- Projects
-- Rental assistance may be used in both existing and newly
constructed RHS Rural Rental Housing (Section 515) or Farm
Labor Housing (Section 514) financed projects. Projects
must be established on a nonprofit or limited profit basis.
- Tenants
-- Persons with very low and low incomes, the elderly, and
persons with disabilities are eligible if they are unable
to pay the basic monthly rent within 30 percent of adjusted
monthly 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 between 80 and
120 percent of AMI. In new Section 515 projects, 95 percent
of those assisted must have very low incomes. In existing
projects 75 percent of new tenants must have very low incomes.
RHS
and the project owner execute a five-year contract in which
RHS commits payments on behalf of tenants in a designated
number or percentage of the units. Both RHS and the project
owner agree to be bound by all applicable RHS regulations.
The contract becomes effective on the first day of the month
in which it is executed (additional units may be covered if
funds are available and an additional contract is executed).
The agreement may be renewed as many times as funds are made
available. State Directors may transfer unused and unneeded
contracts or portions of contracts to other projects.
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The Rural Rental Assistance
(RA) program provides an additional source of support for households
with incomes too low to pay the RHS subsidized (basic) rent
from their own resources. RHS pays the owner of a multi-family
housing complex the difference between the tenant's contribution
(30 percent of adjusted income) and the monthly rental rate.
Priority
for RA in housing financed by Section 515 is given to a project
either if a market study indicates the greatest percentage
of prospective tenants need RA or if the area has the greatest
housing need within the state and is selected for funding
in accordance with the weighted criteria (set forth in FmHA
Instruction 1944-E [1944.231]). Comments: The request for
RA is generally initiated by the borrower (project owner).
However, if the borrower does not request it, people eligible
for rental assistance in a project may petition the borrower
to obtain rental assistance for them. There is an RHS appeals
procedure if rental assistance is denied by the owner. In
existing projects, demand far exceeds supply.
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