[Federal Register Volume 74, Number 81 (Wednesday, April 29, 2009)]
[Notices]
[Pages 19510-19513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-9828]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service


Notice of Funding Availability: Rural Development Voucher Program

AGENCY: Rural Housing Service, USDA.

ACTION: Notice of Rural Development Voucher Program Availability.

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SUMMARY: This notice informs the public that the U.S. Department of 
Agriculture (USDA) has established a demonstration Rural Development 
Voucher Program, as authorized under Section 542 of the Housing Act of 
1949, as amended, (without regard to Section 542(b)), which is being 
administered by USDA. This notice informs the public that funding is 
now available for the Rural Development voucher program. The notice 
also sets forth the general policies and procedures for use of these 
vouchers. Rural Development Vouchers are only available to tenants of 
Rural Development-financed multifamily properties where the owner pays 
off the loan, either through prepayment or a foreclosure action prior 
to the loan's maturity date.

DATES: April 29, 2009.

FOR FURTHER INFORMATION CONTACT: Stephanie B.M. White, Director, Multi-
Family Housing Portfolio Management Division, Rural Development, U.S. 
Department of Agriculture, 1400 Independence Avenue, SW., STOP 0782, 
Washington, DC 20250-0782, telephone (202) 720-1615. Persons with 
hearing or speech impairments may access this number via TTY by calling 
the toll-free Federal Information Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

Background

    Section 106 of the Consolidated Security, Disaster Assistance and 
Continuing Appropriations Act, 2009 (Pub. L. 110-329) (September 30, 
2008) (Consolidated Appropriations Act, 2009) continued the level of 
funding and conditions until the earlier of an applicable appropriation 
act for fiscal year 2009 or March 6, 2009. Subsequently, the Omnibus 
Appropriations Act, 2009 (Pub. L. 111-8) was enacted on March 11, 2009, 
and appropriated $4,965,000 to USDA for the Rural Development Voucher 
Program as authorized under Section 542 of the Housing Act of 1949, as 
amended, 42 U.S.C. 1471 et seq. (without regard to Section 542(b)).
    The Omnibus Appropriations Act, 2009 provided that the Secretary of 
the U.S. Department of Agriculture shall carry out the Rural 
Development Voucher Program as follows:

    That of the funds made available under this heading, $4,965,000 
shall be available for rural housing vouchers to any low-income 
household (including those not receiving Rental Assistance) residing 
in a property financed with a Section 515 loan which has been 
prepaid after September 30, 2005: Provided further, That the amount 
of such voucher shall be the difference between comparable market 
rent for the Section 515 unit and the tenant paid rent for such 
unit: Provided further, That funds made available for such vouchers 
shall be subject to the availability of annual appropriations: 
Provided further, That the Secretary shall, to the maximum extent 
practicable, administer such vouchers with current regulations and 
administrative guidance applicable to Section 8 housing vouchers 
administered by the Secretary of the Department of Housing and Urban 
Development (HUD) (including the ability to pay administrative costs 
related to delivery of the voucher funds).

    This notice outlines the process for providing voucher assistance 
to the eligible impacted families when an owner prepays a Section 515 
loan or Agency action results in a foreclosure after September 30, 
2005.

Design Features of the Rural Development Voucher Program

    This section sets forth the design features of the Rural 
Development Voucher Program, including the eligibility of families, the 
inspection of the units, and the calculation of the subsidy amount.
    Rural Development vouchers under this part are administered by the 
Rural Housing Service; an Agency under the Rural Development mission 
area, in accordance with requirements set forth in this Notice of Funds 
Availability (NOFA) and further explained in, ``The Rural Development 
Voucher Program

[[Page 19511]]

