[Federal Register Volume 71, Number 18 (Friday, January 27, 2006)]
[Notices]
[Pages 4559-4566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-1054]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service


Notice for Requests for Proposals for Guaranteed Loans Under the 
Section 538 Guaranteed Rural Rental Housing Program (GRRHP) for Fiscal 
Year 2006

AGENCY: Rural Housing Service, USDA.

ACTION: Notice.

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SUMMARY: This is a request for proposals for loan guarantees under the 
section 538 Guaranteed Rural Rental Housing Program (GRRHP) pursuant to 
7 CFR 3565.4 for Fiscal Year (FY) 2006 subject to the availability of 
funding. FY 2006 funding for the section 538 program is $99 million. 
Applicants will submit proposals in the form of ''RESPONSES.'' The 
commitment of program dollars will be made to applicants of selected 
responses that have fulfilled the necessary requirements for 
obligation. The commitment of program dollars will be made to 
applicants of selected responses that have fulfilled the necessary 
requirements for obligation, to the extent an appropriation act 
provides funding for GRRHP for FY 2006. Expenses incurred in developing 
applications will be at the applicant's risk. The following paragraphs 
outline the timeframes, eligibility requirements, lender 
responsibilities, and the overall response and application processes.
    The GRRHP operates under 7 CFR part 3565. The GRRHP Origination and 
Servicing Handbook (HB-1-3565) is available to provide lenders and the 
general public with guidance on program administration. HB-1-3565, 
which contains a copy of 7 CFR part 3565 in Appendix 1, can be found at 
the Rural Development Instructions Web site address http://www.rurdev.usda.gov/regs/hblist.html#hbw6.
    Eligible lenders are invited to submit responses for the 
development or acquisition with rehabilitation of affordable rental 
housing to serve rural America. In addition, this fiscal year, 
guarantees will be available for the revitalization, repair, and 
transfer cost of existing direct section 515 housing (transfer costs 
are subject to Agency approval and must be an eligible use of loan 
proceeds as listed in 7 CFR 3565.205). In order to be considered, 
direct section 515 housing projects must need repairs and/or undergo 
revitalization of a minimum of $6,500 per unit.
    The Rural Housing Service (RHS) will review responses submitted by 
eligible lenders, on the lender's letterhead, and signed by both the 
prospective borrower and lender. Although a complete application is not 
required in response to this Notice of Funding Availability (NOFA), 
eligible lenders may submit a complete application concurrently with 
the response. However, submitting a complete application will not have 
an effect on the response's score.

DATES: The RHS will review and score all responses received through 
June 16, 2006. Those responses that are selected that subsequently 
submit complete applications and meet all Federal environmental 
requirements will receive commitments to the extent an appropriation 
act provides funding for GRRHP for FY 2006 until all funds are 
expended. Responses received prior to June 16, 2006, that meet program 
criteria, but score less than 25 points or score 25 points or more but 
have a development cost ratio of equal to or more than 70 percent may 
be selected for obligation after June 16, 2006, with the highest 
scoring responses receiving priority as long as funds remain available. 
The Agency will continue to select the highest scoring NOFA responses 
received after June 16, 2006, notwithstanding the score, as long as the 
response meets program criteria and funds remain available. A notice 
will be placed in the Federal Register when all funds are committed for 
FY 2006.
    Eligible lenders mailing a response or application must provide 
sufficient time to permit delivery to the ``Submission Address'' on or 
before the closing deadline date and time. Acceptance by

[[Page 4560]]

a U.S. Post Office or private mailer does not constitute delivery. 
Postage due responses and applications will not be accepted.
    Submission Address: Eligible lenders will send responses to the 
Multi-Family Housing Director in the State Office where the project 
will be located. The lender will also send a copy of its NOFA response 
(copies of ``Lender Certification'' letter and ``Project Specific 
Data'' sheets only; do not include any application supporting 
documentation, i.e., market studies, plans/specs, etc.) to: C.B. 
Alonso, Senior Loan Specialist, Guaranteed Rural Rental Housing 
Program, Multi-Family Housing Processing Division, U.S. Department of 
Agriculture, South Agriculture Building, Room 1271, STOP 0781, 1400 
Independence Avenue, SW., Washington, DC 20250-0781.
    Rural Development State Offices, their addresses, telephone 
numbers, and person to contact follows: [This information may also be 
found at http://www.rurdev.usda.gov/recd_map.html.]

    Note: Telephone numbers listed are not toll-free.

