Notice of Funding Availability: Section 515 Multi-Family Housing Preservation Revolving Loan Fund (PRLF) Demonstration Program for Fiscal Year 2011, 52305-52311 [2011-21318]
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‘‘Implementation Guidance for Title V
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Comments: Comments are invited on:
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this notice will become a matter of
public record and be summarized in the
request for OMB approval.
Signed at Washington, DC, on July 27,
2011.
Joseph T. Reilly,
Associate Administrator.
[FR Doc. 2011–21361 Filed 8–19–11; 8:45 am]
BILLING CODE 3410–20–P
DEPARTMENT OF AGRICULTURE
Rural Housing Service
Notice of Funding Availability: Section
515 Multi-Family Housing Preservation
Revolving Loan Fund (PRLF)
Demonstration Program for Fiscal Year
2011
Rural Housing Service, USDA.
ACTION: Notice.
AGENCY:
The Rural Housing Service of
Rural Development previously
announced the availability of funds and
the timeframe to submit applications for
loans to private non-profit
organizations, and State and local
housing finance agencies, to carry out a
demonstration program to provide
revolving loans for the preservation and
revitalization of low-income MultiFamily Housing (MFH) in a Notice
published November 9, 2010 (75 FR
68748). Rural Development did not
receive sufficient applications to use all
available funds. As a result, Rural
Development is soliciting additional
applications under this Notice. Housing
that is assisted by this demonstration
program must be financed by Rural
Development through its MFH loan
program under Sections 515, 514 and
516 of the Housing Act of 1949. The
goals of this demonstration program will
be achieved through loans made to
intermediaries. The intermediaries will
establish their programs for the purpose
SUMMARY:
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of providing loans to ultimate recipients
for the preservation and revitalization of
low income Sections 515, 514 and 516
MFH as affordable housing.
DATES: The deadline for receipt of all
applications in response to this Notice
is 5 p.m., Eastern Time, September 21,
2011. The application closing deadline
is firm as to date and hour. Rural
Development will not consider any
application that is received after the
closing deadline. Applicants intending
to mail applications must provide
sufficient time to permit delivery on or
before the closing deadline. Acceptance
by a post office or private mailer does
not constitute delivery. Facsimile,
electronic transmissions and postage
due applications will not be accepted.
FOR FURTHER INFORMATION CONTACT:
Sherry Engel, Financial and Loan
Analyst, Multi-Family Housing, U.S.
Department of Agriculture, Rural
Housing Service, 4949 Kirschling Court,
Stevens Point, Wisconsin 54481 or
Timothy James, Financial and Loan
Analyst, Multi-Family Housing, STOP
0781 (Room 1263–S), U.S. Department
of Agriculture, Rural Housing Service,
1400 Independence Avenue, SW.,
Washington, DC 20250–0781 or by
telephone at: (715) 345–7677 or (202)
720–1610, TDD (302) 857–3585 or via
e-mail at: sherry.engel@wdc.usda.gov or
timothy.james@wdc.usda.gov. (Please
note the phone numbers are not toll free
numbers.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
Under the Paperwork Reduction Act,
44 U.S.C. 3501 (2005) et seq., the Office
of Management and Budget (OMB) must
approve all ‘‘collections of information’’
by Rural Development. The Act defines
‘‘collection of information’’ as a
requirement for ‘‘answers to * * *
identical reporting or recordkeeping
requirements imposed on ten or more
persons * * *.’’ (44 U.S.C. 3502(3)(A))
Because this Notice is expected to
receive less than 10 respondents, the
Paperwork Reduction Act does not
apply.
Programs Affected
This program is listed in the Catalog
of Federal Domestic Assistance under
Number 10.415.
Overview
The Agriculture, Rural Development,
Food and Drug Administration, and
Related Agencies Appropriations Act,
2010 (Pub. L. 111–80), October 21, 2009
provided funding for, and authorized
Rural Development to, establish a
revolving loan fund demonstration
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program for the preservation and
revitalization of the Sections 515, 514
and 516 MFH portfolio. The Department
of Defense and Full Years Continuing
Appropriations Act, 2011 (Pub. L. 112–
10) April 15, 2011, continued the
authority and provided funding for the
revolving loan fund demonstration
program. Sections 514, 515 and 516 of
the Housing Act of 1949 as amended,
provides Rural Development the
authority to make loans for low income
MFH, farm labor housing, and related
facilities.
interest rate of no more than one percent
and the Secretary of Agriculture may
defer the interest and principal payment
to Rural Development for up to three
years during the first three years of the
loan. The term of such loans shall not
exceed 30 years. Funding priority will
be given to entities with equal or greater
matching funds from third parties,
including housing tax credits for rural
housing assistance and to entities with
experience in the administration of
revolving loan funds and the
preservation of MFH.
Program Administration
Funding Restrictions
I. Funding Opportunities Description
No loan made to a single intermediary
applicant under this demonstration
program may exceed $2,125,000 and
any such loan may be limited by
geographic area so that multiple loan
recipients are not providing similar
services to the same service areas. All
PRLF loan obligations will expire two
years after the date of obligation.
Prior fiscal years PRLF loan
obligations not closed within the above
two-year obligation period must be deobligated to allow more immediate
program use unless a six-month
extension is granted by the National
Office. The request for an extension will
be sent to the National Office by the
relevant State Office.
Loans made to the PRLF ultimate
recipient must meet the intent of
providing decent, safe, and sanitary
rural housing and be consistent with the
requirements of Title V of the Housing
Act of 1949, as amended.
This Notice requests applications
from eligible applicants for loans to
establish and operate revolving loan
funds for the preservation of lowincome MFH properties within the
Rural Development Sections 515, 514
and 516 MFH portfolios. Rural
Development’s regulations for the
Section 514, 515 and 516 MFH Program
are published at 7 CFR Part 3560.
Housing that is constructed or
repaired must meet the Rural
Development design and construction
standards and the development
standards contained in 7 CFR Part 1924,
Subparts A and C, respectively. Once
constructed, Section 514, 515, and 516
MFH must be managed in accordance
with the program’s regulation, 7 CFR
Part 3560. Tenant eligibility is limited to
persons who qualify as a very low-, or
low-income, household or who are
eligible under the requirements
established to qualify for housing
benefits provided by sources other than
Rural Development, such as U.S.
Department of Housing and Urban
Development Section 8 assistance or
Low Income Housing Tax Credit
assistance, when a tenant receives such
housing benefits. Additional tenant
eligibility requirements are contained in
7 CFR 3560.152, 3560.577, and
3560.624.
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II. Award Information
The Act made funding available for
loans to private non-profit
organizations, or such non-profit
organizations’ affiliate loan funds and
State and local housing finance
agencies, to carry out a housing
demonstration program to provide
revolving loans for the preservation of
low income MFH project. The total
amount of funding available for this
program is $7,038,926.76. This funding
is a combination of carryover from
previous fiscal years and FY 2011 funds.
Loans to intermediaries under this
demonstration program shall have an
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III. Eligibility Information
Applicant Eligibility
(1) Eligibility Requirements—
Intermediary
(a) The types of entities which may
become intermediaries are private nonprofit organizations, which may include
faith and community based
organizations, and State and local
housing finance agencies.
(b) The intermediary must have:
(i) The legal authority necessary for
carrying out the proposed loan purposes
and for obtaining, giving security, and
repaying the proposed loan.
(ii) A proven record of successfully
assisting low-income Multi-Family
Housing projects. Such record will
include recent experience in loan
making and loan servicing that is
similar in nature to the loans proposed
for the PRLF demonstration program.
The applicant must provide
documentation of a delinquency and
loss rate not which does not exceed four
percent. The applicant will be
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responsible for providing such
information to Rural Development.
(iii) A staff with loan making and
servicing experience.
(iv) A plan showing Rural
Development, that the ultimate
recipients will only use the funds to
preserve low-income MFH projects.
(c) No loans will be extended to an
intermediary unless:
(i) There is adequate assurance of
repayment of the loan evidenced by the
fiscal and managerial capabilities of the
proposed intermediary.
(ii) The amount of the loan, together
with other funds available, is adequate
to complete the preservation or
revitalization of the project.
(iii) The intermediary’s prior calendar
year audit is an unqualified audited
opinion signed by an independent
certified public accountant acceptable to
the Agency and performed in
accordance with Generally Accepted
Government Auditing Standards
(GAGAS). The unqualified audited
opinion must provide a statement
relating to the accuracy of the financial
statements.
(d) Intermediaries, and the principals
of the intermediaries, must not be
suspended, debarred, or excluded based
on the ‘‘List of Parties Excluded from
Federal Procurement and
Nonprocurement Programs’’. In
addition, intermediaries and their
principals must not be delinquent on
Federal debt or be Federal judgment
debtors.
(e) The intermediary and its principal
officers (including immediate family)
must have no legal or financial interest
in the ultimate recipient.
(f) The intermediary’s Debt Service
Coverage Ratio (DSCR) must be greater
than 1.25 for the fiscal year immediately
prior to the year of application. The
DSCR is the financial ratio the loan
committee will use to determine an
applicant’s capacity to borrow and
service additional debt.
The loan committee will use the
intermediary’s Earnings Before Interest
and Taxes (EBIT) to determine DSCR.
