Eligibility top

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).

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.