[Federal Register Volume 73, Number 23 (Monday, February 4, 2008)]
[Notices]
[Pages 6469-6477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-1949]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service


Notice for Request for Proposals for Guaranteed Loans Under the 
Section 538 Guaranteed Rural Rental Housing Program (GRRHP) for Fiscal 
Year 2008

AGENCY: Rural Housing Service, USDA.

ACTION: Notice.

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SUMMARY: This is a request for proposals for guaranteed loans under the 
section 538 Guaranteed Rural Rental Housing Program (GRRHP) pursuant to 
7 CFR 3565.4 for Fiscal Year (FY) 2008 subject to the availability of 
funding. FY 2008 funding for the section 538 program is $129,090,000. 
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. 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 Agency's Instructions Web site address http://www.rurdev.usda.gov/regs/hblist.html#hbw6.
    Eligible lenders are invited to submit responses for the new 
construction of affordable rural rental housing, the acquisition with 
rehabilitation of affordable rural rental housing, the revitalization, 
repair, and transfer (as stipulated in 7 CFR 3560.406) 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), and properties involved in the Agency's multi-family 
preservation and revitalization program (MPR). Equity payments, as 
stipulated in 7 CFR 3560.406, in connection with the transfer of 
existing direct section 515 housing, are an eligible use of loan 
proceeds. In order to be considered, direct section 515 housing and MPR 
projects must need repairs and undergo revitalization of a minimum of 
$6,500 per unit.
    The Agency 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 request for proposals, eligible lenders may submit a 
complete application concurrently with the response. However, 
submitting a complete application will not have an effect on the 
respondent's score.

DATES: As long as funds remain available, eligible responses to this 
notice will be accepted and eligible requests will be obligated per 
this guidance until September 26, 2008, 12 P.M. Eastern Time. Complete 
applications that are received by the Agency prior to April 25, 2008 
will be given priority ranking and scoring. A notice will be placed in 
the Federal Register if all FY 2008 funds are committed prior to 
September 26, 2008. Selected responses that develop into complete 
applications and meet all Federal environmental requirements will 
receive commitments to the extent an appropriation act provides funding 
for GRRHP for FY 2008 until all funds are expended.
    The Agency will select the responses that meet eligibility criteria 
and invite lenders to submit complete applications to the Agency. Those 
responses that are selected that subsequently submit complete 
applications that meet all program requirements and are received prior 
to or on April 25, 2008, but score less than 25 points, or score 25 
points or more, but have a development cost ratio equal to or greater 
than 70 percent, may be selected for obligation after April 25, 2008, 
with the highest scoring responses receiving priority subject to 
availability of funds. After April 25, 2008, responses that develop 
into complete applications that meet all program requirements will be 
selected for further processing regardless of score, subject to the 
availability of funding.
    The USDA Rural Development will prioritize the obligation requests 
received after April 25, 2008, using the highest score and the 
procedures outlined as follows. Once a complete application is received 
and approved by the State Office, an obligation request for 2008 funds 
will be submitted [via fax] by the State Office to the National Office. 
Obligation requests submitted to the National Office will be 
accumulated, but not obligated, throughout the week until the weekly 
obligation request submission deadline of midnight Eastern Time every 
Thursday. To the extent that funds remain available, the National 
Office will obligate the requests accumulated through the weekly 
request submission deadline of the previous week by the following 
Tuesday (i.e., requests received from Friday, May 16, 2008, to 
Thursday, May 22, 2008, will be obligated by Tuesday, May 27, 2008). 
However, requests received prior to April 25, 2008, that are not 
eligible for obligation until after April 25, 2008, will be obligated 
no earlier than Tuesday, April 29, 2008. Funds will be allocated in 
scoring order, with the highest scoring requests being obligated first, 
until all funds are exhausted. In the event of a tie, priority will be 
given to the request for the project that: 1st--has the highest 
percentage of leveraging (lowest Loan to Cost); 2nd--is in the smaller 
rural community. Eligible responses to this Notice received before the 
September 26, 2008, deadline, or before FY 2008 funds are exhausted 
(whichever occurs first) will be processed to the point of a complete 
application, and if approved, will be scored in the 2009 funding cycle 
provided there are no significant program changes.
    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 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 
contact person in the State Office where the project will be located. 
The lender will also send a copy of its response (copies of ``Lender 
Certification'' letter and ``Project Specific Data'' sheets only; do 
not include any application supporting

