Section 538 Guaranteed Rural Rental Housing Program Change in Priority Projects Criteria, 6209-6211 [2023-01803]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Housing Service

[Federal Register Volume 88, Number 20 (Tuesday, January 31, 2023)]
[Proposed Rules]
[Pages 6209-6211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01803]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 3565

[Docket No. RHS-19-MFH-0024]
RIN 0575-AD31


Section 538 Guaranteed Rural Rental Housing Program Change in 
Priority Projects Criteria

AGENCY: Rural Housing Service, Department of Agriculture (USDA).

ACTION: Proposed rule.

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SUMMARY: The Rural Housing Service (RHS or the Agency), a Rural 
Development agency of the United States Department of Agriculture 
(USDA), proposes to amend the current regulation for the Multifamily 
Family Housing (MFH) Section 538 Guaranteed Rural Rental Housing 
Program (GRRHP). The intent of this proposed rule is to align the 
current criteria of priority projects with the Housing Act of 1949. 
This change is expected to improve the customer experience with more 
timely and proactive responses to housing market demands and 
Administration priorities.

DATES: Comments on the proposed rule must be received on or before 
April 3, 2023.

ADDRESSES: Comments may be submitted electronically by the Federal 
eRulemaking Portal: Go to https://www.regulations.gov and, in the 
``Search Field'' box, labeled ``Search for Rules, Proposed Rules, 
Notices, or Supporting Documents,'' enter the following docket number: 
(RHS-19-MFH-0024) or RIN# 0575-AD31. To submit or view public comments, 
click the ``Search'' button, select the ``Documents'' tab, then select 
the following document title: (Rural Rental Housing Change in Priority 
Projects Criteria) from the ``Search Results,'' and select the 
``Comment'' button. Before inputting your comments, you may also review 
the ``Commenter's Checklist'' (optional). Insert your comments under 
the ``Comment'' title, click ``Browse'' to attach files (if available). 
Input your email address and select ``Submit Comment.'' Information on 
using Regulations.gov, including instructions for accessing documents, 
submitting comments, and viewing the docket after the close of the 
comment period, is available through the site's ``FAQ'' link.
    Other Information: Additional information about Rural Development 
and its programs is available on the internet at https://www.rurdev.usda.gov/.
    All comments will be available for public inspection online at the 
Federal eRulemaking Portal (https://www.regulations.gov).

FOR FURTHER INFORMATION CONTACT: Tammy Daniels, Finance and Loan 
Analyst, Multi-Family Housing Production and Preservation Division, 
Rural Housing Service, United States Department of Agriculture, STOP 
0781, 1400 Independence Avenue SW, Washington, DC 20250-0781, 
Telephone: (202) 720-0021 (this is not a toll-free number); email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The RHS offers a variety of programs to build or improve housing 
and essential community facilities in rural areas. RHS offers loans, 
grants, and loan guarantees for single- and multifamily housing, 
childcare centers, fire and police stations, hospitals, libraries, 
nursing homes, schools, first responder vehicles and equipment, housing 
for farm laborers. RHS also provides technical assistance loans and 
grants in partnership with non-profit organizations, Indian tribes, 
state and federal government agencies, and local communities.
    RHS administers the Section 538 Guaranteed Rural Rental Housing 
Program (GRRHP) under the authority of the Housing Act of 1949, as 
amended (42 U.S.C. 1490p-2). Under the GRRHP, RHS guarantees loans for 
the development of housing and related facilities in rural areas.
    As mandated by Title V of the Housing Act of 1949, the Agency must 
give priority to rural areas in which borrowers can best use and need 
guaranteed loans. 42 U.S.C. 1490p-2(l)(2). 7 CFR 3565.5(b) currently 
defines ``priority projects'' as those: in smaller rural communities, 
in the neediest communities having the highest percentage of 
leveraging, having the lowest interest rate, having the highest ratio 
of 3-to-5-bedroom units to total units, or on tribal lands. Some of 
these specific priorities are no longer relevant.

II. Discussion of the Proposed Rule

    RHS is issuing a proposed rule to amend the MFH GRRHP regulation, 7 
CFR 3565.5(b) to align the current criteria of priority projects with 
42 U.S.C. 1490p-2(l)(2).
    Amendments proposed in this rule are designed to increase the 
supply of affordable rural rental housing by using loan guarantees to 
encourage partnerships between the RHS, private

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lenders, and public agencies. 7 CFR part 3565 sets forth the regulation 
requirements for the GRRHP which prescribes the policies, 
authorizations, and procedures for the guarantee of multifamily loans 
authorized by Section 538, Title V, of the Housing Act of 1949. The 
GRRHP uses priority points to rank and score applications that are 
based on criteria that frequently evolve and change depending on the 
housing market demands, as well as current and future Administrations' 
priorities. Currently, 7 CFR 3565.5(b) does not afford the flexibility 
the Agency requires in its decision making to fully address these 
evolving priorities without a regulatory change to the priority-points 
scoring criteria.
    This proposed rule is intended to improve the customer experience 
with more timely and proactive responses to housing market demands 
without frequent regulatory changes. This is expected to be 
accomplished by providing the much-needed flexibility required in the 
Agency's decision making to fully address evolving priorities in the 
housing market demands, as needed, as well as current and future 
Administrations' priorities. The Agency would also be in a stronger 
position to meet the current and future demands of the housing market, 
which ultimately would allow the Agency to be more responsive to the 
needs of the program's rural stakeholders.