EBIT is determined by adding net
income or net loss to depreciation and
interest expense. The loan committee
will compare the principal and interest
payment multiplied by the DSCR to the
EBIT derived from the applicants
consolidated income statement. For
example, if an applicant requests a loan
amount of $2,000,000 at a one percent
interest rate amortized over 30 years, the
principal and interest payments will be
$77,193, annually. Therefore, an
applicant who requests $2,000,000
needs an EBIT of at least $96,491.00
($77,193 × 1.25). Only debt service from
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unrestricted revolving loans will be
considered in the above calculation. An
unrestricted loan is an account in which
the accumulated revenues are not
dictated by a donor or sponsor.
(g) Intermediaries that have received
one or more PRLF loans may apply for
and be considered for subsequent PRLF
loans provided all the following are met:
(i) For prior PRLF loans at least 50
percent of an intermediary’s PRLF loans
must have been disbursed to eligible
ultimate recipients;
(ii) Intermediaries requesting
subsequent loans must meet the
requirements of section III (1) of this
NOTICE;
(iii) The delinquency rate of the
outstanding loans of the intermediary’s
PRLF revolving fund does not exceed 4
percent at the time of application for the
subsequent loan;
(iv) The intermediary is in
compliance with all applicable
regulations and its loan agreements with
Rural Development;
(v) Subsequent loans will not exceed
$1 million each and not more than one
loan will be approved by Rural
Development for an intermediary in any
single fiscal year unless the request is
authorized by a PRLF appropriation;
and
(vi) Total outstanding PRLF
indebtedness of an intermediary to
Rural Development will not exceed $15
million at any time.
Only eligible applicants will be
scored and ranked. Funding priority
will be given to entities with equal or
greater matching funds, including
housing tax credits for rural housing
assistance. Refer to the Selection
Criteria section of the Notice for further
information on funding priorities.
(2) Eligibility requirements—Ultimate
recipients.
(a) To be eligible to receive loans from
the PRLF, ultimate recipients must:
(i) Currently have a Rural
Development Section 515, 514 loans, or
516 grant for the property to be assisted
by the PRLF demonstration program.
(ii) Certify that the principal officers
(including their immediate family) of
the ultimate recipient, hold no legal or
financial interest in the intermediary.
(iii) Be in compliance with all Rural
Development programs and civil rights
requirements or have an Agency
approved workout plan in place which
will correct a non-compliance status.
(b) Any delinquent debt to the Federal
Government including a non-tax
judgment lien (other than a judgment in
the U.S. tax courts), by the ultimate
recipient or any of its principals, shall
cause the proposed ultimate recipient to
be ineligible to receive a loan from the
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PRLF. PRLF loan funds may not be used
to satisfy the delinquency.
(c) The ultimate recipient cannot be
currently debarred or suspended from
Federal Government programs.
(d) There is a continuous need for the
property in the community as affordable
housing.
Other Administrative Requirements
(1) The following policies and
regulations apply to loans to
intermediaries made in response to this
Notice:
(a) PRLF intermediaries will be
required to provide Rural Development
with the following reports:
(i) An annual audit;
(A) The dates of the audit report
period need not coincide with other
reports on the PRLF. Audit reports shall
be due 90 days following the audit
period. The audit period will be set by
the intermediary. The intermediary will
notify Rural Development of the date.
Audits must cover all of the
intermediary’s activities. Audits will be
performed by an independent certified
public accountant. An acceptable audit
will be performed in accordance with
GAGAS and include such tests of the
accounting records as the auditor
considers necessary in order to express
an unqualified audited opinion on the
financial condition of the intermediary.
(B) It is not intended that audits
required by this program be separate
from audits performed in accordance
with State and local laws or for other
purposes. To the extent feasible, the
audit work for this program should be
done in connection with these other
audits. Intermediaries covered by OMB
Circular A–133 should submit audits
made in accordance with that circular.
(ii) Quarterly or semiannual
performance reports (due to Rural
Development 30 days after the end of
the fiscal quarter or half);
(A) Performance reports will be
required quarterly during the first year
after loan closing. Thereafter,
performance reports will be required
semiannually. Also, Rural Development
may resume requiring quarterly reports
if the intermediary becomes delinquent
in repayment of its loan or otherwise
fails to fully comply with the provisions
of its workout plan or Loan Agreement,
or Rural Development determines that
the intermediary’s PRLF is not
adequately protected by the current
financial status and paying capacity of
the ultimate recipients.
(B) These performance reports shall
contain information only on the PRLF,
or if other funds are included, the PRLF
portion shall be segregated from the
others; and in the case where the
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intermediary has more than one PRLF
from Rural Development, a separate
report shall be made for each PRLF.
(C) The performance reports will
include OMB Standard Form 269,
Financial Status Report and OMB
Standard Form 272, Federal Cash
Transaction Report. These reports will
provide information on the
intermediary’s lending activity, income
and expenses, financial condition and a
summary of names and characteristics
of the ultimate recipients the
intermediary has financed.
(iii) Annual proposed budget for the
following year; and other reports as
Rural Development may require from
time to time regarding the conditions of
the loan.
(b) Security will consist of a pledge by
the intermediary of all assets now or
hereafter placed in the PRLF, including
cash and investments, notes receivable
from ultimate recipients, and the
intermediary’s security interest in
collateral pledged by ultimate
recipients. Except for good cause
shown, Rural Development will not
obtain assignments of specific assets at
the time a loan is made to an
intermediary or ultimate recipient. The
intermediary will covenant in the loan
agreement that, in the event the
intermediary’s financial condition
deteriorates or the intermediary takes
action detrimental to prudent fund
operation or fails to take action required
of a prudent lender, the intermediary
will provide additional security, execute
any additional documents, and
undertake any reasonable acts Rural
Development may request to protect
Rural Development’s interest or to
perfect a security interest in any asset,
including physical delivery of assets
and specific assignments to Rural
Development. All debt instruments and
collateral documents used by an
intermediary in connection with loans
to ultimate recipients may be assignable.
(c) RHS may consider, on a case by
case basis, subordinating its security
interest on the ultimate recipient’s
property to the lien of the intermediary
so that Rural Development has a junior
lien interest when an independent
appraisal verifies the Rural
Development subordinated lien will
continue to be fully secured.
(d) The term of the loan to an ultimate
recipient may not exceed the less of 30
years or the remaining term of the Rural
Development loan.
(e) When loans are made to ultimate
recipients restrictive-use provisions
must be incorporated, as outlined in 7
CFR Section 3560.662.
(f) The policies and regulations
contained in 7 CFR Part 1901, Subpart
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F regarding historical and
archaeological properties apply to all
loans funded under this Notice.
(g) The policies and regulations
contained in 7 CFR Part 1940, Subpart
G (and any successor regulation)
regarding environmental assessments
apply to all loans to ultimate recipients
funded under this Notice. Loans to
intermediaries under this program will
be considered a categorical exclusion
under the National Environmental
Policy Act, requiring the completion of
Form RD 1940–22, ‘‘Environmental
Checklist for Categorical Exclusions,’’
by Rural Development.
(h) An Intergovernmental Review,’’
will be conducted in accordance with
the procedures contained in 7 CFR part
3015, subpart V, if the applicant is a
cooperative.
(2) The intermediary agrees to the
following:
(a) To obtain written Rural
Development approval, before the first
lending of PRLF funds to an ultimate
recipient, of:
(i) All forms to be used for relending
purposes, including application forms,
loan agreements, promissory notes, and
security instruments; and
(ii) The intermediary’s policy with
regard to the amount and form of
security to be required.
(b) To obtain written approval from
Rural Development before making any
significant changes in forms, security
policy, or the intermediary’s workout
plan. Rural Development may approve
changes in forms, security policy, or
workout plans at any time upon a
written request from the intermediary
and determination by Rural
Development that the change will not
jeopardize repayment of the loan or
violate any requirement of this Notice or
other Rural Development regulations.
The intermediary must comply with the
workout plan approved by Rural
Development so long as any portion of
the intermediary’s PRLF loan is
outstanding;
(c) To allow Rural Development to
take a security interest in the PRLF, the
intermediary’s portfolio of investments
derived from the proceeds of the loan
award, and other rights and interests as
Rural Development may require;
(d) To return, as an extra payment on
the loan any funds that have not been
used in accordance with the
intermediary’s workout plan by a date
two years from the date of the loan
agreement. The intermediary
acknowledges that Rural Development
may cancel the approval of any funds
not yet delivered to the intermediary if
funds have not been used in accordance
with the intermediary’s workout plan
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within the two year period. Rural
Development, at its sole discretion, may
allow the intermediary additional time
to use the loan funds by delaying
cancellation of the funds by not more
than three additional years. If any loan
funds have not been used by five years
from the date of the loan agreement, the
approval will be canceled for any funds
that have not been delivered to the
intermediary and the intermediary will
return, as an extra payment on the loan,
any funds it has received and not used
in accordance with the workout plan. In
accordance with the Rural Development
approved promissory note, regular loan
payments will be based on the amount
of funds actually drawn by the
intermediary.
