FEDERAL AGENCY:

RURAL HOUSING SERVICE (RHS), DEPARTMENT OF AGRICULTURE

AUTHORIZATION:

Housing Act of 1949, as amended, Section 538, Public Law 104-180, 42 U.S.C. 1490a.

OBJECTIVES:

This 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 housing finance agencies and bond insurers. The program provides effective new forms of Federal credit enhancement for the development of affordable multifamily housing by lenders.

TYPES OF ASSISTANCE:

Guaranteed/Insured Loans. Place Cursor Here for Definition

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 multi-units with two or more family units. The guarantee may not be made for nursing, special care or industrial type housing.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   The applicant in this program is the lender that will use the guarantee as a credit enhancement and therefore be more likely to make the loan. The lender must be approved by Fannie Mae, Freddie Mac, HUD or be a State Housing Finance Agency. The projects must be located in rural areas as defined by the Agency.

Beneficiary Eligibility:   Occupants must be very-low, low- or moderate-income households, elderly, handicapped, or disabled persons with income not in excess of 115 percent of the Median Income.

Credentials/Documentation:   The loans must be made to entities or individuals that meet the underwriting requirements of the lender and will provide the housing to eligible occupants. The lender will provide the loan underwriting and servicing in exchange for the guarantee.

Pre-application Coordination:   None. This program is excluded from coverage under E.O. 12372.

Application Procedure:   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.

Award Procedure:   The RHS 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.

Deadlines:   The funding takes place on the basis of a Notice of Funds Availability. The final deadline for a FY 2001 NOFA is at 4:00 PM, Eastern Time on January 18, 2001, February 15, 2001, March 15, 2001, April 19, 2001, May 17, 2001, June 21, 2001, July 19, 2001, and August 16, 2001.

Range of Approval/Disapproval Time:   The review and award process is established at 60 days from the end of the NOFA.

Appeals:   Applicants may request reconsideration on the basis of pertinent fact concerning the application.

Renewals:   None.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:   None.

Length and Time Phasing of Assistance:   Not applicable.

POST ASSISTANCE REQUIREMENTS:

Reports:   Annual reports from the lender indicating the status and servicing actions taken. Copies of any reports required by the lender should be provided to RHS.

Audits:   As required by the lender.

Records:   Good business records and any records required by the lender.

FINANCIAL INFORMATION:

Account Identification:   12-0137-0-1-604.

Obligations:   (Loans) FY 01 $100,000,000; FY 02 est $100,000,000; and FY 03 est $100,000,000.

Range and Average of Financial Assistance:  
Not applicable.

In fiscal year 2001, the demonstration program became a NOFA, The Section 538 Guaranteed Rural Rental Housing Loan. There were 52 awards of loan requests resulting in 2,895 units.

REGULATIONS, GUIDELINES, AND LITERATURE:

Regulations were developed for the program and published in the Federal Register July 22, 1998, as interim final rule. The final rule was effective July 16, 1999.

INFORMATION CONTACTS:

Regional or Local Office:   See Regional Agency Offices. Consult your local telephone directory under U.S. Department of Agriculture for Rural Development county or district office numbers or visit the website http://offices.sc.egov.usda.gov/locator/app for a State Office listing.

Headquarters Office:   Director, Multifamily Guaranteed Loan Division 1400 Independence Avenue SW, Washington, District of Columbia 20250 Phone: (202) 720-1604

Web Site Address:  
http://www.rurdev.usda.gov

EXAMPLES OF FUNDED PROJECTS:

Not applicable.

CRITERIA FOR SELECTING PROPOSALS:

Provided in the NOFA.