Notes to SEFA
The RD Section 515 Rural Rental Housing Program provides for an interest credit to reduce the annual debt service payable on the mortgage loans from that which is payable at the stated rate to an amount that equates to a 1% rate. Rental collections from tenants in excess of the basic rental charges determined by RD are remitted to RD to effectively reduce the amount of the interest credit. During the year ended December 31, 2025, the Organization recognized $68,642 of interest subsidy.
The Organization has entered into mortgage loan agreements for loans for each individual project. Such funds were provided by RD pursuant to its Rural Housing Program under Section 515 of the National Housing Act of 1949. The terms of the loans are 50 years. The loans are secured by a mortgage on the Project, security interests in any personal property, and an assignment of any rents or income to be derived from the Project. Interest rates on the loans range from 7.25%-7.50% (before interest credit). At December 31, 2025, the remaining balance on the mortgages payable was $1,111,306.