Guide,'' which can be obtained by contacting any Rural Development 
office. Contact information for Rural Development offices can be found 
at http://offices.sc.egov.usda.gov/locator/app. These requirements are 
generally based on the housing choice voucher program regulations of 
HUD set forth at 24 CFR part 982, unless otherwise noted by this 
Notice.
    The Rural Development Voucher Program is intended to offer 
protection to eligible multifamily housing tenants in properties 
financed through Rural Development's Section 515 Rural Rental Housing 
Program (515 property) who may be subject to economic hardship through 
prepayment of the Rural Development mortgage. When the owner of a 515 
property pays off the loan prior to the loan's maturity date (either 
through prepayment or foreclosure action), the Rural Development 
affordable housing requirements and rental assistance subsidies 
generally cease to exist. Rents may increase, thereby making the 
housing unaffordable to tenants. When a prepayment occurs, whether or 
not the rent increases, the tenant will be responsible for the full 
payment of rent. The Rural Development Voucher Program applies to any 
515 property where the mortgage is paid off prior to the maturity date 
in the promissory note and the payment occurs after September 30, 2005. 
This includes foreclosed properties. Tenants in foreclosed properties 
are eligible for a Rural Development voucher under the same conditions 
as properties that go through the standard prepayment process.
    The Rural Development voucher will help tenants by providing an 
annual rental subsidy, renewable on the terms and conditions set forth 
herein and subject to the availability of funds, that will supplement 
the tenant's rent payment. This program enables a tenant to make an 
informed decision about remaining in the property, moving to a new 
property, or obtaining other financial housing assistance. Low-income 
tenants in the prepaying property are eligible to receive a voucher to 
use at their current rental property, or take to any other rental unit 
in the United States and its territories.
    There are some general limitations on the use of a voucher. For 
instance, the rental unit must pass a Rural Development health and 
safety inspection, and the owner must be willing to accept a Rural 
Development voucher. Also, Rural Development vouchers will not be used 
for units in subsidized housing like Section 8 and public housing where 
two housing subsidies would result. The Rural Development voucher may 
be used for rental units in other properties financed by Rural 
Development, but it will not be used in combination with the Rural 
Development Rental Assistance program. The Rural Development voucher 
may not be used for the purchase of a home.

1. Family Eligibility

    In order to be eligible for the Rural Development voucher under 
this notice, a family must (a) be residing in the Section 515 project 
on the date of the prepayment of the Section 515 loan or upon 
foreclosure by Rural Development; (b) the date of the prepayment or 
foreclosure must be after September 30, 2005; (c) as required by 42 
U.S.C. 1436a the tenant must be a citizen, United States non-citizen 
national or qualified alien and will so provide proof of citizenship to 
Rural Development using one of the following:

Copy of U.S. Passport (unexpired or expired).
Copy of U.S. Military ID card (unexpired).
Copy of U.S. Military dependent's ID card (unexpired).
Copy of a birth certificate issued by a state, county, municipal 
authority, or outlying possession of the United States bearing an 
official seal.
Copy of Certificate of U.S. Citizenship (Form N-560 or N-561).
Copy of Certificate of Naturalization (Form N-550 or N-570).
Copy of U.S. Citizen ID card (Form 1-197).
Copy of ID card for use of Resident Citizen in the United States (Form 
I-179).
Copy of Permanent Resident Card or Alien Registration Receipt Card with 
photograph (Form I-151 or I-1551).
Copy of Certification of Birth Abroad issued by the Department of State 
(Form FS-545 or Form DS-1350), and; (d) the family must be a low-income 
family on the date of the prepayment or foreclosure. A low-income 
family is a family whose annual income does not exceed 80 percent of 
the family median income for the area as defined by HUD. HUD's 
definition of median income can be found at http://www.huduser.org/datasets/il/FY2008index_mfi.html.

    During the prepayment or foreclosure process, Rural Development 
will evaluate every tenant family to determine if it is low income. If 
Rural Development determines a family is low-income, immediately prior 
to the foreclosure or prepayment Rural Development will send the 
primary tenant a letter offering the family a voucher and will enclose 
a Voucher Obligation Request Form. If the family wants to participate 
in the Rural Development Voucher Program, the tenant has 10 months from 
the date of prepayment or foreclosure to return the Voucher Obligation 
Request Form to the local Rural Development office.
    If Rural Development makes a determination that the tenant is 
ineligible for any reason, Rural Development will provide 
administrative appeal rights pursuant to 7 CFR part 11.

