Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Notices 21211 

F. Comments regarding relevant 

offsite conditions. 

G. Explanation of any proposed 

energy efficiency components. 

Applicants are encouraged, but not 

required, to include a checklist and to 

have their applications indexed and 

tabbed to facilitate the review process. 

The Rural Development State Office will 

base its determination of completeness 

of the application and the eligibility of 

each applicant on the information 

provided in the application. 

B. Applicants are advised to contact 

the Rural Development State Office 

serving the place in which they desire 

to submit an application for the 

following: 

1. Questions pertaining to the 

application process; and 

2. List of designated places for which 

applications for new section 515 

facilities may be submitted. 

VI. Areas of Special Emphasis or 

Consideration 

A. The RHS encourages the use of 

funding from other sources in 

conjunction with Agency loans. This 

year there will be a National Office 

Initiative pursuant to 7 CFR 

3560.56(c)(1)(iii), whereby preference 

points will be awarded to loan requests 

that meet the selection criteria as 

follows: In states where RHS has an ongoing formal working relationship, 

agreement, or MOU with the State to 

provide State resources (State funds, 

State RA, HOME funds, CDBG funds, or 

LIHTC) for RHS proposals; or where the 

State provides preference or points to 

RHS proposals in awarding these State 

Resources, 20 points will be provided to 

loan requests that include such State 

resources in an amount equal to at least 

5 percent of the TDC. NAHASDA funds 

may be considered a State Resource if 

the Tribal Plan for NAHASDA funds 

contains provisions for partnering with 

RHS for multi-family housing. 

B. $8,910,000 is available nationwide 

in a set-aside for eligible nonprofit 

organizations as defined in 42 U.S.C. 

1485(w). 

C. $4,950,000 is available nationwide 

in a set-aside for the 100 most 

Underserved Counties and Colonias. 

D. $2,655,463 is available nationwide 

in an earmark for EZ, EC, and REAP 

zone. 

E. $990,000 is available nationwide in 

a reserve for States with viable State RA 

programs. In order to participate, States 

are to submit specific written 

information about the State RA program, 

i.e., a memorandum of understanding, 

documentation from the provider, etc., 

to the National Office. 

Dated: April 23, 2007. 

James C. Alsop, 

Acting Administrator, Rural Housing Service. 

[FR Doc. E7–8157 Filed 4–27–07; 8:45 am] 

BILLING CODE 3410–XV–P 

DEPARTMENT OF AGRICULTURE 

Rural Housing Service 

Notice of Funding Availability: Section 

515 Multi-Family Housing Preservation 

and Revitalization Restructuring 

Program (MPR) for Fiscal Year 2007 

AGENCY: Rural Housing Service, USDA. 

ACTION: Notice. 

Announcement Type: Inviting 

applications from eligible applicants for 

Fiscal Year 2007 funding. 

Catalog of Federal Domestic 

Assistance Number (CFDA): 10.447. 

SUMMARY: USDA Rural Development 

administers the programs of Rural 

Housing Service (RHS) announces the 

availability of funds and the timeframe 

to submit applications to participate in 

a demonstration program to preserve 

and revitalize existing rural rental 

housing projects financed by Rural 

Development under Section 515 of the 

Housing Act of 1949. The intended 

effect is to restructure selected existing 

Section 515 loans expressly for the 

purpose of ensuring that sufficient 

resources are available to preserve the 

rental project for the purpose of 

providing safe and affordable housing 

for very low-, low-, or moderate-income 

residents. Expectations are that 

properties participating in this program 

will be revitalized and affordable use 

extended without displacing tenants 

because of increased rents. No 

additional Rural Development rental 

assistance units will be made available 

under this program. 

DATES: The deadline for receipt of all 

pre-applications in response to this 

Notice of Funding Availability (NOFA) 

is 5 p.m., Eastern Time, May 30, 2007. 

The pre-application closing deadline is 

firm as to date and hour. The Agency 

will not consider any pre-application 

that is received after the closing 

deadline. Applicants intending to mail 

pre-applications must allow sufficient 

time to permit delivery on or before the 

closing deadline. Acceptance by a post 

office or private mailer does not 

constitute delivery. Facsimile (FAX) and 

postage-due pre-applications will not be 

accepted. 

FOR FURTHER INFORMATION CONTACT: 

Carlton Jarratt, 

carlton.jarratt@wdc.usda.gov, (804) 

561–0665; Sherry Engel, 

sherry.engel@wi.usda.gov (715) 345–

7677; or Sandra Mercier, 

sandra.mercier@wdc.usda.gov (202) 

720–1617, Senior Loan Specialists, 

Multi-Family Housing Office of Rental 

Housing Preservation, STOP 0782, 

(Room 1263–S), U.S. Department of 

Agriculture, Rural Housing Service, 

1400 Independence Avenue, SW., 

Washington, DC 20250–0782. (Please 

note these phone numbers are not toll 

free numbers.) 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

The information collection 

requirements contained in this Notice 

have received approval from the Office 

of Management and Budget (OMB) 

under Control Number 0570–0190. 

