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.

Rules and Regulations Federal Register

106977 

Vol. 89, No. 250 

Tuesday, December 31, 2024 

DEPARTMENT OF AGRICULTURE 

Rural Housing Service 

7 CFR Parts 1910, 1955, and 3560 

[Docket No. RHS–24–MFH–0042] 

RIN 0575–AD30 

Multifamily Housing Program Update 

to the Credit Report Process 

AGENCY: Rural Housing Service, U.S. 

Department of Agriculture (USDA). 

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 

publishing a final rule to update its 

regulation on how credit reports are 

obtained for the purposes of 

determining eligibility and feasibility 

for Multifamily Housing (MFH) 

Programs. 

DATES: This final rule is effective 

January 30, 2025. 

FOR FURTHER INFORMATION CONTACT: 

Abby Boggs, Branch Chief, Program 

Support Branch, Production and 

Preservation Division, Multifamily 

Housing, Rural Development, U.S. 

Department of Agriculture, 1400 

Independence Avenue SW, Washington, 

DC 20250, telephone: 615–490–1371; or 

email: Abby.Boggs@usda.gov. 

SUPPLEMENTARY INFORMATION: 

Statutory Authority 

The Direct-MFH Loan and Grant 

program is authorized under sections 

514, 515, 516 of title V of the Housing 

Act of 1949, as amended; 42 U.S.C. 1471 

et seq.; 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. 

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 Multifamily 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 Multifamily 

Housing (MFH) Programs. 

The RHS operates the Direct MFH 

Loan and Grant Programs. The direct 

loan program provides loans to eligible 

borrowers unable to get financing 

through traditional lenders. Multifamily 

direct loans feature terms and 

conditions that support the 

development or preservation of 

affordable rural rental housing for lowincome, elderly, or disabled people. 

Loan funds can be used for all 

construction hard costs and land-related 

costs, including land acquisition and 

development. 

II. Discussion of Final Rule 

The RHS published a proposed rule in 

the Federal Register on March 29, 2024 

[89 FR 22094], to change the process by 

which credit reports are obtained to 

determine credit worthiness, eligibility, 

and feasibility for applicants and 

borrowers for MFH funding, transfers, 

and servicing actions. A 60-day 

comment period was provided for the 

proposed rule, which closed on May 28, 

2024. The Agency received comments 

from two (2) respondents. Neither 

comment is applicable to the specific 

contents of the proposed rule. Of the 

comments received, one respondent 

manages a USDA–RD property and 

provided concerns for tenants providing 

their own credit report to live in the 

complex, which is not what this rule 

will allow, and one respondent’s 

comment was made anonymously about 

leasing and selling public land to the 

government, which is not applicable to 

the subject matter of this rule. No 

changes were made in this final rule as 

a result of public comments. 

RHS regulation 7 CFR 3560.56(d)(5) 

provides that for initial loan 

applications, eligibility and feasibility of 

a housing proposal will be determined 

based on, amongst other requirements, 

an analysis of current credit reports. 

Currently, the agency collects a credit 

report fee from applicants during the 

application process and agency staff 

obtains the required credit report 

through a contract with a credit 

reporting agency. RHS has relied on 

various internal guidance documents to 

staff to provide information on this 

credit report process. By not having the 

credit report process clearly codified, 

the Agency makes the process 

unnecessarily complicated for the 

applicant and Agency staff. When the 

Multifamily Housing Program realigned 

all staff members to the National Office 

level, applicants were required to 

submit the credit report fee 

electronically to the Agency’s Business 

Center Servicing Office using a payment 

link. The process for creating the 

payment link is cumbersome. Agency 

staff must determine and notify the 

applicant of the credit report fee 

applicable for the applicant’s particular 

request. Agency staff will request the 

Servicing Office to create a staged 

payment link for the fee through a 

SharePoint portal. Once the payment 

link is created, the Servicing Office 

notifies the requesting Agency staff and 

provides the payment link. Agency staff, 

in turn, notifies the applicant of the 

payment link and the applicant must 

process the payment before the link 

expires in 30 days. After the applicant’s 

payment processes successfully, the 

Agency orders the credit report from a 

contracted bureau. 

This final rule will amend 7 CFR part 

3560 to require that in lieu of applicants 

and borrowers submitting credit report 

fees, the Agency will require applicants 

and borrowers to provide the credit 

report(s). In accordance with 18 U.S.C. 

1001, applicants that submit false, 

fictitious, or fraudulent materials shall 

be fined or imprisoned not more than 5 

years. 