Alabama State Office, Suite 601, Sterling Centre, 4121 Carmichael 
Road, Montgomery, AL 36106-3683. (334) 279-3455. TDD (334) 279-3495. 
James B. Harris.
Alaska State Office, 800 West Evergreen, Suite 201, Palmer, AK 
99645. (907) 761-7740. TDD (907) 761-8905. Deborah Davis.
Arizona State Office, Phoenix Courthouse and Federal Building, 230 
North First Ave., Suite 206. Phoenix, AZ 85003-1706. (602) 280-8765. 
TDD (602) 280-8706. Don Irby.
Arkansas State Office, 700 W. Capitol Ave., Room 3416, Little Rock, 
AR 72201-3225. (501) 301-3250. TDD (501) 301-3063. Gregory Kemper.
California State Office, 430 G Street, 4169, Davis, CA 
95616-4169. (530) 792-5830. TDD (530) 792-5848. Stephen Nnodim.
Colorado State Office, 655 Parfet Street, Room E100, Lakewood, CO 
80215. (720) 544-2923. TDD (800) 659-2656. Jamie Spakow.
Connecticut: Served by Massachusetts State Office.
Delaware and Maryland State Office, 4607 South Dupont Highway, PO 
Box 400, Camden, DE 19934-9998. (302) 697-4353. TDD (302) 697-4303. 
W. Drew Clendaniel.
Florida & Virgin Islands State Office, 4440 NW. 25th Place, 
Gainesville, FL 32606-6563. (352) 338-3465. TDD (352) 338-3499. 
Elizabeth M. Whitaker.
Georgia State Office, Stephens Federal Building, 355 E. Hancock 
Avenue, Athens, GA 30601-2768. (706) 546-2164. TDD (706) 546-2034. 
Wayne Rogers.
Hawaii State Office, (Services all Hawaii, American Samoa Guam, and 
Western Pacific), Room 311, Federal Building, 154 Waianuenue Avenue, 
Hilo, HI 96720. (808) 933-8305. TDD (808) 933-8321. Jack Mahan.
Idaho State Office, Suite A1, 9173 West Barnes Dr., Boise, ID 83709, 
(208) 378-5630. TDD (208) 378-5644. Roni Atkins.
Illinois State Office, 2118 West Park Court, Suite A, Champaign, IL 
61821-2986. (217) 403-6222. TDD (217) 403-6240. Barry L. Ramsey.
Indiana State Office, 5975 Lakeside Boulevard, Indianapolis, IN 
46278. (317) 290-3100 (ext. 423). TDD (317) 290-3343. John Young.
Iowa State Office, 210 Walnut Street Room 873, Des Moines, IA 50309. 
(515) 284-4666. TDD (515) 284-4858. Ambrose H. McGuire.
Kansas State Office, 1303 SW. First American Place, Suite 100, 
Topeka, KS 66604-4040. (785) 271-2721. TDD (785) 271-2767. Tim 
Rogers.
Kentucky State Office, 771 Corporate Drive, Suite 200, Lexington, KY 
40503. (859) 224-7325. TDD (859) 224-7422. Paul Higgins.
Louisiana State Office, 3727 Government Street, Alexandria, LA 
71302. (318) 473-7962. TDD (318) 473-7655. Yvonne R. Emerson.
Maine State Office, 967 Illinois Ave., Suite 4, PO Box 405, Bangor, 
ME 04402-0405. (207) 990-9110. TDD (207) 942-7331. Dale D. Holmes.
Maryland: Served by Delaware State Office.
Massachusetts, Connecticut, & Rhode Island State Office, 451 West 
Street, Amherst, MA 01002. (413) 253-4333. TDD (413) 253-4590. 
Donald Colburn.
Michigan State Office, 3001 Coolidge Road, Suite 200, East Lansing, 
MI 48823. (517) 324-5192. TDD (517) 337-6795. Ghulam R. Sumbal.
Minnesota State Office, 375 Jackson Street Building, Suite 410, St. 
Paul, MN 55101-1853. (651) 602-7782. TDD (651) 602-7830. Jackie 
Morris.
Mississippi State Office, Federal Building, Suite 831, 100 W. 
Capitol Street, Jackson, MS 39269. (601) 965-4325. TDD (601) 965-
5850. Darnella Smith-Murray.
Missouri State Office, 601 Business Loop 70 West, Parkade Center, 
Suite 235, Columbia, MO 65203. (573) 876-0990, TDD (573) 876-9480, 
Anita J. Dunning.
Montana State Office, 900 Technology Blvd. Suite B, Bozeman, MT 
59715. (406) 585-2565. TDD (406) 585-2562. Deborah Chorlton.
Nebraska State Office, Federal Building, Room 152, 100 Centennial 
Mall N, Lincoln, NE 68508. (402) 437-5594. TDD (402) 437-5093. Byron 
L. Fischer.
Nevada State Office, 1390 South Curry Street, Carson City, NV 89703-
9910. (775) 887-1222 (ext. 25). TDD (775) 885-0633. William Brewer.
New Hampshire State Office, Concord Center, Suite 218, Box 317, 10 
Ferry Street, Concord, NH 03301-5004. (603) 223-6046. TDD (603) 229-
0536. Robert McDonald.
New Jersey State Office, 5th Floor North Suite 500, 8000 Midlantic 
Dr., Mt. Laurel, NJ 08054. (856) 787-7740. TDD (856) 787-7784. 
George Hyatt, Jr.
New Mexico State Office, 6200 Jefferson St., NE., Room 255, 
Albuquerque, NM 87109. (505) 761-4944. TDD (505) 761-4938. Walter 
Taylor.
New York State Office, The Galleries of Syracuse, 441 S. Salina 
Street, Suite 357 5th Floor, Syracuse, NY 13202. (315) 477-6419. TDD 
(315) 477-6447. George N. Von Pless.
North Carolina State Office, 4405 Bland Road, Suite 260, Raleigh, NC 
27609. (919) 873-2066. TDD (919) 873-2003. William Hobbs.
North Dakota State Office, Federal Building, Room 208, 220 East 
Rosser, PO Box 1737, Bismarck, ND 58502. (701) 530-2049. TDD (701) 
530-2113. Donald L. Warren.
Ohio State Office, Federal Building, Room 507, 200 North High 
Street, Columbus, OH 43215-2477. (614) 255-2418. TDD (614) 255-2554. 
Gerald Arnott.
Oklahoma State Office, 100 USDA, Suite 108, Stillwater, OK 74074-
2654. (405) 742-1070. TDD (405) 742-1007. Anita Kinyon.
Oregon State Office, 101 SW Main, Suite 1410, Portland, OR 97204-
3222. (503) 414-3325. TDD (503) 414-3387. Jillene Davis.
Pennsylvania State Office, One Credit Union Place, Suite 330, 
Harrisburg, PA 17110-2996. (717) 237-2281. TDD (717) 237-2261. Frank 
Wetherhold.
Puerto Rico State Office, 654 Munoz Rivera Avenue, IBM Plaza, Suite 
601, Hato Rey, PR 00918. (787) 766-5095 (ext. 249). TDD (787) 766-
5332. Pedro Gomez.
Rhode Island: Served by Massachusetts State Office.
South Carolina State Office, Strom Thurmond Federal Building, 1835 
Assembly Street, Room 1007, Columbia, SC 29201. (803) 253-3432. TDD 
(803) 765-5697. Larry D. Floyd.
South Dakota State Office, Federal Building, Room 210, 200 Fourth 
Street, SW., Huron, SD 57350. (605) 352-1132. TDD (605) 352-1147. 
Roger Hazuka or Pam Reilly.
Tennessee State Office, Suite 300, 3322 West End Avenue, Nashville, 
TN 37203-1084. (615) 783-1375. TDD (615) 783-1397. Don Harris.
Texas State Office, Federal Building, Suite 102, 101 South Main, 
Temple, TX 76501. (254) 742-9758. TDD (254) 742-9712. Gayle Ledyard.
Utah State Office, Wallace F. Bennett Federal Building, 125 S. State 
Street, Room 4311, Salt Lake City, UT 84147-0350. (801) 524-4325. 
TDD (801) 524-3309. David E. Brown.
Vermont State Office, City Center, 3rd Floor, 89 Main Street, 
Montpelier, VT 05602. (802) 828-6021. TDD (802) 223-6365. Robert 
McDonald.
Virgin Islands: Served by Florida State Office.
Virginia State Office, Culpeper Building, Suite 238, 1606 Santa Rosa 
Road, Richmond, VA 23229. (804) 287-1596. TDD (804) 287-1753. Eileen 
Nowlin.
Washington State Office, 1835 Black Lake Blvd., Suite B, Olympia, WA 
98512. (360) 704-7730. TDD (360) 704-7760. Robert Lund.
Western Pacific Territories: Served by Hawaii State Office.
West Virginia State Office, Federal Building, 75 High Street, Room 
320, Morgantown, WV 26505-7500. (304) 284-4872. TDD (304) 284-4836. 
David Cain.
Wisconsin State Office, 4949 Kirschling Court, Stevens Point, WI 
54481. (715) 345-7615 (ext. 151). TDD (715) 345-7614. Peter Kohnen.