Overview 

The Agriculture, Rural Development, 

Food and Drug Administration, and 

Related Agencies Appropriations Act, 

2007 (Pub. L. 110–5), February 15, 2007, 

provides funding for and authorizes 

Rural Development to conduct a 

demonstration program for the 

preservation and revitalization of the 

Section 515 multi-family housing 

portfolio. The Section 515 multi-family 

housing program is authorized by 

Section 515 of the Housing Act of 1949 

(42 U.S.C. 1485) and provides Rural 

Development the authority to make 

loans for low-income multi-family 

housing and related facilities. 

Program Administration 

I. Funding Opportunities Description 

This NOFA solicits pre-applications 

from eligible borrowers/applicants to 

restructure existing multi-family 

housing within the Agency’s Section 

515 multi-family housing portfolio for 

the purpose of revitalization and 

preservation. The demonstration 

program shall be referred to in this 

notice as the Multi-Family Housing 

Preservation and Revitalization 

Restructuring Demonstration (MPR) 

program. Agency regulations for the 

Section 515 multi-family housing 

program are published at 7 CFR part 

3560. The MPR is intended to assure 

that existing rental projects will 

continue to deliver decent, safe, and 

sanitary affordable rental housing for 

the lesser of the remaining term of the 

loan or 20 years from the date of the 

MPR transaction closing. Once an 

applicant has been confirmed eligible 

and the project has been selected by the 

Agency in the process described in this 

notice, and the applicant agrees to 

participate in the MPR demonstration 

by written notification to the Agency, an 


rwilkins on PROD1PC63 with NOTICES
21212 Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Notices 

independent third party capital needs 

assessment (CNA) will be conducted to 

provide a fair and objective review of 

projected capital needs. The Agency 

shall implement this NOFA through an 

MPR Conditional Commitment 

(MPRCC) with the eligible borrower, 

which will include all the terms and 

conditions under this NOFA, including 

the MPR Debt Deferral Agreement. 

The primary restructuring tool to be 

used in this program is debt deferral up 

to 20 years of the existing 1% Section 

515 loans obligated prior to October 1, 

1991. The cash flow from the deferred 

payment will be deposited to the reserve 

account to help meet the future physical 

needs of the property. If the resulting 

cash flow is not adequate to address the 

long-term needs of the project, the 

Agency may use the following sources 

of funds: 

(1) Other Agency restructuring tools 

as discussed below; 

(2) Section 515 Rehabilitation loan 

funds; and 

(3) Third party funds in the form of 

grants, tax credits, tax exempt financing, 

owner-provided rehabilitation funds, 

Rural Development Section 538 

Guaranteed Rural Rental Housing 

Program financing, and financing from 

loan funds established through the 

Rural Development Section 515 MultiFamily Housing Preservation Revolving 

Loan Fund Demonstration Program. 

For the purposes of the MPR, the 

restructuring transactions will be 

identified in three categories: 

(1) Simple transactions involve no 

change in ownership. 

(2) Complex transactions will consist 

of a property transfer to new ownership 

processed in accordance with 7 CFR 

3560.406, or transactions requiring a 

subordination agreement as a result of 

third party funds. 

(3) Portfolio Sale transactions that are 

defined as multiple project sale 

transactions with a common purchaser 

all within one state closed no earlier 

than September 30, 2006. 

Each category may utilize any or all 

restructuring tools. Restructuring tools 

that may be available to address capital 

needs during the MPR demonstration 

based on the capital needs assessment 

process and the underwriting feasibility 

determination. Restructuring tools 

include: 

(1) Debt Deferral: A deferral of the 

existing Agency debt for the lesser of the 

remaining term of the loan or 20 years. 

All terms and conditions of the deferral 

will be described in the MPR Debt 

Deferral Agreement. A balloon payment 

of accrued principal and interest will be 

due at the end of the deferral period. 

Interest will accrue at the promissory 

note rate and subsidy will be applied as 

set out in the Agency’s Interest Credit 

Agreement. Interest will not be charged 

on the deferred interest. 

(2) Revitalization Grant: A 

revitalization grant (for non-profit 

applicants/borrowers only), is limited to 

the cost of correcting health and safety 

violations as identified by the CNA. The 

grant administration will be in 

accordance with 7 CFR part 3015. 

(3) Rehabilitation Loan: A 

rehabilitation loan at zero percent 

interest that will be amortized over 30 

years. 

(4) Bullet Loan: A loan with a one 

percent interest rate that will have its 

interest and principal deferred, to a 

balloon payment, due at the time the 

latest maturing Section 515 loan 

becomes due. 

