Changes Related to Reserve Account Administration in Multi-Family Housing (MFH) Direct Loan Programs, 19225-19228 [2024-05571]
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19225
Rules and Regulations
Federal Register
Vol. 89, No. 53
Monday, March 18, 2024
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
FEDERAL RETIREMENT THRIFT
INVESTMENT BOARD
5 CFR Part 1631
Technical Correction
Federal Retirement Thrift
Investment Board.
ACTION: Correcting amendment.
AGENCY:
The Federal Retirement Thrift
Investment Board (FRTIB) is making
technical revisions to its regulations
after a reorganization of the Office of
Participant Services and Office of
Communications and Education into a
new Office of Participant Experience.
This action makes no substantive
regulatory changes.
DATES: Effective March 18, 2024.
FOR FURTHER INFORMATION CONTACT:
Magali Matarazzi at (202) 864–7006.
SUPPLEMENTARY INFORMATION: The
FRTIB administers the Thrift Savings
Plan (TSP), which was established by
the Federal Employees’ Retirement
System Act of 1986 (FERSA), Public
Law 99–335, 100 Stat. 514. The TSP
provisions of FERSA are codified, as
amended, largely at 5 U.S.C. 8351 and
8401–79. The TSP is a tax-deferred
retirement savings plan for Federal
civilian employees and members of the
uniformed services. The TSP is similar
to cash or deferred arrangements
established for private-sector employees
under section 401(k) of the Internal
Revenue Code (26 U.S.C. 401(k)).
SUMMARY:
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Office Name Change
The FRTIB has reorganized the Office
of Participant Services and Office of
Communications and Education into a
new Office of Participant Experience.
This amendment to 5 CFR 1631.3
revises references to former offices of
the FRTIB to reflect their new name.
Administrative Procedures Act
The FRTIB is promulgating these
corrections without advance notice or
an opportunity for comment because the
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FRTIB for good cause finds that notice
and public comment are unnecessary,
impracticable, or contrary to the public
interest under the ‘‘good cause’’
exemption of the Administrative
Procedure Act (‘‘APA’’). 5 U.S.C.
553(b)(B). The FRTIB finds that notice
and comment are unnecessary here
because these corrections are merely
typographical and technical; they effect
no substantive changes to any rule. For
the same reason, these corrections fall
within the ‘‘good cause’’ exception to
the delayed effective date provisions of
the APA and the Congressional Review
Act. 5 U.S.C. 553(d)(3) and 808(2).
Accordingly, these corrections are
effective upon publication in the
Federal Register.
List of Subjects in 5 CFR Part 1631
Availability of records.
Ravindra Deo,
Executive Director, Federal Retirement Thrift
Investment Board.
For the reasons stated in the
preamble, the FRTIB amends 5 CFR
Chapter VI as follows:
PART 1631—AVAILABILITY OF
RECORDS
Subpart A—Production or Disclosure
of Records Under the Freedom of
Information Act, 5 U.S.C. 552
1. The authority citation for subpart A
of part 1631 continues to read as
follows:
■
Authority: 5 U.S.C. 552.
Regulatory Flexibility Act
This regulation will not have a
significant economic impact on a
substantial number of small entities.
This regulation will affect Federal
employees, members of the uniformed
services who participate in the TSP, and
beneficiary participants.
Paperwork Reduction Act
This regulation does not require
additional reporting under the criteria of
the Paperwork Reduction Act.
Unfunded Mandates Reform Act of
1995
Pursuant to the Unfunded Mandates
Reform Act of 1995, 2 U.S.C. 602, 632,
653, and 1501–1571, the effects of this
regulation on State, local, and tribal
governments and the private sector have
been assessed. This regulation will not
compel the expenditure in any one year
of $100 million or more by State, local,
and tribal governments, in the aggregate,
or by the private sector. Therefore, a
statement under 2 U.S.C. 1532 is not
required.
Submission to Congress and the
General Accounting Office
Pursuant to 5 U.S.C. 801(a)(1)(A), the
FRTIB submitted a report containing
this rule and other required information
to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States before
publication of this rule in the Federal
Register. This rule is not a major rule as
defined at 5 U.S.C. 804(2).