(e) The intermediary will be required
to enter into a Rural Development
approved loan agreement and
promissory note. The intermediary will
receive a 30-year loan at a one percent
interest rate. The loan will be deferred
for up to three years if requested in the
intermediary’s work plan.
(f) Loans made to the PRLF ultimate
recipient must meet the intent of
providing decent, safe, and sanitary
rural housing by preserving and
regulating existing properties financed
with 514, 515, and 516 funds. They
must also be consistent with the
requirements of Title V of the Housing
Act of 1949, as amended.
(g) When an intermediary proposes to
make a loan from the PRLF to an
ultimate recipient, Rural Development
concurrence is required prior to final
approval of the loan. The intermediary
must submit a request for Rural
Development concurrence of a proposed
loan to an ultimate recipient. Such
request must include:
(i) Certification by the intermediary
that:
(A) The proposed ultimate recipient is
eligible for the loan;
(B) The proposed loan is for eligible
purposes;
(C) The proposed loan complies with
all applicable statutes and regulations;
and
(D) Prior to closing the loan to the
ultimate recipient, the intermediary and
its principal officers (including
immediate family) hold no legal or
financial interest in the ultimate
recipient, and the ultimate recipient and
its principal officers (including
immediate family) hold no legal or
financial interest in the intermediary.
(ii) Copies of sufficient material from
the ultimate recipient’s application and
the intermediary’s related files, to allow
Rural Development to determine the:
(A) Name and address of the ultimate
recipient;
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(B) Loan purposes;
(C) Interest rate and term;
(D) Location, nature, and scope of the
project being financed;
(E) Other funding included in the
project;
(F) Nature and lien priority of the
collateral; and
(G) Environmental impacts of this
action. This will include an original
Form RD 1940–20, ‘‘Request for
Environmental Information,’’ completed
and signed by the intermediary.
Attached to this form will be a
statement stipulating the age of the
building to be rehabilitated and a
completed and signed Federal
Emergency Management Agency
(FEMA) Form 81–93, ‘‘Standard Flood
Hazard Determination.’’ If the age of the
building is over 50 years or if the
building is either on or eligible for
inclusion in the National Register of
Historic Places, then the intermediary
will immediately contact Rural
Development to begin Section 106 of the
National Historic Preservation Act of
1966 consultation with the State
Historic Preservation Officer. If the
building is located within a 100-year
flood plain, then the intermediary will
immediately contact Rural Development
to analyze any effects as outlined in 7
CFR part 1940, Subpart G, Exhibit C.
The intermediary will assist Rural
Development in any additional
requirements necessary to complete the
environmental review.
(ii) Such other information as Rural
Development may request on specific
cases.
(h) Upon receipt of a request for
concurrence in a loan to an ultimate
recipient Rural Development will:
(i) Review the material submitted by
the intermediary for consistency with
Rural Development’s preservation and
revitalization principles which include
the following;
(A) There is a continuing need for the
property in the community as affordable
housing. If Rural Development
determines there is no continuing need
for the property the ultimate recipient is
ineligible for the loan;
(B) When the transaction is complete,
the property will be owned and
controlled by eligible Section 514, 515,
or 516 borrowers;
(C) The transaction will address the
physical needs of the property;
(D) Existing tenants will not be
displaced because of increased posttransaction rents;
(E) Post-transaction basic rents will
not exceed comparable market rents;
and
(F) Any equity loan amount will be
supported by a market value appraisal.
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(ii) The Intermediary shall pledge as
collateral for non-Rural Development
funds its PRLF Revolving Fund,
including its portfolio of investments
derived from the proceeds of other
funds and this loan award.
(iii) Issue a letter concurring with the
loan when all requirements have been
met or notify the intermediary in
writing the reasons for denial when
Rural Development determines it is
unable to concur with the loan.
IV. Application and Submission
Information
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Submission Address
Applications should be submitted to
U.S. Department of Agriculture, Rural
Housing Service; Attention: Timothy
James, Financial and Loan Analyst,
Multi-Family Housing STOP 0781
(Room 1263–S), U.S. Department of
Agriculture, Rural Housing Service,
1400 Independence Avenue, SW.,
Washington, DC 20250–0781.
The application process is a two step
process: First, all applicants will submit
proposals to the National Office for loan
committee review. The initial loan
committee will determine if the
borrower is eligible, score the
application, and rank the applicants
according to the criteria established in
this Notice. Only eligible borrowers will
be scored. The loan committee will
select proposals for further processing.
In the event that a proposal is selected
for further processing and the applicant
declines, the next highest ranked
unfunded applicant may be selected.
Second, after the loan is obligated to
the intermediary but prior to the loan
closing, the State Office in the
applicant’s residence or State where the
applicant will be doing its intermediary
work will provide written approval of
all forms to be used for relending
purposes, including application forms,
loan agreements, promissory notes, and
security instruments. Additionally, the
State Office will provide written
approval of the applicant’s binding
policy with regard to the amount and
form of security to be required.
Once the loan closes, the applicant
will be required to comply with the
terms of its work plan which describes
how the money will be used, the loan
agreement, the promissory note and any
other loan closing documents. At the
time of loan closing, Rural Development
and loan recipient shall enter into a loan
agreement and a promissory note
acceptable to Rural Development. Loans
obligated by State Offices to
intermediaries must close on or before
the second anniversary of the obligation.
Applicants who have not closed by this
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date must de-obligate PRLF funds to
allow further program use of funds.
Application Requirements
The application must contain the
following:
(1) A summary page, that is doublespaced and not in narrative form, that
lists the following items:
(a) Applicant’s name.
(b) Applicant’s Taxpayer
Identification Number.
(c) Applicant’s address.
(d) Applicant’s telephone number.
(e) Name of applicant’s contact
person, telephone number, and address.
(f) Amount of loan requested.
(2) Form RD 4274–1, Application for
Loan (Intermediary Relending
Program).’’ This form can be found at:
https://forms.sc.egov.usda.gov/
efcommon/eFileServices/eForms/
RD4274–1.PDF.
(3) A written workout plan and other
evidence Rural Development require
that demonstrates the feasibility of the
intermediary’s program to meet the
objectives of this demonstration
program. The plan must, at a minimum:
(a) Document the intermediary’s
ability to administer this demonstration
program in accordance with the
provisions of this Notice. In order to
adequately demonstrate the ability to
administer the program, the
intermediary must provide a complete
listing of all personnel responsible for
administering this program along with a
statement of their qualifications and
experience. The personnel may be either
members or employees of the
intermediary’s organization or contract
personnel hired for this purpose. If the
personnel are to be contracted for, the
contract between the intermediary and
the entity providing such service will be
submitted for Rural Development
review, and the terms of the contract
and its duration must be sufficient to
adequately service Rural Development
loan through to its ultimate conclusion.
If Rural Development determines the
personnel lack the necessary expertise
to administer the program, the loan
request will be denied;
(b) Document the intermediary’s
ability to commit financial resources
under the control of the intermediary to
the establishment of the demonstration
program. This should include a
statement of the sources of non-Rural
Development funds for administration
of the intermediary’s operations and
financial assistance for projects;
(c) Demonstrate a need for loan funds.
As a minimum, the intermediary should
identify a sufficient number of proposed
and known ultimate recipients to justify
Agency funding of its loan request, or
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52309
include well developed targeting criteria
for ultimate recipients consistent with
the intermediary’s mission and strategy
for this demonstration program, along
with supporting statistical or narrative
evidence that such prospective
recipients exist in sufficient numbers to
justify Rural Development funding of
the loan request;
(d) Include a list of proposed fees and
other charges it will assess to the
ultimate recipients;
(e) Provide documentation to Rural
Development the intermediary has
secured commitments of significant
financial support from public agencies
and private organizations or have
received tax credits for the calendar year
prior to this Notice;
(f) Include the intermediary’s plan
(specific loan purposes) for relending
the loan funds. The plan must be of
sufficient detail to provide Rural
Development with a complete
understanding of what the intermediary
will accomplish by lending the funds to
the ultimate recipient and the complete
mechanics of how the funds will flow
from the intermediary to the ultimate
recipient. The service area, eligibility
criteria, loan purposes, fees, rates,
terms, collateral requirements, limits,
priorities, application process, method
of disposition of the funds to the
ultimate recipient, monitoring of the
ultimate recipient’s accomplishments,
and reporting requirements by the
ultimate recipient’s management must
at least be addressed by the
intermediary’s relending plan;
(g) Provide a set of goals, strategies,
and anticipated outcomes for the
intermediary’s program. Outcomes
should be expressed in quantitative or
observable terms such as low-income
housing complexes rehabilitated or lowincome housing units preserved, and
should relate to the purpose of this
demonstration program; and
(h) Providing technical assistance to
ultimate recipients is not required as
part of this program. However if the
intermediary provides technical
assistance, the intermediary will
provide specific information as to how
and what type of technical assistance
the intermediary will provide to the
ultimate recipients and potential
ultimate recipients. For instance
describe the qualifications of the
technical assistance providers, the
nature of technical assistance that will
be available, and expected and
committed sources of funding for
technical assistance. If other than the
intermediary itself, describe the
organizations providing such assistance
and the arrangements between such
organizations and the intermediary.
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(4) A pro forma balance sheet at startup and projected balance sheets for at
least three additional years; and
projected cash flow and earnings
statements for at least three years
supported by a list of assumptions
showing the basis for the projections.
The projected earnings statement and
balance sheet must include one set of
projections that shows the PRLF must
extend to include a year with a full
annual installment on the PRLF loan.
(5) A written agreement of the
intermediary to Rural Development
agreeing to the audit requirements.
(6) Form RD 400–4, ‘‘Assurance
Agreement.’’ A copy of which can be
obtained at: https://
forms.sc.egov.usda.gov/efcommon/
eFileServices/eForms/RD400–4.PDF.
(7) Complete organizational
documents, including evidence of
authority to conduct the proposed
activities.
(8) Most recent unqualified audit
report signed by a CPA and prepared in
accordance with GAGAS.
(9) Form RD 1910–11, Applicant
Certification Federal Collection Policies
for Consumer or Commercial Debts.’’ A
copy of which can be obtained at:
https://forms.sc.egov.usda.gov/
efcommon/eFileServices/eForms/
RD1910–11.PDF.
(10) Form AD–1047, ‘‘Certification
Regarding Debarment, Suspension, and
other Responsibility Matters—Primary
Covered Transactions.’’ A copy of
which can be obtained at: https://
www.ocio.usda.gov/forms/doc/AD1047–
F–01–92.PDF.
(11) Exhibit A–1 of RD Instruction
1940–Q, ‘‘Certification for Contracts,
Grants, and Loans.’’ A copy of which
can be obtained at: https://
www.rurdev.usda.gov/me/CBP/const/
1940qa1.pdf.
(12) Copies of the applicant’s tax
returns for each of the three years prior
to the year of application, and most
recent audited financial statements.
(13) A separate one-page information
sheet listing each of the ‘‘Selection
Criteria’’ contained in this Notice,
followed by the page numbers of all
relevant material and documentation
that is contained in the proposal that
supports these criteria. Applicants are
also encouraged, but not required; to
include a checklist of all of the
application requirements and to have
their application indexed and tabbed to
facilitate the review process.
(14) Financial statements
(consolidated or unconsolidated) for the
year prior to this Notice.
(15) A borrower authorization
statement allowing Rural Development
the authorization to verify past and
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18:50 Aug 19, 2011
Jkt 223001
present earnings with the preparer of
the intermediary’s financial statements.
V. Application Review Information
All applications will be evaluated by
a loan committee. The loan committee
will make recommendations to the
Rural Housing Service Administrator
concerning preliminary eligibility
determinations and for the selection of
applications for further processing
based on the selection criteria contained
in this Notice and the availability of
funds. The Administrator will inform
applicants of the status of their
application within 30 days of the loan
application closing date set forth in this
Notice.
Selection Criteria
Selection criteria points will be
allowed only for factors evidenced by
well documented, reasonable plans
which provide assurance that the items
have a high probability of being
accomplished. The points awarded will
be as specified in paragraphs (1) through
(4) of this section. In each case, the
intermediary’s application must provide
documentation that the selection criteria
have been met in order to qualify for
selection criteria points. If an
application does not cover one of the
categories listed, it will not receive
points for that criteria.
(1) Other funds. Points allowed under
this paragraph are to be based on
documented successful history or
written evidence that the funds are
available.
(a) The intermediary will obtain nonRural Development loan or grant funds
or provide housing tax credits
(measured in dollars) to pay part of the
cost of the ultimate recipients’ project
cost. Points for the amount of funds
from other sources are as follows:
(i) At least 10 percent but less than 25
percent of the total development cost (as
defined in 7 CFR part 3560 Section
3560.11)—5 points;
(ii) At least 25 percent but less than
50 percent of the total development
cost—10 points; or
(iii) 50 percent or more of the total
development cost—15 points.
(b) The intermediary will provide
loans to each ultimate recipient from its
own funds (not loan or grant) to pay part
of the ultimate recipients’ project cost.
The amount of the intermediary’s own
funds will average per project:
(i) At least 10 percent but less than 25
percent of the total development costs—
5 points;
(ii) At least 25 percent but less than
50 percent of total development costs—
10 points; or
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(iii) 50 percent or more of total
development costs—15 points.
(2) Intermediary contribution. The
Intermediary will contribute its own
funds not derived from Rural
Development. The Non-Rural
Development contributed funds will be
placed in a separate account from the
PRLF loan account. The intermediary
shall contribute funds not derived from
Rural Development into a separate bank
account or accounts according to their
‘‘workout plan.’’ These funds are to be
placed into an interest bearing countersignature-account for three years as set
forth in the loan agreement. The
counter-signature-account will require a
signature from a Rural Development
employee and intermediary. After three
years, these funds shall be commingled
with the PRLF to provide loans to the
ultimate recipient for the preservation
and revitalization of Section 515 MultiFamily Housing.
The amount of non-Agency derived
funds contributed to the PRLF will
equal the following percentage of Rural
Development PRLF loan:
(a) At least 5 percent but less than 15
percent—15 points;
(b) At least 15 percent but less than
25 percent—30 points; or
(c) 25 percent or more—50 points.
(3) Experience. The intermediary has
actual experience in the administration
of revolving loan funds and the
preservation of Multi-Family Housing,
with a successful record, for the
following number of full years.
Applicants must have actual experience
in both the administration of revolving
loan funds and the preservation of
Multi-Family Housing in order to
qualify for points under the selection
criteria. If the number of years of
experience differs between the two
types of above listed experience, the
type of experience with the lesser
number of years will be used for the
selection criteria.
(a) At least one but less than three
years—5 points;
(b) At least three but less than five
years—10 points;
(c) At least five but less than 10
years—20 points; or
(d) 10 or more years—30 points.
(4) The DER is the financial ratio used
to determine how much debt an
applicant has relative to its equity. DER
is calculated from the balance sheet by
adding the short term or current debt
plus the long term debt, and then
dividing that number by the
intermediary’s equity. In order to
receive points the intermediary must
submit a summary of how the DER was
calculated.
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(5) Administrative. The Administrator
may assign up to 25 additional points to
an application to account for the
following items not adequately covered
by the other priority criteria set out in
this section. The items that will be
considered are the amount of funds
requested in relation to the amount of
need; a particularly successful
affordable housing development record;
a service area with no other PRLF
coverage; a service area with severe
affordable housing problems; a service
area with emergency conditions caused
by a natural disaster; an innovative
proposal; the quality of the proposed
program; economic development plan
from the local community, particularly
a plan prepared as part of a request for
an Empowerment Zone/Enterprise
Community designation; or excellent
utilization of an existing revolving loan
fund program. The Administrator will
document the reasons for the particular
point allocation.
VI. Appeal Process
All adverse determinations regarding
applicant eligibility and the awarding of
points as part of the selection process
are appealable. Instructions on the
appeal process will be provided at the
time an applicant is notified of the
adverse action.
jlentini on DSK4TPTVN1PROD with NOTICES
Equal Opportunity and
Nondiscrimination Requirements
(1) In accordance with the Fair
Housing Act, Title VI of the Civil Rights
Act of 1964, the Equal Credit
Opportunity Act, the Age
Discrimination Act of 1975, Executive
Order 12898, the Americans with
Disabilities Act, and Section 504 of the
Rehabilitation Act of 1973, neither the
intermediary nor Rural Development
will discriminate against any employee,
proposed intermediary or proposed
ultimate recipient on the basis of sex,
marital status, race, familial status,
color, religion, national origin, age,
physical or mental disability (provided
the proposed intermediary or proposed
ultimate recipient has the capacity to
contract), because all or part of the
proposed intermediary’s or proposed
ultimate recipient’s income is derived
from public assistance of any kind, or
because the proposed intermediary or
proposed ultimate recipient has in good
faith exercised any right under the
Consumer Credit Protection Act, with
respect to any aspect of a credit
transaction anytime Rural Development
loan funds are involved.
(2) The policies and regulations
contained in 7 CFR Part 1901, Subpart
E apply to this program.
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17:16 Aug 19, 2011
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(3) The Rural Housing Service (RHS)
Administrator will assure that equal
opportunity and nondiscrimination
requirements are met in accordance
with the Fair Housing Act, Title VI of
the Civil Rights Act of 1964, the Equal
Credit Opportunity Act, the Age
Discrimination Act of 1975, Executive
Order 12898, the Americans with
Disabilities Act, and Section 504 of the
Rehabilitation Act of 1973.
(4) All housing must meet the
accessibility requirements found at 7
CFR Section 3560.60(d).
(5) To file a complaint of
discrimination, write to USDA,
Assistant Secretary for Civil Rights
Office of the Assistant Secretary for
Civil Rights, 1400 Independence
Avenue, SW., STOP 9410, Washington,
DC 20250–9410, or call (866) 632–9992
(English) or (800) 877–8339 (TDD) or
(866) 377–8642 (English Federal-relay)
or (800) 845–6136 (Spanish Federalrelay). USDA is an equal opportunity
provider, employer, and lender. The
U.S. Department of Agriculture
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).
Dated: August 16, 2011.
Robert Lewis,
Acting Administrator, Rural Housing Service.
