Rural Hospital Revitalization Act of 2026

Purpose of the bill

• The Rural Hospital Revitalization Act of 2026 creates a new, targeted financing mechanism to support replacement, modernization, and renovation of rural hospital facilities. It aims to improve access to care in rural communities by providing temporary zero-interest loans and facilitating subsequent refinancing under existing loan programs.

Key provisions and changes

• New loan program: Adds Section 306BRural hospital revitalization loans to the Consolidated Farm and Rural Development Act.
  • Program: Within the community facilities direct loan program, the Secretary must make temporary zero-percent interest loans to eligible rural hospitals for construction, replacement, or renovation of facilities.
• Eligibility (subsection (b)):
  • Eligible hospitals are rural facilities meeting one or more of these criteria:
  • Located in a county with population under 20,000.
  • Campus at least 35 miles from the nearest hospital (or 15 miles if mountainous terrain/secondary roads, per Secretary determination).
  • Is a critical access hospital or a rural emergency hospital.
  • Has been continuously licensed as a hospital for at least 30 years.
  • Applicants must submit a detailed eligibility package including:
  • Need for the loan (age/condition of facilities, assurances funds won’t be used for recently significantly improved facilities).
  • Demonstrated positive community impact (access to primary care/emergency services, adherence to Title XVIII conditions, and meaningful economic impact).
  • Anticipated health and economic impacts of the loan, including effects on services currently offered and community-based programs.
  • Financial stability: On application, hospitals must show at least 30 days cash on hand and a projected debt-service coverage ratio of at least 1.2.
• Priorities (subsection (b)(2)):
  • Preferences given to hospitals in very sparsely populated areas (fewer than 6 inhabitants per square mile) considering distance, travel time, and seasonal access.
  • Higher priority for projects not financially feasible under standard terms.
  • Preference also given to hospitals with substantial inpatient/outpatient utilization by Medicare/Medicaid/self-pay populations (≥50% of recent costs).
  • Hospitals meeting two or more criteria receive priority.
• Waiver and eligibility (subsection (b)(3)-(4)):
  • Secretary may waive certain eligibility requirements if the hospital demonstrates strong community impacts.
  • Eligible rural hospitals are deemed eligible for the broader community facilities direct loan program.
• Loan terms (subsection (c)):
  • Initial zero-interest loan for 5 years.
  • Principal repayment over 5 years (amortization per existing program schedule; term up to 40 years if needed).
  • End of 5-year period: Secretary assesses financial strength to determine refinancing into a standard community facilities loan at prevailing rates.
  • Refinancing if financially strong: loan refinanced at prevailing rate, no interest due on principal repaid during zero-interest period, amortized for remaining term.
• Renewal options (subsection (d)):
  • If assessment shows insufficient strength, hospitals may request a one-time renewal of the zero-interest loan for up to 5 more years, subject to:
  • Acceptance of available federal technical assistance and continued eligibility.
  • After renewal, refinancing into the standard program again.
  • Interest-rate protection renewal: If market rates exceed 2.5%, hospitals may seek a one-time renewal of zero-interest for 5 years, with continued eligibility criteria including demonstrated community impact and ongoing positive service provision.
  • If renewal is denied, issues handled under standard loan program processes.
• Technical assistance (subsection (e)):
  • Hospitals receiving a zero-interest loan are eligible for targeted technical assistance to support operational improvements and financial stability during the initial loan period and any renewal period.
  • Assistance programs include HRSA’s Targeted Technical Assistance for Rural Hospitals and related Rural Development/NRHA programs.

Who/what is affected

• Eligible rural hospitals seeking facility replacement, modernization, or renovation in qualifying rural areas.
• Rural communities served by those hospitals, which could see improved access to primary care, emergency services, and other hospital-based services.
• Beneficiary populations include Medicare, Medicaid, and self-pay patients in rural regions.
• The U.S. Department of Agriculture/Secretary of Agriculture and related agencies administer and oversee the loan program and its refinancings.

Procedural and timeline notes

• Status: Introduced and referred to the Senate Committee on Agriculture, Nutrition, and Forestry (March 19, 2026).
• Process: New loan authority would operate alongside existing community facilities direct loan program, with annual assessments at the end of the zero-interest period and potential refinancings; renewal options include additional 5-year terms if necessary.
• Implementation would require rulemaking and eligibility determinations by the Secretary, plus coordination with federal technical-assistance programs.

Overall aim: Provide immediate, interest-free capital for rural hospital revitalization, with a path to long-term financing and built-in supports to sustain operations and community health benefits.