[Federal Register Volume 63, Number 246 (Wednesday, December 23, 1998)]
[Notices]
[Pages 71079-71088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: X98-21223]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service


Notice of Availability of Funds; Multi-Family Housing, Single 
Family Housing

AGENCY: Rural Housing Service, USDA.

ACTION: Notice.

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SUMMARY: The Rural Housing Service (RHS) announces the availability of 
housing funds for fiscal year 1999 (FY 1999). This action is taken to 
comply with 42 U.S.C. 1490p which requires that RHS publish in the 
Federal Register notice of the availability of any housing assistance.

EFFECTIVE DATE: December 23, 1998.

FOR FURTHER INFORMATION CONTACT: Cynthia L. Reese-Foxworth, Senior Loan 
Officer, Multi-Family Housing Processing Division, Room 1247 (STOP 
0781), or Gloria Denson, Senior Loan Officer, Single Family Housing 
Processing Division, Room 2211, (STOP 0783), U.S. Department of 
Agriculture, 1400 Independence Ave., SW, Washington, D.C., 20250, 
telephones (202) 720-1604, and (202) 720-1474, respectively. (These are 
not toll free numbers).

SUPPLEMENTARY INFORMATION:

Programs Affected

    The following programs are subject to the provisions of Executive 
Order 12372 that requires intergovernmental consultation with State and 
local officials. These programs or activities are listed in the Catalog 
of Federal Domestic Assistance under Nos.

10.405  Farm Labor Housing (LH) Loans and Grants
10.410  Very Low to Moderate Income Housing Loans
10.411  Rural Housing Site Loans and Self-Help Housing Land 
Development Loans
10.415  Rural Rental Housing Loans
10.417  Very Low Income Housing Repair Loans and Grants
10.420  Rural Self-Help Housing Technical Assistance
10.427  Rural Rental Assistance Payments
10.433  Rural Housing Preservation Grants
10.442  Housing Application Packaging Grants

Discussion of Notice

    7 CFR chapter XVIII, part 1940, subpart L contains the 
``Methodology and Formulas for Allocation of Loan and Grant Program 
Funds.'' The following guidance has been provided to our State offices 
on FY 1999 appropriations and access to funds. Separate guidance has 
been provided to our State offices for assistance available in our 
Multi-and Single-Family Housing Programs as follows:

Multi-Family Housing (MFH)

I. General

    A. This provides guidance on MFH funding for the Rural Rental 
Housing Program (RRH) for FY 1999. Allocation computations have been 
performed in accordance with 7 CFR 1940.575 and 1940.578. For FY 1999, 
State Directors, under the Rural Housing Assistance Grants (RHAG), will 
have the flexibility to transfer their initial allocations of budget 
authority between the Single Family Housing (SFH) section 504 Rural 
Housing Grants and section 533 Housing Preservation Grant (HPG) 
programs.
    B. MFH loan levels for FY 1999 are as follows:


MFH Loan Programs Credit Sales..........................      $3,500,000
Section 514  Farm Labor Housing (LH) Loans..............      20,000,000
Section 515  Rural Rental Housing (RRH).................      79,321,240
Section 515  Rural Rental Housing (RRH)
    Rehabilitation or Repair Loans & Equity Loans.......      35,000,000
Section 521  New Construction
    Rental Assistance (RA)..............................      35,705,890
Section 516  LH Grants (RHAG)...........................      13,500,000
Sections 525  Technical and Supervisory Assistance
 Grants
    (TSA) and 509 Housing Application Packaging Grants
    (HAPG) (Shared between Single and Multi-Family
     Housing)...........................................       1,355,054
Section 533  Housing Preservation Grants (HPG) (RHAG)...       7,000,000
Section 538  Guaranteed Rural Rental Housing Program<SUP>*...     74,800,000
 
<SUP>* The program has been authorized for FY 1999. Guaranteed loan funds
  will be made available under a Notice of Funding Availability (NOFA)
  that will be published with a final rule later this fiscal year.
  Additional guidance will be provided at that time.

