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Missouri

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RURAL HOUSING SITE LOANS

RD Instruction 444.8

ELIGIBLE APPLICANTS

LOAN LIMITATIONS

APPLICATION

TERMS

SECURITY

FUNDING

ELIGIBLE LOAN PURPOSES

INELIGIBLE LOAN PURPOSES

PROGRAM RESITRICTIONS

PURPOSE:  Assist public or private non profit organizations with the purchase and development of adequate sights, including the construction of essential access roads, streets, utility lines, and necessary equipment which will become a permanent part of the development.
ELIGIBLE
APPLICANTS:		 The applicant must be a private or public nonprofit organization.
LOAN
LIMITATIONS:		 $100,000 or total development costs or value of property as improved, whichever is less. Can be a larger loan if prior authorization is obtained from the National Office.
APPLICATION: The application will be in the form of a letter to the Local or Area Office which would include:
  • Financial statement
  • General description of the project
  • Estimated cost and amount of loan needed
  • Evidence of inability to obtain credit elsewhereEvidence of need for the proposed sites in the locality by low- and moderate-income families
  • Evidence of any state, county, or local planning, zoning or other ordinance imposing additional restrictions upon the proposed site
TERMS:
  • For Section 523 – Self Help Site Loans – Interest rate is 3%.
  • For Section 524 – Low and Moderate Site Loans – Interest rate is the same as the current interest rate in effect for the Section 502 loan program. Maturity date will be two years from the date the loan is made. National Office may authorize an extension of the maturity date.
SECURITY: Each loan will be secured by a mortgage on the property purchased or improved with the loan and a security interest in the funds held by the corporation in trust for the Government.
FUNDING: Allocations are maintained at the National Office. Applicants must get prior National Office approval before proceeding with the final request.
ELIGIBLE
LOAN
PURPOSES:
  • Access roads, streets, utility lines
  • Purchase of land
  • Public water and waste disposal facilities if they are not available and cannot reasonably be provided on a community basis with other financing, including Rural Development Water and Waste Disposal association loan
  • Engineering fees, legal fees, and closing costs
  • Actual cash costs of incidental administrative expenses such as postage, telephone, advertising, etc.
  • Needed landscaping, planting, seeding, or sodding, or other necessary facilities related to buildings such as walks, parking areas, and driveways
INELIGIBLE
LOAN
PURPOSES:
  • Purchase more land than immediate need for locality (generally, how many lots can be sold within 2 years)
  • Payment of commissions or refinancing debts
  • Purchase of land from a member of applicant-organization
  • To develop lots which will be excessive in costs
PROGRAM
RESTRICTIONS:		 The sites developed with a site loan (Sec. 524) must be for housing low- and moderate-income families and may be sold to families, nonprofit organizations, public agencies, and cooperatives eligible for assistance under any Section of Title V of the Housing Act of 1949. This could be a private lender, HUD, individuals who are eligible for a VA guaranteed loan, state or local public agencies, such as a housing authority, as long as they meet the income guidelines.

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Revised on:   April 9, 2008


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