Rural Rental Housing Program (Section 515)
Rural Rental Housing Loans are direct, competitive mortgage loans made to provide affordable multifamily rental housing for very low-, low-, and moderate-income families; the elderly; and persons with disabilities. This is primarily a direct mortgage program, but its funds may also be used to buy and improve land and to provide necessary facilities such as water and waste disposal systems.
In new Section 515 projects, 95 percent of tenants must have very low incomes. In existing projects 75 percent of new tenants must have very low incomes.
Variations: There are four variations of the Section 515 loan program. They are Cooperative Housing, Downtown Renewal Areas, Congregate Housing or Group Homes for Persons with Disabilities, and the Rural Housing Demonstration Program.
Loans are for up to 50 years at an effective 1% interest rate. A current rate is used for the promissory note but thereafter is used only to determine maximum rent payments.
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