(5) Additional Section 515 Loan: A 

Section 515 rehabilitation loan at 

traditional rates and terms. 

(6) Regulatory Approvals: Transfers, 

subordinations, and consolidations may 

be approved as part of a MPR 

transaction in accordance with existing 

servicing authorities of the Agency as 

available in 7 CFR part 3560. 

While all non-deferred Agency debt, 

either in first lien position or a 

subordinated lien position, must be 

secured within market value, deferred 

debt may exceed market value of the 

security. Payment of the deferred debt 

will not be required from normal project 

operation income, but from excess cash 

from project operations and the value of 

the property after all other secured debts 

are satisfied. 

(1) Pre-application: Applicants must 

submit a pre-application described in 

Section VI. This pre-application process 

is designed to lessen the cost burden on 

applicants who may not be eligible or 

whose proposals may not be feasible. 

(2) Eligible Properties: Using criteria 

described below in Section III, USDA 

will conduct an initial screening for 

eligibility. As described in Section VIII, 

USDA will conduct additional 

eligibility screening later in the process. 

(3) Scoring and Ranking: All eligible, 

complete and timely-filed preapplications will be scored, ranked and 

put in funding queues as discussed in 

Sections VI and VII. 

(4) Formal Application: Top ranked 

pre-applicants will be invited to submit 

a formal application. As discussed in 

Section VIII paragraph (2) of this notice, 

USDA will require the owner to provide 

a Capital Needs Assessment (CNA) in 

order to determine the mix of tools to 

be offered to the applicant, perform 

additional eligibility review, and 

underwrite the proposal to determine 

financial feasibility. Where proposals 

are found to be ineligible or financially 

infeasible, owners will be informed and 

proposals lower in the queue will be 

considered. 

(5) Financial Feasibility: Using the 

results of the CNA to help identify the 

need for resources and applicant 

provided information regarding 

anticipated or available third party 

financing, the Agency will determine 

the financial feasibility of each potential 

transaction, using restructuring tools 

available either through existing 

regulatory authorities or specifically 

authorized through this demonstration 

program. 

Project financial feasibility is 

determined when a property can 

provide affordable, safe, decent, and 

sanitary housing for 20 years or the 

remaining term of the loan whichever is 

less, by using the authorities of this 

program while minimizing the cost to 

the Agency and without increasing rents 

for tenants, except when necessary to 

meet normal and necessary operating 

expenses. If the transaction is 

determined financially feasible by the 

Agency, the borrower will be offered a 

restructuring proposal, which will 

include the requirement that the 

borrower will execute, for recordation, a 

restrictive use covenant consistent with 

7 CFR 3560.662. The restructuring 

proposal will be established in the form 

of the MPR Conditional Commitment 

(MPRCC). 

MPR Agreements: If accepted by the 

borrower, the Agency and applicant will 

enter into a MPRCC. The applicant must 

also agree to restrict the property use 

pursuant to 7 CFR 3560.662 when the 

MPR transaction is closed. Any third 

party lender will be required to 

subordinate to the Agency’s restrictive 

use covenant unless the Agency 

determines on a case-by-case basis that 

the lender refuses to subordinate and 

such refusal will not compromise the 

purpose of the MPR. The Agency may 

also request that the applicant sign an 

agreement that would require the owner 

to escrow reserve, tax, and insurance 

payments in accordance with all 

pertinent current and future Agency 

regulations. 

General Requirements: The MPR 

transactions may be conducted with a 

stay-in owner (simple) or may involve a 

change in ownership (complex or 

portfolio sale). Any housing or related 

facilities that are constructed or repaired 

must meet the Agency design and 

construction standards and the 

development standards contained in 7 

CFR part 1924, subparts A and C, 

respectively. Once constructed, Section 

515 multi-family housing must be 

managed in accordance with 7 CFR part 


rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Notices 21213 

3560. Tenant eligibility will be limited 

to persons who qualify as a very low- or 

low-income household under Agency 

regulations or who are eligible under the 

requirements established to qualify for 

housing benefits provided by sources 

other than the Agency, such as 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. 

Voluntary Community Market Rent 

Demonstration: In conjunction with this 

demonstration, Rural Development also 

announces the opportunity for all 

successful applicants to participate on a 

voluntary basis in a viability test of a 30 

percent limitation on tenant rents, as 

proposed in Section 544(b)(7) of Saving 

America’s Rural Housing Act of 2006, 

H.R. 5039, for post-restructured 

properties. Owners of properties in the 

Section 515 restructuring program may 

elect to participate in the ‘‘community 

market rent’’ demonstration which will 

allow an owner to set a rent above the 

approved basic rent for any unit not 

currently occupied by a tenant receiving 

Rural Development rental assistance. 