[[Page 4561]]

Wyoming State Office, PO Box 11005, Casper, WY 82602. (307) 233-
6715. TDD (307) 233-6733. Alan Brooks.


FOR FURTHER INFORMATION CONTACT: C.B. Alonso, Senior Loan Specialist, 
Guaranteed Rural Rental Housing Program, Multi-Family Housing 
Processing Division, U.S. Department of Agriculture, South Agriculture 
Building, Room 1271, STOP 0781, 1400 Independence Avenue, SW., 
Washington, DC 20250-0781. Email: [email protected]. Telephone: 
(202) 720-1624. This number is not toll-free. Hearing or speech-
impaired persons may access that number by calling the Federal 
Information Relay Service toll-free at (800) 877-8339.
    Eligibility of Prior Year Selected Notices of Funding Availability 
Responses: NOFA response selections prior to FY 2005 that did not 
develop into a complete application or where funds were not obligated 
have been cancelled. A new NOFA response for the project may be 
submitted subject to the conditions of this NOFA.
    FY 2005 NOFA responses that were selected by the Agency, and a 
complete application (including all Federal environmental documents 
required by 7 CFR part 1940, subpart G, a Form RD 3565-1, and the 
$2,500 application fee) was submitted by the lender within 90 days from 
the date of notification of response selection (unless an extension was 
granted by the State office), will be eligible for FY 2006 program 
dollars and will compete in the FY 2006 priority scoring without having 
to complete a FY 2006 NOFA response.