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2. Amend § 1631.3 by revising
paragraphs (a)(1) through (a)(10) and
removing paragraph (a)(11) to read as
follows:
■
§ 1631.3
Organization and functions.
(a) * * *
(1) The five part-time members who
serve on the Board;
(2) The Office of the Executive
Director;
(3) The Office of Participant
Experience;
(4) The Office of General Counsel;
(5) The Office of Investments;
(6) The Office of Planning and Risk;
(7) The Office of External Affairs;
(8) The Office of Chief Financial
Officer;
(9) The Office of Resource
Management; and
(10) The Office of Technology
Services.
*
*
*
*
*
[FR Doc. 2024–05614 Filed 3–15–24; 8:45 am]
BILLING CODE 6760–01–P
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Part 3560
[Docket #: RHS–23–MFH–0025]
RIN 0575–AD23
Changes Related to Reserve Account
Administration in Multi-Family Housing
(MFH) Direct Loan Programs
Rural Housing Service, U.S.
Department of Agriculture (USDA).
AGENCY:
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ACTION:
Federal Register / Vol. 89, No. 53 / Monday, March 18, 2024 / Rules and Regulations
Final rule.
The Rural Housing Service
(RHS or Agency), a Rural Development
(RD) agency of the United States
Department of Agriculture (USDA), is
updating its regulations and
implementing changes related to the
administration of property reserve
accounts under the Multi-Family
Housing (MFH) section 515, Rural
Rental Housing (RRH), and section 514,
516 Farm Labor Housing (FLH)
programs. This final rule will increase
flexibility in project refinancing for
additional capital improvements needed
at MFH section 515, RRH, and section
514, 516 FLH properties.
DATES: This final rule is effective April
17, 2024.
FOR FURTHER INFORMATION CONTACT:
Michael Resnik, Director, Asset
Management Division, Multifamily
Housing Programs and Housing Service,
Rural Development, U.S. Department of
Agriculture, 1400 Independence Avenue
SW, Washington, DC 20250, telephone:
202–430–3114; or email:
Michael.Resnik@usda.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
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I. Background
The RHS, an agency of the USDA,
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 multi-family housing,
childcare centers, fire and police
stations, hospitals, libraries, nursing
homes, schools, first responder vehicles
and equipment, and 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.
Title V of the Housing Act of 1949
(Act) authorized the USDA to make
housing loans to farmers to enable them
to provide habitable dwellings for
themselves or their tenants, lessees,
sharecroppers, and laborers. The USDA
then expanded opportunities in rural
areas, making housing loans and grants
to rural residents through the SingleFamily Housing (SFH) and Multi-Family
Housing (MFH) Programs.
The RHS operates the MFH section
515 RRH direct loan program. The
section 515 program employs a publicprivate partnership by providing
subsidized loans at an interest rate of
one percent to developers to construct
or renovate affordable rental complexes
in rural areas. This one percent loan
keeps the debt service on the property
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sufficiently low to support belowmarket rents affordable to low-income
tenants. Many of these projects also
utilize low-income housing tax credit
proceeds.
The RHS also operates the MFH FLH
direct loan and grant programs under
sections 514 and 516 which provide low
interest loans and grants to provide
housing for farmworkers. These eligible
farmworkers may work either at the
borrower’s farm (‘‘on-farm’’) or at any
other farm (‘‘off-farm’’). This final rule
is designed to increase flexibility in
project refinancing for additional capital
improvements needed for a section 515
or 514, 516 MFH property.