III. Summary of Changes

    The proposed changes would amend 7 CFR 3565.5(b) to offer 
flexibility by aligning the current criteria of priority projects with 
42 U.S.C. 1490p-2(l)(2) to be more timely and responsive to developing 
demands in the rural housing market, as well as evolving priorities 
with current and future Administrations, while improving its customers' 
experience with the program. The Agency would also be in a stronger 
position to meet the current and future demands of the housing market, 
which ultimately would allow the Agency to be more responsive to the 
needs of the program's rural stakeholders.

IV. Regulatory Information

Statutory Authority

    The RHS administers the 538 Guaranteed Rural Rental Housing Program 
(GRRHP) loans under the authority of the Housing Act of 1949, as 
amended (42 U.S.C. 1490p-2(l)(2)) and operates under 7 CFR part 3565.

Executive Order 12372, Intergovernmental Review of Federal Programs

    These loans are subject to the provisions of Executive Order 12372, 
which require intergovernmental consultation with State and local 
officials. RHS conducts intergovernmental consultations for each loan 
in accordance with 2 CFR part 415, subpart C.

Executive Order 12866, Regulatory Planning and Review

    This proposed rule has been determined to be non-significant and, 
therefore, was not reviewed by the Office of Management and Budget 
(OMB) under Executive Order 12866.

Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988. 
In accordance with this rule: (1) Unless otherwise specifically 
provided, all State and local laws that conflict with this rule will be 
preempted; (2) no retroactive effect will be given to this rule except 
as specifically prescribed in the rule; and (3) administrative 
proceedings of the National Appeals Division of the Department of 
Agriculture (7 CFR part 11) must be exhausted before suing in court 
that challenges action taken under this proposed rule.

Executive Order 13132, Federalism

    The policies contained in this proposed rule do not have any 
substantial direct effect on States, on the relationship between the 
National Government and the States, or on the distribution of power and 
responsibilities among the various levels of Government. This proposed 
rule does not impose substantial direct compliance costs on State and 
local Governments; therefore, consultation with States is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This Executive order imposes requirements on RHS in the development 
of regulatory policies that have tribal implications or preempt tribal 
laws. RHS has determined that the proposed rule does not have a 
substantial direct effect on one or more Indian tribe(s) or on either 
the relationship or the distribution of powers and responsibilities 
between the Federal Government and Indian tribes. Thus, this proposed 
rule is not subject to the requirements of Executive Order 13175. If 
tribal leaders are interested in consulting with RHS on this rule, they 
are encouraged to contact USDA's Office of Tribal Relations or RD's 
Native American Coordinator at: [email protected] to request such a 
consultation.

National Environmental Policy Act

    This document has been reviewed in accordance with 7 CFR part 1970, 
subpart A, ``Environmental Policies.'' RHS determined that this action 
does not constitute a major Federal action significantly affecting the 
quality of the environment. In accordance with the National 
Environmental Policy Act of 1969, Public Law 91-190, an Environmental 
Impact Statement is not required.

Regulatory Flexibility Act

    This proposed rule has been reviewed with regards to the 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The 
undersigned has determined and certified by signature on this document 
that this rule will not have a significant economic impact on a 
substantial number of small entities since this rulemaking action does 
not involve a new or expanded program nor does it require any more 
action on the part of a small business than required of a large entity.

Unfunded Mandate Reform Act (UMRA)

    Title II of the UMRA, Public Law 104-4, establishes requirements 
for Federal Agencies to assess the effects of their regulatory actions 
on State, local, and tribal Governments and on the private sector. 
Under section 202 of the UMRA, Federal Agencies generally must prepare 
a written statement, including cost-benefit analysis, for proposed and 
Final Rules with ``Federal mandates'' that may result in expenditures 
to State, local, or tribal Governments, in the aggregate, or to the 
private sector, of $100 million or more in any one year. When such a 
statement is needed for a rule, section 205 of the UMRA generally 
requires a Federal Agency to identify and consider a reasonable number 
of regulatory alternatives and adopt the least costly, more cost-
effective, or least burdensome alternative that achieves the objectives 
of the rule.
    This proposed rule contains no Federal mandates (under the 
regulatory provisions of title II of the UMRA) for State, local, and 
tribal Governments or for the private sector. Therefore, this 
rulemaking is not subject to the requirements of sections 202 and 205 
of the UMRA.