[[Page 6470]]

documentation, i.e., market studies, plans/specs, etc.) to: C.B. 
Alonso, Senior Loan Specialist, USDA Rural Development 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.
    USDA 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, Vann L. McCloud
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) 280-8768, TDD (602) 280-
8706, Carol Torres
Arkansas State Office
    700 W. Capitol Ave., Room 3416, Little Rock, AR 72201-3225, 
(501) 301-3250, TDD (501) 301-3279, 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, Mary Summerfield
Connecticut
    Served by Massachusetts State Office
Delaware and Maryland State Office
    1221 College Park Drive, Suite 200, Dover, DE 19904, (302) 857-
3600, TDD (302) 857-3585, Patricia M. Baker
Florida & Virgin Islands State Office
    4440 N.W. 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) 541-2600, Don [Eacute]t[eacute]s
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, Stephen Dye
Iowa State Office
    210 Walnut Street, Room 873, Des Moines, IA 50309, (515) 284-
4666, TDD (515) 284-4858, Julie Sleeper
Kansas State Office
    1303 SW First American Place, Suite 100, Topeka, KS 66604-4040, 
(785) 271-2718, 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, P.O. 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 or Paul Geoffroy
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) 602-7804, TDD (651) 602-7830, Tom Osborne
Mississippi State Office
    Federal Building, Suite 831, 100 W. Capitol Street, Jackson, MS 
39269, (601) 965-4326, 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 McCarthy
New Jersey State Office
    5th Floor North Suite 500, 8000 Midlantic Dr., Mt. Laurel, NJ 
08054, (856) 787-7740, TDD (856) 787-7730, George Hyatt, Jr.
New Mexico State Office
    6200 Jefferson St., NE, Room 255, Albuquerque, NM 87109, (505) 
761-4944, TDD (505) 761-4938, Art Garcia
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) 873-2063, 
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, Melodie Taylor-Ward
Oklahoma State Office
    100 USDA, Suite 108, Stillwater, OK 74074-2654, (405) 742-1070, 
TDD (405) 742-1007, Tommy Earls
Oregon State Office
    101 SW Main, Suite 1410, Portland, OR 97204-3222, (503) 414-
3353, TDD (503) 414-3387, Rod Hansen
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 or 
Lourdes Colon
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, Leon Carey or Michael Canales
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) 828-6026, TDD (802) 223-6365, Heidi Setien
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, CJ Michels
Washington State Office

[[Page 6471]]

    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, Dianne Crysler
Wisconsin State Office
    4949 Kirschling Court, Stevens Point, WI 54481, (715) 345-7615 
(ext. 151), TDD (715) 345-7614, Peter Kohnen
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, 
USDA Rural Development 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. E-mail: [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.
    Eligiblity of Prior Year Selected Notice of Funding Availability 
Responses: FY 2007 NOFA response selections that did not develop into 
complete applications within the time constraints stipulated by the 
corresponding State Office have been cancelled. A new response for the 
project may be submitted subject to the conditions of this Notice.
    FY 2007 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 2008 program 
dollars and will compete for available FY 2008 funds without having to 
complete a FY 2008 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 Agency, 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, the acquisition of 
existing structures with a minimum per unit rehabilitation expenditure 
requirement in accordance with 7 CFR 3565.252, the revitalization, 
repair and transfer (as stipulated in 7 CFR 3560.406) 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) and properties involved in the Agency's MPR program. 
Equity payment, as stipulated 7 CFR 3560.406, in the transfer of 
existing direct section 515 housing, is an eligible use of loan 
proceeds. In order to be considered, direct section 515 housing 
projects and MPR properties must need repairs and 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'' loan. 
The Agency can only guarantee construction advances for the 
construction of the property if a guarantee for the permanent loan is 
requested for the same property. The Agency cannot, however, guarantee 
only the ``construction'' advances for the construction of a property.
    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 decrease or increase 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 Agency from the first dollar lost.
    Interest Rate: The Agency 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. When applying for 
interest credit, the lender must provide the basis points over the Long 
Term Monthly Applicable Federal Rate that it will use to calculate the 
loan note's interest rate. The interest rate must be fixed over the 
term of the loan. In case the Agency also guarantees construction 
advances, the interest rate must be fixed (i.e., the same during 
construction as it is for permanent financing) for the entire 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 AFR as such term is used in 
section 42(I)(2)(D) of the Internal Revenue Code of 1986, 26 U.S.C. 
7805, Section 1.42-1T. The interest credit will be paid in accordance 
with HB-1-3565 4.10 D. If 20 percent of the loans have not received 
interest credit by April 25, 2008, then the Agency 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.
    Lenders are not permitted to make requests for interest credit 
after the selection process has taken place. 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 awarded to only 
those responses submitting proposed interest rates equal to or less 
than 250 basis points above the Long Term Monthly AFR. Any response 
submitted that exceeds 250 basis points above the Long Term Monthly AFR 
will receive a deduction of 20 points from its Priority Score (refer to 
``Scoring the Priority Criteria for Selection of Projects'' section of 
this Notice). A total of 30 points will be deducted from the Priority 
Score of any response submitted that is 300 basis points or more above 
the Long Term Monthly AFR.
    Due to limited funding, and in order to distribute interest credit 
assistance as

