538 Guaranteed Rural Rental Housing Program
Construction and permanent loans for affordable rental developments in an eligible rural area.
Individuals, corporations, state or public agencies or instrumentality thereof, partnerships, limited liability companies, trusts and Indian tribes.
New construction, substantial rehabilitation or acquisition of projects having no less than five units per site. Must meet design and site development standards.
Fee simple and lease is acceptable if it meets all requirements.
MFA mortgage must be the first lien on the property. Secondary financing allowed, subject to MFA approval.
Current interest rate estimates are available upon request. Actual rates are based on market rates and are fixed prior to loan closing or bond issue date. Advance rate locks are also available, at an additional cost to the borrower.
Not to exceed 40 years.
Limited, subject to the terms of the loan funding source. Use restrictions may extend beyond the time of prepayment, depending on the provisions of the regulatory agreement.
Latent defects reserve of 2.5% of initial loan amount, operating deficit reserve or sustaining occupancy prior to permanent loan closing, and ongoing replacement reserve contributions.
Completion of repairs or escrow of 150% of repair costs, latent defects reserve of 2.5% of initial loan amount, and initial replacement reserve based on MFA reserve needs study. Operating deficit reserve or sustaining occupancy prior to permanent loan closing, and ongoing replacement reserve Contributions are required.
100% of the units must be rented to households whose annual income does not exceed 115% of area median income, adjusted for family size as determined by HUD.
Rents plus utility costs for the units set aside for households earning no more than 115% of median income shall not exceed 30% of the median income levels specified.