Multi-Family Housing Program
Rural Rental Housing

Multi-Family Housing loans in designated rural areas are available from Rural Development to provide living units for very low, low and moderate income families, senior citizens and people with disabilities. Loans may be made for housing in designated places of up to 10,000 population. Applicants should contact the State Office to see whether the agency can serve them.

The loans are primarily made to build apartment-style housing, usually consisting of garden type or similar multi-unit dwellings. The housing must be modest in size, design, and cost. Loan funds may be used to:

- purchase land and make site improvements
- construct buildings
- allow for A/E fees, interest during construction and legal fees

Applicants should have the ability and experience to own, operate and manage a multi-family housing facility. Loans can be made to individuals, partnerships, limited partnerships, state or local public agencies and limited profit and nonprofit corporations. (The maximum repayment period is 30 year balloon with a 50-year amortization). Each loan will be subject to the following requirements:

1. For non-profit organizations, consumer cooperatives, and State or Local public agencies the amount of the loan (s) will be limited to the total development cost or the security value of each project, whichever is less, plus 2 percent of the initial operating capital.
2. For all other applicants, the amount of the loan (s) will be limited to no more than 97 percent of the total development cost or the security value of each project, whichever is less. If low-income housing tax credits are received, the limit cannot exceed 95 percent.

Reserve requirements (the annual reserve requirement and the fully funded reserve amount) will be determined on a case-by-case basis, taking into consideration the reserve requirements of the other participating lenders, so that the aggregate fully funded reserve amount established by RHS and the other lenders equals at least 10 percent of the project's total development cost (TDC) or appraised value, whichever is greater.

Multi-Family Housing Rental Assistance Program

Rental assistance (RA) is a direct subsidy credited to the tenant. Tenants receiving RA must pay the net tenant contribution toward rent, which will not exceed the higher of: 30 percent of monthly adjusted income or 10 percent of gross monthly income, with an adjustment for any authorized utility allowance. Priority is given to very low-income tenants.

Application Process

Applications are processed through the Rural Development Area Offices. The application process and competitive selection criteria are described in the annual Notice of Funding Availability (NOFA) published by the Rural Housing Service.