[[Page 6472]]

broadly as possible and minimize program costs, the Agency will 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 only available for the permanent loan (not 
construction 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 USDA Rural Development 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 
Notice.
    Surcharges for Guarantee of Construction Advances: There is no 
surcharge for the guarantee of construction advances for FY 2008.
    Program Fees for FY 2008: 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 guaranteed loan amount. For 
purposes of calculating this fee, the guaranteed loan amount is the 
product of the percentage of the guarantee times the 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 USDA Rural 
Development to extend the term of a guarantee commitment.
    (5) There is a flat fee of $500 when a lender requests USDA Rural 
Development to reopen an application when a commitment has expired.
    (6) There is a flat fee of $1,250 when a lender requests USDA Rural 
Development 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 
2008.
    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. Please review 7 CFR 3565.102 for a 
complete list of all of the criteria. 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 USDA Rural 
Development.
    (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 on company letterhead. All contractual and legal 
documentation will be signed between USDA Rural Development and the 
lender that submitted the response and application.
    GRRHP Lender Approval Application: Lenders whose responses are 
selected will be notified by the USDA Rural Development 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 the Section 538 program 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

[[Page 6473]]

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'' loan. The Agency can 
only guarantee construction advances for the construction of the 
property if a guarantee for the permanent loan is requested for the 
same property. The Agency cannot, however, guarantee only the 
``construction'' advances for the construction of a property.
    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 
the 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 multi-
family construction lending. Lenders must also provide a summary of 
their multi-family 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 substitute for multi-family 
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 Agency 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 Notice Responses

    Content of Notice 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.
 
------------------------------------------------------------------------
Equal Opportunity Survey             Optional Completion
 
------------------------------------------------------------------------
Tax Classification Type              State whether borrower is for
                                      profit, not for profit, etc.
 
------------------------------------------------------------------------
Borrower Tax ID             Insert borrower's tax ID .
 
------------------------------------------------------------------------
Borrower DUNS               Insert DUNS .
 
------------------------------------------------------------------------
Borrower Address, including County   Insert borrower's address and
                                      county.
 
------------------------------------------------------------------------
Borrower Phone              Insert borrower's phone .
 
------------------------------------------------------------------------

[[Page 6474]]

 
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,
 Transfer (as stipulated in 7 CFR     including equity payments, are
 3560.406) of Existing Direct         subject to Agency approval and
 Section 515 Housing or MPR           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.
 
------------------------------------------------------------------------
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?

[[Page 6475]]

 
 
------------------------------------------------------------------------
Borrower's Proposed Equity           Insert amount.
 
------------------------------------------------------------------------
Tax Credits                          Have tax credits been awarded? If
                                      tax credits were awarded, submit a
                                      copy of the award notice/evidence
                                      of award with your response. If
                                      not, when do you anticipate an
                                      award will be made (announced)?
                                      What is the [estimated] value of
                                      the tax credits?
 
------------------------------------------------------------------------
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.
 
------------------------------------------------------------------------
Empowerment Zone (EZ) or Enterprise  Yes or No. Is the project in a
 Community (EC), Colonia, Tribal      recognized EZ or EC, Colonia, on
 Lands, or State's Consolidated       an Indian Reservation, or in a
 Plan or State Needs Assessment       place identified in the State's
                                      Consolidated Plan or State Needs
                                      Assessment as a high need
                                      community for multi-family
                                      housing?
 
------------------------------------------------------------------------
Population                           Provide the population of the
                                      county, city, or town where the
                                      project is or will be located.
 
------------------------------------------------------------------------
Is a Guarantee for Construction      State yes or no. The Agency can
 Being Requested?                     guarantee the construction
                                      advances of the property if the
                                      guarantee for the permanent loan
                                      is requested for the same
                                      property. The Agency will not,
                                      however, guarantee only the
                                      ``construction'' of the property.
 
