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State of New Mexico

State of New Mexico. Rural Development Housing Programs. Mission Statement. USDA Rural Development (RD) is dedicated to improving the quality of life for rural residents by ensuring that they have access to safe, well-built, and affordable homes

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State of New Mexico

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  1. State of New Mexico Rural Development Housing Programs

  2. Mission Statement • USDA Rural Development (RD) is dedicated to improving the quality of life for rural residents by ensuring that they have access to safe, well-built, and affordable homes • Through our local presence we promote partnerships based on local strengths and goals that develop and sustain healthy rural communities. • Our creative and collaborative efforts help honor the past and secure the future of rural life.

  3. MULTI-FAMILY HOUSING 515 RRH - Rural Rental Housing Loans 514/516 FLH - Farm Labor Housing Grant/Loan 538 GRRHP – Guaranteed Rural Rental Housing Program 533 HPG - Housing Preservation Grant SINGLE FAMILY HOUSING 502 - Direct Loan program 502 - Guaranteed Loan 504 – Housing Repair 523 – Mutual Self-Help Housing Loan Program 523/524 - Rural Housing Site Loan 525 TSA - Technical and Supervisory Assistance Grants 306C - Individual Water & Waste Grants Housing Programs

  4. MULTI-FAMILY HOUSING PROGRAMS

  5. RURAL RENTAL HOUSING SECTION 515

  6. Rural Rental Housing Section 515 • Notice of Funding Availability (NOFA) published annually in Federal Register announces: • funds availability • application deadline • eligibility requirements • $1M/project; $2.5M/State

  7. RRH Section 515 Con’t - Eligible Areas identified in a Place List - Competes Nationwide - Highly Leveraged in order to compete - Low Income Housing Tax Credits (LIHTC) /HOME funds can be used with 515

  8. RRH - 515 Con’t Purpose: • New Construction affordable housing for: - Very low-low and moderate income households - Elderly/Family Housing (Not Mixed) - Congregate, special needs or group homes - Cooperative Housing

  9. RRH - 515 Con’t • Eligible Entities: - Limited Partnerships/Partnerships - Non-profits/Native American Entities - Public Agencies - Individuals - For-Profit Corporations - Limited Equity Cooperatives

  10. RRH 515 Con’t • Rates/Terms - Underwrite at Note Rate - Subsidize to 1% - RA – Tenant pays 30% of adjusted income towards rent - Terms 30 Years/Amortized 50 years

  11. GUARANTEED RURAL RENTAL HOUSING PROGRAM SECTION 538

  12. Guaranteed Rural Rental Housing Program Section 538 • Guarantee to an eligible Lender - Fund construction of MFH units to be occupied by moderate income families - Household Incomes up to 115% of AMI - Revitilize/repair existing 515 of a minimum of $6500/unit (new)

  13. GRRH Section 538 Con’t - Works well with Low Income Tax Credits - Up to 90% Guarantee - Construction/Permanent loan - Interest Credit on up to $1.5M/loan - NOFA Process – - Term – 25 year minimum/40 year max - 5 year min. for balloon w/40 yr amortization

  14. GRRH Section 538 • Eligible Lenders • State or local HFA or member of Federal Home Loan Bank • HUD, Ginnie Mae, Fannie Mae, Freddie Mac are approved for multi-family housing loans • Any lender with demonstrated ability (originate, underwrite and manage)

  15. GRRH Sectio 538 • $2500 application fee • Initial guarantee fee of 1% of guarantee • Annual fee of 0.5% of principal balance • Secondary market opportunities • Fulfills CRA requirements

  16. FARM LABOR HOUSING LOAN AND GRANT PROGRAM SECTION 514/516

  17. Farm Labor Housing – Section 514/516 • Loan/Grants for New Construction • Not tied to Place List • May be in “Urban” Area • NOFA Process • $3M/Project • Applications must be complete w/market study

  18. FLH Section 514/516 Con’t • Eligible Entity: • Limited Partnership • public/ non-profits • Native American Tribe • Farmer or Association of Farmer • Family Farm Corporation • Association of Farm Worker

  19. FLH Section 514/516 Con’t • Grants awarded only to Non-profits, Indian Tribes, Public agencies. • Tenancy: Farm Worker or Retired Farm Worker • Rents are based on 30% of adjusted income

  20. FLH Section 514/516 Con’t • Rates/Terms: 1% for 33 Yrs • Grants up to 90% of TDC based on Budget • RA available only to LP’s w/no Grant • Highly Leveraged • RA can be awarded if no grant involved • Can combine w/LIHTC if loan made to a Limited Partnership with a Non-Profit General Partner

  21. HOUSING PRESERVATION GRANT PROGRAM SECTION 533

  22. Housing Preservation Grant – Section 533 • NOFA Process • Grant awarded to Grantee who in turn awards funds to a recipient • Highly Leveraged (HOME Funds) • Grantees to administer funds within a two year process

  23. HPG Section 533 Con’t • Highly Competative and based on score point • Statement of Work – identifies goals of grantee and is used for rating/ranking

  24. HPG Section 533 Con’t • Eligible Entity: • Public and Nonprofits • Local governments • Native American tribes • Purpose: Renovate (bring up to standard) existing MFH units or individual homes • NM’s allocation in 2006: $142,310

  25. Single-Family HousingPrograms

  26. Direct Single Family Housing Loan Section 502 • Eligibility: • Be without adequate housing • Be very low/low income households • Unable to obtain Credit Elsewhere • Repayment based on Ratios – within industry PITI • Payment Assistance - enhances repayment ability • Have reasonable credit histories

