Notice of Funding Availability: Sections 514, 515 and 516 Multi-Family Housing Revitalization Demonstration Program for Fiscal Year 2011, 39820-39836 [2011-17107]
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39820
Federal Register / Vol. 76, No. 130 / Thursday, July 7, 2011 / Notices
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Columbia, SC 29201, (803) 253–3432,
TDD (803) 765–5697, Larry D. Floyd.
South Dakota State Office, Federal
Building, Room 210, 200 Fourth
Street, SW., Huron, SD 57350, (605)
352–1132, TDD (605) 352–1147, Roger
Hazuka or Pam Reilly.
Tennessee State Office, Suite 300, 3322
West End Avenue, Nashville, TN
37203–1084, (615) 783–1375, TDD
(615) 783–1397, Don Harris.
Texas State Office, Federal Building,
Suite 102, 101 South Main, Temple,
TX 76501, (254) 742–9765, TDD (254)
742–9712, Scooter Brockette.
Utah State Office, Wallace F. Bennett
Federal Building, 125 S. State Street,
Room 4311, Salt Lake City, UT
84147–0350, (801) 524–4325, TDD
(801) 524–3309, Janice Kocher.
Vermont State Office, City Center, 3rd
Floor, 89 Main Street, Montpelier, VT
05602, (802) 828–6021, TDD (802)
223–6365, Heidi Setien.
Virgin Islands, Served by Florida State
Office.
Virginia State Office, Culpeper Building,
Suite 238, 1606 Santa Rosa Road,
Richmond, VA 23229, (804) 287–
1596, TDD (804) 287–1753, CJ
Michels.
Washington State Office, 1835 Black
Lake Blvd., Suite B, Olympia, WA
98512, (360) 704–7706, TDD (360)
704–7760, Bill Kirkwood.
Western Pacific Territories, Served by
Hawaii State Office.
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Building, 75 High Street, Room 320,
Morgantown, WV 26505–7500, (304)
284–4872, TDD (304) 284–4836,
David Cain.
Wisconsin State Office, 4949 Kirschling
Court, Stevens Point, WI 54481, (715)
345–7676, TDD (715) 345–7614,
Cheryl Halverson.
Wyoming State Office, PO Box 11005,
Casper, WY 82602, (307) 233–6716,
TDD (307) 233–6733, Timothy Brooks.
VIII. Non-Discrimination 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 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).
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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: June 30, 2011.
˜
Tammye Trevino,
Administrator, Rural Housing Service.
[FR Doc. 2011–17110 Filed 7–6–11; 8:45 am]
BILLING CODE 3410–XV–P
DEPARTMENT OF AGRICULTURE
Rural Housing Service
Notice of Funding Availability:
Sections 514, 515 and 516 Multi-Family
Housing Revitalization Demonstration
Program for Fiscal Year 2011
Rural Housing Service, USDA.
Notice.
AGENCY:
ACTION:
United States Department of
Agriculture (USDA) Rural Development
(Agency), which administers the
programs of the Rural Housing Service
(RHS), announces the timeframe to
submit applications to participate in a
demonstration program to preserve and
revitalize existing Multi-Family Housing
(MFH) projects financed by Rural
Development under Section 515,
Section 514 and Section 516 of the
Housing Act of 1949, as amended. The
intended effect is to restructure selected
existing Section 515 Rural Rental
Housing (RRH) loans and Section 514/
516 Off-Farm Labor Housing loans
(FLH) and to provide grants for the
purpose of ensuring that sufficient
resources are available to preserve the
rental projects for the purpose of
providing safe and affordable housing
for very low-, low-, or moderate-income
residents. Expectations are that
properties participating in this program
will be revitalized and the affordable
use will be extended without displacing
tenants because of increased rents. No
additional Agency Rental Assistance
(RA) units will be made available under
this program.
DATES: The deadline for receipt of all
pre-applications in response to this
Notice is 5 p.m., Eastern Time, August
22, 2011. The pre-application closing
deadline is firm as to date and hour. The
Agency will not consider any preapplications that are received after the
closing deadline. Applicants intending
to mail pre-applications must allow
sufficient time to permit delivery on or
before the closing deadline. Acceptance
by a post office or private mailer does
not constitute delivery. Facsimile (FAX)
SUMMARY:
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and postage-due pre-applications will
not be accepted.
FOR FURTHER INFORMATION CONTACT:
Cynthia L. Johnson,
cynthial.johnson@wdc.usda.gov, (202)
720–1940, Finance and Loan Analyst,
Multi-Family Housing Preservation and
Direct Loan Division, STOP 0782,
(Room 1263–S), U.S. Department of
Agriculture, Rural Housing Service,
1400 Independence Avenue, SW.,
Washington, DC 20250–0782. All hard
copy pre-applications and required
documents (attachments) must be
submitted to this address. (Please note
this telephone number is not a toll-free
number.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The information collection
requirements contained in this Notice
have received approval from the Office
of Management and Budget (OMB)
under Control Number 0570–0190.
Overview
Announcement Type: Inviting
applications from eligible applicants for
2011 funding.
Catalog of Federal Domestic Assistance
Number (CFDA): 10.447.
The Agriculture, Rural Development,
Food and Drug Administration, and
Related Agencies Appropriations Act,
2011 (Pub. L. 111–80) October 16, 2009,
authorized the Agency to conduct a
demonstration program for the
preservation and revitalization of the
Section 515 RRH portfolio and Section
514/516 FLH portfolio. The Department
of Defense and Full Year Continuing
Appropriations Act, 2011 (Pub. L. 112–
10) April 15, 2011, continues the
Agency’s authority and provides
funding for this demonstration program
until expended. Sections 514, 515 and
516 MFH programs are authorized by
the Housing Act of 1949, as amended
(42 U.S.C. Sections 1484, 1485, 1486)
and provide Rural Development with
the authority to make loans for lowincome MFH and FLH and related
facilities. All funding for MPR are
subject to the availability of funds for
this purpose.
I. Funding Opportunities Description
This Notice solicits pre-applications
from eligible borrowers/applicants to
restructure existing MFH properties
within the Agency’s Section 515 MFH
portfolio and Section 514/516 FLH
portfolio for the purpose of
revitalization and preservation. The
demonstration program shall be referred
to in this Notice as the Multi-Family
Housing Revitalization Demonstration
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program (MPR). Agency regulations for
the Section 515 MFH program and for
Section 514/516 FLH program are
published at 7 CFR Part 3560.
Applications which were selected for
further processing under previous
Notices (Fiscal Years 2007–2009), must
be submitted to the Multi-Family
Housing Preservation and Direct Loan
Division (MPDL) for approval by the
Loan Review Committee (LRC), prior to
August 31, 2011. Previous applications
which are submitted prior to August 31,
2011, to MPDL will be funded on a firstcome-first-served basis based on the
date submitted to MPDL and do not
have to be rescored under this Notice.
The Agency will not maintain nor fund
applications for FY 2007–2009 that have
not been submitted to MPDL prior to
August 31, 2011, but applicants may
reapply under future Notices. After
August 31, 2011, applicants will then be
selected for funding from the FY 2011
NOFA pursuant to this Notice. All
funding for MPR transactions are subject
to the availability of funds for this
purpose.
The MPR’s intent is to ensure that
existing rental projects will continue to
deliver decent, safe and sanitary
affordable rental housing for 20 years or
the remaining term of any Agency loan
whichever ends later. Once an applicant
has been confirmed eligible and the
project has been selected by the Agency
in the process described in this Notice
and the applicant agrees to participate
in the MPR demonstration program by
written notification to the Agency, an
independent third-party Capital Needs
Assessment (CNA) will be conducted to
provide a fair and objective review of
projected capital needs. The Agency
shall implement this Notice through an
MPR Conditional Commitment
(MPRCC) Letter of Conditions with the
eligible borrower, which will include all
the terms and conditions under this
Notice.
The primary restructuring tool to be
used in this program is debt deferral for
up to 20 years of the existing Section
514 and 515 loans obligated prior to
October 1, 1991. The cash flow from the
deferred payment will be deposited, as
directed by the Agency, to the reserve
account to help meet the future physical
needs of the property or to reduce rents.
Debt deferral is described as follows:
Debt Deferral: A deferral of the
existing Agency debt for the lesser of the
remaining term of the loan or 20 years.
All terms and conditions of the deferral
will be described in the MPR Debt
Deferral Agreement. A balloon payment
of principal and accrued interest will be
due at the end of the deferral period.
Interest will accrue at the promissory
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note rate and subsidy will be applied as
set out in the Agency’s Interest Credit
Agreement. Interest will not be charged
on the deferred interest.
If the resulting cash flow is not
adequate to address the long-term needs
of the project, the Agency may use the
following sources of funds:
(1) Other Agency restructuring tools
as follows:
(i) MPR Revitalization Grant: A
revitalization grant (for non-profit
applicants/borrowers only) is limited to
the cost of correcting health and safety
violations as identified by the CNA. The
grant administration will be in
accordance with applicable provisions
of 7 CFR Parts 3015 or 3019, as
applicable.
(ii) MPR Revitalization Zero Percent
Loan: A revitalization loan at zero
percent interest that will have a term of
30 years and be amortized over 50 years.
(iii) MPR Soft-Second Loan: A loan
with a 1 percent interest rate that will
have its accrued interest and principal
deferred, to a balloon payment, due at
the time the latest maturing Section 514
or Section 515 loan already in place at
the time of closing becomes due. The
term of the soft-second loan will not be
timed to match the term of any new
Section 515 loan added during the
transaction. New Section 515 loans can
be made; however, the applicant will
have to go through the regular Section
515 application process.
(iv) Increased Return to Owner (RTO)
for Stay-in-Owners: Stay-in-owners,
namely existing borrowers who will
retain their property and contribute cash
to fund any hard costs of construction
to meet immediate needs identified by
the CNA, may receive a Return on
Investment (ROI) on those funds
provided the Agency determines an
increased ROI is financially feasible,
and the Agency approves such a return
in the revitalization plan. The Agency
also may offer that the RTO be included
in a ‘‘cash flow split’’ agreement as
outlined in a MPRCC/Letter of
Conditions. The cash flow split will
allow up to 50 percent of excess cash,
generated by the owner’s fiscal year end,
to be split equally between paying down
any outstanding deferred Agency loan
balances, and 50 percent to be returned
to the borrower as an increased RTO,
subject to the provisions of 7 CFR
3560.68.
MPR funds cannot be used to add new
units, community rooms, playgrounds,
and/or laundry rooms; however, other
funding sources as outlined below in (2)
through (6) can be used either for
revitalization or for improvements listed
above to the projects.
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(2) Rural Development Section 515
Rehabilitation loan funds;
(3) Rural Development Section 514/
516 off-farm rehabilitation loan and
grant funds;
(4) Rural Development Section 538
Guaranteed Rural Rental Housing
Program financing;
(5) Rural Development Multi-Family
Housing Re-lending Demonstration
Program Funds;
(6) Third-party loans with below
market rates (below the Applicable
Federal Rate (AFR)), grants, tax credits,
and tax-exempt financing; and
(7) Owner-provided capital
contributions in the form of a cash
infusion. A cash infusion is not a loan.
Transfers, subordinations, and
consolidations may be approved as part
of a MPR transaction in accordance with
7 CFR Part 3560. If a transfer is part of
the MPR transaction, the transfer must
meet the requirements of 7 CFR
3560.406 before the MPR transaction is
processed.
For the purposes of the MPR, the
restructuring transactions will be
identified in three categories:
(Applicants may only apply under one
category.)
(1) Simple transactions that involve
no change in ownership.
(2) Complex transactions which
consist of a property transfer to new
ownership processed in accordance
with 7 CFR 3560.406 or transactions
requiring a subordination agreement as
a result of third-party funds.
(3) Portfolio transactions that are
defined as multiple project sale
transactions with a common purchaser
or multiple MPR transactions with one
stay-in owner all within one State
closed on or after September 30, 2010.
The common purchaser or stay-in owner
must have at least one general partner
in common. If the owner chooses to
remove one or more properties, at least
two properties must remain in order to
be deemed a portfolio transaction.
Each transactional category may
utilize any or all restructuring tools.
MPR Restructuring tools that may be
available to address capital needs are
based on the CNA process and the
underwriting feasibility determination.
While all non-deferred Agency debt,
either in first lien position or a
subordinated lien position must be
secured within market value, deferred
debt may exceed the market value of the
security. Payment of such deferred debt
will not be required from normal project
operation income, but from excess cash
from project operations and the value of
the property after all other secured debts
are satisfied.
