Rescission of Rural Development's Construction and Repair Regulation

======================================================================== Proposed Rules Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. ========================================================================

Federal Register / Vol. 91, No. 159 / Wednesday, August 19, 2026 / Proposed Rules

DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Housing Service

7 CFR Parts 1924, 4280, and 4290

Rescission of Rural Development's Construction and Repair Regulation

Rural Business-Cooperative Service and Rural Housing, Service USDA.

Proposed rule.

The Rural Business-Cooperative Service (RBCS), Rural Housing Service (RHS), and Rural Utilities Service (RUS), together make up the Rural Development (RD or the Agency) mission area within the U.S. Department of Agriculture (USDA). RD is issuing this proposed rule to rescind its regulation regarding construction and repairs. RD found this regulation to be unnecessary and unduly burdensome. In addition, it makes changes to RBCS regulations by removing references to the construction and repair regulations. The plain language summary of the proposal is available on Regulations.gov in the docket for rulemaking.

Comment Date: Comments must be submitted on or before October 19, 2026.

Comments may be submitted by going to the Federal eRulemaking Portal, regulations.gov/. In the "Search for dockets and documents on agency actions" box, enter the docket number, RHS-26- ADMIN-0331, and click "Search" button. From the search results: click on or locate the document title: Rescission of Rural Development's Construction and Repair Regulation and select the "Comment" button. Before inputting comments, commenters may review the "Commenter's Checklist" (optional). To submit a comment: Insert comments under the "Comment" title, click "Browse" to attach files (if available), input email address, select box to opt to receive email confirmation of submission and tracking (optional), select the box "I'm not a robot," and then select "Submit Comment". Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available under the site's "FAQ" link. All comments will be available for public inspection online at the Federal eRulemaking Portal (regulations.gov). Other Information: Additional information about Rural Development and its programs is available on the internet at https://www.rd.usda.gov/. In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed rule may be found by going to http://www.regulations.gov and in the "Search for dockets and documents on agency actions" box, enter the following docket number RHS-26-ADMIN-0331.

Lane Whitten at [email protected], Confidential Assistant for Rural Housing Service, USDA, 1400 Independence Avenue SW, Washington, DC 20250; or call 202-893-0879.

RD proposes to rescind the standards in 7 CFR 1924 for its housing programs as existing State and local requirements sufficiently protect Federal investments. Local building codes and permitting systems already ensure structural integrity, safety, and compliance for construction and development. Since these locally administered requirements meet the needs previously addressed in Part 1924, USDA determined that additional Federal standards are unnecessary for housing programs. For RBCS programs, RD proposes amendments to Parts 4280 and 4290 to replace obsolete references to Part 1924 and similar Federal regulatory standards with cross-references to constructions and development standards used in the Community Facilities programs at 7 CFR part 1942. This proposed rescission advances the administration's priority for regulatory reform by repealing outdated, unnecessary, or ineffective regulations. Part 1924 establishes procedures for construction, site development, and defect resolution across RD programs, but these requirements create duplicative processes, additional paperwork, and extra processing steps for RHS property owners. Part 1924 imposes energy-efficiency and thermal-performance standards, as well as environmental considerations in site planning and design, that often exceed State and local requirements, increase construction and compliance costs, and delay the production and repair of housing in rural communities. RD concluded that these prescriptive regulatory overlays exceed requirements under Title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.), which authorizes the Secretary to ensure that dwellings financed under RHS programs are "decent, safe, and sanitary." The statute does not mandate the sorts of prescriptive design standards found in Part 1924. Requiring compliance with both Federal and local standards adds redundancy, increases costs, and lengthens construction timelines. The costs and delays are passed directly on to borrowers by increasing home prices. Burdensome regulations restrict the number of developers interested in using RHS programs. A longer timeline for housing production and higher construction costs for low- and moderate-income families reduce the number of loans RHS can make and restricts affordability. This proposed rule will make conforming amendments to Parts 4280 and 4290 to replace obsolete references to Part 1924 and similar Federal regulatory standards. Certain rescinded references, where necessary, will now point to 7 CFR part 1942 subpart C. Unlike the housing industry, RBCS projects do not have robust state and local standards and thus those programs necessitate continued Federal regulatory standards. Executive Order 14219 (February 19, 2025), "Ensuring Lawful Governance and Implementing the President's Department of Government Efficiency Deregulatory Initiative," directs agencies to review their regulations and rescind those that are unlawful or unnecessary. In response, RD reviewed Part 1924 and determined it is no longer needed. Executive Order 14394 (March 13, 2026), "Removing Regulatory Barriers to

