[Federal Register Volume 67, Number 37 (Monday, February 25, 2002)]
[Notices]
[Pages 8684-8697]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4333]


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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 2002 (FY 2002). 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: February 25, 2002.

FOR FURTHER INFORMATION CONTACT: For information regarding this notice 
contact Teresa Sumpter, Loan Specialist, Single Family Housing Direct 
Loan Division, telephone 202-720-1485, Stop 0783, for single family 
housing (SFH) issues and Tammy S. Daniels, Loan Specialist, Multi-
Family Housing Processing Division, telephone 202-720-0021, Stop 0781 
for multi-family housing (MFH) issues, U.S. Department of Agriculture, 
1400 Independence Ave., SW., Washington, DC 20250. (The telephone 
numbers listed are not toll free numbers). For information on applying 
for assistance, visit our Internet Web site at www. rurdev.usda.gov/
recd__map.html and select your State or check the blue pages in your 
local telephone directory under ``Rural Development'' for the office 
serving your area. Also attached for information purposes is a listing 
of Rural Development State Directors, State Office addresses and phone 
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

    Part 1940, subpart L of 7 CFR contains the ``Methodology and 
Formulas for

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Allocation of Loan and Grant Program Funds.'' To apply for assistance 
under these programs or for more information, contact the Rural 
Development Office for your area. 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 2002 (does not include carryover funds). 
Allocation computations have been performed in accordance with 7 CFR 
1940.575 and 1940.578. For FY 2002, 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 and grant levels for FY 2002 are as follows:

MFH Loan Programs Credit Sales: $1,778,515
Section 514  Farm Labor Housing (LH) loans: *$28,459,099
Section 515  Rural Rental Housing (RRH) loans: *$114,068,998
Section 521  Rental Assistance (RA) and 502(c)(5)(C) Advance: 
*$701,004,000
Section 516  LH grants: *$17,967,000
Section 525  Technical and Supervisory Assistance grants (TSA) and 509 
Housing Application Packaging grants: $1,415,977
(HAPG) (Shared between single and multi-family housing): (includes 
carryover)
Section 533  Housing Preservation grants (HPG): *$7,982,000
Section 538  Guaranteed Rural Rental Housing program: *$99,770,992

* Does not include disaster or regular program carryover.

II. Funds Not Allocated to States

    A. Credit Sales Authority. For FY 2002, $1,778,515 will be set 
aside for credit sales to program and nonprogram buyers. Credit sale 
funding will not be allocated by State.
    B. Section 538 Guaranteed Rural Rental Housing Program. Guaranteed 
loan funds will be made available under a Notice of Funding 
Availability (NOFA) being published in the Federal Register. Additional 
guidance will be provided at that time.

III. Farm Labor Housing (LH) Loans and Grants.

    The Administrator has the authority to transfer funds between the 
two programs. Upon NOFA closing the Administrator will evaluate the 
responses and determine proper distribution of funds between loans and 
grants.
A. Section 514 Farm LH Loans
    1. These loans are funded in accordance with 7 CFR 1940.579(a).

FY 2002 Appropriation: $28,459,099
Available for Off-Farm Loans: $22,459,099
Available for On-Farm Loans: $2,500,000
National Office Reserve: $3,500,000

    2. Off-farm loan funds will be made available under a NOFA being 
published in the Federal Register. Additional guidance will be provided 
in the NOFA.
B. 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 2002 Appropriation: $17,967,000
Available for LH Grants for Off-Farm: $13,967,000
Available for Technical Assistance Grants: $1,500,000
National Office Reserve: $2,500,000
    2. Labor Housing grant funds for Off-Farm will be made available 
under a NOFA being published in this Federal Register. Additional 
guidance will be provided in the NOFA.
    C. Labor Housing Rental Assistance (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.

IV. Section 515 RRH Loan Funds

FY 2002 section 515 Rural Rental Housing allocation (Total): 
$114,068,998
New Construction funds and set-asides: $49,000,000
    New construction loans: $16,715,502
    Set-aside for nonprofits: $10,266,209
    Set-aside for underserved counties and colonias: $5,703,450
    Earmark for EZ, EC, or REAP Zones: $14,814,839
    State RA designated reserve: $1,500,000
Rehab and repair funds and equity: $55,000,000
    Rehab and repair loans: $50,000,000
    Designated equity loan reserve: $5,000,000
General Reserve: $10,068,998