Eligible tenants for these units must 

have adjusted annual incomes sufficient 

to allow them to pay the community 

market rent using less than 30 percent 

of their adjusted income. Tenants would 

be allowed to occupy without paying 

overage, additional sums that would 

otherwise be required to bring their rent 

payment up to 30 percent of income. 

With Rural Development’s consent, up 

to 50 percent of the difference between 

the basic rent and the new ‘‘community 

market rent’’ could be retained by the 

owner as an increased return. 

For example, if the basic rent is $350, 

the owner could create a community 

market rent at, say, $410, and market the 

unit to tenants who could pay that rent 

at less than 30 percent of adjusted 

income. A percentage of the difference, 

$60.00 could be retained by the owner, 

as negotiated with Rural Development, 

up to $30.00. 

Prior to implementation of the 

community market rent demonstration, 

Rural Development will issue guidance 

to successful applicants who have 

indicated an interest in participating in 

the demonstration providing further 

details with respect to the program. 

II. Award Information 

Public Law 110–5 makes funding 

available to the Secretary of Agriculture 

for Rural Development to provide the 

restructuring tools of the MPR 

demonstration. Approximately 

$8,900,000 in budget authority will be 

available during FY 2007. Additionally, 

up to $70,000,000 in Section 515 

funding may be made available for 

properties selected to participate in the 

MPR. Based on an identical level of 

budget authority made available for the 

MPR last fiscal year, the Agency 2006 

funded approximately $47,795,000 in 

deferred debt, $210,000 in grants, 

$280,000 in zero percent loans, 

$4,473,000 in bullet loans. The Agency 

anticipates the ability to revitalize 

approximately 200 properties (5,500 

units) with the funds available during 

FY 2007. Once the funding levels for 

this program are determined, a 

subsequent notice will be published in 

the Federal Register announcing them. 

Funding levels may differ from above 

when necessary to assure that the 

Agency maximizes the value of the 

funds available and that all funds are 

used. 

All funding must be approved no later 

than September 24, 2007 and obligated 

by the Agency not later than September 

28, 2007. If funds available for the MPR 

are fully used before all properties 

approved under this NOFA are funded, 

the unfunded approved properties may 

receive priority for funding from future 

resources available for MFH 

revitalization if additional funds 

become available and the selected 

properties/owners meet any future 

eligibility criteria. 

III. Eligibility Information 

Applicants (and the principals 

associated with each applicant) must 

meet the following requirements: 

(1) Eligibility under 7 CFR 3560.55; 

however, the requirements described in 

7 CFR 3560.55(a)(5) pertaining to 

required borrower contributions and 

CFR 3560.55(a)(6) pertaining to required 

contributions of initial operating capital 

are waived for MPR proposals. 

(2) That the project is needed in the 

market as evidenced by an average 

physical vacancy rate over the twelve 

months preceding the filing of the preapplication of no more than 10 percent 

for projects of 16 units or more and 15 

percent for projects under 16 units. The 

Agency may consider and accept 

documentation submitted by the 

applicant that demonstrates the 

occupancy standard will be met once a 

restructuring is performed. The 

documentation must include a copy of 

a market study performed according to 

7 CFR 3560.56(d)(2) and the guidance 

provided in HB–1–3560, Attachment 4–

F. The cost of the market study will 

NOT be considered a part of the project 

expense. 

(3) Ownership of and ability to 

operate the facility after the transaction 

is completed. (In the event of a transfer, 

the proposed transferee with an 

executed purchase agreement or other 

evidence of site control will be the 

applicant.) 

(4) Compliance with any commitment 

to contribute funds to pay transaction 

costs as represented at the time of 

application for the MPR program. 

(5) A CNA and Agency financial 

evaluation must demonstrate that 

utilization of the restructuring tools of 

the MPR program is financially feasible 

and necessary for the revitalization and 

preservation of the property for 

affordable housing. Eligibility for 

processing will be determined as of the 

date of the pre-application filing 

deadline. The Agency reserves the right 

to discontinue processing in the event 

that material changes in the applicant’s 

status occurs any time after the initial 

determination. 

IV. Equal Opportunity and 

Nondiscrimination Requirements 

(1) Borrowers and applicants will 

comply with the provisions of 7 CFR 

3560.2. 

(2) All housing must meet the 

accessibility requirements found at 7 

CFR 3560.60(d). 

(3) All MPR participants must have on 

file a valid Form RD 400–1, ‘‘Equal 

Opportunity Agreement’’ and Form RD 

400–4, ‘‘Assurance Agreement.’’

V. Authorities Available for MPR 

MPR tools will be used in accordance 

with 7 CFR part 3560 and its associated 

handbooks (available in any Rural 

Development office). The program will 

be administered within the resources 

made available to the Agency through 

Pub. L. 110–5 for the preservation and 

revitalization of Section 515 financed 

properties. In the event that provisions 

of 7 CFR part 3560 conflict with this 

demonstration program, the provisions 

of the MPR will take precedence. 

