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Rural Development

Housing & Community Facilities Programs

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The Rural Housing Programs makes a variety of loans and grants to housing developers for the construction and renovation of multi-family housing facilities in rural areas. (In some cases, loans and grants are also made for the construction of single-family homes as well.)

The following is a list of programs in which developers might be interested.

 Farm Labor Housing Program (Section 514)

The Housing and Community Facilities Programs Farm Labor Housing program is the only nationwide program designed to provide housing for farm laborers. Loan funds may be used to buy, build, improve, or repair housing for farm laborers, including persons whose income is earned in aquaculture (fish and oyster farms) and those engaged in on-farm processing. Funds can be used to purchase a site or a leasehold interest in a site; to construct housing, day care facilities, or community rooms; to pay fees to purchase durable household furnishings; and to pay construction loan interest.

The Farm Labor Housing program is the only exception to the Housing and Community Facilities Programs rural service area. Funds may be used in urban areas for nearby farm labor.

For more information on the Farm Labor Housing program, click here.

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Rural Rental Housing Guaranteed Loan Program (Section 538)

This program is intended to fund construction, acquisition, or rehabilitation of rural multifamily housing for low-income occupants.

Residents of the completed housing facility must be very low- to moderate-income households; or elderly, handicapped, or disabled persons with income not in excess of 115% of the median income of the surrounding area.

The terms of the loans guaranteed may be up to 40 years, and the loans must be fully amortized. Rates of the loans guaranteed must be fixed, as negotiated between lender and borrower, within the maximum established under the Notice of Fund Availability (NOFA) HCFP publishes each year in the Federal Register.

For more information about the Rural Rental Housing Guaranteed Loan Program, click here.

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Rural Rental Housing Program (Section 515)

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.

In new Section 515 projects, 95 percent of tenants must have very low incomes. In existing projects 75 percent of new tenants must have very low incomes.

Variations: There are four variations of the Section 515 loan program. They are Cooperative Housing, Downtown Renewal Areas, Congregate Housing or Group Homes for Persons with Disabilities, and the Rural Housing Demonstration Program.

Loans are for up to 50 years at an effective 1 percent interest rate. A current rate is used for the promissory note but thereafter is used only to determine maximum rent payments.

For more information about the Rural Rental Housing Program, click here.

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To determine eligibility for these and other Housing and Community Facilities Programs programs, please contact your local or State Rural Development office.


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