General Program Information

    Program Purpose: The purpose of the GRRHP is to increase the supply 
of affordable rural rental housing, through the use of loan guarantees 
that encourage partnerships between the RHS, private lenders, and 
public agencies.
    Responses Must Be Submitted by: The Agency will only accept 
responses from GRRHP eligible or approved lenders as described in 7 CFR 
3565.102 and 3565.103 respectively.
    Qualifying Properties: Qualifying properties include new 
construction for multi-family housing units or the acquisition of 
existing structures with a minimum per unit rehabilitation expenditure 
requirement in accordance with 7 CFR 3565.252.
    In addition, this fiscal year, guarantees will be available for the 
revitalization, repair and transfer cost of existing direct section 515 
housing (transfer costs are subject to Agency approval and must be an 
eligible use of loan proceeds as listed in 7 CFR 3565.205). In order to 
be considered, direct section 515 housing projects must need repairs 
and/or undergo revitalization of a minimum of $6,500 per unit.
    Eligible Financing Sources: Any form of Federal, state, and 
conventional sources of financing can be used in conjunction with the 
loan guarantee, including Home Investment Partnership Program (HOME) 
grant funds, tax exempt bonds, and low income housing tax credits.
    Maximum Guarantee: The Agency can guarantee the ``permanent'' 
portion or both the ``construction and permanent'' portions of a 
construction/permanent loan. The Agency cannot, however, guarantee only 
the ``construction'' portion of a construction/permanent loan.
    The maximum guarantee for a permanent loan will be 90 percent of 
the unpaid principal and interest up to default and accrued interest 90 
calendar days from the date the liquidation plan is approved by the 
Agency, as defined in 7 CFR 3565.452. Penalties incurred as a result of 
default are not covered by the guarantee. The Agency may provide a 
lesser guarantee based upon its evaluation of the credit quality of the 
loan. The Agency liability under any guarantee will decrease or 
increase, in proportion to any increase or decrease in the amount of 
the unpaid portion of the loan, up to the maximum amount specified in 
the Loan Note Guarantee.
    The maximum guarantee of construction advances will not at any time 
exceed the lesser of 90 percent of the amount of principal and interest 
up to default advanced for eligible uses of loan proceeds or 90 percent 
of the original principal amount and interest up to default of the 
loan. Penalties incurred as a result of default are not covered by the 
guarantee. The Agency may provide a lesser guarantee based upon its 
evaluation of the credit quality of the loan.
    Reimbursement of Losses: Any losses will be split on a pro-rata 
basis between the lender and the RHS from the first dollar lost.
    Interest Rate: RHS will accept the best rate negotiated between the 
lender and prospective borrower. The lender is not required to provide 
the interest rate in the response unless applying for interest credit. 
The interest rate must be fixed over the term of the loan.
    Interest Credit: For at least 20 percent of the loans made during 
each fiscal year, the Agency will provide assistance in the form of 
interest credit, to the extent necessary to reduce the agreed-upon rate 
of interest to the Long Term Monthly Applicable Federal Rate (AFR) as 
such term is used in section 42(I)(2)(D) of the Internal Revenue Code 
of 1986, 26 U.S.C. 7805, Sec. 1.42-1T. The interest credit will be paid 
following the January 1st of the year in which the project has reached 
occupancy standards, and the permanent loan note guarantee is issued. 
If 20 percent of the loans have not received interest credit by June 
16, 2006, then RHS will award interest credit to those loans that 
initially requested interest credit and have the highest interest 
credit priority score until at least 20 percent of the loans have 
received interest credit. Requests for interest credit must be made in 
the response. When interest credit assistance is requested, lenders 
must state in the response the maximum basis points above the Long Term 
Monthly AFR that will be used to calculate the interest rate. Priority 
points will be given for basis points equal to or less than 250 above 
the Long Term Monthly AFR. Lenders are not permitted to make requests 
for interest credit after the selection process has taken place.
    Due to limited funding and in order to distribute interest credit 
assistance as broadly as possible, the Agency has decided to limit the 
interest credit to $1.5 million per loan. For example, if an eligible 
request were made for interest credit on a loan of $2.5 million, up to 
$1.5 million of the loan would receive interest credit. Interest credit 
is not available for construction loans. Interest credit is only 
available for permanent loans. Lenders with projects that are viable 
with or without interest credit are encouraged to submit a response 
reflecting financial and market feasibility under both funding options. 
Responses requesting consideration under both options will not affect 
interest credit selection. Due to limited interest credit funds and the 
responsibility of RHS to target and give priority to rural areas most 
in need, responses requesting interest credit must score a minimum of 
55 points under the criteria established in this NOFA. In the event of 
ties, selection between responses will be by lot.
    Surcharges for Guarantee of Construction Advances: There is no 
surcharge for the guarantee of construction advances for FY 2006.
    Program Fees for FY 2006: As a condition of receiving a loan 
guarantee, the Agency will charge the following guarantee fees to the 
lender.
    (1) Initial guarantee fee. The Agency will charge an initial 
guarantee fee equal to one percent of the guarantee amount. For 
purposes of calculating this fee, the guarantee amount is the product 
of the percentage of the guarantee times the

[[Page 4562]]