  27. Direct Loan Section 502 Con’tWho can participate? • Very low-income households • Below 50% of Area Median Income (AMI) • Low-income households • 50%-80% of AMI • Elderly and disabled persons • Up to 80% of AMI

  28. Direct Loan Section 502 Con’t Loan can be used in rural areas for: • Purchase existing home in rural area • Purchase site and construct a dwelling • Purchase newly constructed dwellings • Repair/rehabilitate a home • Relocate a home

  29. Direct Loan Section 502 Con’tTerms • Repayment period • 33 years (38 years for those with incomes below 60% of AMI and who cannot afford 33-year terms) • 30 years for manufactured homes • Interest rate • Set by RHS; currently the interest rate is 6.25% • Modified by payment assistance subsidy • No down payment • Loan can be for 100% of the appraised value of the house

  30. Single-Family HousingPrograms Loan Guarantees

  31. Loan GuaranteesHow does it work? • Approved lender makes a loan to qualifying borrower • Lender determines repayment feasibility using ratios • USDA Rural Development guarantees loan • The qualifying borrower must meet the following criteria: • Without adequate housing • Able to afford mortgage payments, taxes and insurance • Unable to obtain credit elsewhere/have reasonable credit history

  32. Loan GuaranteesWho can participate? • As an approved lender: • Any State housing agency • Lenders approved by: • HUD for submission of applications for Federal Housing Mortgage Insurance or as an issuer of Ginnie Mae mortgage backed securities • U.S. Veterans Administration as a qualified mortgagee • Fannie Mae for participation in family mortgage loans • Freddie Mac for participation in family mortgage loans • Any Farm Credit System (FCS) institution w/direct lending authority • Any lender participating in other USDA Rural Development and/or Farm Service Agency guaranteed loan programs

  33. Loan GuaranteesWho can participate? • As a qualifying borrower: • Moderate-income households • Income of up to 115% of the median income for the area / State

  34. Loan Guarantees What can the loan proceeds be used for? • Purchase an existing dwelling • Purchase a site and construct a dwelling • Purchase newly constructed dwellings located in rural areas • Manufactured housing must be permanently installed

  35. Loan GuaranteesTerms • Repayment period • 30 years • Interest rate • Fannie Mae published rate • No down payment required • Loan can be for 100% of the appraised value of the house

  36. Single-Family HousingPrograms Repair and Rehabilitation Loans and Grants

  37. Repair Loan and Grant Section 504 Who is Eligible • Loans: Very Low-Income Households • Grants: Homeowners who are: • 62 years or older • Unable to repay a Repair Loan • Grant / loan combinations: • Homeowners who are: • 62 years or older • Able to repay a portion of a Repair Loan

  38. Repair Loans and Grants Sec 504How can the funds be used? • Repairs that: • Improve a home • Modernize a home • Remove a safety hazard • Remove a health hazard • Renovation to: • Make a home accessible to someone with disabilities

  39. Loans Amount Up to $20,000 Repayment period Up to 20 years Interest rate 1% Grants Amount Up to $7,500 Repayment Must be repaid if the house is sold in less than 3 years Repair Loan and Grant – 504Terms

  40. Single-Family HousingPrograms Rural Housing Site Loans

  41. Rural Housing Site Loan – Section 523/524 • Loans to public or private non-profits to buy and develop building sites • Preparation of building sites can include: • Construction of access roads • Construction of streets • Installation of utilities

  42. Rural Housing Site LoansWho can participate? • Eligible Site Loan Recipient: • Public non-profit organizations • Private non-profit organizations • As an ultimate beneficiary, sites can be used for: • Section 523 limited to private or public non-profits that provide sites soley for self-help housing • Section 524 (Self-Help in conjunction w/Section 502) • Individual homeowners • Non-profit organizations • Public agencies • Cooperatives who provide financial assistance for housing to low- and moderate-income families

  43. Rural Housing Site LoansLoan Terms • Repayment period • 2 years • Interest rates • Section 523: 3% • Section 524: Market rate

  44. Single-Family HousingPrograms Mutual Self-Help Housing Program

  45. Mutual Self-Help Housing-523 How does it work? • 4-12 homes are built in a neighborhood • Families do 65% of the work on each other’s homes • Nobody can move in until all of the homes are completed • Must put in 30 hours of work each week • Qualifying non-profit/public entity acts as general contractor • Involves coordinating contractors needed for the technical work (i.e., plumbing, electrical, etc.) • Homes are usually financed through USDA Rural Development’s Direct Loan Program

  46. Self-Help Housing 523 Con’tPrograms Involved • Technical Assistance Grants • $10,000/$400,000 • Section 523 Rural Housing Site Loans • Direct Loans

  47. Self-Help Housing - 523Technical Assistance Grants • USDA Rural Development awards a grant to a qualifying non-profit or local government • The qualifying non-profit / local government provides technical assistance to the families building their homes • The grant can be used to pay salaries, rent, and office expenses

  48. Self-Help Housing- 523Section 523 Rural Housing Site Loans • To buy and develop building sites • This can include construction of access roads, streets and utilities • Terms of the loan: • Interest rate: 3% • Repayment period: 2 years

  49. Self-Help Housing - 523Who can participate? • As a qualifying borrower: • Very low to low-income households • Very low-income families living in substandard housing are given 1st priority • As a coordinator: • Non-profits • Public bodies

  50. Self-Help Housing Neighborhood

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