    A. New construction loan funds. New construction loan funds will be 
made available using a national NOFA being published in the Federal 
Register. Upon closing of the NOFA, States will submit a list, in rank 
order of the eligible projects.
    B. National Office New Construction Set-asides. The following 
legislatively mandated set-asides of funds are part of the National 
office set-aside:
    1. Nonprofit Set-aside. An amount of $10,266,209 has been set aside 
for nonprofit applicants. All Nonprofit loan proposals must be located 
in designated places as defined in RD Instruction 1944-E.
    2. Underserved Counties and Colonias Set-Aside. An amount of 
$5,703,450 has been set aside for loan requests to develop units in the 
underserved 100 most needy counties or colonias as defined in section 
509(f) of the Housing Act of 1949 as amended. Priority will be given to 
proposals to develop units in colonias or tribal lands.
    3. EZ, EC or REAP Zone Earmark. An amount of $14,814,839 has been 
earmarked for loan requests to develop units in EZ or EC communities or 
REAP Zones until June 30, 2002.
    C. Rental Assistance (RA). Limited new construction RA will be held 
in the National office for use with section 515 Rural Rental Housing 
loans.
    D. Designated Reserves for State RA. An amount of $1.5 million of 
section 515 loan funds has been set aside for matching with projects in 
which an active State sponsored RA program is available. The State RA 
program must be comparable to the RHS RA program.
    E. Repair and Rehabilitation Loans. Tenant health and safety 
continues to be the top priority. Repair and rehabilitation funds must 
be first targeted to RRH facilities that have physical conditions that 
affect the health and safety of tenants and subsequently made available 
to facilities that have deferred maintenance. All funds will be held in 
the National office and will be distributed based upon indicated 
rehabilitation needs in the MFH survey conducted in October 2001.
    F. Designated Reserve for Equity Loans. An amount of $5 million has 
been designated for the equity loan preservation incentive described in 
RH Instruction 1965-E. The $5 million will be further divided into $4 
million for equity loan requests currently on the pending funding list 
and $1 million to facilitate the transfer of properties from for-profit 
owners to nonprofit corporations and public bodies. Funds for such 
transfers would be authorized

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only for for-profit owners who are currently on the pending funding 
list who agree to transfer to nonprofit corporations or public bodies 
rather than to remain on the pending list. If insufficient transfer 
requests are generated to utilize the full $1 million set aside for 
nonprofit and public body transfers, the balance will revert to the 
existing pending equity loan funding list.
    G. General Reserve. There is one general reserve fund of 
$10,068,998. Some examples of immediate allowable uses include, but are 
not limited to, hardships and emergencies, RH cooperatives or group 
homes, or RRH preservation.

V. Section 533 Housing Preservation Grants (HPG).

Total Available: $7,982,000
Less General reserve: $782,000
Less Earmark for EZ, EC, or REAP Zones: $600,000
Total Available for Distribution: $6,600,000

    Amount available for allocation. See end of this Notice for HPG 
State allocations. Fund availability will be announced in a NOFA being 
published in the Federal Register.
    The amount of $600,000 is earmarked for EZ, EC or REAP Zones until 
June 30, 2002.

Single Family Housing (SFH)

I. General

    All SFH programs are administered through field offices. For more 
information or to make application, please contact the Rural 
Development office servicing your area. To locate these offices, 
contact the appropriate State Office from the attached State Office 
listing, visit our web site at www.rurdev.usda.gov/recd__map.html or 
check the blue pages in your local telephone directory under ``Rural 
Development'' for the office serving your area.
    A. This notice provides SFH allocations for FY 2002. 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 2002 are as follows:

Section 502 Guaranteed Rural Housing (RH) loans
    Nonsubsidized Guarantees: $3,137,968,750
Section 502 Direct RH loans
    Very low-income subsidized loans: $475,133,131
    Low-income subsidized loans: $604,714,893
Credit sales (Nonprogram): $10,000,000
Section 504 housing repair loans: $32,324,929
Section 504 housing repair grants: ***$30,053,395
Section 509 compensation for construction defects: **$574,204
Section 523 mutual and self-help housing grants **: ***$56,055,462
Section 523 Self-Help Site Loans: $5,000,000
Section 524 RH site loans: $5,090,909
Section 306C Water and waste disposal grants: **$1,458,569
Section 525 Supervisory and technical assistance and section 509 
Housing Application:
    Packaging Grants Total Available for single and multi-family: 
**$1,415,977
North Carolina Elderly Demonstration Program
    Modular Home Loans: **$1,961,244
    Modular Home Grants: **$3,998,627
Natural disaster funds (Section 502 loans): **$2,274,638
Natural disaster funds (Section 504 loans): **$13,462,253
Natural disaster funds (Section 504 grants): **$5,035,979