VI. Application and Submission 

Information 

(1) The application submission and 

scoring process will be completed in 

two phases in order to avoid 

unnecessary effort and expense on the 

part of interested borrowers/applicants 

and to allow additional points to be 

added to applications that propose a 

transfer of a troubled project to an 

eligible owner. 

The first phase is the pre-application 

process. The applicant must submit a 

complete pre-application by the 

deadline date under the ‘‘DATES’’ section 

of this Notice. The applicant’s 


rwilkins on PROD1PC63 with NOTICES
21214 Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Notices 

submission will be classified complete 

when a ‘‘pre-application’’ is received by 

MFH for each MPR proposal the 

applicant wishes to be considered in the 

demonstration. In the event the MPR 

proposal involves either a project 

consolidation completed in accordance 

with 7 CFR 3560.410 or a portfolio sale 

only one pre-application for the 

proposal will be required so long as the 

proposal lists all the properties to be 

consolidated or purchased as a 

portfolio. The form to be used for the 

pre-application is ‘‘MPR Preapplication’’ and is attached at the end 

of this Notice. An electronic version of 

this form may be found on the internet 

at http://www.rurdev.usda.gov/rd/nofas/ 

index.html. 

Information must be provided, as 

indicated on the MPR pre-application, 

showing the breakdown of funding 

sources, type and probability of third 

party money, borrower names and 

identification numbers, project names 

and numbers, and property locations of 

all properties being consolidated and 

included in the transaction. 

Additional information that must be 

provided with the pre-application, 

when applicable, includes: 

(i) A copy of a Purchase agreement or 

other evidence of site control if a 

transfer is being considered. 

(ii) Evidence of need for property if 

occupancy standards are not met, which 

could include a copy of a market study. 

The second phase of the application 

process will be completed by the 

Agency based on Agency records and 

the pre-application information. Points 

as set forth below will only be assigned 

to eligible pre-applications. Additional 

points will be assigned when the 

proposal involves a transfer to a new 

eligible owner and the property is 

currently classified by the Agency as a 

troubled property; or to an eligible 

‘‘stay-in owner’’ when the property is 

classified by the Agency as a troubled 

property AND there is an approved 

workout plan in place that was 

approved prior to January 1, 2007. 

All eligible, complete, and timelyfiled pre-applications will then be 

scored and ranked based on points 

received during this two-phase 

application process. 

Further, the Agency will categorize 

each MPR proposal as being potentially 

Simple, Complex, or Portfolio Sale 

based on the information submitted on 

the pre-application and in accordance 

with the category description provided 

in Section I of this Notice. 

(2) Pre-applications can be submitted 

either electronically or in hard copy. 

The Agency will record pre-applications 

received electronically by the actual 

date and time received in the website 

mail box. Hard copy pre-applications 

received on the deadline date will 

receive the close of business time of the 

day received as the receipt time. 

Assistance for filing electronic and hard 

copy pre-applications can be obtained 

from any Rural Development State 

Office. 

The pre-application is stored in the 

form of a .pdf format and may be 

completed as a fillable form. The form 

contains a button labeled ‘‘Submit by 

Email’’. Clicking on the button will 

result in an e-mail containing a 

completed pre-application being sent to 

the Office of Rental Housing 

Preservation in Washington, DC for 

consideration. 

Pre-application forms may be 

downloaded from the site given in 

Section VI, paragraph (1) above or 

obtained by contacting the State Office 

in the state the project is located. Hard 

copy pre-applications and electronic 

submittals should be submitted to the 

attention of Sandra L. Mercier, Senior 

Loan Specialist, Multi-Family Housing 

Office of Rental Housing PreservationSTOP 0782 (Room 1263–S), or Ed 

Duval, Chief, Operations Research and 

Systems Development Branch–STOP 

0782 (Room 1263–S), U.S. Department 

of Agriculture, Rural Housing Service, 

1400 Independence Avenue, SW., 

Washington, DC 20250–0781 

Note: All documents must be received on 

or before the pre-application closing deadline 

to be considered complete and timely filed. 

Pre-applications that are incomplete as of the 

closing deadline will not be considered and 

will be returned to the applicant with no 

appeal rights. 

VII. Selection Process 

Pre-application ranking points will be 

based on information provided during 

the submission process and in Agency 

records. Points will be awarded as 

follows: 

(1) Contribution of third party funds. 

Third party funds are those discussed in 

the second paragraph of Section I 

‘‘Funding Opportunities Description’’. 