initial principal amount of the guaranteed loan.
    (2) Annual guarantee fee. An annual guarantee fee of at least 50 
basis points (one-half percent) of the outstanding principal amount of 
the loan as of December 31 will be charged each year or portion of a 
year that the guarantee is in effect.
    (3) There is a non-refundable application fee of $2,500 when the 
application is submitted.
    (4) There is a flat fee of $500 when a lender requests RHS to 
extend the term of a guarantee commitment.
    (5) There is a flat fee of $500 when a lender requests RHS to 
reopen an application when a commitment has expired.
    (6) There is a flat fee of $1,250 when a lender requests RHS to 
approve the transfer of property and assumption of the loan to an 
eligible prospective borrower.
    (7) There is no lender application fee for lender approval in FY 
2006.
    Eligible Lenders: An eligible lender for the section 538 GRRHP as 
required by 7 CFR 3565.102 must be a licensed business entity or 
Housing Finance Agency (HFA) in good standing in the state or states 
where it conducts business. Lender eligibility requirements are 
contained in 7 CFR 3565.102. Below is a list of some of the eligible 
lender criteria under 7 CFR 3565.102:
    (1) Licensed business entity that meets the qualifications and has 
the approval of the Secretary of Housing and Urban Development (HUD) to 
make multi-family housing loans that are insured under the National 
Housing Act. A complete list of HUD approved lenders can be found on 
the HUD Web site at http://www.hud.gov.
    (2) A licensed business entity that meets the qualifications and 
has the approval of the Ginnie Mae or Freddie Mac or Fannie Mae 
corporations to make multi-family housing loans that are sold to the 
same corporations. A complete list of Freddie Mac approved lenders can 
be found in Freddie Mac's Web site at http://www.freddiemac.com. Fannie 
Mae approved lenders are found at http://www.fanniemae.com. For a list 
of Ginnie Mae issuers, contact Ginnie Mae at http://www.ginniemae.gov.
    (3) A state or local HFA with a top-tier rating from Moody's or 
Standard & Poors, or member of the Federal Home Loan Bank system, and 
the demonstrated ability to underwrite, originate, process, close, 
service, manage, and dispose of multi-family housing loans in a prudent 
manner.
    (4) Be a GRRHP approved lender, defined as an entity with a current 
executed multi-family housing Lender's Agreement with RHS.
    (5) Lenders that can demonstrate the capacity to underwrite, 
originate, process, close, service, manage, and dispose of multi-family 
housing loans in a prudent manner. In order to be approved the lender 
will have to have an acceptable level of financial soundness as 
determined by a lender rating service. The submission of materials 
demonstrating capacity will be required if the lender's response is 
selected. Lenders who are otherwise ineligible may become eligible if 
they maintain a correspondent relationship with an eligible lender that 
does have the capacity to underwrite, originate, process, close, 
service, manage, and dispose of multi-family housing loans in a prudent 
manner. In this case, the eligible lender must submit the response and 
application. All contractual and legal documentation will be signed 
between RHS and the lender that submitted the response and application.
    GRRHP Lender Approval Application: Lenders whose responses are 
selected will be notified by the RHS to submit a request for GRRHP 
lender approval application within 30 days of notification. Lenders who 
request GRRHP approval must meet the standards in the 7 CFR 3565.102 
and 103. Lenders that have received GRRHP lender approval in the past 
and are in good standing do not need to reapply for GRRHP lender 
approval.
    Submission of Documentation For GRRHP Lender Approval: All lenders 
that have not yet received GRRHP lender approval must submit a complete 
lender application to: Director, Multi-Family Housing Processing 
Division, Rural Housing Service, U.S. Department of Agriculture, Room 
1263, STOP 0781, 1400 Independence Avenue, SW., Washington, DC 20250-
0781. Lender applications must be identified as ``Section 538 
Guaranteed Rural Rental Housing Program'' on the envelope.
    As RHS does not have a formal application form, a complete 
application consists of a cover letter requesting GRRHP lender approval 
and the following documentation:
    (1) Request for GRRHP lender approval on the lender's letterhead;
    (2) Lenders who are HUD, Ginnie Mae, Freddie Mac or Fannie Mae 
multi-family approved lenders are required to show evidence of this 
status, such as a copy of a letter designating the distinction;
    (3) The lender's Loan Origination, Loan Servicing, and Portfolio 
Management Handbooks. These handbooks should detail the lender's 
policies and procedures on loan origination through termination for 
multi-family loans;
    (4) Portfolio performance data;
    (5) Copies of standard documents that will be used in processing 
GRRHP loans;
    (6) Resumes and qualifications of key personnel that will be 
involved in the GRRHP;
    (7) Identification of standards and processes that deviate from 
those outlined in the GRRHP Origination and Servicing Handbook (HB-1-
3565) found at http://www.rurdev.usda.gov/regs/hblist.html#hbw6;
    (8) A copy of the most recent audited financial statements;
    (9) Lender specific information including: (a) Legal name and 
address, (b) list of principal officers and their responsibilities, (c) 
certification that the officers and principals of the lender have not 
been debarred or suspended from Federal programs, (d) Form AD 1047, (e) 
certification that the lender is not in default or delinquent on any 
Federal debt or loan, or possesses an outstanding finding of deficiency 
in a federal housing program, and (f) certification of the lender's 
credit rating; and
    (10) Documentation on bonding and insurance.

Additional Construction Lender Requirements

    The Agency can guarantee the ``permanent'' portion or both the 
``construction and permanent'' portions of a construction/permanent 
loan. The Agency will not, however, guarantee only the ``construction'' 
portion of a construction/permanent loan.
    A lender making a construction loan must demonstrate an ability to 
originate and service construction loans, in addition to meeting the 
other requirements of 7 CFR part 3565, subpart C. A lender who 
originates and services construction/permanent loans must agree to 
manage the construction and draw activities in the manner described in 
Chapter 5 of HB-1-3565. Lenders must meet either the basic or the 
demonstrated eligibility test in paragraphs 2.4 and 2.5 of HB-1-3565 
and the lender approval requirements set forth in paragraph 2.6 of HB-
1-3565. Lenders must clearly identify policies and processes for 
multifamily construction lending. Lenders must also provide a summary 
of their multifamily construction lending activity in the same form as 
specified in paragraph 2.5 of HB-1-3565. The Agency may, at its 
discretion, consider other types of construction loans--such as those 
for commercial development--as a

[[Page 4563]]

substitute for multifamily construction experience.
    Lender Responsibilities: Lenders will be responsible for the full 
range of loan origination, underwriting, management, servicing, 
compliance issues, and property disposition activities associated with 
their projects. The lender will be expected to provide guidance to the 
prospective borrower on the RHS requirements during the application 
phase. Once the guarantee is issued, the lender is expected to service 
each loan it underwrites or contract these services to another capable 
entity.

