COLORADO

Rural Development
Multi Family Housing
DIRECT RENTAL LOANS
(SECTION 515)

Multi Family Housing Direct Loans	Multi Family Housing Guaranteed Loans

 

 

Rural Development Multi Family - Direct Loans

Rural Development makes loans to finance construction and site development of multi family housing living facilities for people with very low, low, and moderate incomes.  Some developments are reserved for individuals 62 years or older

Purpose:  What is the Program's Goal?  To develop new construction and/or substantial rehabilitation of existing 515 apartments for very low, low, and modern income tenants.

Program Type:  How does it work?  USDA Rural Development makes construction loans and site development for apartments. 

Eligible Applicants:  Who can apply?  Individuals, profit and non-profit organizations.

Eligible Areas:  Rural areas in Colorado, cities and towns with populations of 20,000 or less and a minimum of 250 households.  Each year Rural Development establishes a designated place list for targeted Section 515 assistance.

Authorized Purposes:  What can funds be used for?  Develop new apartments or buy and renovate existing apartments; may also provide partial or complete rental assistance.

Typical Amount of Assistance:   Up to $1,000,000 from Rural Development. Tax credits and other funds can be used in conjunction with loan as leveraging.  Up to 102% of market value for non profits; 95 - 97% for profits,

Rates & Terms (rates subject to change):  30 year term amortized for  50 years.  Current interest rates subject to change with Interest Credit.  The interest rate credit subsidy reduces the interest rate to 1%.

When to Apply: Once a year an announcement of available funding is published in the Federal Register, in the form of a Notice of Funding Availability (NOFA).  Generally this announcement is published as soon as possible after the start of the fiscal year beginning October 1st.

Who to Contact:  Program is administered through the Rural Development State Office in Lakewood. 

View a listing of current Colorado's Multi Family Housing Developments. 

Rural Development Multi Family - Guarantee Loans

Purpose:  What is the Program's Goal?  Provide an incentive for commercial lending to develop and repair apartments for tenants with an income of 115% above the area income.

Program Type:  How does it work?  USDA Rural Development guarantees loans made by approved lending institutions.

Eligible Applicants:  Who can apply?  Banks and other lenders, making loans to developers, Indian Tribes or public agencies.

Eligible Areas:  Cities and towns with populations of 20,000 or less or in a metropolitan statistical area of 25,000 or less.  

Authorized Purposes:  What can funds be used for?  Develop new apartments or buy and renovate existing apartments.  

Typical Amount of Assistance:   $2,000,000 to $5,000,000.

Rates & Terms (rates subject to change):  Negotiated between borrower and lender with a 1% guarantee fee up to 90% of the loan, an annual fee of 0.5% of the outstanding principle and interest of the loan, and a one time application fee of $2,500.

Key to Success:  Lender and developer driven.

When to Apply:  Once a year an announcement of available funding is published in the Federal Register, in the form of a Notice of Funding Availability (NOFA).  Generally this announcement is published as soon as possible after the start of the fiscal year beginning October 1st.

Who to Contact:  Program is administered through the Rural Development State Office in Lakewood. 

View a listing of current Colorado's Multi Family Housing Developments.