Multi-Family Housing Guaranteed Loans

Multi-Family Housing Guaranteed Loans serve the rental housing needs of low and moderate income rural households by providing loan guarantees for newly constructed or rehabilitated rental property in eligible rural areas. Guarantees may be used in conjunction with other subsidy programs, such as the Low-Income Tax Credit, HOME, and state rental assistance programs. Loans can be made for a variety of rental housing types, for example: family elderly, congregate housing, and mobile homes. Loans can be made for new construction, moderate or substantial rehabilitation, acquisition of buildings that meet "special housing needs," and combination construction and permanent loans.

 

Program Details

Eligibility:

Applicants may be individuals, non-profit or for profit organizations, partnerships, limited liability companies, trusts, state and local agencies and American Indian Tribes. Applicants should have the ability and experience to operate and manage a multi-family housing project successfully. Communities with a population of 10,000 or less (selected communities with a population between 10,000-20,000 are also eligible). Lenders eligible for approval include FHA, Fannie Mae and Freddie Mac approved multi-family lenders, other lenders with multi-family experience such as Federal Home Loan Bank system members and State or local Housing Finance Agencies.

Funding:

The application process and competitive criteria is described in the annual Notice of Funding Availability (NOFA) published by RHS..

Limits:

Tenants income cannot exceed 115% of the area median income, adjusted for family size. Rent (including tenant-paid utilities) for any unit at initial occupancy cannot exceed 30% of 115% of the area median income, adjusted for family size. The average rent (including tenant-paid utilities) for all units in a project cannot exceed 30% of 100% of area median income.

Terms:

Minimum 25 year mortgage with 40 year amortization. Maximum 40 year mortgage. No prepayment is allowed.

Interest:

The interest rate must be fixed, and cannot exceed the rate specified in the NOFA. Selected loans may be eligible to receive a subsidy to reduce the interest cost.

Credit:

Loans to Government agencies and non-profits entities have a 3% capital contribution. Other entities have a 10% capital contribution requirement.

Collateral:

Appraisal must indicate security value equal to or greater than the loan.

Fees:

Initial fee of one percent (1%) of guaranteed amount. Application fee of $2500.00. Annual renewal fee of one-half percent (0.5%) of the outstanding balance on January 1st of each year thereafter.

More Information:

For more information, contact our State Office at (785) 271-2700.