2. Obtaining a Voucher

    Rural Development will monitor the prepayment request process or 
foreclosure process. During the prepayment request process or 
foreclosure process, Rural Development will send all tenants letters 
notifying them of the voucher program. As part of prepayment or 
foreclosure Rural Development will obtain a rent comparability study 
for the property ninety days prior to the date of prepayment or 
foreclosure. The rent comparability study will be used to calculate the 
amount of voucher each tenant is entitled to receive. All tenants will 
be notified of if they are eligible and their voucher calculations by 
Rural Development immediately prior to the date of prepayment or 
foreclosure. As previously stated, such notice will include a 
description of the Rural Development Voucher Program, a Voucher 
Obligation Request Form, and letter from Rural Development offering the 
tenant participation in Rural Development Voucher Program and Form HUD 
52517, ``Request for Tenancy Approval.'' Once the primary tenant 
returns the Voucher Obligation Request Form and proof of citizenship to 
Rural Development office, a voucher will be issued within 30 days. All 
information necessary for a housing search, explanations of unit 
acceptability, and Rural Development contact information will be 
provided by Rural Development to the tenant at the time the voucher 
Obligation Form and proof of citizenship is received.
    The family receiving a Rural Development voucher has an initial 
search period of 60 calendar days from receipt of the voucher to find a 
housing unit. At its discretion, Rural Development may grant one or 
more extensions of the initial search period for up to an additional 60 
days. The maximum voucher search period for any family participating in 
the Rural Development Voucher Program is 120 days. If the family needs 
and requests an extension of the initial search period as a reasonable 
accommodation to make

[[Page 19512]]

the program accessible to a disabled family member, Rural Development 
will extend the voucher search period. If the Rural Development voucher 
remains unused after a period of 150 days from original issuance, the 
Rural Development voucher will become void, any funding will be 
cancelled, and the tenant will no longer be eligible to receive a Rural 
Development voucher.

3. Initial Lease Term

    The initial lease term for the housing unit where the family wishes 
to use the Rural Development voucher must be for 1 year.

4. Inspection of Units and Unit Approval

    Rural Development will inspect and determine if the housing 
standard is acceptable within 30 days of Rural Development receipt of 
the HUD Form 52517. The inspection standards currently in effect for 
the Rural Development Section 515 Multi-Family Housing Program apply to 
the Rural Development Voucher Program. Rural Development must inspect 
the unit and ensure that the unit meets the housing inspection 
standards of the program at 7 CFR 3560.103. Under no circumstances may 
Rural Development make voucher rental payments for any period of time 
prior to the date that Rural Development physically inspects the unit 
and determines the unit meets the housing inspection standards. In the 
case of properties financed by Rural Development under the Section 515 
program, Rural Development may accept the results of physical 
inspections performed no more than one year prior to the date of 
receipt by Rural Development of Form HUD 52517, in order to make 
determinations on acceptable housing standards. Before approving a 
family's assisted tenancy or executing a Housing Assistance Payments 
contract, Rural Development must determine that the following 
conditions are met: (1) The unit has been inspected by Rural 
Development and passes the housing standards inspection or has 
otherwise been found acceptable as noted previously; and (2) the lease 
includes the HUD Tenancy Addendum. A copy of the HUD Tenancy Addendum 
will be provided when the tenant is informed he/she is eligible for a 
voucher.
    Once the conditions in the above paragraph are met, Rural 
Development will approve the unit for leasing. Rural Development will 
then execute with the owner a Housing Assistance Payments (HAP) 
contract, Form HUD-52641. The HAP contract must be executed before 
Rural Development voucher payments can be made. Rural Development will 
use its best efforts to execute the HAP contract on behalf of the 
family before the beginning of the lease term. In the event that this 
does not occur, the HAP contract may be executed up to 60 calendar days 
after the beginning of the lease term. If the HAP contract is executed 
during this 60-day period, Rural Development will pay retroactive 
housing assistance payments to cover the portion of the approved lease 
term before execution of the HAP contract. Any HAP contract executed 
after the 60-day period is untimely, and Rural Development will not pay 
any housing assistance payment to the owner for that period. In 
establishing the effective date of the voucher HAP contracts, Rural 
Development may not execute a housing assistance payments contract that 
is effective prior to the Section 515 loan prepayment.

5. Subsidy Calculations for Rural Development Vouchers

    As stated earlier, if eligible the tenant will be notified of the 
voucher amount immediately prior to prepayment or foreclosure. The 
monthly housing assistance payment for the Rural Development Voucher 
Program is the difference between the comparable market rent for the 
family's former Section 515 unit and the tenant's rent contribution on 
the date of the prepayment. The tenant can appeal Rural Development's 
determination of the voucher amount through USDA's administrative 
appeal process, see 7 CFR part 11. The voucher amount will be based on 
the comparable market rent; the voucher amount will never exceed the 
comparable market rent at the time of prepayment for the tenant's unit 
if the tenant chooses to stay in-place. Also, in no event may the Rural 
Development voucher payment exceed the actual tenant lease rent. The 
amount of the voucher does not change over time or if the tenant 
chooses to move to a more expensive location.

6. Mobility and Portability of Rural Development Vouchers

    An eligible family that is issued a Rural Development voucher may 
elect to use the assistance in the same project or may choose to move 
from the property. The Rural Development voucher may be used at the 
prepaid property or any other rental unit in the United States and its 
territories that passes Rural Development physical inspection 
standards, where the owner will accept a Rural Development voucher and 
execute a Form HUD 52641. HUD Section 8 and Federally-assisted public 
housing, however, is excluded from the Rural Development Voucher 
Program because these units are already Federally subsidized. Tenants 
with a Rural Development voucher would have to give up the Rural 
Development voucher to accept the assistance at those properties. The 
Rural Development voucher may be used in other properties financed by 
Rural Development, but it cannot be used in combination with the Rural 
Development RA program. Tenants with a Rural Development voucher that 
apply for housing in a Rural Development-financed property must choose 
between using the voucher or RA. If the tenant relinquishes the Rural 
Development voucher in favor of RA, the tenant is not eligible to 
receive another Rural Development voucher.

7. Term of Funding for Rural Development Vouchers

    The Rural Development Voucher Program provides voucher assistance 
for 12 monthly payments. The voucher is issued to the household in the 
name of the primary tenant. If the primary tenant dies during the term 
of the voucher, after Rural Development receives notice of the death, 
the use of the voucher passes to the co-tenant.
    The voucher is renewable subject to the availability of 
appropriations to the USDA. In order to renew a voucher a tenant must 
return a signed Voucher Obligation Form which will be sent to the 
tenant within 60-90 days before the current voucher is exhausted. 
Renewal requests will have no preference and will be processed as a new 
application as described in this NOFA.

8. Non-Discrimination Statement

    ``The U.S. Department of Agriculture (USDA) prohibits 
discrimination in all its programs and activities on the basis of race, 
color, national origin, age, disability, and where applicable, sex, 
marital status, familial status, parental status, religion, sexual 
orientation, genetic information, political beliefs, reprisal, or 
because all or a part of an individual's income is derived from any 
public assistance program. (Not all prohibited bases apply to all 
programs.) Persons with disabilities who require alternative means for 
communication of program information (Braille, large print, audiotape, 
etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and 
TDD). To file a complaint of discrimination write to USDA, Director, 
Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC 
20250-9410 or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA 
is an equal

[[Page 19513]]

opportunity provider, employer, and lender.''

9. Paperwork Reduction Act

    The information collection requirements contained in this document 
are those of the Housing Choice Voucher Program, which have been 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (44 USC 3501-3520) and assigned OMB 
control number 2577-0169. In accordance with the Paperwork Reduction 
Act, HUD may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection displays 
a currently valid OMB control number.

    Dated: April 22, 2009.
James C. Alsop,
Acting Administrator, Rural Housing Service.
[FR Doc. E9-9828 Filed 4-28-09; 8:45 am]
BILLING CODE 3410-XV-P