Points awarded are to be based on 

documented written evidence that the 

third party funds are available or they 

will be available by October 1, 2008 or 

closing, whichever is first. The 

maximum points awarded for this 

criterion is 25 points. These points will 

be awarded in the following manner: 

(i) Owner contribution (these funds 

cannot be from project reserve or 

operating funds) sufficient to pay 

transaction costs. Transaction costs are 

defined as those soft costs required to 

complete the transaction and include, 

but are not limited to, the CNA, legal 

and closing costs, appraisal costs and 

filing/recording fees. The minimum 

contribution required to receive these 

points is $5,000 and will be required to 

be deposited in the property reserve 

account prior to closing—5 points, and 

(ii) Evidence of intent that meets the 

approval of the Agency to obtain a 

commitment greater than $5,000 per 

unit from other sources—10 points . (An 

example of evidence to obtain a 

commitment might be an application for 

the Low Income Housing Tax Credit 

Program), or 

(iii) A commitment of at least $3,000 

to $5,000 per unit from other sources—

15 points, or 

(iv) A commitment greater than 

$5,000 per unit from other sources—20 

points. 

(2) Age of project. Since the age of the 

project and the date that the loan was 

made are directly related to physical 

needs, a maximum of 25 points will be 

awarded on the following criteria: 

(i) Initial loans closed prior to 

December 21, 1979—25 points. 

(ii) Initial loans closed on or after 

December 21, 1979, but before 

December 15, 1989—20 points. 

(iii) Initial loans closed on or after 

December 15, 1989, but before October 

1, 1991—15 points. 

Note: For multiple property transactions, 

the closing date of the earliest loan will be 

used. 

(3) Troubled project points. The 

Agency may award up to 25 additional 

points to facilitate the transfer and 

revitalization of troubled projects with 

an Agency classification of ‘‘C’’ or ‘‘D’’

according to HB 2–3560, Paragraph 9.7 

(available at http:// 

www.rurdev.usda.gov/regs/hblist.html). 

Troubled properties that are classified 

‘‘B’’ and do not involve a transfer will 

also receive consideration. These 

projects may be troubled due to an act 

of nature or physical or financial 

deterioration or to correct management 

issues. Points will be awarded in the 

following manner: 

(i) If the Agency servicing 

classification is C or D for less than 24 

months—15 points. 

(ii) If the Agency servicing 

classification is C or D for more than 24 

months—20 points. 

(iii) For Stay-in Owners only: If the 

Agency servicing classification is B as a 

result of a workout plan approved by 

the agency prior to January 1, 2007—25 

points. 

(4) Prior Agency approvals. The 

Agency will award up to 20 points for 

properties with CNAs already approved 

by the Agency. Points will be awarded 

for: 


rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Notices 21215 

(i) CNAs approved after October 1, 

2005 and prior to October 1, 2006—20 

points. 

(ii) CNAs approved after October 1, 

2006 but before April 1, 2007—10 

points. 

(5) Energy generation. Applicants will 

be awarded 5 points if the proposal 

includes the installation of energy 

generation systems to be funded by a 

third party. 

The proposal must include an 

overview of the energy generation 

system being proposed. Evidence that 

an energy generation system has been 

funded by a third party and that it has 

a quantifiable positive impact on energy 

consumption will be required. 

(6) Tenant service provision. The 

Agency will award 10 points for 

applications that include new services 

provided by a non-profit organization, 

which may include a faith-based 

organization, or by a Government 

agency. Such services shall be provided 

at no cost to the project and shall be 

made available to all tenants. Examples 

of such services are transportation for 

the elderly, after-school day care 

services or after-school tutoring, etc. 

The Agency will total the points 

awarded to each pre-application 

received within the timeframes of this 

Notice and rank each pre-application 

according to total score. If point totals 

are equal, the earliest time and date the 

pre-application was received by the 

Agency will determine the ranking. In 

the event pre-applications are still tied, 

they will be further ranked by giving 

priority to those pre-applications with 

the earliest Rural Development loan 

closing date. 

Eligibility will then be confirmed on 

the 10 highest-scoring pre-applications 

in each State. If one or more of the 10 

highest-scoring pre-applications is 

determined ineligible, (i.e. the applicant 

is a borrower that is not in good 

standing with the Agency or has been 

debarred or suspended by the Agency, 

etc.) the next highest-scoring preapplication will be confirmed for 

eligibility. 

If one or more of the highest ranking 

pre-applications is a portfolio sale, then 

eligibility determinations will be 

conducted on all of the pre-applications 

associated with the portfolio sale. 

Should any of the pre-applications 

associated with the portfolio sale be 

determined ineligible, the overall 

eligibility of the portfolio sale will not 

be affected as long as the definition in 

Section I ‘‘Funding Opportunities 

Description’’, of ‘‘portfolio sale’’ is still 

met. 

Once ranking has been established, 

the Agency will conduct a five-step 

process to select pre-applications for 

submission of formal applications. This 

process is needed to assure that the 

Agency can process the proposed 

transactions within available staffing 

resources, develop a representative 

sampling of revitalization transaction 

types, assure geographic distribution, 

and assure an adequate pipeline of 

transactions to use all available funding. 

