Together, America Prospers

Multi-Family Housing Loan Guarantees

What does this 

program do?

The program works with qualified 

private-sector lenders to provide 

financing to qualified borrowers 

to increase the supply of 

affordable rental housing for 

low- and moderate-income 

individuals and families in eligible 

rural areas and towns.

Who may apply for this program?

Private lenders may apply for a loan 

guarantee on loans made to an eligible 

borrower who is unable to obtain 

commercial credit on reasonable 

terms without the guarantee.

Eligible lenders must be approved and 

active in one of the following programs:

• Fannie Mae, Freddie Mac, Ginnie Mae

• HUD

• Federal Home Loan Bank members

• State or local housing 

finance agencies

Eligible borrowers include:

• Most state and local 

governmental entities

• Nonprofit organizations

• For-profit organizations, 

including LLC’s

• Federally recognized Tribes

Additional requirements include:

• Rent for individual units is capped 

at 30 percent of 115 percent area 

median income.

• Average rent for an entire project 

(including tenant paid utilities) cannot 

exceed 30 percent of 100 percent 

of area medium income, adjusted 

for family size.

• Complexes must consist of at 

least five units.

• Complexes may contain units that 

are detached, semi-detached, row 

houses, or multi-family structures.

What is an eligible area?

Areas that may be served include:

Rural areas and towns with 

20,000 or fewer people - 

Check eligible addresses.

• Federally recognized Tribal lands.

How may funds be used?

Construction, improvement, and 

purchase of multi-family rental 

housing for low to moderate income 

families and individuals is the primary 

objective for this program. Funding 

may also be available for:

• Buying and improving land.

• Providing necessary infrastructure.

• For a complete list see 

Code of Federal Regulations, 

7CFR Part 3565.205.

What are the terms of a 

loan guarantee?

• The maximum guarantee is typically 

90 percent for for-profit entities and 

97 percent for nonprofit entities.

• Minimum term of 25 years and 

maximum term of 40 years.

• Interest rate negotiated between the 

lender and the borrower is fixed for 

the life of the loan guarantee.

Who will service the loan?

Loans guaranteed through this 

program are serviced through the 

private lender that makes the loan, just 

as they would be without a guarantee.
Multi-Family Housing Loan Guarantees

Who may live in the rental housing?

• Low- to moderate- income families

or individuals.

• Is there a list of qualified private

lenders in my area?

• Contact your RD office for a

current list of lenders participating

in the program.

How do we get started?

Applications for this program are 

accepted on an annual basis. A Notice 

of Funding Availability (NOFA) is 

posted in the Federal Register.

Who can answer questions?

Contact your State Rural Development 

office or you can find Rural Rental 

Properties here to apply as a tenant.

What governs this program?

• Code of Federal Regulation,

7CFR Part 3565

• HB-1-3565

• This program is authorized by

Title V of the Housing Act of 1949

NOTE: Because citations and other information may be subject to change, 

please always consult the program instructions listed in the section above 

titled “What Governs This Program?” You may also contact your local office for 

assistance. You will find additional forms, resources, and program information at 

rd.usda.gov. USDA is an equal opportunity provider, employer, and lender.

Last Updated January 2020