SUPPLEMENTARY INFORMATION:

I. Background

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This proposed rescission advances the administration's priority for regulatory reform by repealing outdated, unnecessary, or ineffective regulations.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 Certain rescinded references, where necessary, will now point to 7 CFR part 1942 subpart C. Unlike the housing industry, RBCS projects do not have robust state and local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 ( printed page 53541) 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.

II. Summary of Changes

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

III. Executive Orders/Acts

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

This rule does not contain reporting or recordkeeping requirements subject to the Paperwork Reduction Act.

Regulatory Flexibility Act

The rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned has determined and certified by signature on this document that this rule will not have a significant economic impact on a substantial number of small entities since this rulemaking action does not involve a new or expanded program, nor does it require any more action on the part of a small business than required of a large entity.

Unfunded Mandates Reform Act (UMRA)

Title II of the UMRA, Public Law 104-4, establishes requirements for Federal ( printed page 53542) Agencies to assess the effects of their regulatory actions on State, local, and Tribal Governments and on the private sector. Under section 202 of the UMRA, Federal Agencies generally must prepare a written statement, including cost-benefit analysis, for proposed and Final Rules with “Federal mandates” that may result in expenditures to State, local, or Tribal Governments, in the aggregate, or to the private sector, of $100 million or more in any one-year. When such a statement is needed for a rule, section 205 of the UMRA generally requires a Federal Agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and Tribal Governments or for the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

USDA Non-Discrimination Statement

In accordance with Federal civil rights laws and USDA civil rights regulations and policies, the USDA, its Mission Areas, agencies, staff offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.

Persons with disabilities who require alternative means of communication for program information ( e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the State or local Agency that administers the program or contact USDA through the Telecommunications Relay Service at 711 (voice and TTY). Program information may be made available in languages other than English. To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at https://www.usda.gov/​sites/​default/​files/​documents/​ad-3027.pdf and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by:

a. Mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Mail Stop 9410, Washington, DC 20250-9410; or

b. Fax: (202) 690-7442; or

c. Email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

For the reasons stated in the preamble, Rural Development proposes to amend 7 CFR parts 1924, 4280, and 4290 as follows: