USDA Rural Development LogoCommitted to the future of rural communities    

Rural Development

Housing & Community Facilities Programs

 


Guaranteed Rural Rental Housing

 

PROGRAM GOALS

 

The GRRHP was established to increase the supply of moderately-priced housing in rural areas; ensure that housing is affordable to low- and moderate-income rural residents whose incomes are 115 percent of area median income (AMI) or less; provide housing that is decent, safe, sanitary, and competitive in the market; and foster risk-sharing partnerships with public and private lenders.  Under the program, the Agency will provide credit enhancements to encourage private and public lenders to make new loans for affordable rental properties that meet program standards.  Lenders will be expected to underwrite and service the loans. The Agency will approve qualified lenders to participate and will monitor lender performance to ensure that program requirements are met.

 

LOAN GUARANTEE PRODUCT

  •  Up to 90% guarantee

 

ELIGIBLE PURPOSES

  • New construction and acquisition with rehabilitation of at least $6,500/unit

  •  Guarantee on permanent financing or a guarantee on a construction/permanent loan combination

  •  Housing with 5 or more adequate dwellings

ELIGIBLE USES

  •  All hard costs

  •  Soft costs - professional services, bond fees, developerís fees, land acquisition and development, financing costs

 

ELIGIBLE BORROWERS
  • Individuals, partnerships, non-profit or for-profit corporations 

  • State and local agencies, Trusts, Native American Tribes

 

ELIGIBLE AREAS

  • Rural areas with a population up to 20,000

 

ELIGIBLE LENDERS

  • Lenders eligible for approval include HUD, Ginnie Mae, Fannie Mae, and Freddie Mac approved multifamily lenders

  • Lenders with multifamily lending experience and demonstrated capacity to provide all aspects of loan processing, and asset management functions, including disposition

 

BENEFITS TO LENDERS

  • Up to 90% protection against loan losses

  • Credit towards fulfillment of Community Reinvestment Act requirements

  • Secondary mortgage market participation

  • Loans exempted from lenderís legal lending limits

  • For the FY 2010 NOFA, no application or guarantee fees

 

LOAN GUARANTEE FEATURES

Loan to Value (LTV)

  •  90% or less of loans made to for-profit entities

  •  97% or less of loans made to non-profit entities

Interest Rate

  • Best negotiated rate between lender and borrower fixed over the loan term

Repayment Term

  • 25 year minimum, 40 year maximum

  • 25 year minimum for balloon with 40 year amortization

 

Minimum and Maximum Loan Amount

  • No limit

 

PROGRAM PARAMETERS

  • Housing is available to families and individuals whose income at initial occupancy does not exceed 115% of the area median income. No re-certification of income is required

  • Rent (including tenant-paid utilities) for any unit at initial occupancy cannot exceed 30% of 115% of area median income adjusted for family size

  • Average rent (including tenant-paid utilities) for all units in a project cannot exceed 30% of 100% of the area median income adjusted for family size

 

GRRHP REGULATIONS & FORMS

 
 

 

HCFP Home
Feedback
Administrator's Corner
Contacts
Briefing Room
Civil Rights
Regulations
FAQs
RCDI