The Multi-Family 538 Program enables lenders to provide rental housing for moderate income families in rural areas. Under the program, the Agency provides credit enhancements to encourage private and public lenders to make new loans for affordable rental properties that meet program standards.

Qualifying Criteria:

An applicant must be a U.S. citizen(s), or legal resident, a U.S. owned corporation, a limited liability corporation (LLC) or a partnership in which principals are U.S. citizens or permanent legal residents. Other than public agencies, Indian Tribes, and individuals, borrowers must provide documentary evidence that they are valid legal entities licensed to do business in the state where the property is located and able to enter into agreements governing the loan and the guarantee.

Lenders must be an approved a currently active lender in one of the following multi-family housing programs; Fannie Mae, Freddie Mac, HUD, or Ginnie Mae. A State or local housing finance agency, a member of the Federal Home Loan Bank system or other lender may be eligible to participate if they can demonstrate satisfactory experience with multi-family lending.

Occupants must be low or moderate income individuals or families whose incomes, at initial occupancy, do not exceed 115% of the AMI for family size. Monthly rent for a unit may not exceed 30% of 115% of adjusted AMI. Average project rent cannot exceed 30% of 100% of AMI.

Fund Uses:

Funds are used to increase the supply of affordable multi-family housing through partnerships between HCFP and major lending sources as well as State and local finance agencies and bond issuers.

Loan Terms:

The maximum Loan to Value is 90% for for-profit entities and 97% for non-profit entities. The Guaranteed loan has a minimum term of 25 years and a maximum term of 40 years. There is no maximum or minimum loan amount. The interest rate negotiated between the borrower and lender is fixed for the life of the loan.