------------------------------------------------------------------------
Loan Term                            Minimum 25-year term. Maximum 40-
                                      year term (includes construction
                                      period). May amortize up to 40
                                      years. Balloon mortgages permitted
                                      after the 25th year.
 
------------------------------------------------------------------------

    Scoring of Priority Criteria for Selection of Projects: All 2008 
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. Additional points will be awarded to 
responses for the revitalization, repair, and transfers of existing 
direct Section 515 housing.
    Prior to April 25, 2008, projects with an overall score of 25 
points or more 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 will not be obligated 
until after April 25, 2008. After April 25, 2008, the Agency will 
select the highest scoring proposals using the procedure outlined in 
the DATES section of this Notice.
    All projects that score 55 points or more on the seven priority 
criteria, and request and demonstrate a need for an interest credit 
subsidy, will receive interest credit awards, subject to the 
availability of funding.
    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
------------------------------------------------------------------------
0-10,000 people............................................           15
10,001-15,000 people.......................................           10
15,001-20,000 people.......................................            5
------------------------------------------------------------------------

    Priority 2--The most needy communities as determined by the median 
income from the most recent census data will receive points. The Agency 
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 $45,000..........................................           20
$45,000--less than $55,000.................................           15
$55,000--less than $65,000.................................           10
$65,000--less than $75,000.................................            5

[[Page 6476]]

 
$75,000 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 USDA 
Rural Development 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 USDA Rural 
Development will attribute 20 points to projects that are developed in 
any of the locations described in this priority.
    Priority 5--The USDA Rural Development 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--USDA Rural Development 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
------------------------------------------------------------------------
300 or more basis points...................................          -30
251 to 299 basis points....................................          -20
200 to 250 basis points....................................           10
100 to 199 basis points....................................           15
0 to 99 basis points.......................................           20
------------------------------------------------------------------------

    Priority 7--Notice responses for the revitalization, repair, and 
transfer (as stipulated in 7 CFR 3560.406) of existing direct section 
515 housing and properties involved in the Agency's MPR program 
(transfer costs, including equity payments, are subject to Agency 
approval and must be an eligible use of loan proceeds listed in 7 CFR 
3565.205) will receive an additional 30 points.
    Notifications: Responses will be reviewed for completeness and 
eligibility. The USDA Rural Development will notify those lenders whose 
responses are selected via letter. The USDA Rural Development 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 Documentation for GRRHP Lender 
Approval'' in this Notice.
    Lenders will also be invited to submit a complete application and 
the required application fee of $2,500 to the USDA Rural Development 
State Office where the project is located.
    Submission of GRRHP Applications: Notification letters will 
instruct lenders to contact the USDA Rural Development State Office 
immediately following notification of selection to schedule required 
agency reviews.
    USDA Rural Development State Office staff will work with lenders in 
the development of an application package. In response to the Notice, 
lenders must submit a response to the office address identified in the 
Notice 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.
    Notice 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 
Notice.
    (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 a Limited Liability Corporation.
    (b) Borrower's contact name, mailing address, phone and fax 
numbers, and e-mail address.
    (c) Certification 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 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.

[[Page 6477]]

(5) Competitive Criteria

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

(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. The 
State Office has the ability to extend this 90 day deadline for receipt 
of an application only for good cause.
    Obligation of Program Funds: The Agency will only obligate funds to 
projects that meet the requirements for obligation, including having 
undergone a satisfactory environmental review in accordance with the 
National Environmental Protection Act (NEPA) and having 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 USDA 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 USDA Rural Development 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.

Non-Discrimination Statement

    USDA prohibits discrimination in all its programs and activities on 
the basis of race, color, national origin, age, disability, and where 
applicable, sex, marital status, religion, sexual orientation, genetic 
information, political beliefs, reprisal, or because all or part of an 
individual's income is derived from any public assistance program. (Not 
all prohibited bases apply to all programs.) Persons with disabilities 
who require alternative means for communication of program information 
(Braille, large print, audiotape, etc.) should contact USDA's TARGET 
Center at (202) 720-2600 (voice and TDD). To file a complaint of 
discrimination, write to USDA, Director, Office of Civil Rights, 1400 
Independence Avenue, SW., Washington, DC 20250-9410, or call (800) 795-
3272 (voice), or (202) 720-6382 (TDD). ``USDA is an equal opportunity 
provider, employer, and lender.''

    Dated: January 29, 2008.
James C. Alsop,
Acting Administrator, Rural Housing Service.
[FR Doc. E8-1949 Filed 2-1-08; 8:45 am]
BILLING CODE 3410-XV-P