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The following lays out the general
steps of the MPR application process:
(1) Pre-application: Applicants must
submit a pre-application described in
Section VI. This pre-application process
is designed to lessen the cost burden on
all applicants including those who may
not meet eligibility requirements or
whose proposals may not be feasible.
Applicants are encouraged, but not
required, to provide an electronic copy
of all hard copy forms and documents
submitted in the pre-application/
application package as requested by this
Notice. The forms and documents must
be submitted as read-only PDF Adobe
Acrobat files on an electronic media
such as CDs, DVDs or USB drives. For
each electronic device that you submit,
you must include a Table of Contents of
all documents and forms on that device.
The electronic medium must be
submitted to the local State Office.
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Note: If you receive a loan or grant award
under this Notice, USDA reserves the right to
post all information submitted as part of the
pre-application/application package which is
not protected under the Privacy Act on a
public Web site with free and open access to
any member of the public.
(2) Eligible Properties: Using criteria
described below in Section III, USDA
will conduct an initial screening for
eligibility. As described in Section VIII,
USDA will conduct additional
eligibility screening later in the
selection process.
(3) Scoring and Ranking: All eligible,
complete and timely-filed preapplications submitted this fiscal year
will be scored, ranked and put in
funding categories as discussed in
Sections VI and VII.
(4) Formal Applications: Top ranked
pre-applicants will receive a letter from
the Agency and will be invited to
submit a formal application. As
discussed in Section VIII paragraph (2)
of this Notice, USDA will require the
owner to provide a CNA in order to
determine the proper combination of
tools to be offered to the applicant, to
perform additional eligibility review,
and to underwrite the proposal to
determine financial feasibility. Where
proposals are found to be ineligible or
financially infeasible, owners will be
informed and lower scoring applicants
will be considered as set-forth in
Section VIII.
(5) Financial Feasibility: Using the
results of the CNA to help identify the
need for resources and applicantprovided information regarding
anticipated or available third-party
financing, the Agency will determine
the financial feasibility of each potential
transaction, using restructuring tools
available either through existing
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regulatory authorities or specifically
authorized through this demonstration
program. A project is financially feasible
when a property can provide affordable,
safe, decent, and sanitary housing for 20
years or the remaining term of any
Agency loan whichever ends later. By
using the authorities of this program
while minimizing the cost to the
Agency, and without increasing rents
for tenants and farm laborers, except
when necessary to meet normal and
necessary operating expenses. If the
transaction is determined financially
feasible by the Agency, the borrower
will be offered a restructuring proposal,
which will include the requirement that
the borrower will execute, for
recordation, a Restrictive-Use Covenant
(RUC) for a period of 20 years, the
remaining term of any existing loans, or
the remaining term of any existing
Restrictive-Use Provisions (RUP),
whichever ends later. The restructuring
proposal will be established in the form
of the MPRCC.
(6) MPR Agreements: If the offer is
accepted by the applicant, the Agency
and applicant will enter into a MPRCC.
The applicant must also agree to restrict
the property use when the MPR
transaction is closed. Any third-party
lender will be required to subordinate to
the Agency’s RUC unless the Agency
determines on a case-by-case basis that
the lender refuses to subordinate and
such refusal will not compromise the
purpose of the MPR. The Agency may
also request that the applicant sign an
agreement that would require the owner
to escrow reserve, tax, and insurance
payments in accordance with all
pertinent current and future Agency
regulations. In addition, the Agency
may also request that the applicant
agree to accept future rent increases
based on an Annual Adjustment Factor
(AAF). The AAF allows rents to be
adjusted by the annual inflation factor
as determined by the United States
Office of Management and Budget
(OMB). The exact AAF will be
established in the MPR Agreement.
(7) General Requirements: The MPR
transactions may be conducted with a
stay-in owner (simple or portfolio) or
may involve a change in ownership
(complex or portfolio). Any housing or
related facilities that are constructed or
repaired must meet the Agency design
and construction standards and the
development standards contained in 7
CFR Part 1924, subparts A and C,
respectively. Once constructed, Section
515 MFH and Section 514/516 FLH
must be managed in accordance with 7
CFR Part 3560. Tenant eligibility will be
limited to persons who qualify as an
eligible household under Agency
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regulations or who are eligible under the
requirements established to qualify for
housing benefits provided by sources
other than the Agency, such as the U.S.
Department of Housing and Urban
Development (HUD) Section 8
assistance or Low Income Housing Tax
Credits (LIHTC) assistance. Additional
tenant eligibility requirements are
contained in 7 CFR 3560.152.
(8) Voluntary ‘‘community market
rent’’ Demonstration (available for
Section 515 properties only): In
conjunction with this demonstration,
Rural Development announces the
opportunity for all successful Section
515 applicants to participate on a
voluntary basis in a viability test of a 30
percent limitation on tenant rents, for
post-restructured properties. Owners of
properties in the Section 515
restructuring program may elect to
participate in the ‘‘community market
rent’’ demonstration which will allow
an owner to set a rent above the
approved basic rent for any unit not
currently occupied by a tenant receiving
Agency RA.
Eligible tenants for these units must
have adjusted annual incomes sufficient
to allow them to pay the ‘‘community
market rent’’ using less than 30 percent
of their adjusted income. Tenants would
be allowed to occupy without paying
overage, additional sums that would
otherwise be required to bring their rent
payment up to 30 percent of income.
With the Agency’s consent, up to 50
percent of the difference between the
basic rent and the new ‘‘community
market rent’’ could be retained by the
owner as an increased return.
For example, if the basic rent is $350,
the owner could create a ‘‘community
market rent’’ at $410, and market the
unit to tenants who could pay that rent
at less than 30 percent of adjusted
income. A percentage of the difference,
$60 could be retained by the owner, as
negotiated with Rural Development, up
to $30.
Prior to implementation of the
‘‘community market rent’’
demonstrations, the Agency will issue
guidance to successful applicants who
have indicated an interest in
participating in the demonstration
providing further details with respect to
the program.
II. Award Information
The Department of Defense and Full
Year Continuing Appropriations Act,
2011 (Pub. L. 112–20), April 15, 2011,
appropriated $14,970,000 in new budget
authority, to the Agency for the MPR
Demonstration Program. For FY 2011,
up to $51,335,131.69 in Section 515
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loan funds may be made available thru
this NOFA.
All funding must be obligated, by the
Agency, not later than September 30,
2011.
III. Eligibility Information
Applicants (and the principals
associated with each applicant) must
meet the following requirements:
(1) Eligibility under 7 CFR 3560.55;
however, the requirements described in
7 CFR 3560.55(a)(5) pertaining to
required borrower contributions and 7
CFR 3560.55(a)(6) pertaining to required
contributions of initial operating capital
are waived for all MPR proposals.
(2) For Section 515 MFH projects
where the average physical vacancy rate
over the 12 months preceding the filing
of the pre-application will be no more
than 10 percent for projects of 16 units
or more and no more than 15 percent for
projects under 16 units unless an
exception applies under Section VI
paragraph (2) (ii) of this Notice. If a
project consolidation is involved, the
consolidation will remain eligible so
long as the average vacancy rate for all
the projects involved meets the
occupancy standard of this paragraph.
Property(s) that do not meet the
consolidation threshold may be
withdrawn by the owner from the
application process without
jeopardizing the entire deal.
(3) For Sections 514 and 516 FLH
projects, the property must have
positive cash flow for the previous full
three years of operation unless an
exception applies under Section VI
paragraph (2) (ii) of this Notice.
(4) Ownership of, and ability to
operate, the facility after the transaction
is completed. In the event of a transfer,
the proposed transferee with an
executed purchase agreement or other
evidence of site control will be the
applicant. Purchase agreements that
have not been executed Will Not be
accepted.
(5) A CNA and Agency financial
evaluation must be conducted to ensure
that utilization of the restructuring tools
of the MPR program is financially
feasible and necessary for the
revitalization and preservation of the
property as affordable housing. Initial
eligibility for processing will be
determined as of the date of the preapplication filing deadline. The Agency
reserves the right to discontinue
processing any application due to
material changes in the applicant’s
status occurring at any time after the
initial eligibility determination.
(6) Please note that all grant
applicants must obtain a Dun and
Bradstreet Data Universal Numbering
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System (DUNS) number and register in
the Central Contractor Registration
(CCR) prior to submitting a preapplication pursuant to 2 CFR 25.200(b).
In addition, an entity applicant must
maintain registration in the CCR
database at all times during which it has
an active Federal award or an
application or plan under construction
by the Agency. Similarly, all recipients
of Federal Financial Assistance are
required to report information about
first-tier sub-awards and executive
compensation, in accordance with 2
CFR Part 17 a. So long as an entity
applicant does not have an exception
under 2 CFR 170.110(b), the applicant
must have the necessary processes and
systems in place to comply with the
reporting requirements should the
applicant receive funding. See 2 CFR
170.200(b).
IV. Equal Opportunity and
Nondiscrimination Requirements
USDA is an equal opportunity
provider, employer, and lender.
(1) Borrowers and applicants will
comply with the provisions of 7 CFR
3560.2.
(2) All housing must meet the
accessibility requirements found at 7
CFR 3560.60 (d).
(3) All MPR participants must submit
or have on file a valid Form RD 400–1,
‘‘Equal Opportunity Agreement’’ and
Form RD 400–4, ‘‘Assurance
Agreement.’’
USDA prohibits discrimination in all
its programs and activities on the basis
of race, color, national origin, age,
disability, sex, marital status, familial
status, religion, or because all or 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 Adjudication
and Compliance, 1400 Independence
Avenue, SW., Washington, DC 20250–
9410, or call (800) 795–3272 (Voice) or
(202) 720–6382 (TDD).
The policies and regulations
contained in 7 CFR Part 1901, subpart
E, apply to this program.
This Federal Register Notice pertains
to announcing the availability of funds
and the timeframe for submitting
applications to participate in a
demonstration program to preserve and
revitalize existing rural rental housing
projects financed by Rural Development
under Section 515, Section 514, and
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Section 516 of the Housing Act of 1949,
as amended. This Notice does not have
an adverse impact on minority/lowincome populations.
V. Authorities Available for MPR
MPR tools will be used in accordance
with 7 CFR Part 3560 and its associated
handbooks (available in any Rural
Development office or at https://
www.rurdev.usda.gov/handbooks.html).
The program will be administered
within the resources available to the
Agency through Public Law 112–10 for
the preservation and revitalization of
Section 514/516 off-farm and Section
515 financed properties. In the event
that any provisions of 7 CFR Part 3560
conflict with this demonstration
program, the provisions of the MPR will
take precedence.
VI. Application and Submission
Information
Application Submission Information.
Pre-applications can be submitted either
electronically or in hard copy using the
MPR pre-application form. The form to
be used for the pre-application is
attached at the end of this Notice and
available at any State Office. A link to
the electronic version of this form may
be found on the Internet at the MPR
homepage https://www.rurdev.usda.gov/
rhs/mfh/MPR/MPRHome.htm.
Applicants are strongly encouraged, but
not required, to submit the preapplication electronically. The Agency
will record pre-applications received
electronically by the actual date and
time received in the MPR Web site mail
box. Hard copy pre-applications
received on or before the deadline date
will receive the close of business time
of the day received as the receipt time.
Hard copy pre-applications must be
mailed in time to meet the submission
deadline of 5 p.m., Eastern Time,
August 22, 2011. Assistance for filing
electronic and hard copy preapplications can be obtained from any
Rural Development State Office. For
assistance in attaching files to e-mails
for electronic submission, please contact
Cynthia L. Johnson at (202) 720–1940 or
e-mail at
cynthial.johnson@wdc.usda.gov or
Anita Kapoor at (202) 690–1337 or
e-mail at anita.kapoor@wdc.usda.gov.
Sufficient time must be allowed to
ensure the MPR pre-application arrives
either electronically or by mail Before
the submission deadline.
Note: For electronic submissions, there is
a time delay between the time the preapplication is sent and the time it is received
by the Agency, depending on network traffic.
As a result, last-minute submissions sent
before the deadline date and time could well
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be received after the deadline date and time
because of the increased network traffic.
Applicants are reminded that all submissions
received after the deadline date and time will
be rejected, regardless of when they were
sent. An auto-reply acknowledgement will be
sent when the application is received
electronically via e-mail; unless you have
software blocking the receipt of the autoreply e-mail.
Hard copy pre-applications and
additional materials should be mailed to
the attention of Cynthia L. Johnson,
Finance and Loan Analyst, MultiFamily Housing Preservation and Direct
Loan Division, STOP 0782 (Room 1263–
S), U. S. Department of Agriculture,
Rural Housing Service, 1400
Independence Avenue, SW.,
Washington, DC 20250–0782.