Discussion of NOFA

    Content of NOFA Responses: All responses require lender information 
and project specific data. Incomplete responses will not be considered 
for funding. Lenders will be notified of incomplete responses. Complete 
responses are to include a signed cover letter from the lender on the 
lender's letterhead and the following information:
    (1) Lender certification--The lender must certify that the lender 
will make a loan to the prospective borrower for the proposed project, 
under specified terms and conditions subject to the issuance of the 
GRRHP guarantee. Lender certification must be on the lender's 
letterhead and signed by both the lender and the prospective borrower.
    (2) Project specific data--The lender must submit the project 
specific data below on the lender's letterhead, signed by both the 
lender and the prospective borrower.

Lender Name                          Insert the lender's name.
 
------------------------------------
Lender Tax ID               Insert lender's tax ID .
 
------------------------------------
Lender Contact Name                  Name of the lender contact for
                                      loan.
 
------------------------------------
Mailing Address                      Lender's complete mailing address.
 
------------------------------------
Phone                       Phone  for lender contact.
 
------------------------------------
Fax                         Insert lender's fax .
 
------------------------------------
E-mail Address                       Insert lender contact e-mail
                                      address.
 
------------------------------------
Borrower Name and Organization Type  State whether borrower is a Limited
                                      Partnership, Corporation, Indian
                                      Tribe, etc.
 
------------------------------------
Tax Classification Type              State whether borrower is for
                                      profit, not for profit, etc.
 
------------------------------------
Borrower Tax ID             Insert borrower's tax ID .
 
------------------------------------
Borrower Address, including County   Insert borrower's address and
                                      county.
 
------------------------------------
Borrower Phone              Insert borrower's phone .
 
------------------------------------
Principal or Key Member for the      Insert name and title.
 Borrower
 
------------------------------------
Borrower Information and Statement   Attach relevant information.
 of Housing Development Experience
 
------------------------------------
New Construction, Acquisition With   State whether the project is new
 Rehabilitation, or the               construction or acquisition with
 Revitalization, Repair, and          rehabilitation. Transfer costs are
 Transfer Cost of Existing Direct     subject to Agency approval and
 Section 515 Housing                  must be an eligible use of loan
                                      proceeds listed in 7 CFR 3565.205.
 
------------------------------------
Project Location Town or City        Town or city in which the project
                                      is located.
 
------------------------------------
Project County                       County in which the project is
                                      located.
 
------------------------------------
Project State                        State in which the project is
                                      located.
 
------------------------------------
Project Zip Code                     Insert zip code.
 
------------------------------------

[[Page 4564]]

 
Project Congressional District       Congressional District for project
                                      location.
 
------------------------------------
Project Name                         Insert project name.
 
------------------------------------
Project Type                         Family, senior (all residents 55
                                      years or older), or mixed.
 
------------------------------------
Property Description and Proposed    Provide as an attachment.
 Development Schedule
 
------------------------------------
Total Project Development Cost       Enter amount for total project.
 
------------------------------------
 of Units                   Insert the  of units in
                                      the project.
 
------------------------------------
Ratio of 3-5 bedroom units to total  Insert percentage of 3-5 bedroom
 units                                units to total units.
 
------------------------------------
Cost Per Unit                        Total development cost divided by
                                       of units.
 
------------------------------------
Rent                                 Proposed rent structure.
 
------------------------------------
Median Income for Community          Provide median income for the
                                      community.
 
------------------------------------
Evidence of Site Control             Attach relevant information.
 
------------------------------------
Description of Any Environmental     Attach relevant information.
 Issues
 
------------------------------------
Loan Amount                          Insert the loan amount.
 
------------------------------------
Interest Credit (IC)                 Is interest credit requested for
                                      this loan? (Yes or No)
 
------------------------------------
Basis Points over the Long Term      Lenders seeking interest credit
 Monthly Applicable Federal Rate      must provide the maximum basis
                                      points above the Long Term Monthly
                                      AFR that will be used to calculate
                                      the interest rate. Priority points
                                      will only be given for basis
                                      points equal to or less than 250
                                      above the Long Term Monthly AFR.
 
------------------------------------
If Above Is Yes, Should Proposal Be  If Yes, proposal must show
 Considered Under Non-Interest        financial feasibility for Non-IC
 Credit Selection If Scoring Does     consideration.
 Not Meet the Minimum Point
 Threshold of 55 Points for an
 Interest Credit Award?
 
------------------------------------
Borrower's Proposed Equity           Insert amount.
 
------------------------------------
Tax Credits                          Will the project be allocated tax
                                      credits? How much? What is the
                                      estimated value of the tax credits
                                      awarded?
 
------------------------------------
Other Sources of Funds               List all funding sources other than
                                      tax credits and amounts for each
                                      source.
 
------------------------------------
Loan to Total Development Cost       Guaranteed loan divided by the
                                      total development costs of
                                      project.
 
------------------------------------
Debt Coverage Ratio                  Net Operating Income divided by
                                      debt service payments.
 
------------------------------------
Percentage of Guarantee              Percentage guarantee requested.
 
------------------------------------
Collateral                           Attach relevant information.
 