[FR Doc. 2011–21318 Filed 8–19–11; 8:45 am]
BILLING CODE 3410–XV–P
DEPARTMENT OF COMMERCE
Submission for OMB Review;
Comment Request
The Department of Commerce will
submit to the Office of Management and
Budget (OMB) for clearance the
following proposal for collection of
information under the provisions of the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
Agency: International Trade
Administration (ITA).
Title: Application for the President’s
‘‘E’’ and ‘‘E’’ Star Awards for Export
Expansion.
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Form Number(s): ITA–725P.
OMB Control Number: 0625–0065.
Type of Request: Regular submission
(revision and extension of a currently
approved information collection).
Burden Hours: 600.
Number of Respondents: 30.
Average Hours per Response: 20.
Needs and Uses: Expanding the U.S.
exports is a national priority and
essential to improving U.S. trade
performance. The Department of
Commerce, International Trade
Administration, U.S. Commercial
Service serves as the key U.S.
government agency responsible for
promoting exports of goods and services
from the United States and assisting
U.S. exporters in their dealings with
foreign governments.
The ‘‘E’’ Award Program was
established by Executive Order 10978
(EO), to afford suitable recognition to
persons, firms, or organizations that
contribute significantly in the effort to
increase U.S. exports and to encourage
U.S. companies to sell their products
and services internationally. The EO
authorized the Secretary of Commerce,
in cooperation with the Secretary of the
Interior, the Secretary of Agriculture,
the Administrator of the Small Business
Administration, and the heads of other
Government departments and agencies,
to establish procedures for the
nomination and the granting of awards.
A second Presidential award, the ‘‘E
Star’’ Award, was authorized by the
Secretary of Commerce, to afford
continuing recognition of noteworthy
export promotion efforts.
The application form is used to
determine eligibility for the ‘‘E’’ Award
and the ‘‘E Star’’ Award within
established criteria. In addition to the
application form and written
justification, applicants can submit
supporting materials that show their
qualification for the respective awards,
although supporting materials are not
required. Examples of supporting
materials can include: Translated
company and product literature;
promotional materials; client impact
statements; or anything the company or
organization deems relevant to its
qualification for the respective award.
The ‘‘E’’ and ‘‘E Star’’ Awards are the
highest honors that our nation bestows
upon American exporters and
organizations that contribute to
exporting. These awards recognize firms
and organizations for their competitive
achievements in world markets, as well
as the benefits of their success to the
U.S. economy. The purpose of this
information collection is to determine
the applicant’s eligibility to receive a
Presidential award.
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]]>Agencies
[Federal Register Volume 76, Number 162 (Monday, August 22, 2011)]
[Notices]
[Pages 52305-52311]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-21318]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Rural Housing Service
Notice of Funding Availability: Section 515 Multi-Family Housing
Preservation Revolving Loan Fund (PRLF) Demonstration Program for
Fiscal Year 2011
AGENCY: Rural Housing Service, USDA.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Rural Housing Service of Rural Development previously
announced the availability of funds and the timeframe to submit
applications for loans to private non-profit organizations, and State
and local housing finance agencies, to carry out a demonstration
program to provide revolving loans for the preservation and
revitalization of low-income Multi-Family Housing (MFH) in a Notice
published November 9, 2010 (75 FR 68748). Rural Development did not
receive sufficient applications to use all available funds. As a
result, Rural Development is soliciting additional applications under
this Notice. Housing that is assisted by this demonstration program
must be financed by Rural Development through its MFH loan program
under Sections 515, 514 and 516 of the Housing Act of 1949. The goals
of this demonstration program will be achieved through loans made to
intermediaries. The intermediaries will establish their programs for
the purpose of providing loans to ultimate recipients for the
preservation and revitalization of low income Sections 515, 514 and 516
MFH as affordable housing.
DATES: The deadline for receipt of all applications in response to this
Notice is 5 p.m., Eastern Time, September 21, 2011. The application
closing deadline is firm as to date and hour. Rural Development will
not consider any application that is received after the closing
deadline. Applicants intending to mail applications must provide
sufficient time to permit delivery on or before the closing deadline.
Acceptance by a post office or private mailer does not constitute
delivery. Facsimile, electronic transmissions and postage due
applications will not be accepted.
FOR FURTHER INFORMATION CONTACT: Sherry Engel, Financial and Loan
Analyst, Multi-Family Housing, U.S. Department of Agriculture, Rural
Housing Service, 4949 Kirschling Court, Stevens Point, Wisconsin 54481
or Timothy James, Financial and Loan Analyst, Multi-Family Housing,
STOP 0781 (Room 1263-S), U.S. Department of Agriculture, Rural Housing
Service, 1400 Independence Avenue, SW., Washington, DC 20250-0781 or by
telephone at: (715) 345-7677 or (202) 720-1610, TDD (302) 857-3585 or
via e-mail at: sherry.engel@wdc.usda.gov or timothy.james@wdc.usda.gov.
(Please note the phone numbers are not toll free numbers.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
Under the Paperwork Reduction Act, 44 U.S.C. 3501 (2005) et seq.,
the Office of Management and Budget (OMB) must approve all
``collections of information'' by Rural Development. The Act defines
``collection of information'' as a requirement for ``answers to * * *
identical reporting or recordkeeping requirements imposed on ten or
more persons * * *.'' (44 U.S.C. 3502(3)(A)) Because this Notice is
expected to receive less than 10 respondents, the Paperwork Reduction
Act does not apply.
Programs Affected
This program is listed in the Catalog of Federal Domestic
Assistance under Number 10.415.
Overview
The Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies Appropriations Act, 2010 (Pub. L. 111-80), October
21, 2009 provided funding for, and authorized Rural Development to,
establish a revolving loan fund demonstration
[[Page 52306]]
program for the preservation and revitalization of the Sections 515,
514 and 516 MFH portfolio. The Department of Defense and Full Years
Continuing Appropriations Act, 2011 (Pub. L. 112-10) April 15, 2011,
continued the authority and provided funding for the revolving loan
fund demonstration program. Sections 514, 515 and 516 of the Housing
Act of 1949 as amended, provides Rural Development the authority to
make loans for low income MFH, farm labor housing, and related
facilities.
Program Administration
I. Funding Opportunities Description
This Notice requests applications from eligible applicants for
loans to establish and operate revolving loan funds for the
preservation of low-income MFH properties within the Rural Development
Sections 515, 514 and 516 MFH portfolios. Rural Development's
regulations for the Section 514, 515 and 516 MFH Program are published
at 7 CFR Part 3560.
Housing that is constructed or repaired must meet the Rural
Development design and construction standards and the development
standards contained in 7 CFR Part 1924, Subparts A and C, respectively.
Once constructed, Section 514, 515, and 516 MFH must be managed in
accordance with the program's regulation, 7 CFR Part 3560. Tenant
eligibility is limited to persons who qualify as a very low-, or low-
income, household or who are eligible under the requirements
established to qualify for housing benefits provided by sources other
than Rural Development, such as U.S. Department of Housing and Urban
Development Section 8 assistance or Low Income Housing Tax Credit
assistance, when a tenant receives such housing benefits. Additional
tenant eligibility requirements are contained in 7 CFR 3560.152,
3560.577, and 3560.624.
II. Award Information
The Act made funding available for loans to private non-profit
organizations, or such non-profit organizations' affiliate loan funds
and State and local housing finance agencies, to carry out a housing
demonstration program to provide revolving loans for the preservation
of low income MFH project. The total amount of funding available for
this program is $7,038,926.76. This funding is a combination of
carryover from previous fiscal years and FY 2011 funds. Loans to
intermediaries under this demonstration program shall have an interest
rate of no more than one percent and the Secretary of Agriculture may
defer the interest and principal payment to Rural Development for up to
three years during the first three years of the loan. The term of such
loans shall not exceed 30 years. Funding priority will be given to
entities with equal or greater matching funds from third parties,
including housing tax credits for rural housing assistance and to
entities with experience in the administration of revolving loan funds
and the preservation of MFH.
Funding Restrictions
No loan made to a single intermediary applicant under this
demonstration program may exceed $2,125,000 and any such loan may be
limited by geographic area so that multiple loan recipients are not
providing similar services to the same service areas. All PRLF loan
obligations will expire two years after the date of obligation.
Prior fiscal years PRLF loan obligations not closed within the
above two-year obligation period must be de-obligated to allow more
immediate program use unless a six-month extension is granted by the
National Office. The request for an extension will be sent to the
National Office by the relevant State Office.
Loans made to the PRLF ultimate recipient must meet the intent of
providing decent, safe, and sanitary rural housing and be consistent
with the requirements of Title V of the Housing Act of 1949, as
amended.
III. Eligibility Information
Applicant Eligibility
(1) Eligibility Requirements--Intermediary
(a) The types of entities which may become intermediaries are
private non-profit organizations, which may include faith and community
based organizations, and State and local housing finance agencies.
(b) The intermediary must have:
(i) The legal authority necessary for carrying out the proposed
loan purposes and for obtaining, giving security, and repaying the
proposed loan.
(ii) A proven record of successfully assisting low-income Multi-
Family Housing projects. Such record will include recent experience in
loan making and loan servicing that is similar in nature to the loans
proposed for the PRLF demonstration program. The applicant must provide
documentation of a delinquency and loss rate not which does not exceed
four percent. The applicant will be responsible for providing such
information to Rural Development.