The electronic pre-application is
stored as an Adobe Acrobat fillable
form. The form contains a button
labeled ‘‘Send Form.’’ Clicking on the
button will result in an e-mail with an
attachment that includes the electronic
pre-application form. The form will be
sent via e-mail to the Multi-Family
Housing Preservation and Direct Loan
Division in Washington, DC for
consideration. Please click this button
only once, as multiple clicks result in
multiple filings.
Note: If a purchase agreement or market
survey is required, these additional
documents are to be attached to the resulting
e-mail prior to submission. This means all
material must come to the National Office. A
purchase agreement submitted to the State or
Area Office and the pre-application sent
electronically or via mail to the MPDL would
not constitute a complete pre-application.
The pre-application, purchase agreement,
market survey and all associated documents
required for submission under this Notice,
must be received electronically or by mail, as
one package, by MPDL to be considered.
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Note: There is a limitation on the size of
attachments that can be sent electronically. If
you are not successful in submitting your
attachments electronically, please submit the
complete package to the National Office on
an electronic device or in hardcopy form by
the closing deadline of this Notice.
(2) The application submission and
scoring process will be completed in
two phases in order to avoid
unnecessary effort and expense on the
part of interested borrowers/applicants
and to allow additional points for
applicants that propose a transfer of a
troubled project to an eligible owner.
Phase I—Pre-application
Completeness. Phase I is the preapplication process. The applicant must
submit a complete pre-application by
the deadline date under the DATES
section of this Notice. The applicant’s
submission will be classified as
‘‘complete’’ when a pre-application is
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received in the format and place as
described in this Notice by the MPDL
for each MPR proposal the applicant
wishes to be considered for the
demonstration. In the event the MPR
proposal involves a project
consolidation, the actual consolidation
will be completed in accordance with
7 CFR 3560.410. One pre-application for
the proposed consolidated project is
required and must clearly identify each
project included in the consolidation. If
the MPR proposal involves a portfolio,
one pre-application for each project in
the portfolio is required and each preapplication must identify all projects to
be purchased as part of the portfolio.
In order for the pre-application to be
considered complete, all applicable
information requested on the MPR Preapplication form must be included with
the pre-application.
Additional information that must be
provided with the pre-application,
when applicable, includes:
(i) A copy of an executed purchase
agreement if a transfer or sale is being
considered must be attached and
submitted to MPDL.
(ii) A current market survey
(completed within the previous 12
months of the filing of an MPR
application) if the project’s occupancy
standards cited in Section II or if the
FLH project does not have a positive
cash flow as cited in Section III and
there is an overwhelming market
demand evidenced by waiting lists and
a housing shortage confirmed by local
housing agencies and real estate
professionals. The market survey must
show a clear need and demand for the
project once a restructuring transaction
is completed. The results of the survey
of existing and any other proposed
rental or labor housing, including
complex name, location, number of
units, bedroom mix, family or elderly
type, year built, rent charges must be
provided as well as the existing vacancy
rates of all available rental units in the
community, their waiting lists and
amenities, and the availability of RA or
other subsidies. For proposals where the
applicant is requesting LIHTC, the
number of LIHTC units and the
maximum LIHTC incomes and rents by
unit size must be provided. The Rural
Development State Director will
determine whether or not the proposal
has market feasibility based on the data
provided by the applicant. Any costs
associated with the completion of the
market survey will Not be considered a
project expense.
iii. Market Survey for section 515
projects that do not meet the occupancy
standards of Section III, paragraph (2) &
(3) of this Notice or if applicable, the
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requirements for the exception in
Section VI, paragraph (1)(ii) of this
Notice.
iv. Executed Purchase Agreement for
transfer and sales to nonprofit/public
housing authorities proposals.
v. Certification by the applicant to
achieve participation in the Greens
Community Program.
vi. Certification by the applicant to
achieve participation in Local Green
Energy-Efficient Building Standards.
vii. Energy Analysis of preliminary or
rehabilitation building plans using
industry recognized simulation software
to document projected energy
consumption of the building, the
portion of building consumption that
will be satisfied through on-site
generation, and the Buildings Home
Energy Rating System (HERS) score.
viii. Resumes of the designated
property management companies or
individuals responsible for maintenance
operations that have credentials for
Green Property Management.
ix. Documentation substantiating
Green Energy requirements.
x. Documentation on tenant services
provided.
xi. Evidence of commitment and
sources of funds.
xii. Evidence of owner contribution of
funds for transaction costs.
xiii. Evidence of owner contribution
of funds for hard costs of construction.
Unless an exception under this
section applies, the requirements stated
in Section III, paragraph (2) and (3) of
this Notice must be met.
Phase II—Eligibility Review. This
phase of the application process will be
completed by the Agency based on
Agency records and the pre-application
information.
All eligible, complete, and timelyfiled pre-applications will then be
scored and ranked based on points
received during this process as part of
the selection process outlined in Section
VII.
Further, the Agency will categorize
each MPR proposal as being potentially
Simple, Complex, or Portfolio based on
the information submitted on the preapplication and in accordance with the
category description provided in
Section I.
VII. Selection Process
Application scoring points will be
based on information provided during
the submission process and in Agency
records. Points will be awarded as
follows:
(1) Contribution of funds from other
sources. Other funds are those discussed
in items (2) through (7) of Section I
‘‘Funding Opportunities Description.’’
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Points awarded are to be based on
documented written evidence that the
funds are committed. The maximum
points awarded for this criterion is 25
points. These points will be awarded in
the following manner:
(i) Evidence of a commitment of at
least $3,000 to $5,000 per unit per
property from other sources. 15 points.
(ii) Evidence of a commitment greater
than $5,000 per unit per property from
other sources. 20 points.
(iii) Evidence of a commitment greater
than $5,000 per unit per property from
other sources and a binding written
commitment by a third party to
contribute 25 percent or more of any
allowable developer fee to the hard
costs of construction. 25 points.
(2) Owner contribution. The
maximum points awarded for this
criterion is 15 points. These points will
be awarded in the following manner:
(i) Owner contribution sufficient to
pay transaction costs. (These funds
cannot be from the project reserve
account or project general operating
account or in the form of a loan.)
Transaction costs are defined as those
costs required for completing the
transaction and include, but are not
limited to, the CNA, legal and closing
costs, appraisal costs and filing/
recording fees. The minimum
contribution required to receive these
points is $5,000 per project and will be
required to be deposited in the property
reserve account prior to closing. 5
points.
(ii) Owner contribution for the hard
costs of construction. (These funds
cannot be from the project reserve
account or project general operating
account or in the form of a loan.) Hard
costs of construction are defined as
materials, inventory, equipment,
property or machinery. Hard costs are
itemized on Form RD 1924-13 ‘‘Estimate
and Certificate of Actual Cost.’’ Form
RD 1924-13 can be found at https://
www.rurdev.usda.gov/regs/Forms/1924–
13.pdf. The minimum contribution
required to receive these points is
$1,000 per unit per project which will
be required to be deposited in the
property reserve account prior to
closing. An increased RTO may be
budgeted and allowed for funds
committed in accordance with 7 CFR
3560.406(d)(14)(ii). 10 points.
(3) Age of project. For project
consolidation proposals, the project
with the earliest operational date will be
used in calculating the age of the
project. Since the age of the project and
the date that the loan was made are
directly related to physical needs, a
maximum of 25 points will be awarded
on the following criteria:
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(i) Projects with initial operational
dates prior to December 21, 1979. 25
points.
(ii) Projects with initial operational
dates on or after December 21, 1979, but
before December 15, 1989. 20 points.
(iii) Projects with initial operational
dates on or after December 15, 1989, but
before October 1, 1991. 15 points.
(4) Troubled project points. The
Agency may award up to 25 additional
points to facilitate the transfer and
revitalization of projects the Agency
considers as troubled due to an act of
nature or where physical and/or
financial deterioration or management
deficiencies exist. Projects with an
Agency classification of ‘‘C’’ or ‘‘D’’
according to Agency HB–2–3560,
Chapter 9, Paragraph 9.7 (available at
https://www.rurdev.usda.gov/regs/
hblist.html) will be considered troubled.
Projects that are classified ‘‘B’’ and do
not involve a transfer will also receive
consideration. The Handbook definition
of Agency classification takes
precedence over Multifamily Housing
Information System (MFIS) status.
Points will be awarded in the following
manner:
(i) For Stay-in Owners only: If the
Agency servicing classification is ‘‘B’’ as
a result of a workout plan approved by
the Agency prior to January 1, 2011. 25
points.
(ii) If the Agency servicing
classification is ‘‘C’’ or ‘‘D’’ for 24
months or more. 20 points.
(iii) If the Agency servicing
classification is ‘‘C’’ or ‘‘D’’ for less than
24 months. 15 points.
(5) Prior Approved CNAs. In the
interest of ensuring timely application
processing and underwriting, the
Agency will award up to 20 points for
properties with CNAs already approved
by the Agency. ‘‘Approved’’ means
either after the initial CNA has been
reviewed and approved or after an
updated CNA has been reviewed and
approved by the Agency. CNAs over 12
months old may not be used for MPR
underwriting without an update
approved by the Agency. Points will be
awarded for:
(i) CNAs approved on or after October
1, 2009, and prior to October 1, 2010. 10
points.
(ii) CNAs approved on or after
October 1, 2010, but before the
publication of the Fiscal Year (FY) 2011
MPR Notice. 20 points.
(6) Energy Conservation Energy,
Generation, and Green Property
Management. Under the MPR Energy
Initiatives, properties may receive a
maximum of 68 points under three
categories: Energy Conservation, Energy
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39825
Generation, and Green Property
Management.
(i) Energy Conservation. Maximum 48
points.
Pre-applications for rehabilitation and
preservation of properties may be
eligible to receive a maximum of 48
points for the following energy
conservation measures.
a. Participation in the Green
Communities program by the Enterprise
Community Partners (https://
www.enterprisecommunity.org) will be
awarded 45 points for any project that
qualifies for the program. At least 30
percent of the minimum optional points
needed to qualify for the Green
Communities program must be earned
under the Energy Efficiency section of
the Green Communities qualification
program.
b. If you are not enrolling in the Green
Communities program then points can
be accumulated for each of the
following items up to a total of 30
points. Provide documentation to
substantiate your answers below:
i. This proposal includes the
replacement of heating, ventilation and
air conditioning (HVAC) equipment
with Energy Star qualified heating,
ventilation and air conditioning
equipment. 4 points.
ii. This proposal includes the
replacement of windows and doors with
Energy Star qualified windows and
doors. 4 points.
iii. This proposal includes additional
attic and wall insulation that exceeds
the required R-Value of these building
elements for your area as per the
International Energy Conservation Code
2009. Two points will be awarded if all
exterior walls exceed insulation code
and two points will be awarded if attic
insulation exceeds code, for a maximum
of 4 points.
All exterior walls exceed insulation
code. 2 points.
Attic insulation exceeds code. 2
points.
iv. This proposal includes the
reduction in building shell air leakage
by at least 15 percent as determined by
pre- and post-rehab blower door testing
on a sample of units. Building shell air
leakage may be reduced through
materials such as caulk, spray foam,
gaskets, and house-wrap. Sealing of duct
work with mastic, foil-backed tape, or
aerosolized duct sealants can also help
reduce air leakage. 4 points.
v. This proposal includes 100 percent
of installed appliances and exhaust fans
that are Energy Star qualified. 3 points.
vi. This proposal includes 100 percent
of installed water heaters that are
Energy Star qualified. 3 points.
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vii. This proposal includes
replacement of 100 percent of toilets
with flush capacity of more than 1.6
gallon flush capacity with new toilets
having 1.6 gallon flush capacity or less,
and with Environmental Protection
Agency (EPA) Water Sense label. 2
points.
viii. This proposal includes 100
percent of new showerheads with EPA
Water Sense label. 2 points.
ix. Does this proposal include 100
percent of new faucets with EPA Water
Sense label? 2 points.
x. Does this proposal include 100
percent energy-efficient lighting
including Energy Star qualified fixtures,
compact fluorescent replacement bulbs
in standard incandescent fixtures and
Energy Star ceiling fans? 2 points.
c. Participation in local green/energy
efficient building standards. Applicants
who participate in a city, county or
municipality program will receive an
additional 3 points. The applicant
should be aware that most of the
requirements are embedded in the thirdparty programs’ rating and verification
systems; the applicant should look at
the requirements for each program for
details.
(ii) Energy Generation. Maximum 10
points.
