Program 101

Program Status: OPEN
Application Deadline: 12:00 p.m. Eastern Time, December 31, 2017
Notice of Funding Availability (pdf) | Posted: March 14, 2016

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 LLC's
  • 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:

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 (1)

Is there a list of qualified private lenders in my area?
Contact your Rural Development office for a current list of lenders participating in the program.

How do we get started?
Applications for this program are accepted on an annual basis. A Notice of Funding Availability (NOFA) is posted in the Federal Register

Who can answer questions?
Contact your State Rural Development office or you can find Rural Rental Properties here to apply as a tenant.

What governs this program?

NOTE: Because citations and other information may be subject to change please always consult the program instructions listed in the section above titled "What Law Governs this Program?" You may also contact your local office for assistance.

(1) Low to moderate income: At initial occupancy, tenants' income cannot exceed 115% of the area median income adjusted for family size.

Printable Fact Sheet

Forms & Resources

NOTE: If state specific forms are not shown above, please ensure that your state is selected in the dropdown menu above to find the State Office contact information and speak to a Housing Programs Specialist before attempting to fill out any forms or applications. This will save you valuable time in your application.

NOSA Response Form (pdf).  Use this electronic Response Form to submit a pre-application for the Section 538 Guaranteed Rural Rental Housing NOSA published on March 14, 2016. Ending date: December 31, 2017 at 12:00 noon Eastern Time.

NOFA Responses (pdf)

Engineering

Individual states may have particular requirements based on state and local regulations. Please contact the state office in the state where your project is located.

Environmental

Rural Development environmental requirements can be found here: RD 1970 Environmental Policies and Procedures. Benefits of the 1970 environmental regulations are described here: 7 CFR 1970 Benefits.

Architect

Individual states may have particular requirements based on state and local regulations. Please contact the state office in the state where your project is located.

Contacts

USDA RD State Office
3001 Coolidge Rd.
Suite 200
East Lansing, MI 48823
517-324-5190 | Fax 855-813-7741

Toll-Free: (800) 944-8119

James J. Turner
State Director

Assistant to the State Director
Cristina Stanley
517-324-5207

Public Information Coordinator
Alec Lloyd
517-324-5204

Community Programs Staff
517-324-5156

Single Family Housing Staff
517-324-5210

Business Programs Staff
517-324-5157

Multi-Family Housing Staff
517-324-5142

Gladstone Area Office
2003 Minneapolis Ave.
Gladstone, MI 49783
906-428-1060 Ext. 4

Sault Ste. Marie Office
2847 Ashmun
Sault Ste. Marie, MI 49783
906-632-9611 Ext. 4

Traverse City Area Office
1501 Cass St., Suite A
Traverse City, MI 49684
231-941-0951 Ext. 4

West Branch Office
240 W. Wright St.
West Branch, MI 48661
989-345-5470 Ext. 4

Caro Area Office
1075 Cleaver Rd.
Caro, MI 48723
989-673-8173 Ext. 6

Grand Rapids Area Office
3260 Eagle Park Dr., Suite 107
Grand Rapids, MI 49525
616-942-4111 Ext. 6

Paw Paw Office
1035 East Michigan Ave., Suite A
Paw Paw, MI 49079
269-657-7055 Ext. 4

Mason Area Office
525 N. Okemos St., Suite B
Mason, MI 48854
517-676-1808 Ext. 4

Flint Office
1525 North Elms Rd.
Flint, MI 48532
810-230-8766 Ext. 4