Paperwork Reduction Act

    The information collection requirements contained in this

[[Page 6211]]

regulation have been approved by OMB and have been assigned OMB control 
number 0575-0189. This proposed rule contains no new reporting and 
recordkeeping requirements that would require approval under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

E-Government Act Compliance

    RHS is committed to complying with the E-Government Act by 
promoting the use of the internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information, services, and other purposes.

Civil Rights Impact Analysis

    Rural Development has reviewed this rulemaking in accordance with 
USDA Regulation 4300-4, Civil Rights Impact Analysis,'' to identify any 
major civil rights impacts the rule might have on program participants 
on the basis of age, race, color, national origin, sex, disability, 
sex, gender identity (including gender expression), genetic 
information, political beliefs, sexual orientation, marital status, 
familial status, parental status, veteran status, religion, reprisal 
and/or resulting from all or a part of an individual's income being 
derived from any public assistance program. After review and analysis 
of the rule and available data, it has been determined that 
implementation of the rule is not likely to adversely, or 
disproportionately, impact very low, low- and moderate-income 
populations, minority populations, women, Indian tribes, or persons 
with disability by virtue of their race, color, national origin, sex, 
age, disability, or marital or familiar status. No major civil rights 
impact is likely to result from this proposed rule.

Assistance Listing

    The program affected by this regulation is listed in the Catalog of 
Federal Domestic Assistance under numbers 10.438--Rural Rental Housing 
Guaranteed Loans (Section 538).

Non-Discrimination Statement

    In accordance with Federal civil rights laws and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, the USDA, its 
Mission Areas, agencies, staff offices, employees, and institutions 
participating in or administering USDA programs are prohibited from 
discriminating based on race, color, national origin, religion, sex, 
gender identity (including gender expression), sexual orientation, 
disability, age, marital status, family/parental status, income derived 
from a public assistance program, political beliefs, or reprisal or 
retaliation for prior civil rights activity, in any program or activity 
conducted or funded by USDA (not all bases apply to all programs). 
Remedies and complaint filing deadlines vary by program or incident.
    Program information may be made available in languages other than 
English. Persons with disabilities who require alternative means of 
communication to obtain program information (e.g., Braille, large 
print, audiotape, American Sign Language) should contact the 
responsible Mission Area, agency, or staff office; the USDA TARGET 
Center at (202) 720-2600 (voice and TTY); or the Federal Relay Service 
at (800) 877-8339.
    To file a program discrimination complaint, a complainant should 
complete a Form AD-3027, USDA Program Discrimination Complaint Form, 
which can be obtained online at https://www.ocio.usda.gov/document/ad-3027, from any USDA office, by calling (866) 632-9992, or by writing a 
letter addressed to USDA. The letter must contain the complainant's 
name, address, telephone number, and a written description of the 
alleged discriminatory action in sufficient detail to inform the 
Assistant Secretary for Civil Rights (ASCR) about the nature and date 
of an alleged civil rights violation. The completed AD-3027 form or 
letter must be submitted to USDA by:
    (1) Mail: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 
20250-9410; or
    (2) Fax: (833) 256-1665 or (202) 690-7442; or
    (3) Email: [email protected]
    USDA is an equal opportunity provider, employer, and lender.

List of Subjects in 7 CFR Part 3565

    Conflict of interest, Credit, Fair housing, Loan programs--housing 
and community development, Low and moderate-income housing, 
Manufactured homes, Mortgages, Rent subsidies, Reporting and 
recordkeeping requirements, Rural areas.

    For the reasons discussed in the preamble, the Agency is proposing 
to amend 7 CFR part 3565 as follows:

PART 3565--GUARANTEED RURAL RENTAL HOUSING PROGRAM

0
1. The authority citation for part 3565 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480.

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2. Amend Sec.  3565.5 by revising paragraph (b) to read as follows:


Sec.  3565.5   Ranking and selection criteria

* * * * *
    (b) Priority will be given to projects in rural areas in which 
borrowers can best utilize and where loan guarantees are needed the 
most, as determined by the Agency based on information the Secretary 
considers appropriate. In addition, the Agency may, at its sole 
discretion, set aside assistance for or rank projects that meet 
important program goals. Assistance will include both loan guarantees 
and interest credits. Priority projects must compete for set-aside 
funds. The Agency will announce the priority criteria in an 
announcement in the Federal Register.

Cathy Glover,
Acting Administrator, Rural Housing Service.
[FR Doc. 2023-01803 Filed 1-30-23; 8:45 am]
BILLING CODE 3410-XV-P