II. Purpose of This Rulemaking
RHS published a proposed rule on
January 9, 2023 [88 FR 1149], in the
Federal Register to solicit comments on
the proposed updates to 7 CFR part
3560 and changes related to the
administration of property reserve
accounts under the MFH section 515,
RRH, and section 514, 516 FLH
programs. The MFH direct loan project’s
general operating account is deemed to
contain surplus funds when the balance
at the end of the housing project’s fiscal
year, after all payables, exceeds 20
percent of the operating and
maintenance expenses. When a MFH
property’s Agency-approved budget
results in surplus cash at the end of the
year, this change to the current
regulation will allow the borrower to
use surplus cash to fund Agencyapproved soft debt. MFH approved softdebt is a type of debt that generally (1)
is not immediately due and payable, (2)
has lenient repayment terms, and/or (3)
has no-interest or low-interest rates, for
example a ‘‘cash flow note’’. Soft debt
is often provided by State or local
government as vital, additional sources
of MFH direct loan property
rehabilitation funding. This final rule
change will allow owners the flexibility
to access surplus cash notes as a new
source of capital for property
improvements, and to implement
operating cost increases in property
reserve contributions. It is designed to
increase flexibility in project
refinancing for additional capital
improvements under 7 CFR 3560.306 to
implement changes related to the
administration of property reserve
accounts under the MFH section 515,
RRH, and section 514, 516 FLH
programs.
III. Discussion of Public Comments
In response to the published proposed
rule on January 9, 2023 [88 FR 1149],
RHS received two identical comments
from one respondent with positive
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feedback on the MFH programs. The
comment did not include direct
statements regarding the proposed
changes and is not applicable to the
contents of the rule. The comments did
not result in the Agency changing plans
for the final rule.
IV. Summary of Changes
The changes to amend 7 CFR
3560.306 include reducing debt service
on other third-party debt, as an
allowable use of funds, including
payments toward cash flow notes.
Allowing borrowers to use surplus
funds to repay third-party debt would
allow those borrowers to access State
and local government funding available
as a capital source for property
improvements. Acceptable third-party
debt, including cash flow notes, will
take the form of a written agreement for
the payment of an Agency-approved
debt obligation, with or without interest.
Payments may occur only after approval
has been granted by the Agency. These
changes are designed to improve
property condition and increase tools
available to borrowers to preserve
properties as affordable housing
resources. This final rule no longer
includes the reduction in rents as an
allowable use of surplus funds, as rentsetting is part of the annual proposed
budget process and should not be
included in the reserve account section
of this regulation. These changes are
designed to improve property condition
and increase tools available to
borrowers to preserve properties as
affordable housing resources.
V. Regulatory Information
Statutory Authority
The RRH and FLH programs are
authorized under sections 514, 515, 516
of title V of the Housing Act of 1949, as
amended (42 U.S.C. 1484–86); and
implemented under 7 CFR part 3560.
Section 510(k) of Title V the Housing
Act of 1949 (42 U.S.C. 1480(k)), as
amended, authorizes the Secretary of
Agriculture to promulgate rules and
regulations as deemed necessary to
carry out the purpose of that title.
Executive Order 12372,
Intergovernmental Review of Federal
Programs
These loans are subject to the
provisions of Executive Order 12372,
which requires intergovernmental
consultation with State and local
officials. RHS conducts
intergovernmental consultations for
each loan in accordance with 2 CFR part
415, subpart C.
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Federal Register / Vol. 89, No. 53 / Monday, March 18, 2024 / Rules and Regulations
Executive Order 12866, Regulatory
Planning and Review
This final 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 final rule has been reviewed
under Executive Order 12988. In
accordance with this rulemaking: (1)
Unless otherwise specifically provided,
all State and local laws that conflict
with this rulemaking will be preempted;
(2) no retroactive effect will be given to
this rulemaking 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 rulemaking.
Executive Order 13132, Federalism
The policies contained in this final
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 final
rule does not impose substantial direct
compliance costs on State and local
governments; therefore, consultation
with States is not required.
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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 final 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 final rule is not subject to the
requirements of Executive Order 13175.
If Tribal leaders are interested in
consulting with RHS on this
rulemaking, they are encouraged to
contact USDA’s Office of Tribal
Relations or RD’s Tribal Coordinator at:
AIAN@usda.gov 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
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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 (EIS)
is not required.
Regulatory Flexibility Act
This final rule has been reviewed
with regard 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 final 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 Mandates 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 costbenefit 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,
most cost-effective, or least burdensome
alternative that achieves the objectives
of the rule.
This final 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
final rule is not subject to the
requirements of sections 202 and 205 of
the UMRA.