Rehabilitation and Preservation
projects that participate in the Green
Communities program by the Enterprise
Community Partners, or those projects
that accumulated at least 24 points for
Energy Conservation, are eligible to earn
additional points for installation of onsite renewable energy sources.
Renewable, on-site energy generation
will complement a weathertight, well
insulated building envelope with highly
efficient mechanical systems. Possible
renewable energy generation
technologies include: Wind turbines
and micro-turbines, micro-hydro power,
photovoltaics (capable of producing a
voltage when exposed to radiant energy,
especially light), solar hot water
systems, and biomass/biofuel systems
that do not use fossil fuels in
production. Geo-exchange systems are
highly encouraged as they lessen the
total demand for energy and, if
supplemented with other renewable
energy sources, can achieve zero energy
consumption more easily. Points under
this section will be awarded as follows:
a. Projects whose preliminary
building plans project they will have a
10 percent to 100 percent energy
generation commitment (where
generation is considered to be the total
amount of energy needed to be
generated on-site to make the building
a net-zero consumer of energy), will be
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awarded points corresponding to their
percent of commitment as follows:
• At least 10–29 percent commitment
to energy generation—2 points;
• At least 30–49 percent commitment
to energy generation—4 points;
• At least 50–69 percent commitment
to energy generation—6 points;
• At least 70–89 percent commitment
to energy generation—8 points;
• At least 90 percent or more
commitment to energy generation—10
points.
In order to receive more than 2 points
for this section (Energy Generation)
accurate energy analysis prepared by an
engineer will need to be submitted with
the pre-application. Energy analysis of
preliminary building plans using
industry-recognized simulation software
must document the projected total
energy consumption of the building, the
portion of building consumption which
will be satisfied through on-site
generation, and the building’s HERS
score.
(iii). Green Property Management
Credentials. Maximum 10 points.
Projects will be awarded an additional
10 points if the designated property
management company or individuals
that will assume maintenance and
operations responsibilities upon
completion of rehabilitation or repair
have a Credential for Green Property
Management. Credentialing can be
obtained from the National Apartment
Association (NAA), National Affordable
Housing Management Association, the
Institute for Real Estate Management,
US Green Building Council’s Leadership
in Energy and Environmental Design for
Operations and Maintenance (LEED
OM), or another source with a certifiable
credentialing program. This must be
illustrated in the resume(s) of the
property management team and
submitted with the application.
(7) Tenant service provision. The
Agency will award 5 points for
applications that include new services
provided by a non-profit organization,
which may include a faith-based
organization, or by a Government
agency for one year; 10 points for
multiple years. Such services shall be
provided at no cost to the project and
shall be made available to all tenants.
Examples of such services are
transportation for the elderly, afterschool day care services or after-school
tutoring. 5 or 10 Points.
(8) Consolidation of project
operations. To encourage posttransaction operational cost savings and
management efficiencies, the Agency
will award 5 points for applications that
include at least two and up to four
properties that will consolidate project
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budget and management operations and
10 points for applicants that include at
least five or more properties that will
consolidate project budget and
management operations. Consolidations
must meet the requirements of 7 CFR
3560.410. 5 or 10 points.
(9) Proposed Sale to Non-profit/Public
Housing Authority for properties sold to
non-profit organizations under the
prepayment process, as explained in 7
CFR Part 3560, subpart N. To receive
points for the sale, the borrower must
have an executed purchase agreement in
place and submitted with the preapplication. 20 points.
Note: For projects within a portfolio
transaction or group of consolidated projects
within a portfolio transaction, the Agency
will calculate the average score for each
project and each consolidation project group
within the sale or consolidation.
The Agency will total the points
awarded to each pre-application
received within the timeframes of this
Notice and rank each pre-application
according to total score. If point totals
are equal, the earliest time and date the
pre-application was received by the
Agency will determine the ranking. In
the event pre-applications are still tied,
they will be further ranked by giving
priority to those properties with the
earliest Rural Development operational
date.
Eligibility will then be confirmed on
the 10 highest-scoring and complete
pre-applications per State. If one or
more of the 10 highest-scoring preapplications is determined ineligible,
(i.e. the applicant is a borrower that is
not in good standing with the Agency or
has been debarred or suspended by the
Agency, etc.) the next highest-scoring
pre-application will be confirmed for
eligibility.
If one or more of the 10 highestranking pre-applications is a portfolio
transaction, then eligibility
determinations will be conducted on all
of the pre-applications associated with
the portfolio transaction. Should any of
the pre-applications associated with the
portfolio transaction be determined
ineligible, the ineligible pre-application
will be removed from consideration, but
the overall eligibility of the portfolio
transaction will not be affected as long
as the requirements in Section I are met.
Once ranking has been established,
the Agency will conduct a four-step
process to select pre-applications for
submission of formal applications. This
process is needed to ensure that the
Agency can process the proposed
transactions within available staffing
resources, develop a representative
sampling of revitalization transaction
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types, ensure geographic distribution,
and ensure an adequate pipeline of
transactions to use all available funding.
Step One: The Agency will review the
eligible pre-applications nationwide,
identify pre-applications as either RRH
or FLH projects and then as Simple,
Complex, or Portfolio and separate them
by State.
Step Two: The Agency will select, for
further processing, the nationally topranked portfolio sale transactions until
a total of $50,000,000 in potential debt
deferral is reached. Portfolio
transactions will be limited to one per
State (either RRH or FLH) and will
count as one MPR transaction. Portfolio
sale transactions will be limited to a
maximum of 10 properties.
Step Three: The highest ranked RRH
complex transactions in each State will
be selected for further processing, not to
exceed one per State. The highest
ranked FLH complex transactions in
each State will be selected for further
processing, not to exceed one per State.
Step Four: The highest ranked RRH
simple transactions in each State will be
selected for further processing, not to
exceed one per State. If a FLH complex
transaction has not been selected in
Step Three above, one (1) additional
FLH project will be selected from the
highest ranked eligible pre-applications
involving FLH simple transactions, in
that State, until a total of three
transactions per State is reached.
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VIII. Processing for Selected PreApplications
Those proposals that are ranked and
then selected for further processing will
be invited to submit a formal
application on SF 424, ‘‘Application for
Federal Assistance.’’ Those preapplications that are rejected by the
Agency will be returned to the applicant
and the applicant will be given appeal
rights pursuant to 7 CFR Part 11. Those
proposals that are not selected due to
low scores will be retained by the
Agency until all selections have been
made for the MPR, unless they are
withdrawn by the applicant. Once all
the selections have been made the low
score proposals will be notified that the
application was not selected and
provided with appeal rights. In the
event that a pre-application is selected
for further processing and the preapplicant declines, the next highest
ranked pre-application of the same
transaction type in that State will be
selected provided there is no change in
the Phase I requirements.
If there are no other pre-applications
of the same transaction type, then the
next highest-ranked pre-application
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regardless of transaction type will be
selected.
Applications (SF 424s) can be
obtained in hard copy by contacting the
State Office in the State where the
project is located or at https://
www.grants.gov/techlib/SF424-V2.0.pdf.
The SF 424 can be submitted either
electronically or in hard copy to the
State Office.
If a pre-application is accepted for
further processing, the applicant will be
expected to submit additional
information needed to demonstrate
eligibility and feasibility (such as a
CNA), consistent with this Notice and
the appropriate sections of 7 CFR Part
3560, prior to the issuance of a
restructuring offer.
Rural Development will work with
pre-applicants selected for further
processing in accordance with the
following steps:
(1) Based on the feasibility of the type
of transaction that will best suit the
project and the availability of funds,
further eligibility confirmation
determinations will be conducted by the
designated Multi-Family Housing
Revitalization Coordinators assigned by
each Rural Development State Director
with the assistance of the Multi-Family
Housing Preservation and Direct Loan
Division.
(2) If one is not already available to
the Agency, a CNA will be required and
conducted in accordance with the
requirements of 7 CFR 3560.103(c), HB–
3–3560, Chapter 7, and the CNA
Statement of Work together with any
non-conflicting amendments (suggested
formats for CNAs are available in any
Rural Development State Office.) A CNA
is prepared by a qualified independent
contractor and is obtained to determine
needed repairs and any necessary
adjustments to the reserve account for
long-term project viability. While the
requirements of the CNA are described
in the materials referenced above, at a
minimum, to be considered acceptable,
a CNA must include:
(i) A physical inspection of the site,
architectural features, common areas
and all electrical and mechanical
systems;
(ii) An inspection of a sample of
dwelling units;
(iii) Identify repair or replacement
needs;
(iv) Provide a cost estimate of the
repair and replacement expenses; and
(v) Provide at least a 20-year analysis
of the timing and funding for identified
needs which includes reasonable
assumptions regarding inflation. The
cost of the CNA will be considered a
part of the project expense and may be
paid from the ‘‘project reserve’’ with
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39827
prior approval of the Agency. The
Agency approval for participation in
this program will be contingent upon
the Agency’s final approval of the CNA
and concurrence in the scope of work by
the owner. The Agency, in its sole
discretion, may choose to obtain a CNA,
at its expense, if it determines that
doing so is in the best interest of the
Government.
It is important to note that all
applicants will be required to submit an
‘‘As Is’’ CNA based on the existing
conditions at the property.
(3) Loan underwriting will be
conducted by the designated MultiFamily Housing Revitalization
Coordinator assigned by each Rural
Development State Director with the
assistance of the MPDL. The feasibility
and structure of each revitalization
proposal will be determined using this
underwriting process to determine the
restructuring tools that will minimize
the cost to the Government consistent
with the purposes of this Notice. To
help ensure a balanced utilization of
revitalization tools and the long-term
economic viability of revitalized
projects, the MPR underwriting
guidelines include, but are not limited
to the following:
(i) The maximum soft-second loan is
limited to no more than $5,000 per unit,
(ii) The total assistance provided from
a revitalization grant, revitalization zero
percent loan, and/or revitalization softsecond loan is limited to $10,000 per
unit,
(iii) The maximum Section 515 loan
or Section 514/516 off-farm loan and
grant is limited to no more than $20,000
per unit, and
(iv) Properties receiving tax credits
are expected to have sufficient thirdparty funding resources and generally
will receive debt deferral only.
(v) Properties with more than 75
percent of the units receiving significant
subsidy such as Rural Development
rental assistance or HUD-funded
subsidy will be supplemented with
Sections 514, 515 and 516 loans and
grants before revitalization grants and
revitalization soft-second loans are
considered.
(vi) MPR revitalization grants will be
limited to $5,000 per unit.
(vii) Any rent increases that may be
necessary will not exceed 10 percent in
any one project operating year.
(viii) The approved MPR transaction
will include projected revenue
sufficient to cover a 10 percent
Operations and Maintenance increase in
the second year after the transaction.
(ix) Full RTO will be budgeted
pursuant to the Loan Agreement.
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(x) Budgeted increases to reserve
deposit will not exceed three percent
per annum.
(xi) The remaining reserve balance at
the end of the 20-year analysis period
should be at least 2.0 times the average
annual needs, including inflation, over
the 20-year analysis period.
These loan underwriting guidelines
have been developed based on
experience in the FY 2005–2009 MPR
Demonstrations. The Agency believes
that these guidelines will be appropriate
for typical transactions. However, the
Agency reserves the right to re-calculate
which MPR demonstration tools should
be used, when in the Agency’s
judgment, doing so would further the
objectives of the MPR and is in the best
interest of the Government.
The Agency expects that some of the
transactions proposed by selected preapplicants will prove to be infeasible.
The applicant entity may be determined
to be ineligible under Section III of this
Notice. If a proposed transaction is
determined infeasible or the applicant
determined ineligible, the Agency will
then select the next highest-ranked
project for processing regardless of
transaction type.
Each MPR offer will be approved by
the Revitalization Review Committee
chaired by the Deputy Administrator for
Multi-Family Housing or an agencyauthorized delegate. Approved MPR
offers will be presented to applicants
who will then have up to 15 calendar
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days to accept or reject the offer in
writing. Offers will expire after 15 days.
The Agency will replace expired
applications by selecting the next
highest-ranked project. Closing of MPR
offers will occur within 90 days of
acceptance by the applicant unless
extended by the Agency.
IX. Funding Restrictions
Applicants which were selected for
further processing under previous
Notices, and are timely submitted to
MPDL, will be funded on a first-comefirst-served basis on the date submitted
to MPDL and do not have to be rescored
under this Notice. After which,
applicants under this Notice will be
selected in accordance with selection
criteria and the four-step process
identified in Section VII of this Notice.
Once selected to proceed, the Agency
will provide additional guidance to the
applicant and request any other
information and documents necessary to
complete the underwriting and review
process. Since the character of each
application may vary substantially
depending on the type of transactions
proposed, information requirements
will be provided as appropriate.
