WASHINGTON, D.C. — The U.S. Departments of Agriculture and Housing and Urban Development are moving to consolidate environmental reviews and physical inspections for federally supported rural housing, implementing a new law intended to reduce overlapping requirements across the two agencies.
The agencies entered into a memorandum of understanding that creates a framework for aligning environmental-review standards, determining which department takes the lead on jointly funded projects and evaluating whether properties can undergo a single physical inspection.
The agreement implements Section 802 of the 21st Century ROAD to Housing Act, known as the Streamlining Rural Housing Act, which became law July 11 and directed the USDA and HUD secretaries to establish the arrangement.
HUD will lead the interagency coordination, with officials from both departments responsible for carrying out the agreement.
One objective is to identify housing projects that may qualify for categorical exclusions from more extensive environmental reviews. The agencies will also develop a process for designating a lead department when both provide funding.
Under that approach, one agency could adopt an Environmental Impact Statement or Environmental Assessment already approved by the other, reducing duplicative reviews for projects receiving assistance from both departments.
The memorandum also calls for evaluating a joint physical-inspection process for federally supported housing properties.
USDA and HUD will maintain compliance with environmental regulations under Part 58 of Title 24 of the Code of Federal Regulations as they existed Jan. 1, 2025, except for changes to categorical exclusions made through the standard rulemaking process.
The coordination could affect a significant federal rural and affordable-housing portfolio. USDA Rural Development provided more than $42 billion in new funding during fiscal 2025 across housing, community facilities, water and wastewater systems, broadband, energy projects and business development.
USDA and HUD also oversee substantial multifamily housing portfolios, making differences in inspection and environmental-review requirements a potential source of additional administrative work for projects involving both agencies.
“For too long regulation and bureaucracy have slowed the growth of the next generation of America’s Rural homeowners,” Agriculture Secretary Brooke Rollins said.
HUD Secretary Scott Turner said the agencies intend to streamline environmental reviews and other requirements that the administration views as barriers to rural housing development.
USDA Rural Housing Service Administrator George Kelly will serve as an agency coordination lead for USDA. HUD Chief of Staff Drew McCall and Deputy Chief of Staff Reid Wilson will represent HUD in the coordination effort.
The memorandum establishes the framework for the agencies to evaluate and develop the changes rather than itself replacing the underlying environmental and inspection requirements.
Additional information on the agencies’ housing programs is available at www.usda.gov and www.hud.gov.
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