Guaranteed Rural Rental Housing

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Section 538 - Guaranteed Rural Rental Housing

Description:

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

Loan Purposes: Loan funds can be used to:

Construct new housing
Acquisition with rehabilitation of at least $15,000 per unit
Purchase and improve land needed for the development
Development of on-site and off-site improvements essential to the use of the property
Develop related facilities such as recreational areas
Pay related costs such as architectural fees

Eligible Lenders

Lenders may request approved lender status if currently an approved / active lender in one of the following:

HUD / FHA insurance programs; or
Fannie Mae; or
Freddie Mac

If the lender does not meet the basic eligibility test, they may still apply to become an approved lender by demonstrating adequate ability.

Eligible Borrowers

To be considered eligible the borrower must:

Be creditworthy
Be able and intend to maintain and operate the housing in accordance with program requirements
Be in compliance with all requirements on other Agency or other federal debt
Be a U.S. citizen(s) or legal resident(s), a U.S. owned corporation, limited liability corporation or a partnership in which principals are U.S. citizens or permanent legal residents

Program Fees

Applicable fees are as follows:

There is a $2500 application fee due when the application is filed
At the time of issuance of the loan guarantee, 1% of the guaranteed amount is due. There is an annual renewal fee of .5% of the guaranteed outstanding principal due each year.

Loan Amount and Guarantee:

The maximum loan amount and guarantee are as follows:

Non-profit Corporations, public bodies - up to 97% of the value or development cost, whichever is lower.
For-profit owners - up to 90% of the value or development cost, whichever is lower. The guarantee will be limited to 90%

Loan Rates and Terms

The maximum interest rate is announced each year in the Notice of Funds Availability (NOFA) published in the Federal Register. The rate is
based on the 30-year Treasury Bond rate on the day prior to date of loan closing.

Maximum rent is 30 percent of 115 percent of median income, and average rent of all units is 30 percent of 100 percent of the median
income adjusted for family size.

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, but within the limit as stated in the published NOFA.

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 RHS
National Office.

Where Do You Apply?

A Notice of Funds Availability (NOFA) is announced each year in the Federal Register. Applications may be obtained by calling the Multi-Family Housing Division in the Georgia State Office at 706-546-2164. Applications for funding can be obtained at the following address:

USDA, Rural Development
Multi-Family Housing Division
Stop 307
355 East Hancock Avenue
Athens, Georgia 30601-2768
Phone 706-545-2164

Please send any comments or suggestions to: craig.scroggs@ga.usda.gov

Last Updated : August 15, 2007