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Understanding the USDA Multifamily Housing Loan Guarantees Program




Opening Opportunities for Affordable Rural Housing


The USDA Multifamily Housing Loan Guarantees program is a pivotal initiative aimed at increasing affordable rental housing for low- to moderate-income individuals and families in eligible rural areas. As of 2024, this program stands open for continuous application, providing an ongoing opportunity for private lenders and eligible borrowers.


Program Highlights

Continuous Application: The program accepts applications year-round, ensuring no missed opportunities.


Federal Register Notices: Key updates include the Notice of Funding Availability Elimination (10/15/2019) and updates in competitive lender submissions (4/28/2023).

Revised Fees: Effective from April 4, 2022, new Initial and Annual Guarantee fees have been announced.


Eligibility and Application

Applicant Scope: Private lenders, state and local governmental entities, non-profits, for-profits including LLCs, and Federally-recognized Tribes.

Eligible Areas: Rural areas and towns with populations of 35,000 or fewer, and Federally-recognized tribal lands.

Usage of Funds: Funds can be used for construction, improvement, and purchase of multi-family rental housing, land acquisition, and infrastructure.


Loan Guarantee Terms

Guarantee Limits: Up to 90% for for-profits and 97% for non-profits of total development cost or appraised value.

Loan Terms: Minimum 25 years to a maximum of 40 years with fixed interest rates.

Servicing: Loans are serviced through the private lender.


Tenant Eligibility

Income Requirements: Tenants' income at initial occupancy cannot exceed 115% of the area median income, adjusted for family size.


How MMCG Can Help

MMCG, with its expertise in feasibility studies, stands as a valuable ally for those navigating the USDA Multifamily Housing Loan Guarantees program. Feasibility studies are crucial in assessing the viability of proposed projects, ensuring they align with program requirements and area needs. MMCG's role includes:

Project Assessment: Evaluating the potential success and impact of a proposed housing project.

Financial Analysis: Analyzing the financial aspects to ensure alignment with USDA program terms and profitability.

Regulatory Compliance: Ensuring the project complies with all USDA regulations and guidelines.

Risk Management: Identifying and mitigating potential risks associated with the project.


Getting Started

To begin the application process or for inquiries, applicants are advised to contact their regional coordinator or consult the Contact tab for specific guidance. The program is governed by various regulations, including the Code of Federal Regulation, 7 CFR Part 3565, and is authorized by Title V of the Housing Act of 1949.


Conclusion

The USDA Multifamily Housing Loan Guarantees program offers a significant opportunity to develop affordable housing in rural areas. With the continuous application process and comprehensive support from MMCG in conducting feasibility studies, private lenders and eligible borrowers are well-positioned to contribute positively to rural communities. This initiative not only promotes affordable housing but also drives community development and economic growth in rural America.

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