WHAT IS INTEREST SUBSIDY?
Each year a portion of the Section 538 loans carry with it interest subsidy. This interest subsidy reduces the interest rate. The NOFAs encourage deeper subsidy to house very low or extremely low-income persons. The interest subsidy allows the 538 to be used to preserve existing section 515 properties (where the average household is elderly and earns about $10,000 a year), and to be used with HOME and tax credits in rural areas. OMNIBUS CANCELED INTEREST SUBSIDY FOR 2009 The Omnibus Appropriations Act for Fiscal Year 2009, (P.L. 111-8) signed into law on March 10, 2009 provides for $129.1 million for the 538 program, but only $8 million in interest subsidy, instead of $20 million in the Senate Appropriations Committee bill (S. 3289) that was the basis for the interim Continuing Resolution for Fiscal Year 2009. More than that, the Omnibus Act specifically prohibits using the $8 million for 2009 NOFA applications. On January 21, 2009, RHS had already issued its 2009 NOFA, providing for i