Paperwork Reduction Act
The information collection
requirements contained in this
regulation have been approved by OMB
and have been assigned OMB control
number 0575–0189. This final 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).
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19227
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
RD has reviewed this final rule in
accordance with USDA Regulation
4300–4, Civil Rights Impact Analysis, to
identify any major civil rights impacts
the final rule might have on program
participants on the basis of age, race,
color, national origin, sex, or disability.
After review and analysis of the final
rule and available data, it has been
determined that implementation of the
rulemaking will not 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
familial status. No major civil rights
impact is likely to result from this final
rule.
Assistance Listing
The program affected by this
regulation is listed in the Assistance
Listing Catalog (formerly Catalog of
Federal Domestic Assistance) under
number 10.415–Rural Rental Housing
Loans.
Non-Discrimination Statement Policy
In accordance with Federal civil
rights laws and 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
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Federal Register / Vol. 89, No. 53 / Monday, March 18, 2024 / Rules and Regulations
Area, agency, or staff office; or the 711
Relay Service.
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.usda.gov/sites/default/
files/documents/ad-3027.pdf 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:
a. Mail: U.S. Department of
Agriculture, Office of the Assistant
Secretary for Civil Rights, 1400
Independence Avenue SW, Washington,
DC 20250–9410; or
b. Fax: (833) 256–1665 or (202) 690–
7442; or
c. Email: program.intake@usda.gov.
Yvonne Hsu,
Acting Administrator, Rural Housing Service.
[FR Doc. 2024–05571 Filed 3–15–24; 8:45 am]
BILLING CODE 3410–XV–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2023–1709; Project
Identifier MCAI–2022–01642–T; Amendment
39–22685; AD 2024–04–06]
List of Subjects in 7 CFR Part 3560
RIN 2120–AA64
Accounting, Administrative practice
and procedure, Aged, Conflicts of
interest, Government property
management, Grant programs—housing
and community development,
Insurance, Loan programs—agriculture,
Loan programs—housing and
community development, Low and
moderate-income housing, Migrant
labor, Mortgages, Nonprofit
organizations, Public housing, Rentsubsidies, Reporting and recordkeeping
requirements, Rural areas.
For the reasons discussed in the
preamble, the Agency amends 7 CFR
part 3560 as follows:
Airworthiness Directives; Airbus
Canada Limited Partnership (Type
Certificate Previously Held by C Series
Aircraft Limited Partnership (CSALP);
Bombardier, Inc.) Airplanes
PART 3560—DIRECT MULTI-FAMILY
HOUSING LOANS AND GRANTS
1. The authority citation for part 3560
continues to read as follows:
■
Authority: 42 U.S.C. 1480.
2. Amend § 3560.306 by revising
paragraph (d)(2) to read as follows:
■
§ 3560.306
Reserve account.
*
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deposit in the reserve account or reduce
the debt service on the borrower’s loans,
including Agency-approved third-party
debt. The prior written consent of the
Agency must be obtained before surplus
funds may be used to pay debt service
on third-party debt. At the end of the
borrower’s fiscal year, if the borrower is
required to transfer surplus funds from
the general operating account to the
reserve account, the transfer does not
change the future required contributions
to the reserve account.
*
*
*
*
*
*
*
*
*
(d) * * *
(2) If a housing project’s general
operating account has surplus funds at
the end of the housing project’s fiscal
year per paragraph (d)(1) of this section,
the borrower will be required to use
such surplus for one of the following
(not in priority order): use the surplus
funds to address capital needs, make a
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Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
The FAA is adopting a new
airworthiness directive (AD) for certain
Airbus Canada Limited Partnership
Model BD–500–1A10 and BD–500–
1A11 airplanes. This AD was prompted
by reports of mechanical wear damage
on the motive flow fuel-feed tubes that
were secured by bonding clamps and
clamp blocks inside the collector tank.
This AD requires repetitive operational
checks of the gravity cross flow shut-off
valve and, for certain airplanes, a onetime inspection of the motive flow fuelfeed tubes at the clamp blocks location,
and corrective action if necessary, as
specified in a Transport Canada AD,
which is incorporated by reference. The
FAA is issuing this AD to address the
unsafe condition on these products.