Complete project information must be
submitted as soon as possible but in no
case later than 45 days from the date of
Agency notification of the applicant’s
selection for further processing or
September 1, 2011, whichever occurs
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first. Failure to submit the required
information in a timely manner may
result in the Agency discontinuing the
processing of the request.
Funding under this Notice will be
obligated to selectees that finish the
processing steps outlined above first
within each of the three funding
categories described in Section VII of
this Notice and that result in a ratio as
close as possible to 30 percent portfolio
transactions, 50 percent complex
transactions, and 20 percent simple
transactions, subject to funding
availability.
X. Application Review
The Revitalization Review Committee
will notify the appropriate Rural
Development State Director of its
approval for funding of an application
based on the selection criteria contained
in this Notice.
XI. Appeal Process
All adverse determinations regarding
applicant eligibility and the awarding of
points as a part of the selection process
are appealable, in accordance with 7
CFR Part 11 procedures. Instructions on
the appeal process will be provided at
the time an applicant is notified of the
adverse action.
Dated: June 30, 2011.
˜
Tammye Trevino,
Administrator, Rural Housing Service.
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39836
[FR Doc. 2011–17107 Filed 7–6–11; 8:45 am]
BILLING CODE 3410–XV–C
DEPARTMENT OF AGRICULTURE
Rural Housing Service
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Notice of Funds Availability for the
Section 533 Housing Preservation
Grants for Fiscal Year 2011
The Rural Housing Service
(RHS), an Agency within Rural
Development, announces that it is
soliciting competitive applications
under its Housing Preservation Grant
(HPG) program. The HPG program is a
grant program which provides qualified
public agencies, private non-profit
SUMMARY:
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organizations, which may include, but
not be limited to, faith-based and
community organizations, and other
eligible entities grant funds to assist
very low- and low-income homeowners
in repairing and rehabilitating their
homes in rural areas. In addition, the
HPG program assists rental property
owners and cooperative housing
complexes in repairing and
rehabilitating their units if they agree to
make such units available to low- and
very low-income persons. This action is
taken to comply with RHS regulations
found in 7 CFR part 1944, subpart N,
which require RHS to announce the
opening and closing dates for receipt of
preapplications for HPG funds from
eligible applicants. The intended effect
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of this Notice is to provide eligible
organizations notice of these dates.
DATES: If submitting a paper preapplication, the closing deadline for
receipt of all applications in response to
this Notice is 5 p.m. local time for each
Rural Development State Office on
August 22, 2011. If submitting the preapplication in electronic format, the
deadline for receipt is 5 p.m. Eastern
Standard Time on [same date as paper
application]. The pre-application
closing deadline is firm as to date and
hour. RHS will not consider any preapplication that is received after the
closing deadline. Applicants intending
to mail pre-applications must provide
sufficient time to permit delivery on or
before the closing deadline date and
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Federal Register / Vol. 76, No. 130 / Thursday, July 7, 2011 / Notices
Agencies
[Federal Register Volume 76, Number 130 (Thursday, July 7, 2011)]
[Notices]
[Pages 39820-39836]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17107]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Rural Housing Service
Notice of Funding Availability: Sections 514, 515 and 516 Multi-
Family Housing Revitalization Demonstration Program for Fiscal Year
2011
AGENCY: Rural Housing Service, USDA.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: United States Department of Agriculture (USDA) Rural
Development (Agency), which administers the programs of the Rural
Housing Service (RHS), announces the timeframe to submit applications
to participate in a demonstration program to preserve and revitalize
existing Multi-Family Housing (MFH) projects financed by Rural
Development under Section 515, Section 514 and Section 516 of the
Housing Act of 1949, as amended. The intended effect is to restructure
selected existing Section 515 Rural Rental Housing (RRH) loans and
Section 514/516 Off-Farm Labor Housing loans (FLH) and to provide
grants for the purpose of ensuring that sufficient resources are
available to preserve the rental projects for the purpose of providing
safe and affordable housing for very low-, low-, or moderate-income
residents. Expectations are that properties participating in this
program will be revitalized and the affordable use will be extended
without displacing tenants because of increased rents. No additional
Agency Rental Assistance (RA) units will be made available under this
program.
DATES: The deadline for receipt of all pre-applications in response to
this Notice is 5 p.m., Eastern Time, August 22, 2011. The pre-
application closing deadline is firm as to date and hour. The Agency
will not consider any pre-applications that are received after the
closing deadline. Applicants intending to mail pre-applications must
allow sufficient time to permit delivery on or before the closing
deadline. Acceptance by a post office or private mailer does not
constitute delivery. Facsimile (FAX) and postage-due pre-applications
will not be accepted.
FOR FURTHER INFORMATION CONTACT: Cynthia L. Johnson,
cynthial.johnson@wdc.usda.gov, (202) 720-1940, Finance and Loan
Analyst, Multi-Family Housing Preservation and Direct Loan Division,
STOP 0782, (Room 1263-S), U.S. Department of Agriculture, Rural Housing
Service, 1400 Independence Avenue, SW., Washington, DC 20250-0782. All
hard copy pre-applications and required documents (attachments) must be
submitted to this address. (Please note this telephone number is not a
toll-free number.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The information collection requirements contained in this Notice
have received approval from the Office of Management and Budget (OMB)
under Control Number 0570-0190.
Overview
Announcement Type: Inviting applications from eligible applicants
for 2011 funding.
Catalog of Federal Domestic Assistance Number (CFDA): 10.447.
The Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies Appropriations Act, 2011 (Pub. L. 111-80) October
16, 2009, authorized the Agency to conduct a demonstration program for
the preservation and revitalization of the Section 515 RRH portfolio
and Section 514/516 FLH portfolio. The Department of Defense and Full
Year Continuing Appropriations Act, 2011 (Pub. L. 112-10) April 15,
2011, continues the Agency's authority and provides funding for this
demonstration program until expended. Sections 514, 515 and 516 MFH
programs are authorized by the Housing Act of 1949, as amended (42
U.S.C. Sections 1484, 1485, 1486) and provide Rural Development with
the authority to make loans for low-income MFH and FLH and related
facilities. All funding for MPR are subject to the availability of
funds for this purpose.
I. Funding Opportunities Description
This Notice solicits pre-applications from eligible borrowers/
applicants to restructure existing MFH properties within the Agency's
Section 515 MFH portfolio and Section 514/516 FLH portfolio for the
purpose of revitalization and preservation. The demonstration program
shall be referred to in this Notice as the Multi-Family Housing
Revitalization Demonstration
[[Page 39821]]
program (MPR). Agency regulations for the Section 515 MFH program and
for Section 514/516 FLH program are published at 7 CFR Part 3560.
Applications which were selected for further processing under
previous Notices (Fiscal Years 2007-2009), must be submitted to the
Multi-Family Housing Preservation and Direct Loan Division (MPDL) for
approval by the Loan Review Committee (LRC), prior to August 31, 2011.
Previous applications which are submitted prior to August 31, 2011, to
MPDL will be funded on a first-come-first-served basis based on the
date submitted to MPDL and do not have to be rescored under this
Notice. The Agency will not maintain nor fund applications for FY 2007-
2009 that have not been submitted to MPDL prior to August 31, 2011, but
applicants may reapply under future Notices. After August 31, 2011,
applicants will then be selected for funding from the FY 2011 NOFA
pursuant to this Notice. All funding for MPR transactions are subject
to the availability of funds for this purpose.
The MPR's intent is to ensure that existing rental projects will
continue to deliver decent, safe and sanitary affordable rental housing
for 20 years or the remaining term of any Agency loan whichever ends
later. Once an applicant has been confirmed eligible and the project
has been selected by the Agency in the process described in this Notice
and the applicant agrees to participate in the MPR demonstration
program by written notification to the Agency, an independent third-
party Capital Needs Assessment (CNA) will be conducted to provide a
fair and objective review of projected capital needs. The Agency shall
implement this Notice through an MPR Conditional Commitment (MPRCC)
Letter of Conditions with the eligible borrower, which will include all
the terms and conditions under this Notice.
The primary restructuring tool to be used in this program is debt
deferral for up to 20 years of the existing Section 514 and 515 loans
obligated prior to October 1, 1991. The cash flow from the deferred
payment will be deposited, as directed by the Agency, to the reserve
account to help meet the future physical needs of the property or to
reduce rents. Debt deferral is described as follows:
Debt Deferral: A deferral of the existing Agency debt for the
lesser of the remaining term of the loan or 20 years. All terms and
conditions of the deferral will be described in the MPR Debt Deferral
Agreement. A balloon payment of principal and accrued interest will be
due at the end of the deferral period. Interest will accrue at the
promissory note rate and subsidy will be applied as set out in the
Agency's Interest Credit Agreement. Interest will not be charged on the
deferred interest.
If the resulting cash flow is not adequate to address the long-term
needs of the project, the Agency may use the following sources of
funds:
(1) Other Agency restructuring tools as follows:
(i) MPR Revitalization Grant: A revitalization grant (for non-
profit applicants/borrowers only) is limited to the cost of correcting
health and safety violations as identified by the CNA. The grant
administration will be in accordance with applicable provisions of 7
CFR Parts 3015 or 3019, as applicable.
(ii) MPR Revitalization Zero Percent Loan: A revitalization loan at
zero percent interest that will have a term of 30 years and be
amortized over 50 years.
(iii) MPR Soft-Second Loan: A loan with a 1 percent interest rate
that will have its accrued interest and principal deferred, to a
balloon payment, due at the time the latest maturing Section 514 or
Section 515 loan already in place at the time of closing becomes due.
The term of the soft-second loan will not be timed to match the term of
any new Section 515 loan added during the transaction. New Section 515
loans can be made; however, the applicant will have to go through the
regular Section 515 application process.
(iv) Increased Return to Owner (RTO) for Stay-in-Owners: Stay-in-
owners, namely existing borrowers who will retain their property and
contribute cash to fund any hard costs of construction to meet
immediate needs identified by the CNA, may receive a Return on
Investment (ROI) on those funds provided the Agency determines an
increased ROI is financially feasible, and the Agency approves such a
return in the revitalization plan. The Agency also may offer that the
RTO be included in a ``cash flow split'' agreement as outlined in a
MPRCC/Letter of Conditions. The cash flow split will allow up to 50
percent of excess cash, generated by the owner's fiscal year end, to be
split equally between paying down any outstanding deferred Agency loan
balances, and 50 percent to be returned to the borrower as an increased
RTO, subject to the provisions of 7 CFR 3560.68.
MPR funds cannot be used to add new units, community rooms,
playgrounds, and/or laundry rooms; however, other funding sources as
outlined below in (2) through (6) can be used either for revitalization
or for improvements listed above to the projects.
(2) Rural Development Section 515 Rehabilitation loan funds;
(3) Rural Development Section 514/516 off-farm rehabilitation loan
and grant funds;
(4) Rural Development Section 538 Guaranteed Rural Rental Housing
Program financing;
(5) Rural Development Multi-Family Housing Re-lending Demonstration
Program Funds;
(6) Third-party loans with below market rates (below the Applicable
Federal Rate (AFR)), grants, tax credits, and tax-exempt financing; and
(7) Owner-provided capital contributions in the form of a cash
infusion. A cash infusion is not a loan.
Transfers, subordinations, and consolidations may be approved as
part of a MPR transaction in accordance with 7 CFR Part 3560. If a
transfer is part of the MPR transaction, the transfer must meet the
requirements of 7 CFR 3560.406 before the MPR transaction is processed.
For the purposes of the MPR, the restructuring transactions will be
identified in three categories: (Applicants may only apply under one
category.)
(1) Simple transactions that involve no change in ownership.
(2) Complex transactions which consist of a property transfer to
new ownership processed in accordance with 7 CFR 3560.406 or
transactions requiring a subordination agreement as a result of third-
party funds.
(3) Portfolio transactions that are defined as multiple project
sale transactions with a common purchaser or multiple MPR transactions
with one stay-in owner all within one State closed on or after
September 30, 2010. The common purchaser or stay-in owner must have at
least one general partner in common. If the owner chooses to remove one
or more properties, at least two properties must remain in order to be
deemed a portfolio transaction.
Each transactional category may utilize any or all restructuring
tools. MPR Restructuring tools that may be available to address capital
needs are based on the CNA process and the underwriting feasibility
determination.
While all non-deferred Agency debt, either in first lien position
or a subordinated lien position must be secured within market value,
deferred debt may exceed the market value of the security. Payment of
such deferred debt will not be required from normal project operation
income, but from excess cash from project operations and the value of
the property after all other secured debts are satisfied.