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106978 Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations 

It is the Agency’s expectation that this 

regulation update for obtaining credit 

reports will align the Agency with 

current industry practices and create an 

efficiency for applicants and borrowers 

by streamlining the application process. 

III. Summary of Changes 

The Agency will make the following 

revisions as published in the proposed 

rule. No changes were made in this final 

rule as a result of public comments. 

(1) Add the definition of Current 

Comprehensive Credit Report to 7 CFR 

3560.11. 

(2) Update 7 CFR 3560.56(d)(5) to 

include the requirements of a valid 

credit report which must address both 

the entity and the actual individual 

principals, partners, members, etc., 

within the applicant entity, including 

any sub-entities who are responsible for 

controlling the ownership and 

operations of the entity. 

(3) Update 7 CFR 3560.405 to include 

the requirement for a credit report in 

cases of change to the borrower’s 

organization structure or entity’s 

controlling interest. 

(4) Update 7 CFR 3560.406 to include 

the requirement for a credit report for 

approval of transfers and sales. 

(5) Establish a new subpart R within 

7 CFR part 3560 to provide detailed 

requirements of the credit reporting 

process. 

In addition, this final rule will 

include conforming changes to rescind 

7 CFR part 1910, subparts B and C, and 

7 CFR 1955.118, which are outdated. 

IV. Regulatory Information 

Executive Order 12372, 

Intergovernmental Review of Federal 

Programs 

These loans and grants are subject to 

the provisions of Executive Order 

12372, which requires 

intergovernmental consultation with 

State and local officials to foster the 

intergovernmental partnership and 

strengthen federalism by relying on 

State and local processes for the 

coordination and review of proposed 

Federal financial assistance and direct 

Federal development. 

Applicants for the Direct Multifamily 

Housing Loan and Grant program are 

required to contact their State’s Single 

Point of Contact (SPOC) to submit their 

Statement of Activities and find out 

more information on how to comply 

with the State’s process under Executive 

Order 12372. To locate a SPOC for your 

State, the Office of Management and 

Budget (OMB) has an official SPOC list 

on its website https://

www.whitehouse.gov/omb/officefederal-financial-management/spoc-list/ 

. For those States that have a home page 

for their designated SPCO, a direct link 

has been provided by clicking on the 

State name. SPOC information is also 

available in any RD Agency office or on 

the RD Agency’s website. 

States that are not listed on the OMB 

website have chosen not to participate 

in the intergovernmental review 

process, and therefore, do not have a 

SPOC. If you are located within a State 

that does not have a SPOC, you may 

send application materials directly to 

the Federal RD awarding agency. RHS 

conducts intergovernmental 

consultations for each loan in 

accordance with 2 CFR part 415, subpart 

C. 

Executive Order 12866, Regulatory 

Planning and Review 

This final rule has been determined to 

be not 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 bringing 

suit 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 final rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, Consultation 

and Coordination with Indian Tribal 

Governments. Executive Order 13175 

requires Federal agencies to consult and 

coordinate with Tribes on a 

government-to-government basis on 

policies that have tribal implications, 

including regulations, legislative 

comments or proposed legislation, and 

other policy statements or actions that 

have substantial direct effects on one or 

more Indian Tribes, on the relationship 

between the Federal Government and 

Indian Tribes or on the distribution of 

power and responsibilities between the 

Federal Government and Indian Tribes. 

Consultation is also required for any 

regulation that preempts Tribal law or 

that imposes substantial direct 

compliance costs on Indian Tribal 

governments and that is not required by 

statute. 

The Agency has determined that this 

final rule does not, to our knowledge, 

have Tribal implications that require 

formal Tribal consultation under 

Executive Order 13175. If a Tribe 

requests consultation, the RHS will 

work with the Office of Tribal Relations 

to ensure meaningful consultation is 

provided where changes, additions and 

modifications identified herein are not 

expressly mandated by Congress. 

Administrative Pay-As-You-Go-Act of 

2023 

Section 270 of the Administrative 

Pay-As-You-Go-Act of 2023 (Pub. L. 

118–5, div. B, title III, 137 Stat 31) 

amended 5 U.S.C. 801(a)(2)(A) to 

require U.S. Government Accountability 

Office (GAO) to assess agency 

compliance with the Act, which 

establishes requirements for 

administrative actions that affect direct 

spending, in GAO’s major rule reports. 

The Act does not apply to this rule 

because it does not increase direct 

spending. 

