Rural Resource Guides
Shawn Poynter / There Is More Work To Be Done
Shawn Poynter / There Is More Work To Be Done
Housing Application Packaging Grants [Section 509(f)(6)]
INTRODUCTION
The Rural Housing Service (RHS) is an agency in the U.S. Department of Agriculture (USDA). It operates a broad range of programs that were formerly administered by the Farmers Home Administration to support affordable housing and community development in rural areas. The RHS National Office is located in Washington, D.C., and is responsible for setting policy, developing regulations, and performing oversight. RHS employs a central computerized collection and servicing system called DLOS. RHS loans are both direct (made and serviced by USDA staff) and guaranteed for mortgages extended by others. In the field RHS operations are carried out through the USDA’s Rural Development offices. Rural Development State Offices administer programs in a state or multistate area. The organization of Rural Development offices within a state varies, but typically Area or District Offices supervise Local Offices (also termed county or community development offices) and do the processing and servicing of organizational loans and grants. Local Offices process single family housing applications, assist District Offices with organizational applications and servicing, and provide counseling to applicant families and backup servicing as needed.
HOUSING APPLICATION PACKAGING GRANTS [SECTION 509(f)(6)]
Purpose
Section 509(f)(6) provides packaging grants to enable eligible organizations to help RHS make loans and grants in 523 counties and colonias in 26 states, Puerto Rico, the U.S. Virgin Islands, and Western Pacific Territories. Designated counties have a minimum of 10 percent occupied substandard housing and a 20 percent poverty rate. Colonias are “identifiable communities” in Arizona, California, New Mexico and Texas that are within 150 miles of the U.S. Mexico border and that lack decent water and sewage systems and decent housing.
Eligibility
States, state agencies, units of local government, and private nonprofit organizations are eligible to apply. RHS publishes an annual list of the eligible areas.
Terms
Eligible organizations must attend RHS training sessions annually and become certified or recertified as packagers.
Grant Amounts
Grant amounts vary by loan type as follows:
1. Single-family housing loans and grants (Section 502/504): $500
2. On-farm Section 514 farm labor housing loans: $500
3. Multifamily housing loans and grants (including 514/516):
|
Loan Amount |
Packaging Fee Calculation |
|
to $400,000 |
1.6 percent |
|
$400,000 – $800,000 |
add 1.2 percent |
|
$800,001 – $1,200,000 |
add 1.0 percent |
|
$1,200,001 – $1,600,000 |
add 0.7 percent |
|
$1,600,001 – $2,000,000 |
add 0.5 percent |
|
above $2,000,000 |
no additional amount |
4. Section 524 site loans: 1 percent of the loan amount
5. Section 533 Housing Preservation Grants: 2 percent of the grant amount
Reimbursement
The reimbursement schedule depends on loan type.
1. Single-family housing – payable when complete packaging requirements are met.
2. On-farm labor housing–payable when complete packaging requirements are met.
3. Section 515 and 514/516 multifamily housing–payable in three installments:
a. 25 percent at filing of complete preapplication
b. 20 percent at filing of complete application
c. Balance at loan approval from loan funds
4. Section 524–payable in two installments:
a. 30 percent after RHS review of preapplication
b. 70 percent upon completion of full docket
5. Section 533–payable in two installments:
a. 40 percent upon receipt of an AD-622 inviting a full application
b. 60 percent after grant closing
Other
State Directors will announce annually, via advertising, a request for packaging services for the applicable counties, including the number needed by program type. The same announcement will include a packaging training date. Announcements will be made some time between October 1 and December 31 each year.
Basic Instructions
Instruction 1944-B
Instruction 1940-L
ADDITIONAL INFORMATION
For additional information on Housing Application Packaging Grants and RHS, contact the RHS National Office, 1400 Independence Avenue, S.W., Room 5037S, Washington, DC 20250; 202-720-4323. Contact your Rural Development State Office to find out the location of the Local Office closest to you. (To find your state office, visit https://www.rurdev.usda.gov/recd_map.html.) To obtain copies of RHS regulations, contact your Rural Development State offices or write to Rural Development, FC-313, 1520 Market Street, St. Louis, MO 63103. The regulations are also available on-line at https://rurdev.usda.gov/regs.
For a complete list of HAC’s publications, on RHS and other topics, click here and for a list of HAC Information Sheets, click here.
This Information Sheet was prepared by the Housing Assistance Council. The work that provided the basis for this publication was supported by funding from the Ford Foundation and funding under Cooperative Agreement H-5925 CA with the U.S. Department of Housing and Urban Development. The substance and finding of that work are dedicated to the public. The publisher is solely responsible for the accuracy of the statements and interpretations contained in this publication and such interpretations do not necessarily reflect the views of the government.