The Rural Housing Service makes a variety of loans and
grants to housing developers for the construction and renovation of multi-family housing
facilities in rural areas. (In some cases, loans and grants are also made for the
construction of single-family homes as well.) The
following is a list of programs in which developers might be interested.
Farm Labor Housing Program
(Section 514)
The Rural Housing Service's Farm
Labor Housing program is the only nationwide program designed to provide housing for farm
laborers. Loan funds may be used to buy, build, improve, or repair housing for farm
laborers, including persons whose income is earned in aquaculture (fish and oyster farms)
and those engaged in on-farm processing. Funds can be used to purchase a site or a
leasehold interest in a site; to construct housing, day care facilities, or community
rooms; to pay fees to purchase durable household furnishings; and to pay construction loan
interest.
The Farm Labor Housing program is
the only exception to the Rural Housing Service rural service area. Funds may be used in
urban areas for nearby farm labor.
For more information on the Farm
Labor Housing program, click here.
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Rural Rental Housing
Guaranteed Loan Program (Section 538)
This program is intended to fund
construction, acquisition, or rehabilitation of rural multifamily housing for low-income
occupants.
Residents of the completed housing
facility must be very low- to moderate-income households; or elderly, handicapped, or
disabled persons with income not in excess of 115% of the median income of the surrounding
area.
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 maximum
established under the Notice of Fund Availability (NOFA) RHS publishes each year in the
Federal Register.
For more information about the
Rural Rental Housing Guaranteed Loan Program, click here.
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Rural Rental Housing
Program (Section 515)
Rural Rental Housing Loans are
direct, competitive mortgage loans made to provide affordable multifamily rental housing
for very low-, low-, and moderate-income families; the elderly; and persons with
disabilities. This is primarily a direct mortgage program, but its funds may also be used
to buy and improve land and to provide necessary facilities such as water and waste
disposal systems.
In new Section 515 projects, 95
percent of tenants must have very low incomes. In existing projects 75 percent of new
tenants must have very low incomes.
Variations: There are four
variations of the Section 515 loan program. They are Cooperative Housing, Downtown Renewal
Areas, Congregate Housing or Group Homes for Persons with Disabilities, and the Rural
Housing Demonstration Program.
Loans are for up to 50 years at an effective 1
percent interest rate. A current rate is used for the promissory note but thereafter is
used only to determine maximum rent payments.
For more information about the Rural Rental
Housing Program, click here.
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To determine eligibility for
these and other Rural Housing Service programs, please contact your local or State Rural Development office.
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