Content provided by the Catalog of Federal Domestic Assistance
10.438 Section 538 Rural Rental Housing Guaranteed Loans
RURAL HOUSING SERVICE (RHS), DEPARTMENT OF AGRICULTURE
Housing Act of 1949, as amended, Section 538, Public Law 104-180, 42 U.S.C. 1490a.
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:
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.
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.
Pre-application Coordination: None. This program is excluded from coverage under E.O. 12372.
Formula and Matching Requirements: None.
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.
Account Identification: 12-0137-0-1-604.
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.
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.
Regional or Local Office: See Regional Agency Offices. Consult your local telephone directory under U.S. Department of Agriculture for Rural Development county or district office numbers or visit the website http://offices.sc.egov.usda.gov/locator/app for a State Office listing.
EXAMPLES OF FUNDED PROJECTS:
CRITERIA FOR SELECTING PROPOSALS:
Provided in the NOFA.