Rural Development's Rural Housing Site Loans

by U.S.D.A.

Rural Housing Site Loans are made by USDA Rural Development's Rural Housing Service (RHS) to eligible organizations (which includes nonprofit organizations, public bodies and Federally-recognized Indian groups) to provide financing for the purchase and development of affordable housing sites in rural areas (areas of less than 10,000 population) for low- and moderate-income families.

Eligibility:

Section 523 loans are limited to private or public nonprofit organizations that will provide sites solely for self-help housing. Section 524 loans are made to private or public nonprofit organizations. Section 524 sites may be sold to low- or moderate-income families utilizing RHS or any other mortgage financing program which serves the same eligible families.

Purpose:

Rural Housing Site Loans are made to provide financing for the purchase and development of housing sites (including the construction of essential access roads, streets, utility lines, and necessary equipment and waste disposal facilities are not available and cannot reasonably be provided on a community basis with other financing, including Water and Waste Disposal association loans), funds may be for low- and moderate-income families. Section 523 loans are made to acquire and develop sites only for housing to be constructed by the self-help method. Section 524 loans are made to acquire and develop sites for any low- or moderate-income family. Low income is defined as between 50 and 80 percent of the area median income (AMI); the upper limit for moderate income is $5,500 above the low-income limit.

Loan Limits:

No RHS loan(s) will be made to any applicant which will result in the applicant's owing an unpaid principal balance of more than $100,000 unless prior authorization for a larger loan is obtained from the Rural Development's National Office; the loan will exceed the development cost; or, the value of the property as improved with the loan unless the excess amount will be recovered through assured refunds before the maturity of the loan, from sources such as utility companies for facilities initially financed with the RHS loan. These limitations also apply to cases in which the same persons hold a majority of the membership interests or constitute a majority of the directors of two or more applicants.

Note: State Directors may approve site loans for up to $200,000. Larger loans require prior approval of the National Office.

Suitability of Sites:

Sites will meet the requirements of the planned use; for example, individual housing or multiple housing or any combination thereof. Building sites must be well located and designed to provide a desirable living environment. Generally a loan will not be made for the development of less than 10 units, but they need not be contiguous.

Terms:

Loans are for two years. Section 523 loans bear three (3) percent interest. At the discretion of the customer, Section 524 loans bear the market rate of interest either at the time of approval or at the time of the loan closing.

Loan Repayment:

The sale price of each individual site will be based on its appraised value and will not be more than a sufficient amount to pay a proportionate part of the RHS loan and any other actual costs of buying, developing, and selling the building site.

The proceeds from sale of the building sites will be applied on the USDA Rural Development's Rural Housing Service (RHS) loan and any prior lien(s) or, with the prior approval of the National Office, used in a manner consistent with the purpose of the loan and the security interest of the Government. The sites will be released from the mortgage in accordance with prior approval of the Area, State Office, or, the National Office.

How to apply or more Information:

You may contact the USDA Rural Development Single Family Housing Division for the State of Georgia at:
USDA Rural Development
Rural Housing Division (Stop 306)
Stephens Federal Building
355 East Hancock Avenue
Athens, Georgia 30601
Phone: 1-706-546-2169