DATES: This AD is effective April 22,
2024.
The Director of the Federal Register
approved the incorporation by reference
of a certain publication listed in this AD
as of April 22, 2024.
ADDRESSES:
AD Docket: You may examine the AD
docket at regulations.gov under Docket
SUMMARY:
PO 00000
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No. FAA–2023–1709; or in person at
Docket Operations between 9 a.m. and
5 p.m., Monday through Friday, except
Federal holidays. The AD docket
contains this final rule, the mandatory
continuing airworthiness information
(MCAI), any comments received, and
other information. The address for
Docket Operations is U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
Material Incorporated by Reference:
• For material identified in this final
rule, contact Transport Canada,
Transport Canada National Aircraft
Certification, 159 Cleopatra Drive,
Nepean, Ontario K1A 0N5, Canada;
telephone 888–663–3639; email
TC.AirworthinessDirectivesConsignesdenavigabilite.TC@tc.gc.ca;
website tc.canada.ca/en/aviation.
• You may view this material that is
incorporated by reference at the FAA,
Airworthiness Products Section,
Operational Safety Branch, 2200 South
216th Street, Des Moines, WA. For
information on the availability of this
material at the FAA, call 206–231–3195.
It is also available in the AD docket at
regulations.gov under Docket No. FAA–
2023–1709.
FOR FURTHER INFORMATION CONTACT:
Joseph Catanzaro, Aviation Safety
Engineer, FAA, 1600 Stewart Avenue,
Suite 410, Westbury, NY 11590;
telephone 516–228–7366; email
joseph.catanzaro@faa.gov.
SUPPLEMENTARY INFORMATION:
Background
The FAA issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would
apply to certain Airbus Canada Limited
Partnership (Type Certificate previously
held by C Series Aircraft Limited
Partnership (CSALP); Bombardier, Inc.)
Model BD–500–1A10 and BD–500–
1A11 airplanes. The NPRM published in
the Federal Register on August 14, 2023
(88 FR 54949). The NPRM was
prompted by AD CF–2022–70, dated
December 21, 2022, issued by Transport
Canada, which is the aviation authority
for Canada (Transport Canada AD CF–
2022–70) (also referred to as the MCAI).
The MCAI states there have been several
findings of mechanical wear damage on
the motive flow fuel-feed tubes that
were secured by bonding clamps and
clamp blocks inside the collector tank.
In some instances, the wear damage led
to a hole in a motive flow fuel-feed tube
resulting in a fuel imbalance during
flight that required the flightcrews to
correct the imbalance using the gravity
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]]>Agencies
[Federal Register Volume 89, Number 53 (Monday, March 18, 2024)]
[Rules and Regulations]
[Pages 19225-19228]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05571]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Part 3560
[Docket #: RHS-23-MFH-0025]
RIN 0575-AD23
Changes Related to Reserve Account Administration in Multi-Family
Housing (MFH) Direct Loan Programs
AGENCY: Rural Housing Service, U.S. Department of Agriculture (USDA).
[[Page 19226]]
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Rural Housing Service (RHS or Agency), a Rural Development
(RD) agency of the United States Department of Agriculture (USDA), is
updating its regulations and implementing changes related to the
administration of property reserve accounts under the Multi-Family
Housing (MFH) section 515, Rural Rental Housing (RRH), and section 514,
516 Farm Labor Housing (FLH) programs. This final rule will increase
flexibility in project refinancing for additional capital improvements
needed at MFH section 515, RRH, and section 514, 516 FLH properties.
DATES: This final rule is effective April 17, 2024.
FOR FURTHER INFORMATION CONTACT: Michael Resnik, Director, Asset
Management Division, Multifamily Housing Programs and Housing Service,
Rural Development, U.S. Department of Agriculture, 1400 Independence
Avenue SW, Washington, DC 20250, telephone: 202-430-3114; or email:
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The RHS, an agency of the USDA, 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
multi-family housing, childcare centers, fire and police stations,
hospitals, libraries, nursing homes, schools, first responder vehicles
and equipment, and 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.
