The Section 312 Rehabilitation Loan Program encouraged rehabilitation of one- to four-unit private properties. The Government National Mortgage Association (Ginnie Mae) agreed to purchase loans originated by lenders at below-market interest rates. Direct federal loans were made available to building owners, with a three-percent interest rate for 20 years. The program operated as a cooperative venture between the federal government, which furnished the loan funds, and localities, which processed the loans. Section 312 authorized direct federal loans to eligible borrowers whose repayments, together with appropriations and other income, formed a “revolving fund” from which other Section 312 loans were made. The U.S. Department of Housing and Urban Development (HUD) ended the program and sold the outstanding loan proceeds in 2001 .