Notice of Acceptance of Proposals for the Section 538 Multi-Family Housing Guaranteed Rural Rental Housing Program (GRRHP) Demonstration Program for Fiscal Year 2010, 25829-25830 [2010-10929]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Housing Service

[Federal Register Volume 75, Number 89 (Monday, May 10, 2010)]
[Notices]
[Pages 25829-25830]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-10929]


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                                                Federal Register
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Federal Register / Vol. 75, No. 89 / Monday, May 10, 2010 / Notices

[[Page 25829]]



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 2010

AGENCY: Rural Housing Service, USDA.

ACTION: Notice.

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SUMMARY: Through this Notice the Rural Housing Service (Agency) 
announces the implementation of a demonstration program under the 
section 538 Guaranteed Rural Rental Housing Program (GRRHP) pursuant to 
7 CFR 3565.4 and 7 CFR 3565.17 (Demonstration Programs) for Fiscal Year 
(FY) 2010. The Demonstration Program's purpose is to test the viability 
and efficacy 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 of program loan 
authority on loans that have already been obligated 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 2010 
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. Conditional commitment. 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.
    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; and 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. Ability. 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, an 
addendum may be attached to certain program forms 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, particularly section 538, 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.

[[Page 25830]]

    4. A Lender must have submitted its application under 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 
or the GRRHP 2010 Notice published February 26, 2010, Volume 75 FR 
8896-8902.
    5. The application to be considered must have been obligated from 
October 1, 2009 to December 17, 2010. However, if the Demonstration 
Program funds have not been fully utilized by December 17, 2010, the 
Agency may consider applications obligated on or after October 1, 2008.
    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 May 20, 2010. 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 month starting September 17, 2010. December 17, 2010, 
will be the last possible selection date unless the Final Rule is 
published as explained below. All applicants will be notified of the 
selection results no later than 30 business days from the date of 
selection.

DATES: Effective Dates: The GRRHP intends to incorporate the guarantee 
offered under this demonstration as a permanent part of the program. To 
that end we have published in the Federal Register (January 29, 2009, 
Volume 75 FR 4707-4710) a proposed rule for ``Continuous Construction-
Permanent Loan Guarantees.'' This Notice will terminate upon the 
earlier of either the publication date of the final rule or December 
17, 2010.

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 email (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 2010 
Demonstration Program until December 17, 2010 or publication of the 
final rule if earlier. 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, age, disability, and where applicable, sex, 
marital status, familial status, parental status, religion, sexual 
orientation, genetic information, political beliefs, reprisal, or 
because all or a part of an individual's income is derived from any 
public assistance program. (Not all prohibited bases apply to all 
programs.) Persons with disabilities who require alternative means for 
communication of program information (Braille, large print, audiotape, 
etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and 
TDD). To file a complaint of discrimination write to USDA, Director, 
Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC 
20250-9410 or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA 
is an equal opportunity provider and employer.''

    Dated: May 3, 2010.
Tammye Trevi[ntilde]o,
Administrator, Rural Housing Service.
[FR Doc. 2010-10929 Filed 5-7-10; 8:45 am]
BILLING CODE 3410-XV-P