    *Includes $600,000 for EZ/EC and REAP communities until June 30, 
2002.
    **Carryover funds are included in the balance.
    ***Includes $1,000,000 for EZ/EC and REAP communities until June 
30, 2002.

    c. SFH Funding Not Allocated to States. The following funding is 
not allocated to States by formula. Funds are made available to each 
state on a case-by-case basis.
    1. Credit sale authority. Credit sale funds in the amount of 
$10,000,000 are available only for nonprogram sales of Real Estate 
Owned (REO) property.
    2. Section 509 Compensation for Construction Defects. $574,204 is 
available for compensation for construction defects.
    3. Section 523 Mutual and Self-Help Technical Assistance Grants. 
$56 million is available for section 523 Mutual and Self-Help Technical 
Assistance Grants. Of these funds, $1 million is earmarked for EZ, EC 
or REAP Zones until June 30, 2002. 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. $5,000,000 and $5,090,909 are available for section 523 
Mutual Self-Help and Section 524 RH Site loans, respectively.
    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 total amount available to Arizona, California, New Mexico, and 
Texas will be $1,458,569 for FY 2002. This amount includes the 
carryover unobligated balance of $458,569 and the transferred amount of 
$1 million from the Rural Utilities Service (RUS) to RHS for processing 
individual grant applications.
    6. Section 525 Technical and Supervisory Assistance (TSA) and 
Section 509 Housing Application Packaging Grants (HAPG). $998,000 of 
new funds and $417,977 of carryover funds from previous years remain 
available for the TSA and HAPG programs. The 29 eligible States under 
HAPG that have active grantees operating will be able to access up to 
$5,000 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. North Carolina Elderly Demonstration Program. Budget authority 
was earmarked in FY 2001 for the North Carolina Elderly Demonstration 
Program. These funds were used to provide Section 502 loans and grants 
in North Carolina for very low- and low-income elderly families who 
lost their housing as a result of a major disaster declared by the 
President. Unobligated funds have been carried over into FY 2002 for 
this demo program. These funds will remain available until they are 
exhausted.
    8. Natural Disaster Funds. Funds are available until exhausted to 
those States with active Presidential Declarations.
    9. Deferred Mortgage Payment Demonstration. There is no FY 2002 
funding provided for deferred mortgage authority or loans for deferred 
mortgage assumptions.
    D. Contingency Reserve. For the Section 502 direct and Section 504 
loan and grant programs, a 5 percent contingency reserve will be held 
in the National Office pending a potential rescission of funds which 
may be used to offset federal outlays to address the tragic events of 
September 11, 2001. If no rescession occurs, these funds will be 
distributed to the States based upon the allocation formula.

[[Page 8687]]

II. State allocations

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

Total Available: $3,137,968,750
    Less National Office General Reserve: $700,348,107
    Less Special Outreach Area Reserve: $300,120,643
Basic Formula--Administrative Allocation: $2,137,500,000

    2. National Office General Reserve. The Administrator may restrict 
access to this reserve for States not meeting their goals in special 
outreach areas.
    3. Special Outreach Areas. FY 2002 GRH funding is allocated to 
States in two funding streams (70/30) similar to the 60/40 income split 
for direct SFH funds. Seventy percent of GRH funds may be used in any 
eligible area. Thirty percent of GRH funds are to be used in 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.
    4. 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.
B. Section 502 Direct RH Loans
    1. Amount Available for Allocation.

Total Available: $1,079,848,024
Less Required Set Aside for:
    Underserved Counties and Colonias: $53,992,401
    EZ, EC and REAP Earmark: $38,000,000
Less 5% contingency: $53,000,000
Less General Reserve: $145,000,623
Administrator's Reserve: $30,000,623
Hardships & Homelessness: $3,500,000
    Rural Housing Demonstration Program: $1,500,000
Homeownership Partnership: $95,000,000
Program funds for the sale of REO properties: $15,000,000
Less Designated Reserve for Self-Help: $110,000,000
Basic Formula Administrative Allocation: $679,855,000

