[Federal Register Volume 59, Number 70 (Tuesday, April 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8674]


[[Page Unknown]]

[Federal Register: April 12, 1994]


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DEPARTMENT OF AGRICULTURE
Farmers Home Administration

 

Implementation of the Rural Rental Housing Diversity 
Demonstration Program (RRHDDP)

AGENCY: Farmers Home Administration, USDA.

ACTION: Notice.

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SUMMARY: On October 1, 1993, the Farmers Home Administration (FmHA) 
announced its intent to establish the Rural Rental Housing Diversity 
Demonstration Program (RRHDDP) for Fiscal Year (FY) 1994, in the 
Federal Register (58 FR 51312). This notice is being published to 
provide more detailed guidance on loan requests under the program. The 
intended outcome is to make the public aware of the program and that 
funding is available.

EFFECTIVE DATE: April 12, 1994.

FOR FURTHER INFORMATION CONTACT: Cynthia Reese-Foxworth, Loan 
Specialist, Multi-Family Housing Processing Division, USDA-FmHA, South 
Agriculture Building, 14th and Independence Ave., SW., Washington, DC 
20250-0700, telephone (202) 720-1608 (this is not a toll free number).

SUPPLEMENTARY INFORMATION:

Programs Affected

    These programs/activities are listed in the Catalog of Federal 
Domestic Assistance under Numbers 10.415, ``Rural Rental Housing 
Loans'' and 10.427, ``Rural Rental Assistance Payments''.

Discussion of Notice

    7 CFR part 1940, subpart L contains the ``Methodology and Formulas 
for Allocation of Loan and Grant Program Funds.'' Similar guidance was 
published in the Federal Register on November 15, 1993 (58 FR 60165), 
which included a set-aside of funds for this program. This notice 
provides the public with further guidance on accessing this set-aside.

Program Description

I. Objectives

    A. To encourage applicants of limited gross incomes which have 
little or no participation in the section 515 Program.
    B. To provide housing in unserved areas.
    C. To provide an economic stimulus to the local economy by 
encouraging procurement of labor, goods, and services from the local 
community.

II. Background

    In accordance with section 506 (b) of the Housing Act of 1949, as 
amended, the Secretary is authorized and directed to conduct research, 
technical studies, and demonstrations relating to the mission and 
programs of FmHA and the national housing goals defined in section 2 of 
this Act. In connection with such activities, the Secretary shall seek 
to promote the construction of adequate farm and other rural housing. 
The Secretary shall conduct such activities for the purposes of 
stimulating construction and improving the architectural design and 
utility of dwellings and buildings. In furtherance of this goal, the 
Rural Rental Housing Diversity Demonstration Program (RRHDDP) is 
implemented. An appropriate amount of section 521 new construction 
rental assistance (RA) is set aside for use with section 515 loan 
funds.

