Notice of Acceptance of Proposals for the Section 538 Multi-Family Housing Guaranteed Rural Rental Housing Program (GRRHP) Demonstration Program for Fiscal Year 2009, 47185-47186 [E9-21859]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Housing Service

[Federal Register Volume 74, Number 177 (Tuesday, September 15, 2009)]
[Notices]
[Pages 47185-47186]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21859]


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Notices
                                                Federal Register
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Federal Register / Vol. 74, No. 177 / Tuesday, September 15, 2009 / 
Notices

[[Page 47185]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service


Notice of Acceptance of Proposals for the Section 538 Multi-
Family Housing Guaranteed Rural Rental Housing Program (GRRHP) 
Demonstration Program for Fiscal Year 2009

AGENCY: Rural Housing Service, USDA.

ACTION: Notice.

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SUMMARY: Through this Notice, the Agency announces the implementation 
of a demonstration program under the section 538 Guaranteed Rural 
Rental Housing Program (GRRHP) pursuant to 7 CFR 3565.4 for Fiscal Year 
(FY) 2009 and 7 CFR 3565.17 demonstration programs. The Demonstration 
Program's purpose is to test the viability and efficacy of the concept 
of a continuous loan note guarantee through the construction and 
permanent loan financing phases of a project. Those applications that 
meet the Demonstration Program's qualifying criteria and are selected 
to participate will be offered one loan note guarantee upon closing of 
the construction loan that will be in effect throughout both of the 
project's construction and permanent phases without interruption.
    The Agency will permit approximately $10 million in previously 
obligated program loan authority to participate in this Demonstration 
Program. Expenses incurred in developing applications will be at the 
applicant's risk. The following paragraphs outline the timeframes, 
eligibility requirements, lender responsibilities, and the overall 
response and application processes.
    Eligible Lenders wishing to have their GRRHP obligated, but 
unfunded guaranteed 538 applications considered for the FY 2009 
Demonstration Program must send a signed request on its letterhead with 
the proposed project details as outlined in the ``Demonstration Program 
Response Submission Address'' section of this Notice. No other 
applications will be considered.

Demonstration Program Guidelines

    The following guidelines are being provided to facilitate a 
structured implementation of the program:
    1. Demonstration guarantee. The Demonstration guarantee is a 
guarantee that will be offered to selected lenders who submit 
applications in response to this Notice. The Demonstration guarantee 
will consist of one loan note guarantee that will be issued upon 
closing of the construction loan and will be in effect throughout both 
of the project's construction and permanent financing phases without 
interruption.
    2. Upon approval of an eligible previously obligated guaranteed 538 
application from an approved lender, the Agency will modify the 
outstanding conditional commitment to provide a demonstration guarantee 
for the construction and permanent financing phases of the project, 
subject to the availability of funds.
    3. Guarantee percentage and payment. Both construction loan 
advances and permanent loans are eligible for a guarantee subject to 
the following limitations:
    Construction loan advances and permanent loans. The Agency can 
guarantee the ``construction and permanent'' financing phases of a 
project. The Agency cannot, however, guarantee only the 
``construction'' financing phase of a project. Guarantees under the 
demonstration guarantee will cover construction loan advances and the 
subsequent permanent loan. The maximum guarantee of construction 
advances will not at any time exceed the lesser of 90 percent of the 
amount of principal and interest up to default advanced for eligible 
uses of loan proceeds or 90 percent of the original principal amount 
and interest up to default of a loan. Penalties incurred as a result of 
default are not covered by the guarantee. The Agency may provide a 
lesser guarantee based upon its evaluation of the credit quality of the 
loan.
    4. A lender making a construction loan must demonstrate an ability 
to originate and service construction loans.
    5 Guarantee during construction. The Agency will issue a 
demonstration guarantee only to an approved lender.
    6. Demonstration guarantee program compliance requirement. For a 
demonstration guarantee, after the loan note guarantee is issued, the 
following items will have to be submitted and approved by the Agency 
within the timeframe stipulated by the Agency:
    (i) A certificate of substantial completion;
    (ii) A certificate of occupancy or similar evidence of local 
approval;
    (iii) A final cost certification in a form acceptable to the 
Agency;
    (iv) A complete copy of the permanent loan closing docket, if a 
separate closing is conducted for the permanent loan; and
    (v) Any other information necessary for the Agency to comply with 
its regulations.
    Items (i), (ii) and (iii) are only required if the project is 
constructed. To facilitate the implementation of the program, certain 
program forms may be addended to include relevant Demonstration Program 
requirements.
    The selected applicants will be subject to the Demonstration 
Program guidelines in this Notice, and GRRHP's controlling statute, 
regulations, and handbook as amended. The GRRHP operates under the 
Housing Act of 1949, as amended, and regulations at 7 CFR part 3565. 
The GRRHP Origination and Servicing Handbook (HB-1-3565) is available 
to provide lenders and the general public with guidance on program 
administration. HB-1-3565, which contains a copy of 7 CFR part 3565 in 
Appendix 1, can be found at the Rural Development Instructions Web site 
address https://www.rurdev.usda.gov/regs/hblist.html#hbw6.
    Demonstration Program Eligibility: GRRHP obligated applications 
that meet the following criteria will be eligible for consideration to 
be selected into the Demonstration Program:
    1. The project must have been awarded and continue to receive Low 
Income Housing Tax Credits.
    2. The project must have a loan to cost (LTC) ratio equal to or 
lower than 50%.
    3. The Lender must have submitted a timely response to this Notice 
in accordance with the ``Demonstration Program Response Submission 
Address'' section of this Notice.
    4. A Lender must have submitted its application under the GRRHP 
2008 Notice published February 4, 2008,

