Fannie Mae Rural Development Guaranteed Rural Rental Housing Program Financing

Fannie Mae Insured Loans for Building, Purchasing, or Renovating a Rural Multifamily Property

While they may not be incredibly popular, rural multifamily properties are crucial to the housing infrastructure and are still sound investments. Developers and investors looking to finance the construction, acquisition, or renovation of a rural development will find that the Fannie Mae Rural development Guaranteed Rural Rental Housing program is not just a mouthful, but a program with some incredible terms. Offered through the United States Department of Agriculture (USDA) Office of Rural Development's (RD's) Section 538 program, the program offers fixed-rate loans with terms between 25 and 40 years. In addition, LTV allowances of up to 90% for for-profit organizations, and up to 97% for non-profit organizations are allowed.

2021 Sample Fannie Mae Terms For Rural Development Guaranteed Rural Rental Housing Loans

Size: Varies

Terms: 25-40 years

Amortization: 25-40 years (both fully amortizing loans and balloon loans allowed)

Interest Rate: Fixed-rate only

MaximumLTV: 90%, up to 97% for non-profits with Fannie Mae approval

MinimumDSCR: 1.15x

Recourse: Loans are recourse, except for the portion of the loan covered by the USDA Office of Rural Development's (RD's) 90% guaranty

Eligible Properties:

  • Lenders must be approved by the USDA RD and Fannie Mae
  • Property transactions with rent subsidies allowed
  • For properties undergoing rehabilitation, a minimum of $6,500 per unit is required
  • Rent must be restricted to 30% of the area median income (AMI), adjusted for family size


  • Fast underwriting/approval process
  • Flexible amortizations
  • Competitive interest rates
  • 90% USDA guaranty


  • Loans are partially recourse
  • Only available in rural areas