III. RRHDDP

    A. Amount of Set Aside. Set asides for RRHDDP from the current FY 
allocations are listed at the end of this notice.
    B. Selection of States. All States were considered using the 
following criteria:
    1. Highest percentage of poverty;
    2. Highest percentage of substandard housing;
    3. Highest unemployment rates;
    4. Lowest rural median income; and
    5. Number of places with population of 2,500 or less.
    Each State selected for RRHDDP had to be in the top 10 of at least 
3 of 5 criteria. Data from the 1990 Census was used for all criteria. 
Seven States were selected and are listed at the end of this notice.
    C. State RRHDDP Levels. See the list at the end of this notice.
    D. Use of Funds. To ensure the success of RRHDDP, the State 
Director may leverage funds from the RRHDDP with allocated funds from 
the Section 515 and 521 allocations held in the State Office reserve. 
The State Director has the discretion to determine the most effective 
delivery of RRHDDP funds; however, the intent and scope of the program 
should be ever present in the implementation and application processes.
    E. National Office RRHDDP Reserve. There is no RRHDDP reserve 
available when the State is unable to fund a request from its regular 
or RRHDDP allocation.
    F. Pooling. Unused RRHDDP funds and RA will be pooled. Pooling 
dates and any pertinent information are listed at the end of this 
notice. Pooled funds will be available on a first-come, first-served 
basis to all eligible States. Pooled RRHDDP funds will remain available 
until the year-end pooling date.
    IV. Eligibility. Applicants and proposals will need to meet the 
following requirements, in addition to those found in 7 CFR part 1944, 
subpart E:
    A. The applicant must have had an interest (including family 
members) in no more than one section 515 loan over the past 3 years. 
For entity applicants, this restriction applies to all general partners 
and their family members. For the purposes of this program, interest 
means a section 515 loan which has been approved and funds obligated.
    B. The applicant must have had a gross aggregate income from 
business and personal operations of less than $500,000 in the previous 
calendar year. For entity applicants, the aggregate income of all 
general partners will be considered. American Indian tribes and tribal 
housing authorities are exempt from these income requirements.
    C. At least 51 percent of the labor, goods, and services to develop 
the proposed housing must come from the market area as described in 
paragraph V B of this notice.
    D. The housing must be constructed in a market area without similar 
subsidized housing. Market area is defined in Exhibit A-8 of 7 CFR part 
1944, subpart E. Similar subsidized housing is defined in 
Sec. 1944.213(f) of 7 CFR part 1944, subpart E.
    E. The proposed complex must contain no more than 50 percent of the 
average number of units of the average size Section 515 complex in the 
State based on the previous FY average.

V. Processing Preapplications

    A. Requirements. To be eligible for participation in this 
demonstration program, applicants must ensure that the preapplication 
meets all requirements set forth in 7 CFR part 1944, subpart E and this 
notice.
    1. All complete preapplications must be received in the place 
designated by the State Director by May 2, 1994. Incomplete 
preapplications will not be considered. A complete preapplication 
consists of all items specified in Exhibit A-7 of 7 CFR part 1944, 
subpart E.
    2. Based upon projected demand for the RRHDDP, the State Director 
will select the manner in which preapplications will be rated prior to 
implementation and/or announcement of the program to ensure the public 
is aware of how requests will be prioritized. The State Director may 
elect one of the following systems to prioritize and select proposals 
for further processing:
    a. The priority point system contained in Sec. 1944.231(d) of 7 CFR 
part 1944, subpart E; or
    b. The following priority point scoring system;
    (i) Interest in Section 515 loans over the past 3 fiscal years as 
specified in paragraph IV A of this notice.

No Interest--5 points
Interest in 1 project--2 points

    (ii) Gross incomes as defined in paragraph IV B of this Notice.

Income:
    $400,001-499,999--1 point
    $300,000-400,000--2 points
    $299,999 or less--3 points
    American Indian Tribes/Tribal Housing Authorities--3 points

    (iii) Percent of the labor, goods, and services must come from the 
local market described in paragraph V B of this notice.

100% from local market--5 points
90-99% from local market--4 points
80-89% from local market--3 points
70-79% from local market--2 points
51-69% from local market--1 point

    (iv) Size of proposed complex compared to average size complex 
obligated in previous FY.

40-50% average size--3 points
30-39% average size--4 points
Less than 30%--5 points

