Section 538 Rural Rental Housing Guaranteed Loans


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.

General information about this opportunity
Last Known Status
Program Number
Federal Agency/Office
Rural Housing Service, Department of Agriculture
Type(s) of Assistance Offered
F - Guaranteed/Insured Loans
Program Accomplishments
Not applicable.
Housing Act of 1949, as amended, Section 538, Public Law 106-569, 42 U.S.C. 1490p-2.
Who is eligible to apply/benefit from this assistance?
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.
Eligible borrowers include: individual partnerships; profit and not-for-profit corporations; limited liability companies; trusts; State and local agencies; and Indian Tribes.
What is the process for applying and being award this assistance?
Pre-Application Procedure
Preapplication coordination is required. An environmental impact statement is required for this listing. An environmental impact assessment is required for this listing. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. This program is subject to environmental review pursuant to the National Environmental Policy Act (NEPA) of 1969.
Application Procedure
2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. 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 to the lender with conditions. Once the conditions are met the final Contract Guarantee will be issued.
Contact the headquarters or regional location, as appropriate for application deadlines
Approval/Disapproval Decision Time
Decisions on applications will normally be rendered within 60-120 calendar days of receipt of a complete application.
Applicants may appeal adverse decisions in accordance with 7 CFR Part 11, National Appeals Division.
How are proposals selected?
Provided in the Notice of Funding Availability (NOFA) or Notice of Solicitation of Applications (NOSA)
How may assistance be used?
The guarantee will encourage the construction of new or rehabilitation of existing rural rental housing and appropriate related facilities. Housing as a general rule will consist of projects with five or more dwellings.
What are the requirements after being awarded this opportunity?
Performance Reports: Annual borrower financial statements are required to be provided to the Agency by the lender.
As required by the lender and program regulations.
Good business records and any records required by the lender. These records must be kept for a minimum of seven years after the loan's maturity date.
Other Assistance Considerations
Formula and Matching Requirements
Statutory formula is not applicable to this assistance listing.

Matching requirements are not applicable to this assistance listing.

MOE requirements are not applicable to this assistance listing.
Length and Time Phasing of Assistance
Not applicable. The funding takes place as outlined in the Notice of Solicitation of Applications (NOSA)
Who do I contact about this opportunity?
Regional or Local Office
Consult your local telephone directory under U.S. Department of Agriculture for Rural Development or visit the website for an Office listing.
Headquarters Office
Production and Preservation Division
USDA Rural Development
1400 Independence Avenue SW
Room 5017
Washington, DC 20250 US
Phone: (202) 400-0127
Website Address
Financial Information
Account Identification
(Guaranteed/Insured Loans) FY 22$250,000,000.00; FY 23 est $400,000,000.00; FY 24 est $400,000,000.00; FY 21$229,960,374.00; FY 20$230,000,000.00; FY 19$160,390,000.00; FY 18$185,639,985.00; -
Range and Average of Financial Assistance
Not Applicable.
Regulations, Guidelines and Literature
The Final Rule, 7 CFR 3565, became effective January 19, 2005. Also available in the Guaranteed Rural Rental Housing Program Origination and Servicing Handbook.
Examples of Funded Projects
Not applicable.


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