II. Funds not Allocated to States

    A. Credit Sales Authority. For FY 1999, $3,500,000 will be set 
aside for credit sales to program and nonprogram buyers. Credit sale 
funding will not be allocated by State.
    B. Section 514 Farm LH Loans. 1. These loans are funded in 
accordance with 7 CFR 1940.579(a).


FY 1999 Appropriation...................................     $20,000,000
Available for Off-Farm Loans............................      15,500,000
Available for On-Farm Loans.............................       1,500,000
National Office Reserve.................................       3,000,000
 

    2. Off-farm loan fundings will be made available under a NOFA that 
will be published with a final rule later this fiscal year. Additional 
guidance will be provided at that time. (A proposed rule was published 
at 63 FR 57932 on October 29, 1998.)
    C. Section 516 Farm LH Grants. 1. Grants are funded in accordance 
with 7 CFR 1940.579(b). Unobligated prior year balances and 
cancellations will be added to the amount shown.


FY 1999 Appropriation...................................     $13,500,000
Available for LH Grants.................................       9,150,000
Available for Technical Assistance Contracts............       1,350,000
National Office Reserve.................................       3,000,000
 

    2. Labor Housing grant funds for off-farm will be made available 
under a NOFA that will be published with a final rule later this fiscal 
year. Additional guidance will be provided at that time. (A Proposed 
Rule was published on October 29, 1998.)
    D. Rental Assistance for LH. Labor Housing RA will be held in the 
National office for use with LH loan and grant applications. RA is only 
available with an LH loan of at least 5 percent of the total 
development cost. Projects without a LH loan cannot receive RA.

III. Section 515 RRH Loan Funds

    A. Section 515 RRH Loan Funds (for New Construction Loans): New 
construction loan funds will be made available via a National NOFA 
using the following parameters:
    1. No one State may receive more than $2.5 million under the NOFA. 
Reserve funds are not considered NOFA funds and therefore, will not be 
counted toward the $2.5 million State cap.
    2. No single loan request may exceed $1 million. The Administrator 
may waive this limit in cases where a State's average total development 
costs exceed the National average by 50 percent or more. States may set 
a lower loan amount.
    3. The amount of RA available will be impacted by the amount of 
leveraging in

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applications selected. If no (or insufficient) rental assistance is 
available, the next ranked request that does not need rental assistance 
(or falls within the available amount) will be selected.
    4. States will continue to score and rank requests by point score 
in accordance with Sec. 1944.231 of RD Instruction 1944-E. This fiscal 
year's NOFA will include a National office selection criteria. In 
States with an on-going formal working relationship, agreement, or 
memorandum of understanding (MOU) with the State to provide State 
funds, State RA, HOME funds, Community Development Block Grant (CDBG) 
funds, or Low Income Housing Tax Credits (LIHTC) for RHS proposals, 
points will be provided to loan requests that include such funds or RA. 
No State selection criteria will be used this fiscal year.
    5. States will submit a list, in rank order, showing the name of 
the applicant; location of the project (City & State); if it is located 
in an Empowerment Zone (EZ) or Enterprise Community (EC), Tribal Land, 
or Colonia; amount of leveraging; RHS loan amount; point score; number 
of new construction RA units needed; total project units; number of tax 
credit units, and other information requested in this NOFA, to the 
National office. Requests that are eligible for the Nonprofit Set-Aside 
must be so indicated. Include requests for the Underserved Counties and 
Colonias Set-Aside and indicate if they are also eligible for regular 
section 515 funds, i.e., are located in a designated place.
    6. The National office will rank the States' requests by point 
score, Nationwide, using the same tie breaker criteria established in 
Sec. 1944.231 of RD Instruction 1944-E.
    7. Funds will be distributed to the States for loan requests in 
rank order, up to a maximum of $2.5 million for any one State.
    B. Amount available for new construction loans is as follows:


Total Available.........................................     $79,321,240
Less Set-Aside for Nonprofits...........................       7,138,912
Less Set-Aside for Underserved Counties and Colonias....       3,966,062
Less Set-Aside for EZ or EC communities.................       7,253,866
Less General Reserve....................................       5,740,000
Less State RA Designated Reserve........................       1,500,000
NOFA Balance............................................      53,722,380
 

    1. National Office Reserves. These reserves are broken down as 
follows:


General Reserve.........................................      $5,740,000
Designated Reserves: State RA...........................       1,500,000
Total National Office Reserve...........................       7,240,000
 

    2. National Office Set-asides. The following legislatively mandated 
set-asides of funds are part of the National office set-aside:


Nonprofit Set-Aside.....................................      $7,560,000
Underserved Counties and Colonias.......................       4,200,000
EZ or EC Communities....................................       7,250,000
 

    3. Rental Assistance (RA). New construction RA will be held in the 
National office for use with section 515 Rural Rental Housing loans.

IV. State Allocations for Rehabilitation or Repair Loans

    A. Repairs and Rehabilitation. Tenant health and safety continues 
to be a priority. Repair and rehabilitation funds must be first 
targeted to RRH facilities that have physical conditions that effect 
the health and safety of tenants and then made available to facilities 
that have deferred maintenance.
    B. Section 515 RRH Loan Funds (for Repairs and Rehabilitation). All 
funds will be held in the National office and will be distributed based 
upon indicated rehabilitation needs in the MFH Survey conducted in 
September 1998. The amount available for rehabilitation or repair loans 
is as follows:


Rehab and Repair Appropriation..........................     $35,000,000
Designated Equity Reserve...............................       5,000,000
Total Available for Rehabilitation or repair loans......      30,000,000
 

V. Section 533 Housing Preservation Grants (HPG)

    Amount available for allocation. See end of this Notice for HPG 
State allocations.


Total Available.........................................      $7,000,000
Less General Reserve....................................         700,000
Less Designated Set-Aside for EZ or EC..................       1,200,000
Total Available for Distribution........................       5,100,000
 

Single Family Housing (SFH)

I. General

    A. This notice provides SFH allocations for FY 1999. Allocation 
computations have been made in accordance with 7 CFR 1940.563 through 
1940.568. Information on basic formula criteria, data source and 
weight, administrative allocation, pooling of funds, and availability 
of the allocation are located on a chart at the end of this notice.
    B. The SFH levels authorized for FY 1999 are as follows:


Section 502  Guaranteed Rural Housing (RH) Loans
    Nonsubsidized Guarantees.........................     $3,000,000,000
Section 502  Direct RH Loans
    Very Low-Income Subsidized Loans.................        424,738,000
    Low-Income Subsidized Loans......................        540,575,000
    Nonsubsidized Loans..............................                  0
Credit Sales (Program and Non Program)...............         19,968,000
Section 504  Housing Repair Loans....................         25,001,000
Section 504  Housing Repair Grants...................         20,000,000
Section 509  Compensation for Construction Defects
 (RHAG)..............................................          1,433,237
Section 523  Mutual and Self-Help Technical
 Assistance and Grants                                        26,000,000
Section 523  Self-Help Site Loans....................          5,000,000
Section 524  RH Site Loans...........................          5,151,510
Section 306C  Water and Waste Disposal (WWD) Grants..          1,604,800
Sections 525  Technical and Supervisory Assistance
 Grants..............................................          1,355,054
    (TSA) and 509 Housing Application Packaging
     Grants
    (HAPG) (Shared between Single and Multi-Family
     Housing)
 

    C. SFH funding not allocated to States are:
    1. Credit Sale Authority. The distribution of available credit sale 
authority is outlined on a chart at the end of this notice. States will 
use loan funds to finance program Real Estate Owned (REO) sales to 
program applicants when all credit sale authority is exhausted.
    2. Section 509 Compensation for Construction Defects. All claims 
for

