Fannie Mae Loans for Rural Multifamily Properties

Build, Purchase, or Renovate a Rural Multifamily Property with a Fannie Mae Insured Loan

Building, buying, or renovating a rural multifamily property isn't for everyone-- but for investors who are serious about rural development, the Fannie Mae Rural Development Guaranteed Rural Rental Housing Program offers some pretty incredible terms. The program, which is offered by the United States Department of Agriculture (UDSA) Office of Rural Development's (RD's) Section 538 program, offers fixed-rate loans with terms between 25 and 40 years. Plus, the program offers LTV allowances of up to 90% for for-profit organizations, and up to 97% for non-profit organizations. 

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 

Maximum LTV90%, up to 97% for non-profits with Fannie Mae approval 

Minimum DSCR 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