Step One: The Agency will review the 

eligible pre-applications, identify preapplications as either Simple, Complex 

or Portfolio Sale and separate them by 

state. 

Step Two: For portfolio sale 

transactions, the Agency will recalculate an average score for each 

portfolio sale transaction and then score 

and separately rank the simple, complex 

and portfolio sale transactions. 

Step Three: The Agency will select, 

for further processing, the top-ranked 

portfolio sale transactions until a total of 

$100,000,000 in potential debt deferral 

is reached. Portfolio sale transactions 

will be limited to one per State. 

Step Four: The highest ranked 

complex transaction in each State will 

be selected for further processing, not to 

exceed 3 per State. 

Step Five: For those states not having 

a portfolio transaction and at least two 

eligible complex transactions, 

additional projects will be selected from 

the highest ranking eligible preapplications involving simple 

transactions in that state, seeking a 

minimum of 4 pre-applications for MPR 

transactions per state. 

VIII. Processing for Selected Preapplications 

Those proposals that are ranked and 

then selected for further processing will 

be invited to submit a formal 

application on SF 424 ‘‘Application for 

Federal Assistance.’’ Those proposals 

that are rejected by the Agency will be 

returned to the applicant and the 

applicant will be given appeal rights 

pursuant to 7 CFR Part 11. In the event 

that a proposal is selected for further 

processing and the pre-applicant 

declines, the next highest ranked preapplication in that state will be selected. 

Applications can be obtained and 

completed on line. An electronic 

version of this form may be found on 

the internet at http:// 

forms.sc.egov.usda.gov/eforms/ 

mainservlet and can be submitted either 

electronically or in hard copy. 

If a pre-application is accepted for 

further processing, the applicant will be 

expected to submit additional 

information needed to demonstrate 

eligibility and feasibility (such as a 

CNA), consistent with this NOFA and 

the appropriate sections of 7 CFR part 

3560, prior to the issuance of a 

restructuring offer. 

Rural Development will work with 

pre-applicants selected for further 

processing in accordance with the 

following steps: 

(1) Based on the feasibility of the type 

of transaction that will best suit the 

project and the availability of funds, 

further eligibility confirmation 

determinations will be conducted by the 

designated Multi-Family Housing 

Revitalization Coordinators assigned by 

each Rural Development State Director 

with the assistance of the Office of 

Rental Housing Preservation. 

(2) If one is not already available to 

the Agency, a CNA will be required and 

conducted in accordance with the 

requirements of 7 CFR 3560.103(c), HB 

3–3560, Chapter 7, ‘‘Guidance on the 

Capital Needs Assessment Process,’’ and 

the CNA Statement of Work (available 

in any Rural Development State Office.) 

A CNA is prepared by a qualified 

independent contractor and is obtained 

to determine needed repairs and any 

necessary adjustments to the reserve 

account for long-term project viability. 

While the requirements of the CNA are 

described in the materials referenced 

above, at a minimum, to be considered 

acceptable, a CNA must include: 

(i) A physical inspection of the site, 

architectural features, common areas 

and all electrical and mechanical 

systems, 

(ii) An inspection of a sample of 

dwelling units; 

(iii) Identify repair or replacement 

needs, 

(iv) Provide a cost estimate of the 

repair and replacement expenses, and 

(v) Provide at least a 20-year analysis 

of the timing and funding for identified 

needs which includes reasonable 

assumptions regarding inflation. The 

cost of the CNA will be considered a 

part of the project expense and may be 

paid from the ‘‘project reserve’’ with 

prior approval of the Agency. The 

Agency approval for participation in 

this program will be contingent upon 

the Agency’s final approval of the CNA 

and concurrence in the scope of work by 

the owner. The Agency, in its sole 

discretion, may choose to obtain a CNA, 

at its expense, if it determines that 

doing so is in the best interest of the 

Government. 

(3) Underwriting will be conducted by 

the designated Multi-Family Housing 

Revitalization Coordinator assigned by 

each Rural Development State Director 

with the assistance of the Office of 

Rental Housing Preservation. The 

feasibility and structure of each 

revitalization proposal will be 


rwilkins on PROD1PC63 with NOTICES
21216 Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Notices 

determined using this underwriting 

process and will include a 

determination of the restructuring tools 

that will minimize the cost to the 

Government consistent with the 

purposes of this NOFA. To help assure 

a balanced utilization of revitalization 

tools and the long-term economic 

viability of revitalized projects, the MPR 

underwriting guidelines include, but are 

not limited to the following: 

(i) The maximum bullet loan is 

limited to no more than $5,000 per unit, 

(ii) The total assistance provided from 

a revitalization grant, rehabilitation 

loan, and/or a bullet loan is limited to 

$10,000 per unit, 

(iii) The maximum Section 515 one 

percent loan is limited to no more than 

$20,000 per unit, 

(iv) Properties receiving tax credits 

are expected to have sufficient funding 

sources and generally will receive debt 

deferral only. 

