Apartment Building

USDA Rental Insurance Program

Rental assistance may be used in both existing and newly constructed HCFP Rural Rental Housing (Section 515) or Farm Labor Housing (Section 514) financed projects. Projects must be established on a nonprofit or limited profit basis.


Persons with very low and low incomes, the elderly, and persons with disabilities are eligible if they are unable to pay the basic monthly rent within 30 percent of adjusted monthly income. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is established by adding $5,500 to the low-income limit.

Use of Funds

The Rural Rental Assistance (RA) program provides an additional source of support for households with incomes too low to pay the HCFP subsidized (basic) rent from their own resources. HCFP pays the owner of a multi-family housing complex the difference between the tenant's contribution (30 percent of adjusted income) and the monthly rental rate. Priority for RA in housing financed by Section 515 is given to a project either if a market study indicates the greatest percentage of prospective tenants need RA or if the area has the greatest housing need within the state and is selected for funding in accordance with the weighted criteria. Comments: The request for RA is generally initiated by the borrower (project owner). However, if the borrower does not request it, people eligible for rental assistance in a project may petition the borrower to obtain rental assistance for them. There is an HCFP appeals procedure if rental assistance is denied by the owner. In existing projects, demand far exceeds supply.

USDA Apartment Loans