[[Page 39822]]
The following lays out the general steps of the MPR application
process:
(1) Pre-application: Applicants must submit a pre-application
described in Section VI. This pre-application process is designed to
lessen the cost burden on all applicants including those who may not
meet eligibility requirements or whose proposals may not be feasible.
Applicants are encouraged, but not required, to provide an electronic
copy of all hard copy forms and documents submitted in the pre-
application/application package as requested by this Notice. The forms
and documents must be submitted as read-only PDF Adobe Acrobat files on
an electronic media such as CDs, DVDs or USB drives. For each
electronic device that you submit, you must include a Table of Contents
of all documents and forms on that device. The electronic medium must
be submitted to the local State Office.
Note: If you receive a loan or grant award under this Notice,
USDA reserves the right to post all information submitted as part of
the pre-application/application package which is not protected under
the Privacy Act on a public Web site with free and open access to
any member of the public.
(2) Eligible Properties: Using criteria described below in Section
III, USDA will conduct an initial screening for eligibility. As
described in Section VIII, USDA will conduct additional eligibility
screening later in the selection process.
(3) Scoring and Ranking: All eligible, complete and timely-filed
pre-applications submitted this fiscal year will be scored, ranked and
put in funding categories as discussed in Sections VI and VII.
(4) Formal Applications: Top ranked pre-applicants will receive a
letter from the Agency and will be invited to submit a formal
application. As discussed in Section VIII paragraph (2) of this Notice,
USDA will require the owner to provide a CNA in order to determine the
proper combination of tools to be offered to the applicant, to perform
additional eligibility review, and to underwrite the proposal to
determine financial feasibility. Where proposals are found to be
ineligible or financially infeasible, owners will be informed and lower
scoring applicants will be considered as set-forth in Section VIII.
(5) Financial Feasibility: Using the results of the CNA to help
identify the need for resources and applicant-provided information
regarding anticipated or available third-party financing, the Agency
will determine the financial feasibility of each potential transaction,
using restructuring tools available either through existing regulatory
authorities or specifically authorized through this demonstration
program. A project is financially feasible when a property can provide
affordable, safe, decent, and sanitary housing for 20 years or the
remaining term of any Agency loan whichever ends later. By using the
authorities of this program while minimizing the cost to the Agency,
and without increasing rents for tenants and farm laborers, except when
necessary to meet normal and necessary operating expenses. If the
transaction is determined financially feasible by the Agency, the
borrower will be offered a restructuring proposal, which will include
the requirement that the borrower will execute, for recordation, a
Restrictive-Use Covenant (RUC) for a period of 20 years, the remaining
term of any existing loans, or the remaining term of any existing
Restrictive-Use Provisions (RUP), whichever ends later. The
restructuring proposal will be established in the form of the MPRCC.
(6) MPR Agreements: If the offer is accepted by the applicant, the
Agency and applicant will enter into a MPRCC. The applicant must also
agree to restrict the property use when the MPR transaction is closed.
Any third-party lender will be required to subordinate to the Agency's
RUC unless the Agency determines on a case-by-case basis that the
lender refuses to subordinate and such refusal will not compromise the
purpose of the MPR. The Agency may also request that the applicant sign
an agreement that would require the owner to escrow reserve, tax, and
insurance payments in accordance with all pertinent current and future
Agency regulations. In addition, the Agency may also request that the
applicant agree to accept future rent increases based on an Annual
Adjustment Factor (AAF). The AAF allows rents to be adjusted by the
annual inflation factor as determined by the United States Office of
Management and Budget (OMB). The exact AAF will be established in the
MPR Agreement.
(7) General Requirements: The MPR transactions may be conducted
with a stay-in owner (simple or portfolio) or may involve a change in
ownership (complex or portfolio). Any housing or related facilities
that are constructed or repaired must meet the Agency design and
construction standards and the development standards contained in 7 CFR
Part 1924, subparts A and C, respectively. Once constructed, Section
515 MFH and Section 514/516 FLH must be managed in accordance with 7
CFR Part 3560. Tenant eligibility will be limited to persons who
qualify as an eligible household under Agency regulations or who are
eligible under the requirements established to qualify for housing
benefits provided by sources other than the Agency, such as the U.S.
Department of Housing and Urban Development (HUD) Section 8 assistance
or Low Income Housing Tax Credits (LIHTC) assistance. Additional tenant
eligibility requirements are contained in 7 CFR 3560.152.
(8) Voluntary ``community market rent'' Demonstration (available
for Section 515 properties only): In conjunction with this
demonstration, Rural Development announces the opportunity for all
successful Section 515 applicants to participate on a voluntary basis
in a viability test of a 30 percent limitation on tenant rents, for
post-restructured properties. Owners of properties in the Section 515
restructuring program may elect to participate in the ``community
market rent'' demonstration which will allow an owner to set a rent
above the approved basic rent for any unit not currently occupied by a
tenant receiving Agency RA.
Eligible tenants for these units must have adjusted annual incomes
sufficient to allow them to pay the ``community market rent'' using
less than 30 percent of their adjusted income. Tenants would be allowed
to occupy without paying overage, additional sums that would otherwise
be required to bring their rent payment up to 30 percent of income.
With the Agency's consent, up to 50 percent of the difference between
the basic rent and the new ``community market rent'' could be retained
by the owner as an increased return.
For example, if the basic rent is $350, the owner could create a
``community market rent'' at $410, and market the unit to tenants who
could pay that rent at less than 30 percent of adjusted income. A
percentage of the difference, $60 could be retained by the owner, as
negotiated with Rural Development, up to $30.
Prior to implementation of the ``community market rent''
demonstrations, the Agency will issue guidance to successful applicants
who have indicated an interest in participating in the demonstration
providing further details with respect to the program.
II. Award Information
The Department of Defense and Full Year Continuing Appropriations
Act, 2011 (Pub. L. 112-20), April 15, 2011, appropriated $14,970,000 in
new budget authority, to the Agency for the MPR Demonstration Program.
For FY 2011, up to $51,335,131.69 in Section 515
[[Page 39823]]
loan funds may be made available thru this NOFA.
All funding must be obligated, by the Agency, not later than
September 30, 2011.
III. Eligibility Information
Applicants (and the principals associated with each applicant) must
meet the following requirements:
(1) Eligibility under 7 CFR 3560.55; however, the requirements
described in 7 CFR 3560.55(a)(5) pertaining to required borrower
contributions and 7 CFR 3560.55(a)(6) pertaining to required
contributions of initial operating capital are waived for all MPR
proposals.
(2) For Section 515 MFH projects where the average physical vacancy
rate over the 12 months preceding the filing of the pre-application
will be no more than 10 percent for projects of 16 units or more and no
more than 15 percent for projects under 16 units unless an exception
applies under Section VI paragraph (2) (ii) of this Notice. If a
project consolidation is involved, the consolidation will remain
eligible so long as the average vacancy rate for all the projects
involved meets the occupancy standard of this paragraph. Property(s)
that do not meet the consolidation threshold may be withdrawn by the
owner from the application process without jeopardizing the entire
deal.
(3) For Sections 514 and 516 FLH projects, the property must have
positive cash flow for the previous full three years of operation
unless an exception applies under Section VI paragraph (2) (ii) of this
Notice.
(4) Ownership of, and ability to operate, the facility after the
transaction is completed. In the event of a transfer, the proposed
transferee with an executed purchase agreement or other evidence of
site control will be the applicant. Purchase agreements that have not
been executed Will Not be accepted.
(5) A CNA and Agency financial evaluation must be conducted to
ensure that utilization of the restructuring tools of the MPR program
is financially feasible and necessary for the revitalization and
preservation of the property as affordable housing. Initial eligibility
for processing will be determined as of the date of the pre-application
filing deadline. The Agency reserves the right to discontinue
processing any application due to material changes in the applicant's
status occurring at any time after the initial eligibility
determination.
(6) Please note that all grant applicants must obtain a Dun and
Bradstreet Data Universal Numbering System (DUNS) number and register
in the Central Contractor Registration (CCR) prior to submitting a pre-
application pursuant to 2 CFR 25.200(b). In addition, an entity
applicant must maintain registration in the CCR database at all times
during which it has an active Federal award or an application or plan
under construction by the Agency. Similarly, all recipients of Federal
Financial Assistance are required to report information about first-
tier sub-awards and executive compensation, in accordance with 2 CFR
Part 17 a. So long as an entity applicant does not have an exception
under 2 CFR 170.110(b), the applicant must have the necessary processes
and systems in place to comply with the reporting requirements should
the applicant receive funding. See 2 CFR 170.200(b).
IV. Equal Opportunity and Nondiscrimination Requirements
USDA is an equal opportunity provider, employer, and lender.
(1) Borrowers and applicants will comply with the provisions of 7
CFR 3560.2.
(2) All housing must meet the accessibility requirements found at 7
CFR 3560.60 (d).
(3) All MPR participants must submit or have on file a valid Form
RD 400-1, ``Equal Opportunity Agreement'' and Form RD 400-4,
``Assurance Agreement.''
USDA prohibits discrimination in all its programs and activities on
the basis of race, color, national origin, age, disability, sex,
marital status, familial status, religion, or because all or 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 Adjudication and
Compliance, 1400 Independence Avenue, SW., Washington, DC 20250-9410,
or call (800) 795-3272 (Voice) or (202) 720-6382 (TDD).
The policies and regulations contained in 7 CFR Part 1901, subpart
E, apply to this program.
This Federal Register Notice pertains to announcing the
availability of funds and the timeframe for submitting applications to
participate in a demonstration program to preserve and revitalize
existing rural rental housing projects financed by Rural Development
under Section 515, Section 514, and Section 516 of the Housing Act of
1949, as amended. This Notice does not have an adverse impact on
minority/low-income populations.
V. Authorities Available for MPR
MPR tools will be used in accordance with 7 CFR Part 3560 and its
associated handbooks (available in any Rural Development office or at
https://www.rurdev.usda.gov/handbooks.html). The program will be
administered within the resources available to the Agency through
Public Law 112-10 for the preservation and revitalization of Section
514/516 off-farm and Section 515 financed properties. In the event that
any provisions of 7 CFR Part 3560 conflict with this demonstration
program, the provisions of the MPR will take precedence.
VI. Application and Submission Information
Application Submission Information. Pre-applications can be
submitted either electronically or in hard copy using the MPR pre-
application form. The form to be used for the pre-application is
attached at the end of this Notice and available at any State Office. A
link to the electronic version of this form may be found on the
Internet at the MPR homepage https://www.rurdev.usda.gov/rhs/mfh/MPR/MPRHome.htm. Applicants are strongly encouraged, but not required, to
submit the pre-application electronically. The Agency will record pre-
applications received electronically by the actual date and time
received in the MPR Web site mail box. Hard copy pre-applications
received on or before the deadline date will receive the close of
business time of the day received as the receipt time. Hard copy pre-
applications must be mailed in time to meet the submission deadline of
5 p.m., Eastern Time, August 22, 2011. Assistance for filing electronic
and hard copy pre-applications can be obtained from any Rural
Development State Office. For assistance in attaching files to e-mails
for electronic submission, please contact Cynthia L. Johnson at (202)
720-1940 or e-mail at cynthial.johnson@wdc.usda.gov or Anita Kapoor at
(202) 690-1337 or e-mail at anita.kapoor@wdc.usda.gov. Sufficient time
must be allowed to ensure the MPR pre-application arrives either
electronically or by mail Before the submission deadline.
Note: For electronic submissions, there is a time delay between
the time the pre-application is sent and the time it is received by
the Agency, depending on network traffic. As a result, last-minute
submissions sent before the deadline date and time could well
[[Page 39824]]
be received after the deadline date and time because of the
increased network traffic. Applicants are reminded that all
submissions received after the deadline date and time will be
rejected, regardless of when they were sent. An auto-reply
acknowledgement will be sent when the application is received
electronically via e-mail; unless you have software blocking the
receipt of the auto-reply e-mail.
Hard copy pre-applications and additional materials should be
mailed to the attention of Cynthia L. Johnson, Finance and Loan
Analyst, Multi-Family Housing Preservation and Direct Loan Division,
STOP 0782 (Room 1263-S), U. S. Department of Agriculture, Rural Housing
Service, 1400 Independence Avenue, SW., Washington, DC 20250-0782.
The electronic pre-application is stored as an Adobe Acrobat
fillable form. The form contains a button labeled ``Send Form.''
