Section 538 Rural Rental Housing Guaranteed Loans
RURAL DEVELOPMENT, DEPARTMENT OF AGRICULTURE
Housing Act of 1949, as amended, Section 538, Public Law 106-569, 42 U.S.C. 1490p-2.
This program has been designed to increase the supply of affordable multifamily housing in rural areas through partnerships between Rural Development and major lending sources, as well as State and local housing finance agencies and bond insurers. The program provides Federal credit enhancement to encourage private and public lenders to make new loans for affordable rental properties that meet program standards.
Types of Assistance
Uses and Use Restrictions
The guarantee will encourage the construction of new rural rental housing and appropriate related facilities. Housing as a general rule will consist of projects with five or more dwellings. The guarantee may not be made for nursing, special care or industrial type housing.
The applicant in this program is the lender. The lender must be approved and currently active with Fannie Mae, Freddie Mac, HUD/FHA insurance programs, Ginnie Mae or be a State or local Housing Finance Agency. A member of the Federal Home Loan Bank System or other lender may be able to participate if they can demonstrate satisfactory experience with multifamily lending.
Occupants must be families or persons with income not in excess of 115 percent of the Median Income at the time of initial occupancy.
Eligible borrowers include: individual partnerships; profit and not-for-profit corporations; limited liability companies; trusts; State and local agencies; and Indian Tribes.
Application and Award Process
None. This program is excluded from coverage under E.O. 12372.
The lender originates the loan and performs the necessary underwriting and provides the documentation required by the RHS and request for guarantee to the RHS for consideration.
Rural Development will review all the applications for compliance with the program requirements and issue the Conditional Commitment of Guarantee with conditions. Once the conditions are met the final Contract of Guarantee will be issued.
Please contact the program contact listed in the Information Contacts section below.
Range of Approval/Disapproval Time
The review and award process is established at 60 days from the end of the NOFA.
Applicants may appeal adverse decisions in accordance with 7 CFR Part 11, National Appeals Division.
Formula and Matching Requirements
Length and Time Phasing of Assistance
Post Assistance Requirements
Per program requirements.
As required by the lender and program regulations.
Good business records and any records required by the lender.
(Loans) FY 07 $197,997,000; FY 08 est not available; and FY 09 est not reported.
Range and Average of Financial Assistance
Regulations, Guidelines and Literature
The final rule, 7 CFR 3565, was effective January 19, 2005. Also available in the Guaranteed Rural Rental Housing Program Origination and Servicing Handbook.
Regional or Local Office
Consult your local telephone directory for Rural Development field office number. If no listing, get in touch with appropriate Rural Development State office listed in Appendix IV of the Catalog or on the internet at http://www.rurdev.usda.gov
Director, Multi-Family Housing Processing Division, Rural Development, Department of Agriculture, Washington, DC 20250. Telephone (202) 720-1604. Use the same number for FTS.
Web Site Address
Examples of Funded Projects
Criteria for Selecting Proposals
Provided in the NOFA.