[[Page 71081]]

compensation for construction defects must be submitted to the National 
office for authorization of funds prior to approval.
    3. Section 523 Mutual and Self-Help Technical Assistance Grants. 
$26 million has been appropriated for section 523 Mutual and Self-Help 
Technical Assistance Grants. Of these funds, $1 million is earmarked 
for EZ or EC communities. In order to receive earmark funds, at least 
50 percent of the total homes to be constructed must be located in the 
EZ or EC community. The State Director must request funding approval 
from the National office for all requests. A technical review and 
analysis must be completed by the Technical and Management Assistance 
(T&MA) contractor on all predevelopment, new, and existing (refunding) 
grant applications.
    4. Section 523 Mutual and Self-Help Site Loans and Section 524 RH 
Site Loans. The State Director must request funding authority from the 
National office prior to obligating loan funds.
    5. Section 306C WWD Grants to Individuals in Colonias. The 
objective of the section 306C WWD individual grant program is to 
facilitate the use of community water or waste disposal systems for the 
residents of the colonias along the U.S.-Mexico border.
    The cumulative amount available to Arizona, California, New Mexico, 
and Texas will be $1,604,800 for FY 1999. This amount includes the 
carryover unobligated balance of $104,800 and the transferred amount of 
$1.5 million from the Rural Utilities Service (RUS) to RHS for 
processing individual grant applications. The above States will have 
access to the equal quarterly allocation distributions.
    6. Section 525 Technical and Supervisory Assistance (TSA) and 
section 509 Housing Application Packaging Grants (HAPG). $500,000 of 
new funds and $855,054 of carry-over funds from previous years remain 
available for the TSA and HAPG programs. State Directors should submit 
proposals from potential applicants to the National office for review 
and concurrence prior to authorizing an application. The 29 eligible 
States under HAPG that have active grantees operating will be able to 
access up to $17,500 for section 502 or 504 loan and grant programs in 
order to continue operations. Reserve requests will be considered on a 
first-come, first-served basis.
    7. Deferred Mortgage Payment Demonstration. There is no FY 1999 
funding provided for deferred mortgage authority or loans for deferred 
mortgage assumptions.
    8. Section 502 direct nonsubsidized funds (loan making and 
servicing). There were no FY 1999 funds appropriated for loans for 
nonsubsidized loan making or servicing.

II. State Allocations

    A. Section 502 Nonsubsidized Guaranteed RH (GRH) Loans.
    1. Amount Available for Allocation.


Total Available......................................     $3,000,000,000
    Less National Office General Reserve.............        640,000,000
    Less Special Outreach Area Reserve...............        160,000,000
                                                      ------------------
        Basic Formula--Administrative Allocation.....      2,200,000,000
 

    2. National Office General Reserve. The Administrator may restrict 
access to this reserve for States not meeting their goals in Special 
Outreach Areas.
    3. Reservation of Funds. Because it is anticipated that demand will 
exceed available funds, States must use the reservation of funds system 
per Sec. 1980.351 of RD Instruction 1980-D.
    4. Special Outreach Areas. FY 99 GRH funding is allocated to States 
in two funding streams (80/20) similar to the 60/40 income split for 
direct SFH funds. Eighty percent of GRH funds may be used in any 
eligible area. Twenty percent of GRH funds are to be used Special 
Outreach Areas. Special Outreach Areas are counties with median incomes 
at or below the State's nonmetropolitan median income. Each funding 
stream will independently be subject to pooling. If needed, Special 
Outreach Area funds may be pooled nationwide on July 16, 1998 and made 
available to other Special Outreach Areas in the Nation.
    5. National Office Special Area Outreach Reserve. A special 
outreach area reserve fund has been established at the National Office. 
Funds from this reserve may only be used in special outreach areas.
    6. Suballocation by the State Director. The State Director may 
retain funds at the State Office level or suballocate to the Area or 
Field Office level.
    B. Section 502 Direct RH loans.
    1. Amount Available for Allocation.