(iii) A staff with loan making and servicing experience.
(iv) A plan showing Rural Development, that the ultimate recipients
will only use the funds to preserve low-income MFH projects.
(c) No loans will be extended to an intermediary unless:
(i) There is adequate assurance of repayment of the loan evidenced
by the fiscal and managerial capabilities of the proposed intermediary.
(ii) The amount of the loan, together with other funds available,
is adequate to complete the preservation or revitalization of the
project.
(iii) The intermediary's prior calendar year audit is an
unqualified audited opinion signed by an independent certified public
accountant acceptable to the Agency and performed in accordance with
Generally Accepted Government Auditing Standards (GAGAS). The
unqualified audited opinion must provide a statement relating to the
accuracy of the financial statements.
(d) Intermediaries, and the principals of the intermediaries, must
not be suspended, debarred, or excluded based on the ``List of Parties
Excluded from Federal Procurement and Nonprocurement Programs''. In
addition, intermediaries and their principals must not be delinquent on
Federal debt or be Federal judgment debtors.
(e) The intermediary and its principal officers (including
immediate family) must have no legal or financial interest in the
ultimate recipient.
(f) The intermediary's Debt Service Coverage Ratio (DSCR) must be
greater than 1.25 for the fiscal year immediately prior to the year of
application. The DSCR is the financial ratio the loan committee will
use to determine an applicant's capacity to borrow and service
additional debt.
The loan committee will use the intermediary's Earnings Before
Interest and Taxes (EBIT) to determine DSCR. EBIT is determined by
adding net income or net loss to depreciation and interest expense. The
loan committee will compare the principal and interest payment
multiplied by the DSCR to the EBIT derived from the applicants
consolidated income statement. For example, if an applicant requests a
loan amount of $2,000,000 at a one percent interest rate amortized over
30 years, the principal and interest payments will be $77,193,
annually. Therefore, an applicant who requests $2,000,000 needs an EBIT
of at least $96,491.00 ($77,193 x 1.25). Only debt service from
[[Page 52307]]
unrestricted revolving loans will be considered in the above
calculation. An unrestricted loan is an account in which the
accumulated revenues are not dictated by a donor or sponsor.
(g) Intermediaries that have received one or more PRLF loans may
apply for and be considered for subsequent PRLF loans provided all the
following are met:
(i) For prior PRLF loans at least 50 percent of an intermediary's
PRLF loans must have been disbursed to eligible ultimate recipients;
(ii) Intermediaries requesting subsequent loans must meet the
requirements of section III (1) of this NOTICE;
(iii) The delinquency rate of the outstanding loans of the
intermediary's PRLF revolving fund does not exceed 4 percent at the
time of application for the subsequent loan;
(iv) The intermediary is in compliance with all applicable
regulations and its loan agreements with Rural Development;
(v) Subsequent loans will not exceed $1 million each and not more
than one loan will be approved by Rural Development for an intermediary
in any single fiscal year unless the request is authorized by a PRLF
appropriation; and
(vi) Total outstanding PRLF indebtedness of an intermediary to
Rural Development will not exceed $15 million at any time.
Only eligible applicants will be scored and ranked. Funding
priority will be given to entities with equal or greater matching
funds, including housing tax credits for rural housing assistance.
Refer to the Selection Criteria section of the Notice for further
information on funding priorities.
(2) Eligibility requirements--Ultimate recipients.
(a) To be eligible to receive loans from the PRLF, ultimate
recipients must:
(i) Currently have a Rural Development Section 515, 514 loans, or
516 grant for the property to be assisted by the PRLF demonstration
program.
(ii) Certify that the principal officers (including their immediate
family) of the ultimate recipient, hold no legal or financial interest
in the intermediary.
(iii) Be in compliance with all Rural Development programs and
civil rights requirements or have an Agency approved workout plan in
place which will correct a non-compliance status.
(b) Any delinquent debt to the Federal Government including a non-
tax judgment lien (other than a judgment in the U.S. tax courts), by
the ultimate recipient or any of its principals, shall cause the
proposed ultimate recipient to be ineligible to receive a loan from the
PRLF. PRLF loan funds may not be used to satisfy the delinquency.
(c) The ultimate recipient cannot be currently debarred or
suspended from Federal Government programs.
(d) There is a continuous need for the property in the community as
affordable housing.
Other Administrative Requirements
(1) The following policies and regulations apply to loans to
intermediaries made in response to this Notice:
(a) PRLF intermediaries will be required to provide Rural
Development with the following reports:
(i) An annual audit;
(A) The dates of the audit report period need not coincide with
other reports on the PRLF. Audit reports shall be due 90 days following
the audit period. The audit period will be set by the intermediary. The
intermediary will notify Rural Development of the date. Audits must
cover all of the intermediary's activities. Audits will be performed by
an independent certified public accountant. An acceptable audit will be
performed in accordance with GAGAS and include such tests of the
accounting records as the auditor considers necessary in order to
express an unqualified audited opinion on the financial condition of
the intermediary.
(B) It is not intended that audits required by this program be
separate from audits performed in accordance with State and local laws
or for other purposes. To the extent feasible, the audit work for this
program should be done in connection with these other audits.
Intermediaries covered by OMB Circular A-133 should submit audits made
in accordance with that circular.
(ii) Quarterly or semiannual performance reports (due to Rural
Development 30 days after the end of the fiscal quarter or half);
(A) Performance reports will be required quarterly during the first
year after loan closing. Thereafter, performance reports will be
required semiannually. Also, Rural Development may resume requiring
quarterly reports if the intermediary becomes delinquent in repayment
of its loan or otherwise fails to fully comply with the provisions of
its workout plan or Loan Agreement, or Rural Development determines
that the intermediary's PRLF is not adequately protected by the current
financial status and paying capacity of the ultimate recipients.
(B) These performance reports shall contain information only on the
PRLF, or if other funds are included, the PRLF portion shall be
segregated from the others; and in the case where the intermediary has
more than one PRLF from Rural Development, a separate report shall be
made for each PRLF.
(C) The performance reports will include OMB Standard Form 269,
Financial Status Report and OMB Standard Form 272, Federal Cash
Transaction Report. These reports will provide information on the
intermediary's lending activity, income and expenses, financial
condition and a summary of names and characteristics of the ultimate
recipients the intermediary has financed.
(iii) Annual proposed budget for the following year; and other
reports as Rural Development may require from time to time regarding
the conditions of the loan.
(b) Security will consist of a pledge by the intermediary of all
assets now or hereafter placed in the PRLF, including cash and
investments, notes receivable from ultimate recipients, and the
intermediary's security interest in collateral pledged by ultimate
recipients. Except for good cause shown, Rural Development will not
obtain assignments of specific assets at the time a loan is made to an
intermediary or ultimate recipient. The intermediary will covenant in
the loan agreement that, in the event the intermediary's financial
condition deteriorates or the intermediary takes action detrimental to
prudent fund operation or fails to take action required of a prudent
lender, the intermediary will provide additional security, execute any
additional documents, and undertake any reasonable acts Rural
Development may request to protect Rural Development's interest or to
perfect a security interest in any asset, including physical delivery
of assets and specific assignments to Rural Development. All debt
instruments and collateral documents used by an intermediary in
connection with loans to ultimate recipients may be assignable.
(c) RHS may consider, on a case by case basis, subordinating its
security interest on the ultimate recipient's property to the lien of
the intermediary so that Rural Development has a junior lien interest
when an independent appraisal verifies the Rural Development
subordinated lien will continue to be fully secured.
(d) The term of the loan to an ultimate recipient may not exceed
the less of 30 years or the remaining term of the Rural Development
loan.
(e) When loans are made to ultimate recipients restrictive-use
provisions must be incorporated, as outlined in 7 CFR Section 3560.662.
(f) The policies and regulations contained in 7 CFR Part 1901,
Subpart
[[Page 52308]]
F regarding historical and archaeological properties apply to all loans
funded under this Notice.
(g) The policies and regulations contained in 7 CFR Part 1940,
Subpart G (and any successor regulation) regarding environmental
assessments apply to all loans to ultimate recipients funded under this
Notice. Loans to intermediaries under this program will be considered a
categorical exclusion under the National Environmental Policy Act,
requiring the completion of Form RD 1940-22, ``Environmental Checklist
for Categorical Exclusions,'' by Rural Development.
(h) An Intergovernmental Review,'' will be conducted in accordance
with the procedures contained in 7 CFR part 3015, subpart V, if the
applicant is a cooperative.
(2) The intermediary agrees to the following:
(a) To obtain written Rural Development approval, before the first
lending of PRLF funds to an ultimate recipient, of:
(i) All forms to be used for relending purposes, including
application forms, loan agreements, promissory notes, and security
instruments; and
(ii) The intermediary's policy with regard to the amount and form
of security to be required.
(b) To obtain written approval from Rural Development before making
any significant changes in forms, security policy, or the
intermediary's workout plan. Rural Development may approve changes in
forms, security policy, or workout plans at any time upon a written
request from the intermediary and determination by Rural Development
that the change will not jeopardize repayment of the loan or violate
any requirement of this Notice or other Rural Development regulations.