[[Page 47186]]

Volume 73 FR 6469-6477, the GRRHP 2009 Notice published January 21, 
2009, Volume 74 FR, 3551-3558, or the GRRHP 2009 Notice published on 
June 26, 2009, Volume 74 FR, 30503-30510.
    5. The application to be considered must have been obligated from 
October 1, 2008 to December 18, 2009. However, if Demonstration funds 
have not been fully utilized by December 18, 2009, the Agency may 
consider applications obligated on or after October 1, 2007.
    6. The Lender must not have closed the construction loan prior to 
its selection to participate in the Demonstration Program.

Demonstration Program Selection Process

    Selections from qualified applications that have requested 
consideration and met all requirements for this Demonstration Program 
will be based on priority scores they received on their previously 
submitted applications, with the highest scoring applications, being 
selected first, until all available Demonstration Program Authority is 
used. In the event of a tie, priority will be given to the application 
that: is in the smaller rural community, and in case of a subsequent 
tie to the application that has the lowest LTC ratio.
    The first round of selections into the Demonstration Program will 
be made on
    September 18, 2009. In the event there are not enough qualified 
requests for selection into the Demonstration Program to utilize all 
the available Demonstration Program Authority, then until all funds are 
exhausted, an additional selection process will be conducted on the 3rd 
Friday of each the month starting October 16, 2009, with December 18, 
2009 being the last selection date. All applicants will be notified of 
the selection results no later than 30 business days from the date of 
selection.

Demonstration Program Response Submission Address

    Eligible lenders wishing to have their obligated applications 
considered for selection into the Demonstration Program must submit a 
signed request (not to exceed one page) on its letterhead that includes 
the following information:
    1. Developer's Name
    2. Borrower's Name
    3. Project's Name
    4. Project's Address (City and State)
    5. Project Type (Family, Senior, or Mixed)
    6. Project's Total Units
    7. Project's Total Development Cost (TDC)
    8. Amount of 538 Loan Guarantee
    9. Amount of Tax Credits Awarded
    10. Amount and Source of Other Financing
    11. Loan to Cost (LTC) %
    12. Area Population
    13. Date obligated or date of Conditional Commitment
    Send the Demonstration Program Response Submission Letter with all 
of the information listed above, along with a copy of the State 
Office's ``Proceed with Application/NOFA Response Selection'' letter 
and a copy of the tax credit award notification to: Tammy S. Daniels, 
Financial and Loan Analyst, Multi-Family Housing Guaranteed Loan 
Division, Guaranteed Rural Rental Housing Program, USDA Rural 
Development, South Agriculture Building, Room 1233, STOP 0781, 1400 
Independence Avenue, SW., Washington, DC 20250-0781.
    Requests may also be faxed to 202-690-3444 or sent by e-mail 
(signed PDF copies of the above submissions) to 
tammy.daniels@wdc.usda.gov. Eligible lenders mailing a request must 
provide sufficient time to permit delivery to the Submission Address. 
If all the funds set aside for the Demonstration Program have not been 
utilized, the Agency will continue to accept requests for inclusion 
into the FY 2009 Demonstration Program until December 17, 2009. 
Acceptance by a U.S. Post Office or private mailer does not constitute 
delivery. Postage due responses and applications will not be accepted.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, the 
information collection requirements contained in this Notice is 
approved by the Office of Management and Budget (OMB) under OMB Control 
Number 0575-0174.

Nondiscrimination Statement

    ``The U.S. Department of Agriculture (USDA) prohibits 
discrimination in all its programs and activities on the basis of race, 
color, national origin, sex, religion, age, disability, political 
beliefs, sexual orientation, marital status or family status (not all 
prohibited basis apply to all programs). Persons with disabilities who 
require alternative means for communication of program information 
(Braille, large print, audiotape, etc.) should contact the USDA's 
Target Center at (202) 720-2600 (voice or TDD). To file a complaint of 
discrimination, write USDA, Director, Office of Civil Rights, Room 326-
W, Whitten Building, 1400 Independence Avenue, SW., Washington, DC 
20250-9410, or call toll free, (866) 632-9992 (Voice). TDD users can 
contact USDA through local relay (800) 720-6382 (TDD) or (866) 377-8642 
(relay voice users). USDA is an equal opportunity provider and 
employer.''

    Dated: September 3, 2009.
Sylvia Bolivar,
Acting Administrator, Rural Housing Service.
[FR Doc. E9-21859 Filed 9-14-09; 8:45 am]
BILLING CODE 3410-XV-P