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Borrowing a mortgage isn’t always easy in rural America, where just one or two local banks might lend.
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The FARM Home Loans Act of 2026 aims to change that. If it passes, here’s what it means for nearly 30 million American homebuyers and their finances.
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Proposed Changes
The new bipartisan proposal looks to update the Farm Credit Act of 1971, which still governs the FCS. The FCS serves as a member-owned cooperative network of lenders, regulated by the Farm Credit Administration. Specializing in rural lending, they provide credit for farms, homes, equipment, livestock and more.
But the Farm Credit Act of 1971 restricted access to areas with populations under 2,500. That may have made sense 55 years ago — but not today.
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As its main amendment, the FARM Home Loans Act of 2026 lifts that population limit to 10,000. That would open Farm Credit access to nearly 30 million more Americans. It also allows for financing of accessory dwelling units (ADUs).
“Farm labor housing is a common bottleneck on lots of farms,” notes real estate broker Erik Leland of Realty First, who often works with farm and vineyard operators in Oregon.
Secondary Benefits
Many small towns currently have too many people for Farm Credit lending but not enough for conventional lenders to serve well. Expanding access would make millions more homes “lendable.”
Adding another lending option creates more competition among lenders. That drives down borrowing costs for better rates and terms for buyers. More lending activity also attracts more support services like appraisers.
“Rural areas face a serious shortage of appraisers,” explains Andrew Fortune, real estate broker with Great Colorado Homes. “I’ve seen deals sit for weeks waiting on an appraisal because there aren’t enough qualified appraisers willing to drive out to small towns.”
What Are the Trade-offs?
Greater loan availability and lower borrowing costs boost demand. Buyers can afford to bid more for the same property — which drives up property prices and negates the affordability bump.
“I expect to see an upward move in property values for the newly eligible areas,” Leland added. “That’s a win for existing homeowners but could be net neutral for buyers.”
Fortune also points out that the arrival of cheaper Farm Credit loans in these rural towns could put local community banks out of business.
“Community banks are the only banking presence in more than a third of U.S. counties, and make nearly 80% of all farm loans. Many might scale back lending or close branches, leaving small towns with fewer financial services than they had before,” he explained.
No change comes without trade-offs. Still, modernizing an outdated population limit seems like a net win for rural communities overall, with better access to the kind of credit options that urban and suburban Americans enjoy.
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This article originally appeared on GOBankingRates.com: A Change Could Be Coming for Almost 30 Million Homebuyers and Their Money