Affordable Home Construction," directs Federal housing agencies to reform or eliminate burdensome energy-efficiency, water-use, and alternative-energy requirements that increase construction costs. RD determined that Part 1924 contains this type of prescriptive energy and construction standards and falls within the scope of the Executive Order's directives. This rescission also supports Executive Order 14192 (January 31, 2025), "Unleashing Prosperity through Deregulation," which directs agencies to identify, and repeal outdated, unnecessary, or ineffective regulations that impose costs or hinder economic growth. Removing obsolete cross-references will further streamline RD's regulatory framework and improve clarity for lenders, builders, and rural borrowers, consistent with the Administration's regulatory reform policies.

RD is rescinding 7 CFR part 1924 and is making conforming changes to RBCS program regulations to remove such references.

Executive Orders

Executive Order 12372--Intergovernmental Consultation

This program is not subject to the requirements of Executive Order 12372, "Intergovernmental Review of Federal Programs," as implemented under USDA's regulations at 2 CFR 415, subpart C.

Executive Order 12866 Regulatory Planning and Review

This rule has been determined to be not significant and therefore was not reviewed by the Office of Management and Budget under Executive Order 12866.

Executive Order 12988--Civil Justice Reform

This rule has been reviewed under Executive Order 12988. In accordance with this rule: (1) unless otherwise specifically provided, all State and local laws that conflict with this rule will be preempted; (2) no retroactive effect will be given to this rule except as specifically prescribed in the rule; and (3) administrative proceedings of the National Appeals Division of the Department of Agriculture (7 CFR part 11) must be exhausted before bringing suit in court that challenges action taken under this rule.

Executive Order 13132--Federalism

The policies contained in this rule do not have any substantial direct effect on States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with the States is not required.

Executive Order 13175--Consultation and Coordination With Indian Tribal Governments

This proposed rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to- government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal government and Indian Tribes or on the distribution of power and responsibilities between the Federal government and Indian Tribes. Consultation is also required for any regulation that preempts Tribal law or that imposes substantial direct compliance costs on Indian Tribal governments and that is not required by statute. The Agency has determined that this proposed rule does not, to our knowledge, have Tribal implications that require formal Tribal consultation under Executive Order 13175. If a Tribe requests consultation, the RBCS and/or RHS will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress.

Civil Rights Impact Analysis

Rural Development has reviewed this rule in accordance with USDA Regulation 4300-4, Civil Rights Impact Analysis, to identify any major civil rights impacts the rule might have on program participants on the basis of age, race, color, national origin, sex, disability, marital or familial status. Based on the review and analysis of the rule and all available data, issuance of this Proposed Rule is not likely to negatively impact low and moderate-income populations, minority populations, women, Indian tribes or persons with disability, by virtue of their age, race, color, national origin, sex, disability, or marital or familial status. No major civil rights impact is likely to result from this proposed rule.

Congressional Review Act

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this final rule as not a major rule, as defined by 5 U.S.C. 804(2).

E-Government Act Compliance

Rural Development is committed to the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible and to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

National Environmental Policy Act

In accordance with the National Environmental Policy Act of 1969, Public Law 91-190, this proposed rule has been reviewed in accordance with 7 CFR part 1b ("National Environmental Policy Act"). The Agency has determined that (i) this action meets the criteria established in 7 CFR 1b.4(c)(31) and (ii) no extraordinary circumstances exist. Therefore, the Agency has determined that the action does not have a significant effect on the human environment, and therefore neither an Environmental Assessment nor an Environmental Impact Statement is required.

Paperwork Reduction Act