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Catalog of Federal Domestic Assistance

Program Descriptions

CATALOG OF FEDERAL DOMESTIC ASSISTANCE

10.438: Section 538 Rural Rental Housing Guaranteed Loans

Objectives: 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.

PROGRAM AND AWARD FINANCIAL AND INFORMATION CONTACTS

ELIGIBILITY REQUIREMENTS FINANCIAL AND ADMINISTRATIVE INFO.

APPLICATION AND AWARD PROCESS INFORMATION CONTACTS

RELATED PROGRAMS ASSISTANCE CONSIDERATIONS

PROGRAM ACCOMPLISHMENTS POST ASSISTANCE REQUIREMENTS

10.438 ELIGIBILITY REQUIREMENTS:

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.

Beneficiary Eligibility: Occupants must be very-low, low- or moderate-income households, elderly, handicapped, or disabled persons with income not in excess of 115 percent of the Median Income.

Credentials/Documentation: The loans must be made to entities or individuals that meet the underwriting requirements of the lender and will provide the housing to eligible occupants. The lender will provide the loan underwriting and servicing in exchange for the guarantee.

10.438 APPLICATION AND AWARD PROCESS:

Preapplication Coordination: None. This program is excluded from coverage under E.O. 12372.

Application Procedure: 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: The RHS will review all the applications for compliance with the program requirements and issue the Conditional Commitment of Guarantee with conditions. Once the conditions are met the final Contract of Guarantee will be issued.

Deadlines: The funding takes place on the basis of a Notice of Funds Availability. The final deadline for a FY 2000 NOFA is at 4:00 PM, Eastern Time on May 8, 2000. In the event that there are insufficient funds available in either selection pool, priorities will be assigned to the FOFA responses on the basis of the criteria assigned in 7 CFR 3565.5(b) and in paragraph VI, "Selection Criteria" of the NOFA. In order for the NOFA response to be complete, a Form RD 1940-20, "Request for Environmental Information" must be included. For additional Information, see VII (A) of the NOFA.

Range of Approval/Disapproval Time: The review and award process is established at 60 days from the end of the NOFA.

Appeals: Applicants may request reconsideration on the basis of pertinent facts concerning the application.

Renewals: None.

Criteria for Selecting Proposals: Provided in the NOFA.

Examples of Funded Projects: Not applicable.

Range and Average of Financial Assistance: Not applicable.

10.438 RELATED PROGRAMS:

None.

10.438 PROGRAM ACCOMPLISHMENTS:

In fiscal year 1999, the demonstration program became a NOFA, the Section 538 Guaranteed Rural Rental Housing Loan. There were 51 awards of loan requests resulting in 2,540 units.

10.438 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency: RURAL HOUSING SERVICE (RHS), (DEPARTMENT OF AGRICULTURE )

Type of Assistance: Guaranteed/Insured Loans.

Obligations: (Loans) FY 99 $74,817,000; FY 00 est $100,000,000; and FY 01 est $200,000,000.

Budget Account Number: 12-0137-0-1-604.

Authorization: Housing Act of 1949, as amended, Section 538, Public Law 104-180, 42 U.S.C. 1490a.

Regulations, Guidelines, and Literature: Regulations are developed for the program and are published in the Federal Register July 22, 1998, as interim final rule. Final rule was effective July 16,1999.

10.438 INFO CONTACTS:

Regional or Local Office: Consult your local phone directory for RD county or district office number. If no listing, get in touch with appropriate RD State office listed in Appendix IV of the Catalog or on the internet at www.rurdev.usda.gov/recd_map.html.

Headquarters Office: Director, Multi-Family Housing Processing Division, Rural Housing, Department of Agriculture, Washington, DC 20250. Phone (202) 720-1604. Use the same number for FTS. (Home Page)

(See Appendix IV for more contact info.)

10.438 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements: None.

Length and Time Phasing of Assistance: Not applicable.

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.

10.438 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.

Audits: As required by the lender.

Records: Good business records and any records required by the lender.