Title V of the Housing Act of 1949 (Act) authorized the USDA to
make housing loans to farmers to enable them to provide habitable
dwellings for themselves or their tenants, lessees, sharecroppers, and
laborers. The USDA then expanded opportunities in rural areas, making
housing loans and grants to rural residents through the Single-Family
Housing (SFH) and Multi-Family Housing (MFH) Programs.
The RHS operates the MFH section 515 RRH direct loan program. The
section 515 program employs a public-private partnership by providing
subsidized loans at an interest rate of one percent to developers to
construct or renovate affordable rental complexes in rural areas. This
one percent loan keeps the debt service on the property sufficiently
low to support below-market rents affordable to low-income tenants.
Many of these projects also utilize low-income housing tax credit
proceeds.
The RHS also operates the MFH FLH direct loan and grant programs
under sections 514 and 516 which provide low interest loans and grants
to provide housing for farmworkers. These eligible farmworkers may work
either at the borrower's farm (``on-farm'') or at any other farm
(``off-farm''). This final rule is designed to increase flexibility in
project refinancing for additional capital improvements needed for a
section 515 or 514, 516 MFH property.
II. Purpose of This Rulemaking
RHS published a proposed rule on January 9, 2023 [88 FR 1149], in
the Federal Register to solicit comments on the proposed updates to 7
CFR part 3560 and changes related to the administration of property
reserve accounts under the MFH section 515, RRH, and section 514, 516
FLH programs. The MFH direct loan project's general operating account
is deemed to contain surplus funds when the balance at the end of the
housing project's fiscal year, after all payables, exceeds 20 percent
of the operating and maintenance expenses. When a MFH property's
Agency-approved budget results in surplus cash at the end of the year,
this change to the current regulation will allow the borrower to use
surplus cash to fund Agency-approved soft debt. MFH approved soft-debt
is a type of debt that generally (1) is not immediately due and
payable, (2) has lenient repayment terms, and/or (3) has no-interest or
low-interest rates, for example a ``cash flow note''. Soft debt is
often provided by State or local government as vital, additional
sources of MFH direct loan property rehabilitation funding. This final
rule change will allow owners the flexibility to access surplus cash
notes as a new source of capital for property improvements, and to
implement operating cost increases in property reserve contributions.
It is designed to increase flexibility in project refinancing for
additional capital improvements under 7 CFR 3560.306 to implement
changes related to the administration of property reserve accounts
under the MFH section 515, RRH, and section 514, 516 FLH programs.
III. Discussion of Public Comments
In response to the published proposed rule on January 9, 2023 [88
FR 1149], RHS received two identical comments from one respondent with
positive feedback on the MFH programs. The comment did not include
direct statements regarding the proposed changes and is not applicable
to the contents of the rule. The comments did not result in the Agency
changing plans for the final rule.
IV. Summary of Changes
The changes to amend 7 CFR 3560.306 include reducing debt service
on other third-party debt, as an allowable use of funds, including
payments toward cash flow notes. Allowing borrowers to use surplus
funds to repay third-party debt would allow those borrowers to access
State and local government funding available as a capital source for
property improvements. Acceptable third-party debt, including cash flow
notes, will take the form of a written agreement for the payment of an
Agency-approved debt obligation, with or without interest. Payments may
occur only after approval has been granted by the Agency. These changes
are designed to improve property condition and increase tools available
to borrowers to preserve properties as affordable housing resources.
This final rule no longer includes the reduction in rents as an
allowable use of surplus funds, as rent-setting is part of the annual
proposed budget process and should not be included in the reserve
account section of this regulation. These changes are designed to
improve property condition and increase tools available to borrowers to
preserve properties as affordable housing resources.
V. Regulatory Information
Statutory Authority
The RRH and FLH programs are authorized under sections 514, 515,
516 of title V of the Housing Act of 1949, as amended (42 U.S.C. 1484-
86); and implemented under 7 CFR part 3560. Section 510(k) of Title V
the Housing Act of 1949 (42 U.S.C. 1480(k)), as amended, authorizes the
Secretary of Agriculture to promulgate rules and regulations as deemed
necessary to carry out the purpose of that title.
