The Rural Housing Service guarantees loans under the Rural
Rental Housing Guaranteed loan program for development of multi-family
housing facilities in rural areas of the United States.
Loan guarantees are provided for the construction, acquisition,
or rehabilitation of rural multi-family housing.
An
applicant must be: A citizen of the United States or a legally
admitted alien for permanent residence in the United States;
a nonprofit organization such as a local government, community
development group or American Indian tribe, band, group, or
nation (including Alaskan Indians, Aleuts, Eskimos, and any
Alaskan native village); or a for-profit corporation.
Eligible
lenders are those currently approved and considered eligible
by the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, the Federal Home Loan Bank
members, or the Department of Housing and Urban Development
for guaranteed programs supporting multifamily housing. State
Housing Finance Agencies may also be considered eligible lenders.
Other lenders have the opportunity to enter into a correspondent
bank relationship with approved lenders in order to participate
in the program.
Occupants
must be very- low-, low- or moderate-income households, elderly,
handicapped, or disabled persons with income not in excess
of 115% of the area median 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 capped
at $5,500 above the low-income limit. The average rent of
all units is 30% of 100% of the median income of the surrounding
area (adjusted for family size).
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The program has been designed to increase the supply of affordable
multifamily housing through partnerships between RHS and major
lending sources , as well as State and local finance agencies
and bond issuers.
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, within the
RHS maximum established under the Notice of Fund Availability
(NOFA). 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 program is
limited to rural areas. Generally, communities are eligible
if they have populations of not more than 10,000, nor more
than 20,000 if there is a serious lack of mortgage credit.
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