What does this program do?
The program works with qualified private-sector lenders to provide financing to qualified borrowers to increase the supply of affordable rental housing for low- and moderate-income individuals and families in eligible rural areas and towns.

Who may apply for this program?
Private lenders may apply for a loan guarantee on loans made to eligible borrowers who are building or preserving affordable rural rental housing.

Eligible lenders are automatically eligible if approved and active in one of the following programs:

• Fannie Mae, Freddie Mac, Ginnie Mae
• HUD
• Federal Home Loan Bank members
• State or local housing finance agencies

Eligible borrowers include:

• Most state and local governmental entities
• Nonprofit organizations
• For-profit organizations, including LLCs
• Federally-recognized Tribes

Additional requirements include:

• Rent for individual units is capped at 30% of 115% area median income
• Average rent for an entire project (including tenant paid utilities) cannot exceed 30% of 100% of area medium income, adjusted for family size
• Complexes must consist of at least five units
• Complexes may contain units that are detached, semi-detached, row houses or multi-family structures

What is an eligible area?
Areas that may be served include:

• Rural areas and towns with 35,000 or fewer people — Check eligible addresses
• Federally-recognized tribal lands

How may funds be used?
Construction, improvement and purchase of multi-family rental housing for low to moderate income families and individuals is the primary objective for this program.

Funding may also be available for:

• Buying and improving land
• Providing necessary infrastructure

For a complete list see Code of Federal Regulations, 7CFR Part 3565.205.

What are the terms of a loan guarantee?

• The Agency offers guarantees of up to 90% of the loan amount
• For-profit entities may borrow up to 90% and non-profit entities may borrow up to 97% of the total development cost or appraised value, whichever is less
• Minimum term of 25 years and maximum term of 40 years
• Interest rate negotiated between the lender and the borrower is fixed for the life of the loan guarantee

Who will service the loan?
Loans guaranteed through this program are serviced through the private lender that makes the loan, just as they would be without a guarantee.

Who may live in the rental housing?

• Low- to moderate- income families or individuals