USDA wants to delete its entire construction rulebook for rural home loans, and its reason is that local building codes already do the job

USDA proposes to remove and reserve an entire part of its rulebook.

Part 1924 of title 7 is called Construction and Repair. It has governed how houses financed by the Rural Housing Service are built, how sites are developed, and how defects get resolved. Rural Development filed a proposed rule on Tuesday morning that deletes it, keeps the authority citation, and leaves the part number empty.

The argument

The preamble is short about why. State and local requirements already protect the federal investment, it says, because local building codes and permitting systems ensure structural integrity and safety. Running a federal standard on top of that duplicates the work, adds paperwork, and adds processing steps for property owners. The energy efficiency and thermal performance rules in part 1924, together with its site planning and design requirements, often sit above what states and counties ask for. Costs and delays follow, and the department says both are passed to the borrower in the price of the house.

There is a statutory argument underneath it. Title V of the Housing Act of 1949 tells the Secretary to make sure the dwellings financed under these programs are decent, safe and sanitary. Rural Development reads that as stopping well short of the prescriptive design standards part 1924 contains.

The part that is not being deleted

The business programs keep their standards. In the same document, Rural Development revises the loan and grant regulations at part 4280 so that construction and development requirements point instead to the Community Facilities rules at part 1942, subpart C, and it revises the grant provision so that construction project grants must conform to the same subpart.

The reason given for the difference is unqualified. Rural business projects do not have comparable state and local standards, the preamble says, so those programs still need federal ones. The same sentence that justifies deleting the housing standards therefore justifies keeping the business ones, on the basis that local codes cover houses and do not cover the rest.

What it is not

The rule was determined not significant under the review order, so the Office of Management and Budget did not look at it. It is not a major rule under the Congressional Review Act. Rural Development certified that it will not have a significant economic impact on a substantial number of small entities, and claimed a categorical exclusion from environmental review. Three deregulatory executive orders are cited as the reason the review happened at all, one of them aimed specifically at energy efficiency and water use requirements that raise the cost of building a home.

No number appears anywhere in the document. There is no count of affected loans, no count of dwellings, no estimate of the savings the department expects, and no estimate of what a house costs to build under the standard being removed. Comments run for 60 days from publication, which is scheduled for Wednesday.