------------------------------------

[[Page 4565]]

 
Empowerment Zone (EZ) or Enterprise  Yes or No. Is the project in a
 Community (EC), Colonia or Tribal    recognized EZ or EC, Colonia or on
 Lands                                an Indian Reservation?
 
------------------------------------
Population                           Must be within the 20,000
                                      population limit set for the
                                      program.
 
------------------------------------
Is a Guarantee for Construction      State yes or no. The Agency can
 Being Requested? Are Advances        guarantee the ``permanent''
 Being Requested?                     portion or both the ``construction
                                      and permanent'' portions of a
                                      construction/permanent loan. The
                                      Agency will not, however,
                                      guarantee only the
                                      ``construction'' portion of a
                                      construction/permanent loan.
 
------------------------------------
Loan Term                            Up to a 40-year amortized loan.
                                      Balloon mortgages with a minimum
                                      25-year term are eligible.
 
------------------------------------------------------------------------

    Scoring of Priority Criteria for Selection of Projects: All 2006 
NOFA responses will be scored based on the criteria set forth below to 
establish their priority for obligation of funds. Per 7 CFR 3565.5 (b), 
priority will be given to projects: in smaller rural communities, in 
the most needy communities having the highest percentage of leveraging, 
having the lowest interest rate, having the highest ratio of 3-5 
bedroom units to total units, or located in Empowerment Zones/
Enterprise Communities or on tribal lands. In addition, the Agency may, 
at its sole discretion, set aside assistance for or rank projects that 
meet important program goals.
    In order to meet program goals, the Agency will award additional 
points to Fiscal Year 2006 NOFA responses for the revitalization, 
repair, and transfer cost of existing direct Section 515 housing.
    Prior to June 16, 2006, projects with an overall score of 25 points 
and a loan to development cost ratio less than 70 percent will be 
processed and, when ready, obligated on a first-come-first-serve basis, 
provided funds are available. Projects that score less than 25 points, 
and projects that score 25 points or more and do not have a loan to 
development cost ratio less than 70 percent, may be processed up to the 
point of obligation, but they will not be obligated until after June 
16, 2006. Each month after June 16, 2006, the Agency will select the 
highest scoring proposals, in light of the remaining funding, until all 
funds are expended. A notice will be placed in the Federal Register 
when all funds are committed for FY 2006.
    Subject to available funding, all projects scoring 55 points or 
more on the seven priority criteria below, and that request and 
demonstrate a need for an interest credit subsidy, will receive 
interest credit awards.
    The seven priority criteria for projects are listed below.
    Priority 1--Projects located in eligible rural communities with the 
lowest populations will receive the highest points.

------------------------------------------------------------------------
                        Population size                           Points
------------------------------------------------------------------------
0-5,000 people.................................................       15
5,001-10,000 people............................................       10
10,001-15,000 people...........................................        5
15,001-20,000 people...........................................        0
------------------------------------------------------------------------

    Priority 2--The most needy communities as determined by the median 
income from the most recent census data will receive points. The RHS 
will allocate points to projects located in communities having the 
lowest median income. Points for median income will be awarded as 
follows:

------------------------------------------------------------------------
                    Median income  (dollars)                      Points
------------------------------------------------------------------------
Less than $35,000..............................................       20
$35,000-less than $45,000......................................       15
$45,000-less than $55,000......................................       10
$55,000-less than $65,000......................................        5
$65,000 or more................................................        0
------------------------------------------------------------------------

    Priority 3--Projects that demonstrate partnering and leveraging in 
order to develop the maximum number of units and promote partnerships 
with state and local communities will also receive points. Points will 
be awarded as follows:

------------------------------------------------------------------------
      Loan to total development cost ratio  (percentage %)        Points
------------------------------------------------------------------------
90-100.........................................................        0
Less than 90-70................................................       15
Less than 70-50................................................       20
Less than 50...................................................       30
------------------------------------------------------------------------

    Priority 4--The development of projects on Tribal Lands, or in an 
Empowerment Zone or Enterprise Community will receive points. The RHS 
will attribute 20 points to projects that are developed in any of the 
locations described in this priority. The development of projects in a 
Colonia or in a place identified in the State's Consolidated Plan or 
State Needs Assessment as a high need community for multi-family 
housing will receive points. The RHS will attribute 20 points to 
projects that are developed in any of the locations described in this 
priority.
    Priority 5--The RHS will award points to projects with the highest 
ratio of 3-5 bedroom units to total units as follows:

------------------------------------------------------------------------
           Ratio of 3-5 bedroom units to total units              Points
------------------------------------------------------------------------
More than 50%..................................................        6
21%-50%........................................................        5
Less than 21%-more than 0%.....................................        1
------------------------------------------------------------------------

    Priority 6--RHS will award points for basis points above the long 
term monthly AFR used to calculate the interest rate. The score for 
basis points is as follows:

------------------------------------------------------------------------
                          Basis points                            Points
------------------------------------------------------------------------
More than 250 basis points.....................................      -20
200 to 250 basis points, inclusive.............................       10
100 to 199 basis points, inclusive.............................       15
0 to 99 basis points, inclusive................................       20
------------------------------------------------------------------------

    Priority 7--NOFA responses for the revitalization, repair, and 
transfer cost of existing direct section 515 housing (transfer costs 
are subject to Agency approval and must be an eligible use of loan 
proceeds listed in 7 CFR 3565.205) will receive an additional 20 
points.
    Notifications: Responses will be reviewed for completeness and 
eligibility. The RHS will notify those lenders whose responses are 
selected via letter. The RHS will request lenders without GRRHP lender 
approval to apply for GRRHP lender approval within 30 days upon receipt 
of notification of selection. For information regarding GRRHP lender 
approval, please refer to the section entitled ``SUBMISSION OF

