Rental Assistance Program
- Projects -- Rental assistance may be used in both existing and newly constructed
HCFP Rural Rental Housing (Section 515) or Farm Labor Housing (Section 514)
financed projects. Projects must be established on a nonprofit or limited profit basis.
- Tenants -- Persons with very low and low incomes, the elderly, and persons with
disabilities are eligible if they are unable to pay the basic monthly rent within 30
percent of adjusted monthly income. 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 established by adding $5,500 to the low-income limit.
HCFP and the project owner execute a five-year contract in which HCFP commits payments
on behalf of tenants in a designated number or percentage of the units. Both HCFP and the
project owner agree to be bound by all applicable HCFP regulations. The contract becomes
effective on the first day of the month in which it is executed (additional units may be
covered if funds are available and an additional contract is executed). The agreement may
be renewed as many times as funds are made available. State Directors may transfer unused
and unneeded contracts or portions of contracts to other projects.
Fund Uses:The Rural Rental Assistance (RA) program provides an additional source of
support for households with incomes too low to pay the HCFP subsidized (basic) rent from
their own resources. HCFP pays the owner of a multi-family housing complex the difference
between the tenant's contribution (30 percent of adjusted income) and the monthly rental rate.
Priority for RA in housing financed by Section 515 is given to a project either if a market
study indicates the greatest percentage of prospective tenants need RA or if the area has the
greatest housing need within the state and is selected for funding in accordance with the
weighted criteria (set forth in FmHA Instruction 1944-E [1944.231]). Comments: The request for
RA is generally initiated by the borrower (project owner). However, if the borrower does not
request it, people eligible for rental assistance in a project may petition the borrower to
obtain rental assistance for them. There is an HCFP appeals procedure if rental assistance is
denied by the owner. In existing projects, demand far exceeds supply.
Application Processing: RA requests are approved by the State Director.
For more information about this program, or to file an application, contact the local
Rural Development office in your area.