Full Version of Site

USDA MFH Home Page Home Page               Rural Rental Housing              Housing Preservation Grants                 Farm Labor Housing
Guaranteed Rural Rental Housing                   MFH In the News           MFH 2002 Accomplishments

Home Page        Rural Business & Cooperative Service        Community Programs          Single Family Housing         Other Information

                    Guaranteed Rural Rental Housing

Eligibility

The Rural Housing Service guarantees loans under the Rural Rental Housing Guaranteed loan program for development of multi-family
housing facilities in rural areas of the United States. Loan guarantees are provided for the construction, acquisition, or rehabilitation of rural
multi-family housing.

An applicant must be: A citizen of the United States or a legally admitted alien for permanent residence in the United States; a nonprofit
organization such as a local government, community development group or American Indian tribe, band, group, or nation (including Alaskan
Indians, Aleuts, Eskimos, and any Alaskan native village); or a for-profit corporation. 

Eligible lenders are those currently approved and considered eligible by the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, the Federal Home Loan Bank members, or the Department of Housing and Urban Development for guaranteed programs supporting multifamily housing. State Housing Finance Agencies may also be considered eligible lenders. Other lenders have the opportunity to enter into a correspondent bank relationship with approved lenders in order to participate in the program. 

Occupants must be very- low-, low- or moderate-income households, elderly, handicapped, or disabled persons with income not in excess of
115% of the area median income. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is capped at $5,500 above the low-income limit. The average rent of all units is 30% of 100% of the median income of the surrounding area (adjusted for family size).

Fund Uses

The program has been designed to increase the supply of affordable multifamily housing through partnerships between RHS and major lending
sources , as well as State and local finance agencies and bond issuers.

The terms of the loans guaranteed may be up to 40 years, and the loans must be fully amortized. Rates of the loans guaranteed must be fixed, as
negotiated between lender and borrower, within the RHS maximum established under the Notice of Fund Availability (NOFA). The rate is
based on the 30-year Treasury Bond rate on the day prior to date of loan closing. Maximum rent is 30 percent of 115 percent of median income, and average rent of all units is 30 percent of 100 percent of the median income adjusted for family size.

The program is limited to rural areas. Generally, communities are eligible if they have populations of not more than 10,000, nor more than 20,000 if there is a serious lack of mortgage credit.

Application Processing

Loans of up to $1,500,000 must be approved by State Directors. All requests for loans above $1,500,000 must be reviewed by the RHS
National Office.

Last Updated : February 18, 2003