[[Page 4566]]

DOCUMENTATION FOR GRRHP LENDER APPROVAL'' in this NOFA.
    Lenders will also be invited to submit a complete application and 
the required application fee of $2,500 to the Rural Development State 
Office where the project is located.
    Submission of GRRHP Applications: Notification letters will 
instruct lenders to contact the Rural Development State Office 
immediately following notification of selection to schedule required 
agency reviews.
    Rural Development State Office staff will work with lenders in the 
development of an application package. In response to the NOFA, lenders 
must submit a NOFA response to the office address identified in the 
NOFA for the scoring and ranking of a proposed GRRHP project. The 
lender must provide the requested information concerning the project, 
to establish the purpose of the proposed project, its location, and how 
it meets the established priorities for funding. The Agency will 
determine the highest ranked responses based on priority criteria and a 
threshold score.
    NOFA responses will at least include the following [but the Agency, 
at its sole discretion, may request additional information]:

(1) The Project

    (a) A brief description of the proposed location of the project, 
including town, county, state, and congressional district.
    (b) A description of the property and improvements, including lot 
size, number of units, building type, type of construction, etc., 
including preliminary drawings, if available.
    (c) The proposed development schedule.
    (d) Total project development cost.
    (e) The proposed rent structure and area median income (HUD 
published area median incomes can be found online at http://www.huduser.org).
    (f) Evidence of site control by the proposed borrower or a purchase 
option.
    (g) Description of any environmental issues that may affect the 
project.
    (h) Amount of loan to be guaranteed.
    (i) Type of project (e.g. elderly or family).

(2) The Proposed Financing

    (a) Proposed loan amount and the proposed borrower's equity.
    (b) Proposed use of interest credit--If the lender proposes to use 
interest credit, this section should include the maximum basis points 
the lender will charge the borrower for the project. The interest rate 
may not be lower than the published Long Term Monthly AFR at the 
closing of the lender's loan. Selection and scoring criteria that the 
project must meet to receive interest credit will be published in the 
NOFA.
    (c) Estimated development budget (total and cost/unit) and the 
proposed sources and uses of funds. This information should include all 
proposed financing sources--the amount, type, rates and terms of loans, 
tax credits, or grant funds. Letters of application and commitment 
letters should be included, if available.
    (d) Estimated loan-to-development cost ratio for the guaranteed 
loan.
    (e) Proposed Agency guarantee percentage for guaranteed loan (under 
no condition can the percentage exceed 90 percent of the loan amount).
    (f) Collateral--all security, in addition to the real property, 
proposed to secure the loan.

(3) The Proposed Borrower

    (a) The name of the borrower and the type of ownership entity. List 
the general partners if a limited partnership, officers if a 
corporation or members of an Limited Liability Corporation.
    (b) Borrower's contact name, mailing address, phone and fax 
numbers, and e-mail address.
    (c) Evidence that the borrower or principals of the ownership are 
not barred from participating in Federal housing programs and are not 
delinquent on any Federal debt.
    (d) Borrower's unaudited or audited financial statements.
    (e) Statement of borrower's housing development experience.

(4) Lender Eligibility and Approval Status

    Evidence that the lender is either an approved lender for the 
purposes of the GRRHP or that the lender is eligible to apply for 
approved lender status. The lender's application for approved lender 
status can be submitted with the NOFA response but must be submitted to 
the National Office within 45 calendar days of the lender's receipt of 
the ``notice to proceed with application processing'' letter.

(5) Competitive Criteria

    Information that shows how the proposal is responsive to the 
selection criteria specified in the NOFA.

(6) Lender Certification

    A commitment letter signed by the lender, on the lender's 
letterhead, indicating that the lender will make a loan to the borrower 
for the proposed project, under specified terms and conditions subject 
only to the issuance of a guarantee by the Agency.
    The deadline for the submission of a complete application and 
application fee is 90 days from the date of notification of response 
selection. If the application and fee are not received by the 
appropriate State Office within 90 days from the date of notification, 
the selection is subject to cancellation, thereby allowing another 
response that is ready to proceed with processing to be selected.
    Obligation of Program Funds: The RHS will only obligate funds to 
projects that meet the requirements for obligation, including 
undergoing a satisfactory environmental review in accordance with the 
National Environmental Protection Act (NEPA) and lenders who have 
submitted the $2,500 application fee and completed Form RD 3565-1 for 
the selected project.
    Conditional Commitment: Once required documents for obligation and 
the application fee are received and all NEPA requirements have been 
met, the Rural Development State Office will issue a conditional 
commitment, which stipulates the conditions that must be fulfilled 
before the issuance of a guarantee, in accordance with 7 CFR 3565.303.
    Issuance of Guarantee: The RHS State Office will issue a guarantee 
to the lender for a project in accordance with 7 CFR 3565.303. No 
guarantee can be issued without a complete application, review of 
appropriate certifications, satisfactory assessment of the appropriate 
level of environmental review, and the completion of any conditional 
requirements.

    Dated: January 18, 2006.
David J. Villano,
Acting Administrator, Rural Housing Service.
[FR Doc. E6-1054 Filed 1-26-06; 8:45 am]
BILLING CODE 3410-XV-P