    c. A combination of the points received in paragraphs V A 2 a and b 
of this notice.
    3. In the event of a tie, the proposal with the earliest date of 
complete preapplication will take preference.
    B. Procurement of labor, goods, and services. One of the intents of 
the RRHDDP is to stimulate the local economy by encouraging procurement 
of labor, goods, and services from the local area. FmHA recognizes that 
defining a local trade area in which to procure the labor, goods, and 
services to build an apartment complex is difficult in rural America. 
To be responsive to the application procedures, applicants must procure 
labor, goods, and services from Level One of this paragraph. If labor, 
goods, and services are not available in Level One of this paragraph, 
the applicant may use the trade area defined in Level Two of this 
paragraph. Documentation as to why the labor, goods, and services are 
not available in Level One of this paragraph must be included in the 
case file. The applicant may propose to secure labor, goods, and 
services from Levels Three or Four of this paragraph; however, 
documentation as to why same is not available in all of the previous 
levels must be included in the case file.
    1. Level One: Labor, goods, and services must be procured within 15 
miles of the proposed site of the apartments.
    2. Level Two: Labor, goods, and services must be procured within 
the County where the proposed apartments will be located.
    3. Level Three: Labor, goods, and services must be procured within 
the lesser of 50 miles from the site of the proposed complex OR the 
boundaries of any adjacent County (regardless of State boundary).
    4. Level Four: Labor, goods, and services must be procured within 
100 miles of the proposed site (regardless of State boundary).
    C. Outreach. Outreach efforts publicizing the availability of loan 
funds for the eligible RRHDDP States will be aggressively carried out. 
Each affected State Director will develop an outreach plan which 
includes such techniques as news releases, community meetings, 
coordination with other Federal, State, and local government 
organizations, to promote full utilization of these funds by all 
qualified applicants regardless of race, color, religion, national 
origin, marital status, age, and sex. In addition to the above outreach 
efforts, States with eligible colonias and/or Tribal lands should 
establish liaison with community groups in order to leverage support 
and assistance provided to residents of colonias and Tribal lands.
    D. Monitoring performance. 1. National Office: The National Office 
will track the use of targeted funds on a regular basis throughout the 
FY and take necessary follow-up actions to facilitate the delivery of 
the program.
    2. State Office: The State Director will designate a staff member 
to coordinate all efforts under RRHDDP.
    E. Issuance of Form AD-622, ``Notice of Preapplication Review 
Action'', inviting a formal application. 1. The State Director may 
issue AD-622s up to 100 percent of the amount shown at the end of this 
notice and any funds made available from the State Office reserve.
    2. All AD-622s issued for applicants under this demonstration 
program will be annotated, in Item 7 of the form, under ``Other 
Remarks,'' with the following: ``Issuance of this AD-622 is contingent 
upon receiving funds from the Rural Rental Housing Diversity 
Demonstration Program (RRHDDP).'' Should RRHDDP funds be unavailable or 
the program discontinued, this AD-622 will no longer be valid. In these 
cases, the request for assistance will need to compete with other 
preapplications based upon its priority point score established in 
accordance with Sec. 1944.231 of 7 CFR part 1944, subpart E.

VI. Exception Authority

    The Administrator, or his/her designee, may, in individual cases, 
make an exception to any requirements of this Notice which are not 
inconsistent with the authorizing statute, if he/she finds that 
application of such requirement would adversely affect the interest of 
the Government. The Administrator, or his/her designee, may exercise 
this authority upon the request of the State Director, Assistant 
Administrator for Housing, or Director of the Multi-Family Housing 
Processing Division (MFHPD). The request must be supported by 
information that demonstrates the adverse impact or effect on the 
program. The Administrator, or his/her designee, also reserves the 
right to change the pooling date, establish/change minimum and maximum 
fund usage from set asides and/or the reserve, or restrict 
participation in set asides and/or reserves.
    The following is a list of States selected to participate in the 
RRHDDP and other pertinent information: 

     Multi-Family Housing Section 515 Rural Rental Housing Diversity    
                     Demonstration Program--FY 1994                     
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                                            Demonstration               
              Selected states                    loan      Demonstration
                                              allocation   RA allocation
------------------------------------------------------------------------
Arkansas..................................    $1,000,000             27 
Kentucky..................................     1,000,000             27 
Louisiana.................................     1,000,000             27 
Mississippi...............................     1,000,000             27 
New Mexico................................     1,000,000             27 
Puerto Rico...............................     1,000,000             27 
West Virginia.............................     1,000,000             27 
                                           -----------------------------
                                               7,000,000            189 
------------------------------------------------------------------------

    Unused RRHDDP funds and RA will be pooled at close of business 
(COB) on July 15, 1994. Pooled funds will be available on a first-
come, first-served basis to the above mentioned States. Pooled 
RRHDDP funds will remain available until the year-end pooling 
tentatively scheduled for August 15, 1994.

    Dated: March 25, 1994.
Michael V. Dunn,
Administrator, Farmers Home Administration.
[FR Doc. 94-8674 Filed 4-11-94; 8:45 am]
BILLING CODE 3410-07-U