Clicking on the button will result in an e-mail with an attachment that
includes the electronic pre-application form. The form will be sent via
e-mail to the Multi-Family Housing Preservation and Direct Loan
Division in Washington, DC for consideration. Please click this button
only once, as multiple clicks result in multiple filings.
Note: If a purchase agreement or market survey is required,
these additional documents are to be attached to the resulting e-
mail prior to submission. This means all material must come to the
National Office. A purchase agreement submitted to the State or Area
Office and the pre-application sent electronically or via mail to
the MPDL would not constitute a complete pre-application. The pre-
application, purchase agreement, market survey and all associated
documents required for submission under this Notice, must be
received electronically or by mail, as one package, by MPDL to be
considered.
Note: There is a limitation on the size of attachments that can
be sent electronically. If you are not successful in submitting your
attachments electronically, please submit the complete package to
the National Office on an electronic device or in hardcopy form by
the closing deadline of this Notice.
(2) The application submission and scoring process will be
completed in two phases in order to avoid unnecessary effort and
expense on the part of interested borrowers/applicants and to allow
additional points for applicants that propose a transfer of a troubled
project to an eligible owner.
Phase I--Pre-application Completeness. Phase I is the pre-
application process. The applicant must submit a complete pre-
application by the deadline date under the DATES section of this
Notice. The applicant's submission will be classified as ``complete''
when a pre-application is received in the format and place as described
in this Notice by the MPDL for each MPR proposal the applicant wishes
to be considered for the demonstration. In the event the MPR proposal
involves a project consolidation, the actual consolidation will be
completed in accordance with 7 CFR 3560.410. One pre-application for
the proposed consolidated project is required and must clearly identify
each project included in the consolidation. If the MPR proposal
involves a portfolio, one pre-application for each project in the
portfolio is required and each pre-application must identify all
projects to be purchased as part of the portfolio.
In order for the pre-application to be considered complete, all
applicable information requested on the MPR Pre-application form must
be included with the pre-application.
Additional information that must be provided with the pre-
application, when applicable, includes:
(i) A copy of an executed purchase agreement if a transfer or sale
is being considered must be attached and submitted to MPDL.
(ii) A current market survey (completed within the previous 12
months of the filing of an MPR application) if the project's occupancy
standards cited in Section II or if the FLH project does not have a
positive cash flow as cited in Section III and there is an overwhelming
market demand evidenced by waiting lists and a housing shortage
confirmed by local housing agencies and real estate professionals. The
market survey must show a clear need and demand for the project once a
restructuring transaction is completed. The results of the survey of
existing and any other proposed rental or labor housing, including
complex name, location, number of units, bedroom mix, family or elderly
type, year built, rent charges must be provided as well as the existing
vacancy rates of all available rental units in the community, their
waiting lists and amenities, and the availability of RA or other
subsidies. For proposals where the applicant is requesting LIHTC, the
number of LIHTC units and the maximum LIHTC incomes and rents by unit
size must be provided. The Rural Development State Director will
determine whether or not the proposal has market feasibility based on
the data provided by the applicant. Any costs associated with the
completion of the market survey will Not be considered a project
expense.
iii. Market Survey for section 515 projects that do not meet the
occupancy standards of Section III, paragraph (2) & (3) of this Notice
or if applicable, the requirements for the exception in Section VI,
paragraph (1)(ii) of this Notice.
iv. Executed Purchase Agreement for transfer and sales to
nonprofit/public housing authorities proposals.
v. Certification by the applicant to achieve participation in the
Greens Community Program.
vi. Certification by the applicant to achieve participation in
Local Green Energy-Efficient Building Standards.
vii. Energy Analysis of preliminary or rehabilitation building
plans using industry recognized simulation software to document
projected energy consumption of the building, the portion of building
consumption that will be satisfied through on-site generation, and the
Buildings Home Energy Rating System (HERS) score.
viii. Resumes of the designated property management companies or
individuals responsible for maintenance operations that have
credentials for Green Property Management.
ix. Documentation substantiating Green Energy requirements.
x. Documentation on tenant services provided.
xi. Evidence of commitment and sources of funds.
xii. Evidence of owner contribution of funds for transaction costs.
xiii. Evidence of owner contribution of funds for hard costs of
construction.
Unless an exception under this section applies, the requirements
stated in Section III, paragraph (2) and (3) of this Notice must be
met.
Phase II--Eligibility Review. This phase of the application process
will be completed by the Agency based on Agency records and the pre-
application information.
All eligible, complete, and timely-filed pre-applications will then
be scored and ranked based on points received during this process as
part of the selection process outlined in Section VII.
Further, the Agency will categorize each MPR proposal as being
potentially Simple, Complex, or Portfolio based on the information
submitted on the pre-application and in accordance with the category
description provided in Section I.
VII. Selection Process
Application scoring points will be based on information provided
during the submission process and in Agency records. Points will be
awarded as follows:
(1) Contribution of funds from other sources. Other funds are those
discussed in items (2) through (7) of Section I ``Funding Opportunities
Description.''
[[Page 39825]]
Points awarded are to be based on documented written evidence that the
funds are committed. The maximum points awarded for this criterion is
25 points. These points will be awarded in the following manner:
(i) Evidence of a commitment of at least $3,000 to $5,000 per unit
per property from other sources. 15 points.
(ii) Evidence of a commitment greater than $5,000 per unit per
property from other sources. 20 points.
(iii) Evidence of a commitment greater than $5,000 per unit per
property from other sources and a binding written commitment by a third
party to contribute 25 percent or more of any allowable developer fee
to the hard costs of construction. 25 points.
(2) Owner contribution. The maximum points awarded for this
criterion is 15 points. These points will be awarded in the following
manner:
(i) Owner contribution sufficient to pay transaction costs. (These
funds cannot be from the project reserve account or project general
operating account or in the form of a loan.) Transaction costs are
defined as those costs required for completing the transaction and
include, but are not limited to, the CNA, legal and closing costs,
appraisal costs and filing/recording fees. The minimum contribution
required to receive these points is $5,000 per project and will be
required to be deposited in the property reserve account prior to
closing. 5 points.
(ii) Owner contribution for the hard costs of construction. (These
funds cannot be from the project reserve account or project general
operating account or in the form of a loan.) Hard costs of construction
are defined as materials, inventory, equipment, property or machinery.
Hard costs are itemized on Form RD 1924-13 ``Estimate and Certificate
of Actual Cost.'' Form RD 1924-13 can be found at https://www.rurdev.usda.gov/regs/Forms/1924-13.pdf. The minimum contribution
required to receive these points is $1,000 per unit per project which
will be required to be deposited in the property reserve account prior
to closing. An increased RTO may be budgeted and allowed for funds
committed in accordance with 7 CFR 3560.406(d)(14)(ii). 10 points.
(3) Age of project. For project consolidation proposals, the
project with the earliest operational date will be used in calculating
the age of the project. Since the age of the project and the date that
the loan was made are directly related to physical needs, a maximum of
25 points will be awarded on the following criteria:
(i) Projects with initial operational dates prior to December 21,
1979. 25 points.
(ii) Projects with initial operational dates on or after December
21, 1979, but before December 15, 1989. 20 points.
(iii) Projects with initial operational dates on or after December
15, 1989, but before October 1, 1991. 15 points.
(4) Troubled project points. The Agency may award up to 25
additional points to facilitate the transfer and revitalization of
projects the Agency considers as troubled due to an act of nature or
where physical and/or financial deterioration or management
deficiencies exist. Projects with an Agency classification of ``C'' or
``D'' according to Agency HB-2-3560, Chapter 9, Paragraph 9.7
(available at https://www.rurdev.usda.gov/regs/hblist.html) will be
considered troubled. Projects that are classified ``B'' and do not
involve a transfer will also receive consideration. The Handbook
definition of Agency classification takes precedence over Multifamily
Housing Information System (MFIS) status. Points will be awarded in the
following manner:
(i) For Stay-in Owners only: If the Agency servicing classification
is ``B'' as a result of a workout plan approved by the Agency prior to
January 1, 2011. 25 points.
(ii) If the Agency servicing classification is ``C'' or ``D'' for
24 months or more. 20 points.
(iii) If the Agency servicing classification is ``C'' or ``D'' for
less than 24 months. 15 points.
(5) Prior Approved CNAs. In the interest of ensuring timely
application processing and underwriting, the Agency will award up to 20
points for properties with CNAs already approved by the Agency.
``Approved'' means either after the initial CNA has been reviewed and
approved or after an updated CNA has been reviewed and approved by the
Agency. CNAs over 12 months old may not be used for MPR underwriting
without an update approved by the Agency. Points will be awarded for:
(i) CNAs approved on or after October 1, 2009, and prior to October
1, 2010. 10 points.
(ii) CNAs approved on or after October 1, 2010, but before the
publication of the Fiscal Year (FY) 2011 MPR Notice. 20 points.
(6) Energy Conservation Energy, Generation, and Green Property
Management. Under the MPR Energy Initiatives, properties may receive a
maximum of 68 points under three categories: Energy Conservation,
Energy Generation, and Green Property Management.
(i) Energy Conservation. Maximum 48 points.
Pre-applications for rehabilitation and preservation of properties
may be eligible to receive a maximum of 48 points for the following
energy conservation measures.
a. Participation in the Green Communities program by the Enterprise
Community Partners (https://www.enterprisecommunity.org) will be awarded
45 points for any project that qualifies for the program. At least 30
percent of the minimum optional points needed to qualify for the Green
Communities program must be earned under the Energy Efficiency section
of the Green Communities qualification program.
b. If you are not enrolling in the Green Communities program then
points can be accumulated for each of the following items up to a total
of 30 points. Provide documentation to substantiate your answers below:
i. This proposal includes the replacement of heating, ventilation
and air conditioning (HVAC) equipment with Energy Star qualified
heating, ventilation and air conditioning equipment. 4 points.
ii. This proposal includes the replacement of windows and doors
with Energy Star qualified windows and doors. 4 points.
iii. This proposal includes additional attic and wall insulation
that exceeds the required R-Value of these building elements for your
area as per the International Energy Conservation Code 2009. Two points
will be awarded if all exterior walls exceed insulation code and two
points will be awarded if attic insulation exceeds code, for a maximum
of 4 points.
All exterior walls exceed insulation code. 2 points.
Attic insulation exceeds code. 2 points.
iv. This proposal includes the reduction in building shell air
leakage by at least 15 percent as determined by pre- and post-rehab
blower door testing on a sample of units. Building shell air leakage
may be reduced through materials such as caulk, spray foam, gaskets,
and house-wrap. Sealing of duct work with mastic, foil-backed tape, or
aerosolized duct sealants can also help reduce air leakage. 4 points.
v. This proposal includes 100 percent of installed appliances and
exhaust fans that are Energy Star qualified. 3 points.
vi. This proposal includes 100 percent of installed water heaters
that are Energy Star qualified. 3 points.
[[Page 39826]]
vii. This proposal includes replacement of 100 percent of toilets
with flush capacity of more than 1.6 gallon flush capacity with new
toilets having 1.6 gallon flush capacity or less, and with
Environmental Protection Agency (EPA) Water Sense label. 2 points.
viii. This proposal includes 100 percent of new showerheads with
EPA Water Sense label. 2 points.
ix. Does this proposal include 100 percent of new faucets with EPA
Water Sense label? 2 points.
x. Does this proposal include 100 percent energy-efficient lighting
including Energy Star qualified fixtures, compact fluorescent
replacement bulbs in standard incandescent fixtures and Energy Star
ceiling fans? 2 points.
c. Participation in local green/energy efficient building
standards. Applicants who participate in a city, county or municipality
program will receive an additional 3 points. The applicant should be
aware that most of the requirements are embedded in the third-party
programs' rating and verification systems; the applicant should look at
the requirements for each program for details.
(ii) Energy Generation. Maximum 10 points.
Rehabilitation and Preservation projects that participate in the
Green Communities program by the Enterprise Community Partners, or
those projects that accumulated at least 24 points for Energy
Conservation, are eligible to earn additional points for installation
of on-site renewable energy sources. Renewable, on-site energy
generation will complement a weathertight, well insulated building
envelope with highly efficient mechanical systems. Possible renewable
energy generation technologies include: Wind turbines and micro-
turbines, micro-hydro power, photovoltaics (capable of producing a
voltage when exposed to radiant energy, especially light), solar hot
water systems, and biomass/biofuel systems that do not use fossil fuels
in production. Geo-exchange systems are highly encouraged as they
lessen the total demand for energy and, if supplemented with other
renewable energy sources, can achieve zero energy consumption more
easily. Points under this section will be awarded as follows:
a. Projects whose preliminary building plans project they will have
a 10 percent to 100 percent energy generation commitment (where
generation is considered to be the total amount of energy needed to be
generated on-site to make the building a net-zero consumer of energy),
will be awarded points corresponding to their percent of commitment as
follows:
At least 10-29 percent commitment to energy generation--2
points;
At least 30-49 percent commitment to energy generation--4
points;
At least 50-69 percent commitment to energy generation--6
points;
At least 70-89 percent commitment to energy generation--8
points;
At least 90 percent or more commitment to energy
generation--10 points.
