Section 538 Rural Rental Housing Guaranteed Loans (10.438)

Program

10.438 Section 538 Rural Rental Housing Guaranteed Loans

Federal Agency

Agency: Department of Agriculture
Office: Rural Development

Authorization

Housing Act of 1949, as amended, Section 538, Public Law 106-569, 42 U.S.C. 1490p-2.

Program Number

10.438

Last Known Status

Active

Objectives

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

GUARANTEED/INSURED LOANS

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.

Eligibility Requirements

Applicant Eligibility

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.

Beneficiary Eligibility

Occupants must be families or persons with income not in excess of 115 percent of the Median Income at the time of initial occupancy.

Credentials/Documentation

Eligible borrowers include: individual partnerships; profit and not-for-profit corporations; limited liability companies; trusts; State and local agencies; and Indian Tribes. This program is excluded from coverage under OMB Circular No. A-87.

Application and Award Process

Preapplication Coordination

This program is subject to environmental review pursuant to the National Environmental Policy Act (NEPA) of 1969. An environmental impact assessment is required for this program. This program is excluded from coverage under E.O. 12372.

Application Procedure

This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110. 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

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.

Deadlines

Contact the headquarters or regional office, as appropriate, for application deadlines.

Range of Approval/Disapproval Time

The review and award process is established at 60 days from the end of the NOFA.

Appeals

Applicants may appeal adverse decisions in accordance with 7 CFR Part 11, National Appeals Division.

Renewals

None.

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula.

This program has no matching requirements.

MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

Not applicable. See the following for information on how assistance is awarded/released: The funding takes place as outlined in the Notice of Funding Availability.

Post Assistance Requirements

Reports

Audits

This program is excluded from coverage under OMB Circular No. A-133. As required by the lender and program regulations.

Records

Good business records and any records required by the lender.

Program Accomplishments

Not Applicable.

Financial Information

Account Identification

12-0137-0-1-604.

Obligations

(Guaranteed/Insured Loans) FY 08 $132,400,000; FY 09 est $129,100,000; FY 10 est $129,000,000

Range and Average of Financial Assistance

Not applicable.

Regulations, Guidelines and Literature

The Final Rule, 7 C.F.R. 3565, became effective January 19, 2005. Also available in the Guaranteed Rural Rental Housing Program Origination and Servicing Handbook.

Related Programs

Not Applicable.

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, Multi-Family Housing Processing Division, Rural Development U.S. Department of Agriculture, 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 Notice of Funding Availability.