    2. Reserves.
    a. State Office Reserve. State Directors must maintain an adequate 
reserve to fund the following applications:
    (i) Hardship and homeless applicants including the direct section 
502 loan and section 504 loan and grant programs.
    (ii) Mutual Self-Help loans.
    (iii) Subsequent loans for essential improvements or repairs and 
transfers with assumptions.
    (iv) Financing for the purchase of program REOs when the National 
office reserve has been exhausted.
    (v) States will leverage an amount equal to 25 percent of their 
initial low-income allocation and 5 percent of their initial very low-
income allocation with funding from other sources. For example, if a 
State receives an initial low-income allocation of $900,000 the amount 
to be leveraged from other sources would be $225,000 ($900,000  x  25 
percent) for a total RHS and other funding source of $1,125,000 
($900,000 + $225,000).
    (vi) Areas targeted by the State according to its strategic plan.
    b. National Office Reserves.
    (i) General Reserve. The National office has a general reserve of 
$145 million. Of this amount, the Administrator's reserve is $30 
million. 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 established as follows:
    (ii) Hardship and Homelessness Reserve. $3.5 million has been set 
aside for hardships and homeless.
    (iii) Rural Housing Demonstration Program. $1.5 million has been 
set aside for innovative demonstration initiatives.
    (iv) Program credit sales. $20 million has been set aside for 
program sales of REO property.
    (c) Homeownership Partnership. $95 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:
    (i) Department of Treasury, Community Development Financial 
Institutions (CDFI)--Funds will be available to fund leveraged loans 
made in partnership with the Department of Treasury CDFI participants.
    (ii) Partnership initiatives established to carry out the 
objectives of the rural home loan partnership (RHLP).
    (d) Designated Reserve for Self-Help. $110 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.
    (e) Underserved Counties and Colonias. An amount of $53,992,401 has 
been set aside for the 100 underserved counties and colonias.
    (f) Empowerment Zone (EZ) and Enterprise Community (EC) or Rural 
Economic Area Partnership (REAP) earmark. An amount of $38,000,000 has 
been earmarked until June 30, 2002, for loans in EZ, EC or REAP Zones. 
Further information will follow.
    (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.
    B. Section 504 Housing Loans and Grants. Section 504 grant funds 
are included in the Rural Housing Assistance Grant program (RHAG) in 
the FY 2002 appropriation.
    1. Amount available for allocation.
Section 504 Loans
Total Available: $32,324,929
    Less 5% for 100 Underserved Counties and Colonias: $1,616,247
    EZ, EC or REAP Zone Earmark: $1,200,000
    Less 5% contingency: $1,600,000
    Less General Reserve: $1,500,682
Basic Formula--Administrative Allocation: $26,408,000
Section 504 Grants
Total Available: $30,053,395
    Less 5% for 100 Underserved Counties and Colonias: $1,496,700
    Less EZ, EC or REAP Earmark: $600,000
    Less 5% contingency: $1,400,000
    Less General Reserve: $1,619,395
Basic Formula-Administrative Allocation: $24,937,300
    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. Approximately $1.6 million 
and $1.5 million have been set aside for the 100 underserved counties 
and colonias until June 30, 2002, for the section 504 loan and grant 
programs, respectively.
    c. Empowerment Zone (EZ) and Enterprise Community (EC) or Rural 
Economic Area Partnership (REAP)

[[Page 8688]]

Earmark (Loan Funds Only). Approximately $1.2 million and $600,000 have 
been earmarked through June 30, 2002, for EZ, EC or REAPs for the 
section 504 loan and grant programs, respectively.
    d. General Reserve. $1.5 million for section 504 loan hardships and 
$1.6 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
    No.              Description               nonsubsidized       Section 502 direct RH   Section 504 loans and
                                            guaranteed RH loans            loans                  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 weight.                                                     and 1940.567(b).
2            Administrative Allocation:   $1,000,000............  $1,000,000............  $1,000,000 loan
              Western Pacific Area.                                                        $500,000 grant.
3            Pooling of funds:
             a. Mid-year pooling........  If necessary..........  If necessary..........  If necessary.
             b. Year-end pooling........  August 16, 2002.......  August 16, 2002.......  August 16, 2002.
             c. Underserved counties and  N/A...................  June 30, 2002.........  June 30, 2002.
              colonias.
             d. EZ, EC or REAP..........  N/A...................  June 30, 2002.........  June 30, 2002.
             e. Credit sales............  N/A...................  June 30, 2002.........  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...........  90 percent............  90 percent............  90 percent.
             d. fourth quarter..........  100 percent...........  100 percent...........  100 percent.
----------------------------------------------------------------------------------------------------------------
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 for the close of business (COB). Pooled funds will be placed in the National
  office reserve and made available administratively. The Administrator reserves the right to redistribute funds
  based upon program performance.
4. Funds will be distributed cumulatively through each quarter listed until the National office year-end pooling
  date.


    Dated: February 15, 2002.
James C. Alsop,
Acting Administrator, Rural Housing Service.
BILLING CODE 3410-XV-P

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[FR Doc. 02-4333 Filed 2-22-02; 8:45 am]
BILLING CODE 3410-XV-C