National Environmental Policy Act 

In accordance with the National 

Environmental Policy Act of 1969, 

Public Law 91–190, this final rule has 

been reviewed in accordance with 7 

CFR part 1970 (‘‘Environmental Policies 

and Procedures’’). The Agency has 

determined that i) this action meets the 

criteria established in 7 CFR 1970.53(f); 

ii) no extraordinary circumstances exist; 

and iii) the action is not ‘‘connected’’ to 

other actions with potentially 

significant impacts, is not considered a 

‘‘cumulative action’’ and is not 

precluded by 40 CFR 1506.1. Therefore, 

the Agency has determined that the 

action does not have a significant effect 

on the human environment, and 

therefore neither an Environmental 

Assessment nor an Environmental 

Impact Statement is required. 


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Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations 106979 

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 

This final rule contains no new 

reporting or recordkeeping burdens 

under OMB control number 0575–0189 

that would require approval under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. chapter 35). 

E-Government Act Compliance 

Rural Development is committed to 

the E-Government Act, which requires 

Government agencies in general to 

provide the public the option of 

submitting information or transacting 

business electronically to the maximum 

extent possible and to promote the use 

of the internet and other information 

technologies to provide increased 

opportunities for citizen access to 

Government information and services, 

and for 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 

numbers 10.415-Rural Rental Housing 

Loans and 10.405-Farm Labor Housing 

Loans and Grants. 

Non-Discrimination Statement Policy 

In accordance with Federal civil 

rights laws and U.S. Department of 

Agriculture (USDA) civil rights 

regulations and policies, the USDA, its 

Mission Areas, agencies, staff offices, 

employees, and institutions 

participating in or administering USDA 

programs are prohibited from 

discriminating based on race, color, 

national origin, religion, sex, gender 

identity (including gender expression), 

sexual orientation, disability, age, 

marital status, family/parental status, 

income derived from a public assistance 

program, political beliefs, or reprisal or 

retaliation for prior civil rights activity, 

in any program or activity conducted or 

funded by USDA (not all bases apply to 

all programs). Remedies and complaint 

filing deadlines vary by program or 

incident. 

Program information may be made 

available in languages other than 

English. Persons with disabilities who 

require alternative means of 

communication to obtain program 

information (e.g., Braille, large print, 

audiotape, American Sign Language) 

should contact the responsible Mission 

Area, agency, staff office, or the 711 

Federal 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: 

(1) Mail: U.S. Department of 

Agriculture, Office of the Assistant 

Secretary for Civil Rights, 1400 

Independence Avenue SW, 

Washington, DC 20250–9410; or 

(2) Fax: (833) 256–1665 or (202) 690– 

7442; or 

(3) Email: program.intake@usda.gov. 

USDA is an equal opportunity 

provider, employer, and lender. 

Severability 

It is USDA’s intention that the 

provisions of this rule shall operate 

independently of each other. In the 

event that this rule or any portion of this 

rule is ultimately declared invalid or 

stayed as to a particular provision, it is 

USDA’s intent that the rule nonetheless 

be severable and remain valid with 

respect to those provisions not affected 

by a declaration of invalidity or stayed. 

USDA concludes it would separately 

adopt all of the provisions contained in 

this final rule. 

List of Subjects 

7 CFR Part 1910 

Agriculture, Credit, Grant programs— 

agriculture, Grant programs—housing 

and community development, Loan 

programs—agriculture, Loan programs— 

housing and community development, 

Low and moderate income housing, 

Reporting and recordkeeping 

requirements, Rural areas. 

7 CFR Part 1955 

Agriculture, Drug traffic control, 

Government property, Loan programs— 

agriculture, Loan programs—housing 

and community development, Low and 

moderate income housing, Rural areas. 

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 


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106980 Federal Register / Vol. 89, No. 250 / Tuesday, December 31, 2024 / Rules and Regulations 

labor, Mortgages, Nonprofit 

organizations, Public housing, Rent— 

subsidies, Reporting and recordkeeping 

requirements, Rural areas. 

For the reasons set forth in the 

preamble, the Rural Housing Service 

amends 7 CFR parts 1910, 1955, and 

3560 as follows: 

PART 1910—[Removed and Reserved] 

■ 1. Under the authority of 5 U.S.C. 301, 

7 U.S.C. 1989, and 42 U.S.C. 1480, part 

1910 is removed and reserved. 

PART 1955—PROPERTY 

MANAGEMENT 

■ 2. The authority citations for part 

1955 continues to read as follows: 

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

U.S.C. 1480. 

Subpart C—Disposal of Inventory 

Property 

■ 3. Amend § 1955.118 by revising 

paragraphs (b)(2) and (6), (b)(8)(iii), and 

(b)(11) to read as follows: 

§ 1955.118 Processing cash sales or MFH 

credit sales on NP terms. 