The intermediary must comply with the workout plan approved by Rural
Development so long as any portion of the intermediary's PRLF loan is
outstanding;
(c) To allow Rural Development to take a security interest in the
PRLF, the intermediary's portfolio of investments derived from the
proceeds of the loan award, and other rights and interests as Rural
Development may require;
(d) To return, as an extra payment on the loan any funds that have
not been used in accordance with the intermediary's workout plan by a
date two years from the date of the loan agreement. The intermediary
acknowledges that Rural Development may cancel the approval of any
funds not yet delivered to the intermediary if funds have not been used
in accordance with the intermediary's workout plan within the two year
period. Rural Development, at its sole discretion, may allow the
intermediary additional time to use the loan funds by delaying
cancellation of the funds by not more than three additional years. If
any loan funds have not been used by five years from the date of the
loan agreement, the approval will be canceled for any funds that have
not been delivered to the intermediary and the intermediary will
return, as an extra payment on the loan, any funds it has received and
not used in accordance with the workout plan. In accordance with the
Rural Development approved promissory note, regular loan payments will
be based on the amount of funds actually drawn by the intermediary.
(e) The intermediary will be required to enter into a Rural
Development approved loan agreement and promissory note. The
intermediary will receive a 30-year loan at a one percent interest
rate. The loan will be deferred for up to three years if requested in
the intermediary's work plan.
(f) Loans made to the PRLF ultimate recipient must meet the intent
of providing decent, safe, and sanitary rural housing by preserving and
regulating existing properties financed with 514, 515, and 516 funds.
They must also be consistent with the requirements of Title V of the
Housing Act of 1949, as amended.
(g) When an intermediary proposes to make a loan from the PRLF to
an ultimate recipient, Rural Development concurrence is required prior
to final approval of the loan. The intermediary must submit a request
for Rural Development concurrence of a proposed loan to an ultimate
recipient. Such request must include:
(i) Certification by the intermediary that:
(A) The proposed ultimate recipient is eligible for the loan;
(B) The proposed loan is for eligible purposes;
(C) The proposed loan complies with all applicable statutes and
regulations; and
(D) Prior to closing the loan to the ultimate recipient, the
intermediary and its principal officers (including immediate family)
hold no legal or financial interest in the ultimate recipient, and the
ultimate recipient and its principal officers (including immediate
family) hold no legal or financial interest in the intermediary.
(ii) Copies of sufficient material from the ultimate recipient's
application and the intermediary's related files, to allow Rural
Development to determine the:
(A) Name and address of the ultimate recipient;
(B) Loan purposes;
(C) Interest rate and term;
(D) Location, nature, and scope of the project being financed;
(E) Other funding included in the project;
(F) Nature and lien priority of the collateral; and
(G) Environmental impacts of this action. This will include an
original Form RD 1940-20, ``Request for Environmental Information,''
completed and signed by the intermediary. Attached to this form will be
a statement stipulating the age of the building to be rehabilitated and
a completed and signed Federal Emergency Management Agency (FEMA) Form
81-93, ``Standard Flood Hazard Determination.'' If the age of the
building is over 50 years or if the building is either on or eligible
for inclusion in the National Register of Historic Places, then the
intermediary will immediately contact Rural Development to begin
Section 106 of the National Historic Preservation Act of 1966
consultation with the State Historic Preservation Officer. If the
building is located within a 100-year flood plain, then the
intermediary will immediately contact Rural Development to analyze any
effects as outlined in 7 CFR part 1940, Subpart G, Exhibit C. The
intermediary will assist Rural Development in any additional
requirements necessary to complete the environmental review.
(ii) Such other information as Rural Development may request on
specific cases.
(h) Upon receipt of a request for concurrence in a loan to an
ultimate recipient Rural Development will:
(i) Review the material submitted by the intermediary for
consistency with Rural Development's preservation and revitalization
principles which include the following;
(A) There is a continuing need for the property in the community as
affordable housing. If Rural Development determines there is no
continuing need for the property the ultimate recipient is ineligible
for the loan;
(B) When the transaction is complete, the property will be owned
and controlled by eligible Section 514, 515, or 516 borrowers;
(C) The transaction will address the physical needs of the
property;
(D) Existing tenants will not be displaced because of increased
post-transaction rents;
(E) Post-transaction basic rents will not exceed comparable market
rents; and
(F) Any equity loan amount will be supported by a market value
appraisal.
[[Page 52309]]
(ii) The Intermediary shall pledge as collateral for non-Rural
Development funds its PRLF Revolving Fund, including its portfolio of
investments derived from the proceeds of other funds and this loan
award.
(iii) Issue a letter concurring with the loan when all requirements
have been met or notify the intermediary in writing the reasons for
denial when Rural Development determines it is unable to concur with
the loan.
IV. Application and Submission Information
Submission Address
Applications should be submitted to U.S. Department of Agriculture,
Rural Housing Service; Attention: Timothy James, Financial and Loan
Analyst, Multi-Family Housing STOP 0781 (Room 1263-S), U.S. Department
of Agriculture, Rural Housing Service, 1400 Independence Avenue, SW.,
Washington, DC 20250-0781.
The application process is a two step process: First, all
applicants will submit proposals to the National Office for loan
committee review. The initial loan committee will determine if the
borrower is eligible, score the application, and rank the applicants
according to the criteria established in this Notice. Only eligible
borrowers will be scored. The loan committee will select proposals for
further processing. In the event that a proposal is selected for
further processing and the applicant declines, the next highest ranked
unfunded applicant may be selected.
Second, after the loan is obligated to the intermediary but prior
to the loan closing, the State Office in the applicant's residence or
State where the applicant will be doing its intermediary work will
provide written approval of all forms to be used for relending
purposes, including application forms, loan agreements, promissory
notes, and security instruments. Additionally, the State Office will
provide written approval of the applicant's binding policy with regard
to the amount and form of security to be required.
Once the loan closes, the applicant will be required to comply with
the terms of its work plan which describes how the money will be used,
the loan agreement, the promissory note and any other loan closing
documents. At the time of loan closing, Rural Development and loan
recipient shall enter into a loan agreement and a promissory note
acceptable to Rural Development. Loans obligated by State Offices to
intermediaries must close on or before the second anniversary of the
obligation. Applicants who have not closed by this date must de-
obligate PRLF funds to allow further program use of funds.
Application Requirements
The application must contain the following:
(1) A summary page, that is double-spaced and not in narrative
form, that lists the following items:
(a) Applicant's name.
(b) Applicant's Taxpayer Identification Number.
(c) Applicant's address.
(d) Applicant's telephone number.
(e) Name of applicant's contact person, telephone number, and
address.
(f) Amount of loan requested.
(2) Form RD 4274-1, Application for Loan (Intermediary Relending
Program).'' This form can be found at: https://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD4274-1.PDF.
(3) A written workout plan and other evidence Rural Development
require that demonstrates the feasibility of the intermediary's program
to meet the objectives of this demonstration program. The plan must, at
a minimum:
(a) Document the intermediary's ability to administer this
demonstration program in accordance with the provisions of this Notice.
In order to adequately demonstrate the ability to administer the
program, the intermediary must provide a complete listing of all
personnel responsible for administering this program along with a
statement of their qualifications and experience. The personnel may be
either members or employees of the intermediary's organization or
contract personnel hired for this purpose. If the personnel are to be
contracted for, the contract between the intermediary and the entity
providing such service will be submitted for Rural Development review,
and the terms of the contract and its duration must be sufficient to
adequately service Rural Development loan through to its ultimate
conclusion. If Rural Development determines the personnel lack the
necessary expertise to administer the program, the loan request will be
denied;
(b) Document the intermediary's ability to commit financial
resources under the control of the intermediary to the establishment of
the demonstration program. This should include a statement of the
sources of non-Rural Development funds for administration of the
intermediary's operations and financial assistance for projects;
(c) Demonstrate a need for loan funds. As a minimum, the
intermediary should identify a sufficient number of proposed and known
ultimate recipients to justify Agency funding of its loan request, or
include well developed targeting criteria for ultimate recipients
consistent with the intermediary's mission and strategy for this
demonstration program, along with supporting statistical or narrative
evidence that such prospective recipients exist in sufficient numbers
to justify Rural Development funding of the loan request;
(d) Include a list of proposed fees and other charges it will
assess to the ultimate recipients;
(e) Provide documentation to Rural Development the intermediary has
secured commitments of significant financial support from public
agencies and private organizations or have received tax credits for the
calendar year prior to this Notice;
(f) Include the intermediary's plan (specific loan purposes) for
relending the loan funds. The plan must be of sufficient detail to
provide Rural Development with a complete understanding of what the
intermediary will accomplish by lending the funds to the ultimate
recipient and the complete mechanics of how the funds will flow from
the intermediary to the ultimate recipient. The service area,
eligibility criteria, loan purposes, fees, rates, terms, collateral
requirements, limits, priorities, application process, method of
disposition of the funds to the ultimate recipient, monitoring of the
ultimate recipient's accomplishments, and reporting requirements by the
ultimate recipient's management must at least be addressed by the
intermediary's relending plan;
(g) Provide a set of goals, strategies, and anticipated outcomes
for the intermediary's program. Outcomes should be expressed in
quantitative or observable terms such as low-income housing complexes
rehabilitated or low-income housing units preserved, and should relate
to the purpose of this demonstration program; and
(h) Providing technical assistance to ultimate recipients is not
required as part of this program. However if the intermediary provides
technical assistance, the intermediary will provide specific
information as to how and what type of technical assistance the
intermediary will provide to the ultimate recipients and potential
ultimate recipients. For instance describe the qualifications of the
technical assistance providers, the nature of technical assistance that
will be available, and expected and committed sources of funding for
technical assistance. If other than the intermediary itself, describe
the organizations providing such assistance and the arrangements
between such organizations and the intermediary.
