SBA Doubles Cumulative 7(a) and 504 Loan Limit to $10 Million
SBA announced a new rule, effective July 4, allowing eligible borrowers to combine 7(a) and 504 loans for up to $10 million in SBA-backed financing, doubling the previous $5 million cumulative cap. Under the new policy, borrowers who secure a 7(a) loan first may access up to $5 million through each program. Small manufacturers, who can already secure an unlimited number of 504 loans tied to distinct projects, will also be able to apply for $5 million through 7(a). SBA framed the change as supporting capital-intensive small businesses in construction, logistics, energy, and food production, and as complementing the agency’s existing initiatives for manufacturers, including waived loan fees, a dedicated manufacturing loan program, and the 90% Made in America Loan Guarantee.
Student Loan Policy in Flux: Courts Block Administration Restrictions
Two sets of federal court rulings have blocked Trump Administration efforts to reshape the student loan landscape. On June 25, U.S. District Judge Beryl Howell halted an Education Department rule that would have narrowed the definition of “professional degree,” excluding nursing and other healthcare graduate programs from the higher borrowing tier established under the One Big Beautiful Bill Act. The Act set annual loan caps of $50,000 for professional students and $20,500 for other graduate students. Howell found the department exceeded its authority by adding criteria Congress had not specified, though the underlying statutory loan caps remain in effect.
Then on June 30, two federal judges struck down the Administration’s overhaul of the Public Service Loan Forgiveness program, which would have given the Education Secretary authority to exclude employers deemed to have a “substantial illegal purpose.” Judge Myong Joun in Massachusetts vacated the rule, finding it overstepped agency authority and threatened First Amendment protections. Together, the rulings leave significant uncertainty around how the new graduate lending caps will be administered and which employers qualify under PSLF going forward.
DOE Commits $17.5 Billion in Loans for Nuclear Reactor Deployment
The Department of Energy’s Office of Energy Dominance Financing issued a conditional loan commitment of up to $17.5 billion to accelerate construction of 10 new Westinghouse AP1000 nuclear reactors across five project sites. The loans would finance long-lead equipment, components that typically take years to manufacture and deliver, with the goal of shortening deployment timelines by up to three years. Westinghouse, jointly owned by Brookfield Asset Management and Cameco, has signed letters of intent with seven potential utility partners. The commitment follows a May 2025 executive order calling for 10 large reactors to be under construction by 2030. The AP1000 is currently the only large reactor design licensed to operate in the United States. Energy Secretary Chris Wright said the loans would lower construction costs and rebuild the domestic nuclear supply chain. Whatever one thinks of the energy policy, the scale of the federal credit commitment is notable: $17.5 billion in government-backed lending to support a single reactor design across multiple sites.
GAO: Main Street Lending Program Continues to Hold Outstanding Loans
A new GAO report (GAO-26-108011) examines the performance of the Federal Reserve’s Main Street Lending Program, which made 1,830 loans totaling $16.6 billion to small and midsized businesses and nonprofits during the pandemic. As of January 2026, 70 percent of loans had been fully repaid. But 16 percent resulted in losses ($1.3 billion in charged-off amounts and $1.4 billion sold back to lenders at a net loss), and another 14 percent remained outstanding past their scheduled maturity dates. Those outstanding loans, representing nearly $2 billion, largely involve borrowers unable to make their final balloon payments. GAO found that elevated interest rates and the timing of principal payment milestones were associated with decreased likelihood of repayment. Loans to larger borrowers and those originated by larger lenders had notably better outcomes.
The 21st Century ROAD to Housing Act is Now Law
The 21st Century ROAD to Housing Act, the most significant housing legislation since 1990, became law on July 11 after President Trump neither signed nor vetoed it within the constitutional window. The Senate passed the bill 85-5 on June 22, and the House followed 358-32 the next day. The law touches a number of federal loan programs. It expands FHA access to small-dollar mortgages. It updates manufactured housing financing standards, including removing the permanent chassis requirement from the federal definition of “manufactured home” and increasing FHA Title I loan limits. It directs the CFPB to study barriers to small-dollar originator compensation and to evaluate the impact of points and fees thresholds on loans under $100,000. It allows both licensed and credentialed appraisers to conduct FHA appraisals. It also includes community bank provisions that adjust deposit access rules and raise the examination cycle threshold.
The investor ban provisions are worth noting separately. Restricting entities that control 350 or more single-family homes from purchasing additional properties will shift some housing demand from institutional buyers to individual households. That also shifts origination volume, servicing composition, and compliance requirements.
Center for USA Lending Convenes First Quarterly Forum on Federal Student Lending
On July 14, the Center for USA Lending held its inaugural quarterly forum on federal credit policy, bringing together practitioners and leaders for a candid conversation on the future of federal lending. The forum series will continue this fall: our next convening, on housing finance, is scheduled for October — timely given the sweeping changes now underway with the 21st Century ROAD to Housing Act. Details to follow.