(4) Properties with more than 75 

percent of the units receiving deep 

tenant subsidy such as Rural 

Development rental assistance or HUDfunded tenant subsidy will be 

supplemented with rehabilitation loans 

and Section 515 loans before grant and 

bullet loans are considered, 

(5) Grants will be limited to $5,000 

per unit, 

(6) Any rent increases that may be 

necessary will not exceed 10 percent in 

any one year, 

(7) The approved MPR transaction 

will include projected revenue 

sufficient to cover a 10 percent 

Operations and Maintenance increase in 

the second year after the transaction, 

(8) Full return to owner will be 

budgeted pursuant to the Loan 

Agreement, 

(9) Budgeted increases to reserve 

deposit will not exceed 3 percent per 

annum, 

(10) The remaining reserve balance at 

the end of the 20-year analysis period 

should be at least 2.0 times the average 

annual needs, including inflation, over 

the 20-year analysis period. 

These guidelines have been 

developed based on experience in the 

FY 2005 and FY 2006 Demonstrations. 

The Agency believes that these 

guidelines will be appropriate for 

typical transactions. However, the 

Agency reserves the right to waive any 

of the guidelines if, in the Agency’s 

judgment, doing so would further the 

objectives of the Demonstration and is 

in the best interest of the Government. 

The Agency expects that some of the 

transactions proposed by selected preapplicants will prove to be infeasible. 

The applicant entity may be determined 

to be ineligible under Section III of this 

Notice. If a proposed transaction is 

determined infeasible or the applicant 

determined ineligible, the Agency will 

then select the next highest ranked 

project for processing. 

Each MPR offer will be approved by 

the Revitalization Review Committee 

chaired by the Deputy Administrator for 

Multi-Family Housing or an agencyauthorized delegate. Approved MPR 

offers will be presented to applicants 

who will then have up to 15 calendar 

days to accept or reject the offer in 

writing. Offers will expire after 15 days. 

The Agency will replace expired 

applications by selecting the next 

highest ranked project. Closing of MPR 

offers will occur within 90 days of 

acceptance by the applicant unless 

extended by the Agency. 

IX. Funding Restrictions 

Applicants will be selected in 

accordance with selection criteria and 

the five-step process identified in 

Section VII of this Notice. Once selected 

to proceed, the Agency will provide 

additional guidance to the applicant and 

request information and documents 

necessary to complete the underwriting 

and review process. Since the character 

of each application may vary 

substantially depending on the type of 

transactions proposed, information 

requirements will be provided as 

appropriate. Complete project 

information must be submitted as soon 

as possible but in no case later than 45 

days from the date of Agency 

notification of the applicant’s selection 

for further processing or September 1, 

2007, whichever occurs first. Failure to 

submit the required information in a 

timely manner may result in the Agency 

discontinuing the processing of the 

request. 

Funding under this NOFA will be 

obligated to selectees that finish the 

processing steps outlined above first 

within each of the 3 funding queues 

described in Section VII of this Notice 

and to result in a ratio as close as 

possible to 30 percent portfolio sale 

transactions, 50 percent complex 

transactions, and 20 percent simple 

transactions. 

X. Application Review 

A review committee will make 

recommendations for final decision 

regarding funding to the appropriate 

Rural Development State Director based 

on the selection criteria contained in 

this NOFA. 

XI. Appeal Process 

All adverse determinations regarding 

applicant eligibility and the awarding of 

points as a 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. 

Dated: April 20, 2007 

Russell T. Davis, 

Administrator, Rural Housing Service. 

[FR Doc. E7–8148 Filed 4–27–07; 8:45 am] 

BILLING CODE 3410–XV–P 

DEPARTMENT OF COMMERCE 

Economic Development Administration 

Notice of Petitions by Firms for 

Determination of Eligibility To Apply 

for Trade Adjustment Assistance 

AGENCY: Economic Development 

Administration, Department of 

Commerce. 

ACTION: Notice and opportunity for 

public comment. 

Pursuant to Section 251 of the Trade 

Act of 1974 (19 U.S.C. 2341 et seq.), the 

Economic Development Administration 

(EDA) has received petitions for 

certification of eligibility to apply for 

Trade Adjustment Assistance from the 

firms listed below. EDA has initiated 

separate investigations to determine 

whether increased imports into the 

United States of articles like or directly 

competitive with those produced by 

each firm contributed importantly to the 

total or partial separation of the firm’s 

workers, or threat thereof, and to a 

decrease in sales or production of each 

petitioning firm. 


rwilkins on PROD1PC63 with NOTICES