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**[Rural Housing Site Loans]{.underline}**

*USDA Rural Development makes loans to finance building sites, which may
be developed into desirable residential communities. The sites must be
in rural areas and must be sold on a nonprofit basis. Rural areas
include open country and places with a population of 10,000 or less that
are rural in character and not closely associated with urban areas.
Loans may be made in towns with populations under 20,000. Rural Housing
site loans are authorized under Section 523 and 524 of the Housing Act
of 1949, as amended. Section 523 sites are for housing to be built by
the self-help method. Section 524 sites have no limitation on the method
of home construction.*

**Who May Receive A Loan?**

Loans may be made to public or private local nonprofit organizations
with legal authority to buy, develop and sell home sites to eligible
applicants.

Each applicant must provide evidence of need for the proposed sites and
information as to the number of sites to be developed and the estimated
development cost.

Applicants should not start work or incur obligations in connection with
the project before the loan is closed.

**Who May Buy Sites?**

Sites developed with a Section 523 loan may be sold only to qualified
families who will build homes by the self-help method.

Sites developed with a Section 524 loan may be used for dwellings for
low and moderate income families and may be sold to families, nonprofit
organizations, public agencies and cooperatives eligible for assistance
under any law which provides financial aid for housing. Such agencies
include USDA Rural Development, HUD, VA, private lenders, nonprofit
organizations funded by federal, state or local governments, or state
and local public agencies.

**What Are The Loan Terms?**

-   Repayment is expected within two years.

-   The interest rate for Section 523 loans is three percent.

-   The interest rate for Section 524 loans is determined annually.

**How May Loan Funds Be Used?**

Funds may be used to:

-   Buy and develop building sites, including construction of essential
    access road, streets, and utilities that become permanent features
    of the development.

-   Pay engineering and legal fees and actual cost of incidental
    administrative expenses such as postage, telephone, advertising and
    temporary secretarial help, provided funds for these expenses are
    not otherwise available.

Funds may NOT be used to:

-   Buy land in excess of immediate needs in the locality.

-   Buy land directly or indirectly from a member of the applicant
    organization unless prior USDA Rural Development consent has been
    obtained.

-   Develop lots that are excessive in cost or unsuitable for the type
    of housing needed and planned.

**What Security Is Required?**

Each loan will be adequately secured to protect the interest of the
government. Loans will be secured by liens on property purchased or
improved with the loan.

**Where Is Application Made?**

Applications for loans are made at the local offices of USDA Rural
Development. The office staff will be glad to discuss services available
from the agency and explain how to prepare a written application. All
applications are considered without regard to the race, color, religion,
age, sex, marital status, handicap or nation origin of the applicant and
benefits that accrue from use of the funds must be available to all on
the same basis.

U.S. Department of Agriculture

Rural Development - Rural Housing Program

(Revised December 2007)

National Office Web Site: http://www.rurdev.usda.gov\
South Dakota Web Site: http://www.rurdev.usda.gov/sd/

South Dakota State Office Telephone Number: (605) 352-1100

South Dakota State Office Facsimile Number : (605) 352-1146

South Dakota State Office TDD Number : (605) 352-1147

E-Mail Address: tammi.schone@sd.usda.gov

*The U.S. Department of Agriculture (USDA) prohibits discrimination in
all its programs and activities on the basis of race, color, national
origin, age, disability, and where applicable, sex, marital status,
familial status, parental status, religion, sexual orientation, genetic
information, political beliefs, reprisal, or because all or part of an
individual\'s income is derived from any public assistance program. (Not
all prohibited bases apply to all programs.) Persons with disabilities
who require alternative means for communication of program information
(braille, large print, audiotape, etc.) should contact USDA's TARGET
Center at (202) 720-2600 (voice and TDD). To file a complaint of
discrimination, write to USDA, Director, Office of Civil Rights, 1400
Independence Avenue, S.W. Washington, D.C. 20250-9410, or call (800)
795-3272 (voice), or (202) 720-6382 (TDD). "USDA is an equal opportunity
provider, employer, and lender." (RHS-5)*