CARH’S BROADCAST E-MAIL – Regulatory Update

April 17, 2015

CARH has been the main advocate for the Section 538 Guaranteed Rural Rental Housing Program since the program was first created in 1996.  Last year, CARH’s Developers and Owners Committees recommended that CARH work with the Government National Mortgage Association (Ginnie Mae) to raise the loan-to-cost limit. On August 18, 2014, CARH authored, along with other interest groups representing borrowers and lenders, a letter to the Ginnie Mae asking that the agency enhance its securitization for Section 538 loans by raising the current 50% loan-to-cost threshold to a 70% loan-to-cost threshold. In that letter to the President of Ginnie Mae, Theodore Tozer (click here for a copy), the groups indicated that the increase to 70% loan-to-cost will allow the industry to increase usage closer to the optimal $150 million level that has been budgeted for the program and then opening up the possibility of using 4% housing credits with tax exempt bonds for new construction Section 538 transactions.  A letter was also sent to the Administrator of Housing and Community Facilities, Tony Hernandez, asking him to also weigh-in with Ginnie Mae and support the change.

CARH is pleased to report that yesterday Ginnie Mae announced that the agency has agreed to go to the 70% loan-to-cost threshold for the Section 538 program.  Click here for a copy of the press release announcing the change.  We would like to take this opportunity to thank Ginnie Mae, particularly the multifamily staff and the national Rural Development (RD) for their efforts. We also appreciate the information and guidance from our Section 538 lender members.

If you have any questions, please contact the CARH national office at or 703-837-9001 or carh@carh.org.