RD Multi-Family Program « Back to Search Results
RD Multi-Family Program

Category: Federal Incentives, Grants & Loans


AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service
DESCRIPTION: This program, also known as the Rural Rental Housing or Section 515 Loan Program, was developed by the RD. The Multi-Family Program offers direct and guaranteed loans for purchasing, constructing and/or repairing multi-family housing units for households with very low, low- and moderate-incomes.
ELIGIBLE USE:
• The purchase, construction or repair of multi-family housing units, including duplexes, garden apartments and similar type units are eligible.
• Purchase and improvements of the land on which housing units will be located.
• Improvement of on-site streets, water and waste disposal systems.
• Development of recreational and service facilities.
• Install laundry facilities and equipment.
• Provide landscaping. 
PROGRAM/LOAN STRUCTURE:
• Maximum Program Benefits: The Direct Loan finances up to 100% of the appraised value or development cost, whichever is less, for non-profits, and state and local public agencies. Up to 95% or 97% financing on the lesser of appraised value or development cost is available to private, for-profit developers, depending on whether tax credits will be available.
• Equity: Eligible borrowers must demonstrate and provide initial operating capital equal to at least 2% of the total development cost. Non-profits and public agencies may include the 2% in the financing, but may also have to finance up to 5% of initial cost.
• Maturities: Up to 30 years maximum, with 50-year amortization.
• Rates: One% minimum interest rate, below market rates are available for borrowers in accordance with the market rent structure.
• Fees: The borrower is responsible for closing costs and other fees. Such costs may be loan eligible.
QUALIFICATION CRITERIA/COMMENTS:
• Eligible borrowers include individuals, trusts, associations, partnerships, corporations, state and local public agencies, consumer cooperatives, for-profit and non-profit organizations, and Indian Tribes.
• Projects located in communities with populations of less than 20,000 are eligible.
• Ineligible uses of the program include commercial properties and communities over 20,000 in population.
• A complete loan application must include financial information, market feasibility plans and specifications, ownership and management experience, and demonstration of financial need.
• Applications are accepted under a NOFA process for designated states.
• RD Area Offices and the State Office receive and review applications.
• For more information, visit http://www.rurdev.usda.gov/ or call (202) 690-1522.
 


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