The Multi-Family 515 Direct Program provides loans for the development of affordable rental housing in rural communities for very low, low and moderate income seniors, Individuals and families. RD may also provide rental assistance (RA). RA is a tenant subsidy that pays a portion of the tenant shelter costs down to 30% of adjusted income.
Eligible Ownership entities are individuals, partnerships, limited partnerships, for profit corporations, nonprofit corporations, limited equity cooperatives, Native American Tribes, and public agencies. For profit borrowers must agree to operate on a limited profit basis (currently 8% 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 must be for very low, low or moderate income individuals or families which is defined as follows: Very low is below 50% of the area median income (AMI), low is between 50 and 80% of the AMI, and moderate is capped at $5,500 above the low income limit. Those living in substandard housing are given first priority for tenancy. When rental assistance is used, top priority is given to very low income households.
Rural Rental Housing loans are direct, competitive mortgage loans made to provide affordable multi-family rental housing for very low, low, and moderate income families, the elderly and persons with disabilities. This is primarily a direct mortgage program, but funds are used to buy and improve land and to provide necessary facilities such as waste and water disposal systems.
State Directors use criteria based on need as established by reviewing targeted communities. A list of these communities, for which applicants can request loan funds, 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 recipients.
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