[[Page 52310]]
(4) A pro forma balance sheet at start-up and projected balance
sheets for at least three additional years; and projected cash flow and
earnings statements for at least three years supported by a list of
assumptions showing the basis for the projections. The projected
earnings statement and balance sheet must include one set of
projections that shows the PRLF must extend to include a year with a
full annual installment on the PRLF loan.
(5) A written agreement of the intermediary to Rural Development
agreeing to the audit requirements.
(6) Form RD 400-4, ``Assurance Agreement.'' A copy of which can be
obtained at: https://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD400-4.PDF.
(7) Complete organizational documents, including evidence of
authority to conduct the proposed activities.
(8) Most recent unqualified audit report signed by a CPA and
prepared in accordance with GAGAS.
(9) Form RD 1910-11, Applicant Certification Federal Collection
Policies for Consumer or Commercial Debts.'' A copy of which can be
obtained at: https://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD1910-11.PDF.
(10) Form AD-1047, ``Certification Regarding Debarment, Suspension,
and other Responsibility Matters--Primary Covered Transactions.'' A
copy of which can be obtained at: https://www.ocio.usda.gov/forms/doc/AD1047-F-01-92.PDF.
(11) Exhibit A-1 of RD Instruction 1940-Q, ``Certification for
Contracts, Grants, and Loans.'' A copy of which can be obtained at:
https://www.rurdev.usda.gov/me/CBP/const/1940qa1.pdf.
(12) Copies of the applicant's tax returns for each of the three
years prior to the year of application, and most recent audited
financial statements.
(13) A separate one-page information sheet listing each of the
``Selection Criteria'' contained in this Notice, followed by the page
numbers of all relevant material and documentation that is contained in
the proposal that supports these criteria. Applicants are also
encouraged, but not required; to include a checklist of all of the
application requirements and to have their application indexed and
tabbed to facilitate the review process.
(14) Financial statements (consolidated or unconsolidated) for the
year prior to this Notice.
(15) A borrower authorization statement allowing Rural Development
the authorization to verify past and present earnings with the preparer
of the intermediary's financial statements.
V. Application Review Information
All applications will be evaluated by a loan committee. The loan
committee will make recommendations to the Rural Housing Service
Administrator concerning preliminary eligibility determinations and for
the selection of applications for further processing based on the
selection criteria contained in this Notice and the availability of
funds. The Administrator will inform applicants of the status of their
application within 30 days of the loan application closing date set
forth in this Notice.
Selection Criteria
Selection criteria points will be allowed only for factors
evidenced by well documented, reasonable plans which provide assurance
that the items have a high probability of being accomplished. The
points awarded will be as specified in paragraphs (1) through (4) of
this section. In each case, the intermediary's application must provide
documentation that the selection criteria have been met in order to
qualify for selection criteria points. If an application does not cover
one of the categories listed, it will not receive points for that
criteria.
(1) Other funds. Points allowed under this paragraph are to be
based on documented successful history or written evidence that the
funds are available.
(a) The intermediary will obtain non-Rural Development loan or
grant funds or provide housing tax credits (measured in dollars) to pay
part of the cost of the ultimate recipients' project cost. Points for
the amount of funds from other sources are as follows:
(i) At least 10 percent but less than 25 percent of the total
development cost (as defined in 7 CFR part 3560 Section 3560.11)--5
points;
(ii) At least 25 percent but less than 50 percent of the total
development cost--10 points; or
(iii) 50 percent or more of the total development cost--15 points.
(b) The intermediary will provide loans to each ultimate recipient
from its own funds (not loan or grant) to pay part of the ultimate
recipients' project cost. The amount of the intermediary's own funds
will average per project:
(i) At least 10 percent but less than 25 percent of the total
development costs--5 points;
(ii) At least 25 percent but less than 50 percent of total
development costs--10 points; or
(iii) 50 percent or more of total development costs--15 points.
(2) Intermediary contribution. The Intermediary will contribute its
own funds not derived from Rural Development. The Non-Rural Development
contributed funds will be placed in a separate account from the PRLF
loan account. The intermediary shall contribute funds not derived from
Rural Development into a separate bank account or accounts according to
their ``workout plan.'' These funds are to be placed into an interest
bearing counter-signature-account for three years as set forth in the
loan agreement. The counter-signature-account will require a signature
from a Rural Development employee and intermediary. After three years,
these funds shall be commingled with the PRLF to provide loans to the
ultimate recipient for the preservation and revitalization of Section
515 Multi-Family Housing.
The amount of non-Agency derived funds contributed to the PRLF will
equal the following percentage of Rural Development PRLF loan:
(a) At least 5 percent but less than 15 percent--15 points;
(b) At least 15 percent but less than 25 percent--30 points; or
(c) 25 percent or more--50 points.
(3) Experience. The intermediary has actual experience in the
administration of revolving loan funds and the preservation of Multi-
Family Housing, with a successful record, for the following number of
full years. Applicants must have actual experience in both the
administration of revolving loan funds and the preservation of Multi-
Family Housing in order to qualify for points under the selection
criteria. If the number of years of experience differs between the two
types of above listed experience, the type of experience with the
lesser number of years will be used for the selection criteria.
(a) At least one but less than three years--5 points;
(b) At least three but less than five years--10 points;
(c) At least five but less than 10 years--20 points; or
(d) 10 or more years--30 points.
(4) The DER is the financial ratio used to determine how much debt
an applicant has relative to its equity. DER is calculated from the
balance sheet by adding the short term or current debt plus the long
term debt, and then dividing that number by the intermediary's equity.
In order to receive points the intermediary must submit a summary of
how the DER was calculated.
[[Page 52311]]
(5) Administrative. The Administrator may assign up to 25
additional points to an application to account for the following items
not adequately covered by the other priority criteria set out in this
section. The items that will be considered are the amount of funds
requested in relation to the amount of need; a particularly successful
affordable housing development record; a service area with no other
PRLF coverage; a service area with severe affordable housing problems;
a service area with emergency conditions caused by a natural disaster;
an innovative proposal; the quality of the proposed program; economic
development plan from the local community, particularly a plan prepared
as part of a request for an Empowerment Zone/Enterprise Community
designation; or excellent utilization of an existing revolving loan
fund program. The Administrator will document the reasons for the
particular point allocation.
VI. Appeal Process
All adverse determinations regarding applicant eligibility and the
awarding of points as part of the selection process are appealable.
Instructions on the appeal process will be provided at the time an
applicant is notified of the adverse action.
Equal Opportunity and Nondiscrimination Requirements
(1) In accordance with the Fair Housing Act, Title VI of the Civil
Rights Act of 1964, the Equal Credit Opportunity Act, the Age
Discrimination Act of 1975, Executive Order 12898, the Americans with
Disabilities Act, and Section 504 of the Rehabilitation Act of 1973,
neither the intermediary nor Rural Development will discriminate
against any employee, proposed intermediary or proposed ultimate
recipient on the basis of sex, marital status, race, familial status,
color, religion, national origin, age, physical or mental disability
(provided the proposed intermediary or proposed ultimate recipient has
the capacity to contract), because all or part of the proposed
intermediary's or proposed ultimate recipient's income is derived from
public assistance of any kind, or because the proposed intermediary or
proposed ultimate recipient has in good faith exercised any right under
the Consumer Credit Protection Act, with respect to any aspect of a
credit transaction anytime Rural Development loan funds are involved.
(2) The policies and regulations contained in 7 CFR Part 1901,
Subpart E apply to this program.
(3) The Rural Housing Service (RHS) Administrator will assure that
equal opportunity and nondiscrimination requirements are met in
accordance with the Fair Housing Act, Title VI of the Civil Rights Act
of 1964, the Equal Credit Opportunity Act, the Age Discrimination Act
of 1975, Executive Order 12898, the Americans with Disabilities Act,
and Section 504 of the Rehabilitation Act of 1973.
(4) All housing must meet the accessibility requirements found at 7
CFR Section 3560.60(d).
(5) To file a complaint of discrimination, write to USDA, Assistant
Secretary for Civil Rights Office of the Assistant Secretary for Civil
Rights, 1400 Independence Avenue, SW., STOP 9410, Washington, DC 20250-
9410, or call (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866)
377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-
relay). USDA is an equal opportunity provider, employer, and lender.
The U.S. Department of Agriculture 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).
Dated: August 16, 2011.
Robert Lewis,
Acting Administrator, Rural Housing Service.
[FR Doc. 2011-21318 Filed 8-19-11; 8:45 am]
BILLING CODE 3410-XV-P
