The Purpose Of The Guaranteed Rural Rental Housing Program Is...To construct new or purchase an existing building(s) with rehabilitation as outlined in agency regulations or rehabilitation and revitalization of existing Section 515 Rural Development financed properties.

Qualified lenders are authorized to originate, underwrite and close loans to eligible applicants to construct new multi-family housing complexes in rural areas.  Lenders may also make loans for the purchase of an existing rural property where rehabilitation of at least $6,500 per unit is needed.  The Rural Housing Service guarantee to the lender will be limited to 90 percent. 

Eligible Borrowers Include...Nonprofit corporations, public bodies, and for-profit organizations may apply for a guarantee through an eligible lender.

The minimum loan term is 25 years and the maximum is 40 years.

The interest rate must be fixed and is negotiated between the lender and the borrower.  An interest rate buy down of up to 250 basis points down to the Average Federal Rate (AFR) may be available on the first $1.5 million of the loan amount.  This is limited to 20 percent of loans requested annually.

The amount of loan varies depending on the development cost and appraised value of the property.  Loan amounts limited to HUD 207C per unit maximum published annually.

Non-profits and public bodies can borrow up to 97 percent of the value or development costs, whichever is less.  For-profit organizations can borrow up to 90 percent of the value or development costs, whichever is less.

Tenant income can be up to the moderate income limit for the area.  Income limits can be accessed at:  http://www.rurdev.usda.gov/rhs/sfh/sfh%20guaranteed%20loan%20income%20limits.htm.

View...The detailed Guaranteed Rural Rental Housing Loan Fact Sheet.