In order to receive more than 2 points for this section (Energy
Generation) accurate energy analysis prepared by an engineer will need
to be submitted with the pre-application. Energy analysis of
preliminary building plans using industry-recognized simulation
software must document the projected total energy consumption of the
building, the portion of building consumption which will be satisfied
through on-site generation, and the building's HERS score.
(iii). Green Property Management Credentials. Maximum 10 points.
Projects will be awarded an additional 10 points if the designated
property management company or individuals that will assume maintenance
and operations responsibilities upon completion of rehabilitation or
repair have a Credential for Green Property Management. Credentialing
can be obtained from the National Apartment Association (NAA), National
Affordable Housing Management Association, the Institute for Real
Estate Management, US Green Building Council's Leadership in Energy and
Environmental Design for Operations and Maintenance (LEED OM), or
another source with a certifiable credentialing program. This must be
illustrated in the resume(s) of the property management team and
submitted with the application.
(7) Tenant service provision. The Agency will award 5 points for
applications that include new services provided by a non-profit
organization, which may include a faith-based organization, or by a
Government agency for one year; 10 points for multiple years. Such
services shall be provided at no cost to the project and shall be made
available to all tenants. Examples of such services are transportation
for the elderly, after-school day care services or after-school
tutoring. 5 or 10 Points.
(8) Consolidation of project operations. To encourage post-
transaction operational cost savings and management efficiencies, the
Agency will award 5 points for applications that include at least two
and up to four properties that will consolidate project budget and
management operations and 10 points for applicants that include at
least five or more properties that will consolidate project budget and
management operations. Consolidations must meet the requirements of 7
CFR 3560.410. 5 or 10 points.
(9) Proposed Sale to Non-profit/Public Housing Authority for
properties sold to non-profit organizations under the prepayment
process, as explained in 7 CFR Part 3560, subpart N. To receive points
for the sale, the borrower must have an executed purchase agreement in
place and submitted with the pre-application. 20 points.
Note: For projects within a portfolio transaction or group of
consolidated projects within a portfolio transaction, the Agency
will calculate the average score for each project and each
consolidation project group within the sale or consolidation.
The Agency will total the points awarded to each pre-application
received within the timeframes of this Notice and rank each pre-
application according to total score. If point totals are equal, the
earliest time and date the pre-application was received by the Agency
will determine the ranking. In the event pre-applications are still
tied, they will be further ranked by giving priority to those
properties with the earliest Rural Development operational date.
Eligibility will then be confirmed on the 10 highest-scoring and
complete pre-applications per State. If one or more of the 10 highest-
scoring pre-applications is determined ineligible, (i.e. the applicant
is a borrower that is not in good standing with the Agency or has been
debarred or suspended by the Agency, etc.) the next highest-scoring
pre-application will be confirmed for eligibility.
If one or more of the 10 highest-ranking pre-applications is a
portfolio transaction, then eligibility determinations will be
conducted on all of the pre-applications associated with the portfolio
transaction. Should any of the pre-applications associated with the
portfolio transaction be determined ineligible, the ineligible pre-
application will be removed from consideration, but the overall
eligibility of the portfolio transaction will not be affected as long
as the requirements in Section I are met.
Once ranking has been established, the Agency will conduct a four-
step process to select pre-applications for submission of formal
applications. This process is needed to ensure that the Agency can
process the proposed transactions within available staffing resources,
develop a representative sampling of revitalization transaction
[[Page 39827]]
types, ensure geographic distribution, and ensure an adequate pipeline
of transactions to use all available funding.
Step One: The Agency will review the eligible pre-applications
nationwide, identify pre-applications as either RRH or FLH projects and
then as Simple, Complex, or Portfolio and separate them by State.
Step Two: The Agency will select, for further processing, the
nationally top-ranked portfolio sale transactions until a total of
$50,000,000 in potential debt deferral is reached. Portfolio
transactions will be limited to one per State (either RRH or FLH) and
will count as one MPR transaction. Portfolio sale transactions will be
limited to a maximum of 10 properties.
Step Three: The highest ranked RRH complex transactions in each
State will be selected for further processing, not to exceed one per
State. The highest ranked FLH complex transactions in each State will
be selected for further processing, not to exceed one per State.
Step Four: The highest ranked RRH simple transactions in each State
will be selected for further processing, not to exceed one per State.
If a FLH complex transaction has not been selected in Step Three above,
one (1) additional FLH project will be selected from the highest ranked
eligible pre-applications involving FLH simple transactions, in that
State, until a total of three transactions per State is reached.
VIII. Processing for Selected Pre-Applications
Those proposals that are ranked and then selected for further
processing will be invited to submit a formal application on SF 424,
``Application for Federal Assistance.'' Those pre-applications that are
rejected by the Agency will be returned to the applicant and the
applicant will be given appeal rights pursuant to 7 CFR Part 11. Those
proposals that are not selected due to low scores will be retained by
the Agency until all selections have been made for the MPR, unless they
are withdrawn by the applicant. Once all the selections have been made
the low score proposals will be notified that the application was not
selected and provided with appeal rights. In the event that a pre-
application is selected for further processing and the pre-applicant
declines, the next highest ranked pre-application of the same
transaction type in that State will be selected provided there is no
change in the Phase I requirements.
If there are no other pre-applications of the same transaction
type, then the next highest-ranked pre-application regardless of
transaction type will be selected.
Applications (SF 424s) can be obtained in hard copy by contacting
the State Office in the State where the project is located or at https://www.grants.gov/techlib/SF424-V2.0.pdf. The SF 424 can be submitted
either electronically or in hard copy to the State Office.
If a pre-application is accepted for further processing, the
applicant will be expected to submit additional information needed to
demonstrate eligibility and feasibility (such as a CNA), consistent
with this Notice and the appropriate sections of 7 CFR Part 3560, prior
to the issuance of a restructuring offer.
Rural Development will work with pre-applicants selected for
further processing in accordance with the following steps:
(1) Based on the feasibility of the type of transaction that will
best suit the project and the availability of funds, further
eligibility confirmation determinations will be conducted by the
designated Multi-Family Housing Revitalization Coordinators assigned by
each Rural Development State Director with the assistance of the Multi-
Family Housing Preservation and Direct Loan Division.
(2) If one is not already available to the Agency, a CNA will be
required and conducted in accordance with the requirements of 7 CFR
3560.103(c), HB-3-3560, Chapter 7, and the CNA Statement of Work
together with any non-conflicting amendments (suggested formats for
CNAs are available in any Rural Development State Office.) A CNA is
prepared by a qualified independent contractor and is obtained to
determine needed repairs and any necessary adjustments to the reserve
account for long-term project viability. While the requirements of the
CNA are described in the materials referenced above, at a minimum, to
be considered acceptable, a CNA must include:
(i) A physical inspection of the site, architectural features,
common areas and all electrical and mechanical systems;
(ii) An inspection of a sample of dwelling units;
(iii) Identify repair or replacement needs;
(iv) Provide a cost estimate of the repair and replacement
expenses; and
(v) Provide at least a 20-year analysis of the timing and funding
for identified needs which includes reasonable assumptions regarding
inflation. The cost of the CNA will be considered a part of the project
expense and may be paid from the ``project reserve'' with prior
approval of the Agency. The Agency approval for participation in this
program will be contingent upon the Agency's final approval of the CNA
and concurrence in the scope of work by the owner. The Agency, in its
sole discretion, may choose to obtain a CNA, at its expense, if it
determines that doing so is in the best interest of the Government.
It is important to note that all applicants will be required to
submit an ``As Is'' CNA based on the existing conditions at the
property.
(3) Loan underwriting will be conducted by the designated Multi-
Family Housing Revitalization Coordinator assigned by each Rural
Development State Director with the assistance of the MPDL. The
feasibility and structure of each revitalization proposal will be
determined using this underwriting process to determine the
restructuring tools that will minimize the cost to the Government
consistent with the purposes of this Notice. To help ensure a balanced
utilization of revitalization tools and the long-term economic
viability of revitalized projects, the MPR underwriting guidelines
include, but are not limited to the following:
(i) The maximum soft-second loan is limited to no more than $5,000
per unit,
(ii) The total assistance provided from a revitalization grant,
revitalization zero percent loan, and/or revitalization soft-second
loan is limited to $10,000 per unit,
(iii) The maximum Section 515 loan or Section 514/516 off-farm loan
and grant is limited to no more than $20,000 per unit, and
(iv) Properties receiving tax credits are expected to have
sufficient third-party funding resources and generally will receive
debt deferral only.
(v) Properties with more than 75 percent of the units receiving
significant subsidy such as Rural Development rental assistance or HUD-
funded subsidy will be supplemented with Sections 514, 515 and 516
loans and grants before revitalization grants and revitalization soft-
second loans are considered.
(vi) MPR revitalization grants will be limited to $5,000 per unit.
(vii) Any rent increases that may be necessary will not exceed 10
percent in any one project operating year.
(viii) The approved MPR transaction will include projected revenue
sufficient to cover a 10 percent Operations and Maintenance increase in
the second year after the transaction.
(ix) Full RTO will be budgeted pursuant to the Loan Agreement.
[[Page 39828]]
(x) Budgeted increases to reserve deposit will not exceed three
percent per annum.
(xi) The remaining reserve balance at the end of the 20-year
analysis period should be at least 2.0 times the average annual needs,
including inflation, over the 20-year analysis period.
These loan underwriting guidelines have been developed based on
experience in the FY 2005-2009 MPR Demonstrations. The Agency believes
that these guidelines will be appropriate for typical transactions.
However, the Agency reserves the right to re-calculate which MPR
demonstration tools should be used, when in the Agency's judgment,
doing so would further the objectives of the MPR and is in the best
interest of the Government.
The Agency expects that some of the transactions proposed by
selected pre-applicants will prove to be infeasible. The applicant
entity may be determined to be ineligible under Section III of this
Notice. If a proposed transaction is determined infeasible or the
applicant determined ineligible, the Agency will then select the next
highest-ranked project for processing regardless of transaction type.
Each MPR offer will be approved by the Revitalization Review
Committee chaired by the Deputy Administrator for Multi-Family Housing
or an agency-authorized delegate. Approved MPR offers will be presented
to applicants who will then have up to 15 calendar days to accept or
reject the offer in writing. Offers will expire after 15 days. The
Agency will replace expired applications by selecting the next highest-
ranked project. Closing of MPR offers will occur within 90 days of
acceptance by the applicant unless extended by the Agency.
IX. Funding Restrictions
Applicants which were selected for further processing under
previous Notices, and are timely submitted to MPDL, will be funded on a
first-come-first-served basis on the date submitted to MPDL and do not
have to be rescored under this Notice. After which, applicants under
this Notice will be selected in accordance with selection criteria and
the four-step process identified in Section VII of this Notice. Once
selected to proceed, the Agency will provide additional guidance to the
applicant and request any other information and documents necessary to
complete the underwriting and review process. Since the character of
each application may vary substantially depending on the type of
transactions proposed, information requirements will be provided as
appropriate. Complete project information must be submitted as soon as
possible but in no case later than 45 days from the date of Agency
notification of the applicant's selection for further processing or
September 1, 2011, whichever occurs first. Failure to submit the
required information in a timely manner may result in the Agency
discontinuing the processing of the request.
Funding under this Notice will be obligated to selectees that
finish the processing steps outlined above first within each of the
three funding categories described in Section VII of this Notice and
that result in a ratio as close as possible to 30 percent portfolio
transactions, 50 percent complex transactions, and 20 percent simple
transactions, subject to funding availability.
X. Application Review
The Revitalization Review Committee will notify the appropriate
Rural Development State Director of its approval for funding of an
application based on the selection criteria contained in this Notice.
XI. Appeal Process
All adverse determinations regarding applicant eligibility and the
awarding of points as a part of the selection process are appealable,
in accordance with 7 CFR Part 11 procedures. Instructions on the appeal
process will be provided at the time an applicant is notified of the
adverse action.
Dated: June 30, 2011.
Tammye Trevi[ntilde]o,
Administrator, Rural Housing Service.
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[FR Doc. 2011-17107 Filed 7-6-11; 8:45 am]
BILLING CODE 3410-XV-C