Executive Order 12372, Intergovernmental Review of Federal Programs
These loans are subject to the provisions of Executive Order 12372,
which requires intergovernmental consultation with State and local
officials. RHS conducts intergovernmental consultations for each loan
in accordance with 2 CFR part 415, subpart C.
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Executive Order 12866, Regulatory Planning and Review
This final 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 final rule has been reviewed under Executive Order 12988. In
accordance with this rulemaking: (1) Unless otherwise specifically
provided, all State and local laws that conflict with this rulemaking
will be preempted; (2) no retroactive effect will be given to this
rulemaking 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 rulemaking.
Executive Order 13132, Federalism
The policies contained in this final 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 final
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 final 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 final rule
is not subject to the requirements of Executive Order 13175. If Tribal
leaders are interested in consulting with RHS on this rulemaking, they
are encouraged to contact USDA's Office of Tribal Relations or RD's
Tribal 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 (EIS) is not required.
Regulatory Flexibility Act
This final rule has been reviewed with regard 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
final 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 Mandates 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, most cost-
effective, or least burdensome alternative that achieves the objectives
of the rule.
This final 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 final rule is
not subject to the requirements of sections 202 and 205 of the UMRA.
Paperwork Reduction Act
The information collection requirements contained in this
regulation have been approved by OMB and have been assigned OMB control
number 0575-0189. This final 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
RD has reviewed this final rule in accordance with USDA Regulation
4300-4, Civil Rights Impact Analysis, to identify any major civil
rights impacts the final rule might have on program participants on the
basis of age, race, color, national origin, sex, or disability. After
review and analysis of the final rule and available data, it has been
determined that implementation of the rulemaking will not 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 familial status. No major civil rights
impact is likely to result from this final rule.
Assistance Listing
The program affected by this regulation is listed in the Assistance
Listing Catalog (formerly Catalog of Federal Domestic Assistance) under
number 10.415-Rural Rental Housing Loans.
Non-Discrimination Statement Policy
In accordance with Federal civil rights laws and 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
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Area, agency, or staff office; or the 711 Relay Service.
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.usda.gov/sites/default/files/documents/ad-3027.pdf 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:
a. Mail: U.S. Department of Agriculture, Office of the Assistant
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC
20250-9410; or
b. Fax: (833) 256-1665 or (202) 690-7442; or
c. Email: [email protected].
List of Subjects in 7 CFR Part 3560
Accounting, Administrative practice and procedure, Aged, Conflicts
of interest, Government property management, Grant programs--housing
and community development, Insurance, Loan programs--agriculture, Loan
programs--housing and community development, Low and moderate-income
housing, Migrant labor, Mortgages, Nonprofit organizations, Public
housing, Rent-subsidies, Reporting and recordkeeping requirements,
Rural areas.
For the reasons discussed in the preamble, the Agency amends 7 CFR
part 3560 as follows:
PART 3560--DIRECT MULTI-FAMILY HOUSING LOANS AND GRANTS
0
1. The authority citation for part 3560 continues to read as follows:
Authority: 42 U.S.C. 1480.
0
2. Amend Sec. 3560.306 by revising paragraph (d)(2) to read as
follows:
Sec. 3560.306 Reserve account.
* * * * *
(d) * * *
(2) If a housing project's general operating account has surplus
funds at the end of the housing project's fiscal year per paragraph
(d)(1) of this section, the borrower will be required to use such
surplus for one of the following (not in priority order): use the
surplus funds to address capital needs, make a deposit in the reserve
account or reduce the debt service on the borrower's loans, including
Agency-approved third-party debt. The prior written consent of the
Agency must be obtained before surplus funds may be used to pay debt
service on third-party debt. At the end of the borrower's fiscal year,
if the borrower is required to transfer surplus funds from the general
operating account to the reserve account, the transfer does not change
the future required contributions to the reserve account.
* * * * *
Yvonne Hsu,
Acting Administrator, Rural Housing Service.
[FR Doc. 2024-05571 Filed 3-15-24; 8:45 am]
BILLING CODE 3410-XV-P
