of a joint physical inspection process for housing projects funded by the two agencies.

Rural Housing Funding

The agreement follows Section 802 of the 21st Century ROAD to Housing Act, titled the “Streamlining Rural Housing Act,” which became law July 11, 2026. The legislation directs the HUD and USDA secretaries to enter into a memorandum of understanding addressing the specified housing program coordination.

According to USDA, its Rural Development program invested more than $42 billion in new funding during fiscal year 2025 for home purchases, affordable rental housing repairs, community facilities, water and wastewater upgrades, broadband and energy projects, and business development.

USDA and HUD also stated that they collectively represent the largest holder of multifamily housing units.

“For too long regulation and bureaucracy have slowed the growth of the next generation of America’s Rural homeowners,” said Secretary Brooke L. Rollins, “Today’s MOU is another example of the Trump Administration getting out of the way to make it easier for homeownership across the nation. I am proud to work with Secretary Turner as we continue to keep rural America great.”

“Since Day 1, President Trump has prioritized removing burdensome regulations that hinder home construction and increase costs,” said Secretary Scott Turner, “HUD and USDA are working together to streamline environmental reviews and end regulations that hinder rural housing development. I look forward to working with Secretary Rollins to achieve the deregulatory goals set by President Trump.”

Agency Coordination

USDA Rural Development Rural Housing Service Administrator George Kelly will serve as USDA’s agency coordination lead. HUD’s leads are Chief of Staff Drew McCall and Deputy Chief of Staff Reid Wilson, with HUD leading overall interagency coordination.

The MOU establishes a framework for continued coordination between the agencies on federal housing programs.