Purpose

Kentucky Housing Corporation’s (KHC) RHTF program provides gap financing for the development of affordable housing in rural Kentucky.

RHTF funding is available to:

• Nonprofit organizations
• For-profit developers
• Local housing authorities
• Units of local government

Eligible Activities

Projects may include:

• Acquisition and new construction of affordable housing.
• Acquisition with rehabilitation.
• New construction of affordable housing developments.

Legislative Priorities

RHTF gives funding preference to projects that meet one or more of the following priorities:

1. Disaster Recovery – Projects in a federally declared disaster area approved for FEMA Individual Assistance, or serving those displaced by a declared disaster (within 24 months of declaration).
2. Rural New Housing – Projects submitted by nonprofit organizations or local governments that create new rural housing.
3. Privately Owned Housing – Projects using existing privately owned housing stock.
4. Publicly Owned Housing – Projects using existing publicly owned housing stock.
5. Zoning and SRO Controls – Projects from local governments demonstrating effective zoning, conversion, or demolition controls for single-room occupancy units.

Additional Priorities

The RHTF Governing Committee also gives preference to:

1. Projects that create new housing supply.
2. Projects in rural areas with significant job growth.
3. Projects in counties with a housing supply gap, as identified in KHC’s Housing Supply Gap Analysis.
4. Projects with local contributions from government, employers, economic development entities, or philanthropic organizations.

Program Requirements

• Location
  • RHTF funds may only be used in rural areas of Kentucky, as designated by USDA Rural Development.
• Affordability
  • The affordability period for all rental projects is 30 years.
  • A deed restriction will be recorded to ensure compliance for the full period.
  • For multifamily developments, If the RHTF loan is repaid early, the deed restriction remains in effect.
• Loan Terms
  • RHTF funds are offered as a 30-year amortizing loan or deferred loan (due at maturity).
  • Interest rates are up to 3%, based on KHC’s underwriting.
  • Loans are non-recourse and carry no interest during the construction period.
  • Loan terms cannot exceed 30 years
• Income and Rent Requirement
  • RHTF may serve households earning up to 120% of Area Median Income (AMI).
  • However, rents may not exceed the applicable LIHTC or tax-exempt bond limits (whichever applies).
  • Note: Under LIHTC rules, the maximum household income is 80% AMI. Units serving households above 80% AMI cannot be tax credit units and may affect the project’s applicable fraction.