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USDA-RD Section 538 Low Loan-to-Cost Ratio and Lease-Up Reserves

USDA-Rural Development published “Guaranteed Rural Rental Housing Low Loan-to-Cost Ratio” in the Federal Register. RD will not be modifying the lease-up reserves and percent of the guarantee previously established for loans guaranteed under Option Three (Continuous Guarantee) of the Guaranteed Rural Rental Housing Program (GRRHP) for the Section 538 program.

The low loan-to-cost ratio is defined at 50 percent in order for a loan to be eligible for a single continuous guarantee for construction and permanent loans.

A copy of the announcement may be found here: http://www.gpo.gov/fdsys/pkg/FR-2012-09-06/pdf/2012-21883.pdf

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