Total Available......................................       $965,313,000
    Less Required Set Aside for Underserved Counties
     and Colonias....................................         48,266,000
        EZ and EC Earmark............................         45,516,000
    Less General Reserve.............................         63,500,000
        Administrator's Reserve......................         30,000,000
        Hardships & Homelessness.....................          3,500,000
        Homeownership Partnership....................         25,000,000
        Rural Housing Demonstration Program..........          5,000,000
Less Designated Reserve for Self-Help................        150,000,000
Basic Formula Administrative Allocation..............        658,031,000
 

    2. Reserves.
    a. State office Reserve. State Directors must maintain an adequate 
reserve to fund the following applications:
    (i) Hardship and homeless applicants based upon historical data and 
projected demand. This shall include the direct section 502 Loan and 
section 504 Loan and Grant Programs.
    (ii) The State's 25 percent portion of funds for Mutual Self-Help 
loans.
    (iii) Subsequent loans for essential improvements or repairs and 
transfers with assumptions.
    (iv) Financing for the purchase of program REO's when credit sale 
authority has been exhausted.
    (v) State Directors must ensure that not less than 25 percent of 
the initial low-income allocation and 5 percent of the initial very low 
allocation are utilized for participation in leveraging section 502 
direct loan funds.
    (vi) Areas targeted by the State.
    b. National office Reserves.
    (i) General reserve. The National office has a general reserve of 
$63.5 million. Of this amount, the Administrator's reserve is $30 
million.

[[Page 71082]]

One of the purposes of the Administrator's reserve will be for loans in 
Indian Country. Indian Country is defined as land inside the boundaries 
of Indian reservations, communities made up mainly of Native Americans, 
Indian trust and restricted land, and tribal allotted lands. The 
remaining reserves will be distributed as follows:
    (ii) Hardship and Homelessness Reserve. $3.5 million has been set 
aside for Hardships & Homelessness.
    (iii) Homeownership Partnership. $25 million has been set aside for 
Homeownership Partnerships. These funds will be used to expand existing 
partnerships and create new partnerships, such as the following:
    (A) Department of the Treasury, Community Development Financial 
Institutions (CDFI)--Funds will be available to fund leveraged loans 
made in partnership with the Department of the Treasury CDFI 
participants.
    (B) Rural Home Loan Partnership (RHLP). Partnership initiatives 
established to carry out the objectives of the National Partners in 
Homeownership including the RHLP and other strategies or initiatives.
    (iv) Rural Housing Demonstration Program. $5 million has been set 
aside for innovative demonstration initiatives.
    c. Designated reserve for Self-Help. $150 million has been set 
aside for matching funds to assist participating Self-Help applicants. 
The matching funds were established on the basis of the National office 
contributing 75 percent from the National office reserve and States 
contributing 25 percent of their allocated section 502 RH funds.
    d. Underserved counties and colonias. $48,266,000 has been set 
aside for the 100 underserved counties and colonias.
    e. Empowerment Zone (EZ) and Enterprise Community (EC) Earmark. 
These funds are earmarked for loans in EZs and ECs only. Further 
information will follow.
    f. Reserve requests. All National office reserve requests should be 
submitted by the State Director to the National office on a case-by-
case basis.
    g. State office Pooling. If pooling is conducted within a State, it 
must not take place within the first 30 calendar days of the first, 
second, or third quarter. (There are no restrictions on pooling in the 
fourth quarter.)
    h. Suballocation by the State Director. The State Director may 
suballocate to each area office using the methodology and formulas 
required by 7 CFR Part 1940, Subpart L. If suballocated to the area 
level, the Rural Development Manager will make funds available on a 
first-come, first-served basis to all offices at the field or area 
level. No field office will have its access to funds restricted without 
the prior written approval of the Administrator.
    C. Section 504 Housing Loans and Grants. Section 504 Grant funds 
are included in the Rural Housing Assistance Grant Program (RHAG) in 
the FY 1999 Appropriation. Funds included in RHAG may be transferred in 
accordance with Part I of this notice.
    1. Amount available for allocation.