* * * * * 

(b) * * * 

(2) Processing. Purchasers requesting 

credit on NP terms will be required to 

submit documentation to establish 

financial stability, repayment ability, 

and creditworthiness. Standard forms 

used to process program applications 

may be utilized or comparable 

documentation may be accepted from 

the purchaser with the servicing official 

having the discretion to determine what 

information is required to support loan 

approval for the type of property 

involved. Individual credit reports will 

be ordered for each individual applicant 

and each principal within an applicant 

entity in accordance with subpart R of 

7 CFR part 3560. Commercial credit 

reports will be ordered for profit 

corporations and partnerships, and 

organizations with a substantial interest 

in the applicant entity in accordance 

with subpart R of 7 CFR part 3560. 

* * * * * 

(6) Term of note. The note amount 

will be amortized over a period not to 

exceed 10 years. If the leadership 

designee determines more favorable 

terms are necessary to facilitate the sale, 

the note amount may be amortized 

using a 30-year factor with payment in 

full (balloon payment) due not later 

than 10 years from the date of closing. 

In no case will the term be longer than 

the period for which the property will 

serve as adequate security. 

* * * * * 

(8) * * * 

(iii) The Agency will provide the 

closing agent with the necessary 

information for closing the sale. The 

assistance of OGC will be requested to 

provide closing instructions for all MFH 

sales. 

* * * * * 

(11) Form RD 1910–11, ‘‘Applicant 

Certification, Federal Collection Policies 

for Consumer or Commercial Debts.’’ 

The Agency must review Form RD 

1910–11, ‘‘Applicant Certification, 

Federal Collection Policies for 

Consumer or Commercial Debts,’’ with 

the applicant, and the form must be 

signed by the applicant. 

PART 3560—DIRECT MULTI-FAMILY 

HOUSING LOANS AND GRANTS 

■ 4. The authority citation for part 3560 

continues to read as follows: 

Authority: 42 U.S.C. 1480. 

Subpart A—General Provisions and 

Definitions 

■ 5. Amend § 3560.11 by adding the 

definition of Current Comprehensive 

Credit Report in alphabetical order to 

read as follows: 

§ 3560.11 Definitions. 

* * * * * 

Current Comprehensive Credit Report. 

A credit report no older than six months 

from the date of issuance, that contains 

details of both current open credit 

accounts and closed accounts, and that 

is provided by one of the three 

accredited major credit bureaus 

(Experian, Equifax, or TransUnion). 

* * * * * 

Subpart B—Direct Loan and Grant 

Origination 

■ 6. Amend § 3560.56 by revising 

paragraph (d)(5) to read as follows: 

§ 3560.56 Processing section 515 housing 

proposals. 

* * * * * 

(d) * * * 

(5) An analysis of current credit 

reports in accordance with subpart R of 

this part; 

* * * * * 

Subpart I—Servicing 

■ 7. Amend § 3560.405 by adding 

paragraph (b)(4) to read as follows: 

§ 3560.405 Borrower organizational 

structure or ownership interest changes. 

* * * * * 

(b) * * * 

(4) Borrowers must submit a credit 

report in accordance with subpart R of 

this part. 

* * * * * 

■ 8. Amend § 3560.406 by adding 

paragraph (c)(6) to read as follows: 

§ 3560.406 MFH ownership transfers or 

sales. 

* * * * * 

(c) * * * 

(6) A credit report in accordance with 

subpart R of this part. 

* * * * * 

Subpart Q—[Added and Reserved] 

■ 9. Add reserved subpart Q. 

■ 10. Add subpart R to read as follows: 

Subpart R—Credit Report 

Requirements 

Sec. 

3560.851 General. 

3560.852 Requirements. 

§ 3560.851 General. 

This subpart contains the Agency’s 

credit reporting requirements for all 

Multifamily (MFH) programs. 

§ 3560.852 Requirements. 

When required to submit a credit 

report under any provision of this part, 

such submission must include a current 

comprehensive credit report for both the 

entity and the individual principals, 

partners, members, and the individual 

sub-entities or natural persons who are 

responsible for controlling the 

ownership and operations of the 

applicant entity, including but not 

limited to, principals, partners, or 

members. The Agency will also accept 

combination comprehensive credit 

reports which provides a 

comprehensive view of the applicant’s 

credit profile by combining data from all 

three major credit bureaus (Experian, 

Equifax, and TransUnion). 

Joaquin Altoro, 

Administrator, Rural Housing Service. 

[FR Doc. 2024–31388 Filed 12–30–24; 8:45 am] 

BILLING CODE 3410–XV–P 


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