Rural Rental Housing Loans
The program is adaptable for participation by a wide variety of owners. Loans
can be made to individuals, trusts, associations, partnerships, limited partnerships,
State or local public agencies, consumer cooperatives, and profit or nonprofit
Eligibility: Ownership - Individuals, partnerships, limited partnerships,
for-profit corporations, nonprofit organizations, limited equity cooperatives, Native
American tribes, and public agencies are eligible to apply. For-profit borrowers must agree
to operate on a limited-profit basis (currently 8 percent on initial investment). Borrowers
must be unable to obtain credit elsewhere that will allow them to charge rents affordable to
low- and moderate-income tenants.
Tenancy: Very low-, low-, and moderate-income families; the elderly; and persons with
disabilities are eligible for tenancy of Section 515-financed housing. 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. When rental assistance is used top priority is given
to very low-income households.
Competitive Applications: Rural Development State Directors use needs criteria to establish
a list of targeted communities for which applicants may request loan funds. A list of these
communities is published yearly in the Federal Register in the form of a Notice of Funding
Availability (NOFA). The applications are then rated competitively in order to select
Fund Uses: Rural Rental Housing Loans are direct, competitive mortgage loans made to
provide affordable multifamily rental housing for very low-, low-, and moderate-income families;
the elderly; and persons with disabilities. This is primarily a direct mortgage program, but its
funds may also be used to buy and improve land and to provide necessary facilities such as
water and waste disposal systems.
NOFA: The National Office publishes a Notice of Funds Availability in the Federal Register
as soon after the start of the Fiscal Year as possible. Generally, the NOFA should be published
around November 1.
NOFA will indicate the information that applicants must submit in their project proposal:
The criteria the Agency will use to evaluate and rank project proposals; The deadline for
submitting project proposals; and
The state office addresses where: the project proposals must be sent; A list of designated places
for the state may be obtained; and the funding for the state may be obtained.
The Pre-Application Packet can be found here.
Basic Instructions: 7 C.F.R. 3560, HB-1-3560 and HB-2-3560
For more information about this program, or to file an application, contact the local
Rural Development office in your area.