Section 538 Rural Rental Housing Guaranteed Loans (10.438)
Program
10.438 Section 538 Rural Rental Housing Guaranteed Loans
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.
Program Number
10.438
Last Known Status
Active
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.
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.
Application and Award Process
Preapplication 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
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.
Program Accomplishments
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.
Financial Information
Account Identification
12-0137-0-1-604.
Obligations
(Loans) FY 02 $100,000,000; FY 03 est $100,000,000; and FY 04 est $100,000,000.
Range and Average of Financial Assistance
Not applicable.
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.
Related Programs
None.
Information Contacts
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.
Headquarters Office
Director, Multi-Family Housing Processing Division, Rural Housing, Department of Agriculture, Washington, DC 20250. Telephone (202) 720-1604. Use the same number for FTS.
Web Site Address
Examples of Funded Projects
Not applicable.
Criteria for Selecting Proposals
Provided in the NOFA.