Section 504  Loans
    Total Available.....................................     $25,001,000
        Less 5% for 100 Underserved Counties and
         Colonias.......................................       1,250,000
        EZ and EC Earmark...............................       4,258,000
        Less General Reserve............................       2,500,000
    Basic Formula--Administrative Allocation............      16,993,000
Section 504  Grants
    Total Available.....................................      20,000,000
        Less 5% for 100 Underserved Counties and
         Colonias.......................................       1,000,000
        Less General Reserve............................       2,500,000
    Basic Formula--Administrative Allocation............      16,500,000
 

    2. Reserves and Set-asides.
    a. State Office Reserve. State Directors must maintain an adequate 
reserve to handle all anticipated hardship applicants based upon 
historical data and projected demand.
    b. Underserved Counties and Colonias. $1,250,000 and $1,000,000, 
respectively, have been set aside for the 100 underserved counties and 
colonias for the section 504 loan and grant programs.
    c. Empowerment Zone (EZ) and Enterprise Community (EC) Earmark 
(Loan funds only). These funds are earmarked for EZs and ECs only.
    d. National Office Reserve. $2.5 million for section 504 loan 
hardships and $2.5 million for section 504 grant extreme hardships have 
been set-aside in the General Reserve. For section 504 grants, an 
extreme hardship case is one requiring a significant priority in 
funding, ahead of other requests, due to severe health or safety 
hazards, or physical needs of the applicant.
    Information on basic formula criteria, data source and weight, 
administrative allocation, pooling of funds, and availability of the 
allocation.

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                                          Section 502 nonsubsidized guaranteed
      No.              Description                      RH loans                    Section 502 direct RH loans          Section 504 loans and grants
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..............  Basic formula criteria,  See 7 CFR 1940.563(b)...............  See 7 CFR 1940.565(b)..............  See 7 CFR 1940.566(b)
                  data source, and                                                                                   and 1940.567(b).
                  weight.
2..............  Administrative
                  allocation
                 Western Pacific Area...  $1,000,000..........................  $1,100,000.........................  $2,400,000 Loan
                                                                                                                     $ 560,000 Grant.
3..............  Pooling of funds
                 a. Mid year pooling....  If Necessary........................  None Anticipated...................  None Anticipated.
                 b. Year-end pooling....  July 16, 1999.......................  August 13, 1999....................  August 13, 1999.
                 c. Underserved Counties  N/A.................................  June 30, 1999......................  June 30, 1999.
                  and Colonias.
                 d. EZ & EC.............  N/A.................................  June 30, 1999......................  June 30, 1999.
                 e. Credit Sales........  N/A.................................  June 30, 1999......................  N/A.
4..............  Availability of the
                  allocation
                 a. first quarter.......  50 percent..........................  50 percent.........................  50 percent.
                 b. second quarter......  75 percent..........................  70 percent.........................  70 percent.
                 c. third quarter.......  100 percent.........................  90 percent.........................  90 percent.
                 d. fourth quarter......   N/A................................  100 percent........................  100 percent.
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[[Page 71083]]

    1. Data derived from the 1990 U.S. Census was provided to each 
State by the National office on August 12, 1993.
    2. Due to the absence of Census Data.
    3. All dates are tentative and are as of close of business (COB). 
Pooled funds will be placed in the National office reserve and made 
available administratively.
    4. Funds will be distributed cumulatively through each quarter 
listed until the National office year-end pooling date.

    Dated: December 11, 1998.
Jan E. Shadburn,
Administrator, Rural Housing Service.

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