Rural Rental Housing Guaranteed Loans (538)

  • Meleah Smith
  • Housing Program Director
  • USDA Rural Development
  • 2118 West Park Court, Suite A,
  • Champaign, IL 61821
  • Phone: 217-403-6229
  • Email:
  • Website Link:

Purpose of the Program

The purpose of this program is to provide safe, well-built, affordable rental housing for very low and low income individuals and families through new construction or rehabilitation of rental housing. The program encourages commercial financing of rural rental housing by providing loan guarantees to lenders.

Who is Eligible

The project must be in a rural area, typically cities with a population of less than 20,000. Projects must consist of at least 5 rental units.

Application Process

An interested lender submits a NOFA response briefly describing the project including evidence of site control.

Availability of Funds

The 538 program is lender-driven. $130m in guarantees are available in FY 2012.

How Funds are to be used

Funds may be used for construction of new rental housing, and the acquisition and rehabilitation of existing rural rental housing. Funds may also be used for the rehab/acquisition of an existing rental property (minimum $6,500 per unit rehab).

Types of Assistance

Loan guarantee

Year Program was established