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Rural Development

Housing & Community Facilities Programs

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Eligibility Fund Uses Application Processing

Eligibility top

The program is adaptable for participation by a wide variety of owners. Loans can be made to individuals, trusts, associations, partnerships, limited partnerships, State or local public agencies, consumer cooperatives, and profit or nonprofit corporations.


  • Ownership -- Individuals, partnerships, limited partnerships, for-profit corporations, nonprofit organizations, limited equity cooperatives, Native American tribes, and public agencies are eligible to apply. For-profit borrowers must agree to operate on a limited-profit basis (currently 8 percent 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 -- Very low-, low-, and moderate-income families; the elderly; and persons with disabilities are eligible for tenancy of Section 515-financed housing. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income 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.
  • Competitive Applications -- Rural Development State Directors use needs criteria to establish a list of targeted communities for which applicants may request loan funds. A list of these communities 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.

Fund Uses

Rural Rental Housing Loans are direct, competitive mortgage loans made to provide affordable multifamily rental housing for very low-, low-, and moderate-income families; the elderly; and persons with disabilities. This is primarily a direct mortgage program, but its funds may also be used to buy and improve land and to provide necessary facilities such as water and waste disposal systems.

Application Processing

Loans of up to $1,500,000 must be approved by State Directors.  All requests for loans above $1,500,000 must be reviewed by the HCFP National Office.

The National Office publishes a Notice of Funds Availability in the Federal Register as soon after the start of the Fiscal Year as possible. Generally, the NOFA should be published around November 1.

The NOFA will indicate:

  • The information that applicants must submit in their project proposal:
  • The criteria the Agency will use to evaluate and rank project proposals;
  • The deadline for submitting project proposals; and
  • The state office addresses where:
    • The project proposals must be sent;
    • A list of designated places for the state may be obtained; and
    • The funding for the state may be obtained



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