[Federal Register Volume 75, Number 89 (Monday, May 10, 2010)]
[Notices]
[Pages 25829-25830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-10929]
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Notices
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
and investigations, committee meetings, agency decisions and rulings,
delegations of authority, filing of petitions and applications and agency
statements of organization and functions are examples of documents
appearing in this section.
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Federal Register / Vol. 75, No. 89 / Monday, May 10, 2010 / Notices
[[Page 25829]]
DEPARTMENT OF AGRICULTURE
Rural Housing Service
Notice of Acceptance of Proposals for the Section 538 Multi-
Family Housing Guaranteed Rural Rental Housing Program (GRRHP)
Demonstration Program for Fiscal Year 2010
AGENCY: Rural Housing Service, USDA.
ACTION: Notice.
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SUMMARY: Through this Notice the Rural Housing Service (Agency)
announces the implementation of a demonstration program under the
section 538 Guaranteed Rural Rental Housing Program (GRRHP) pursuant to
7 CFR 3565.4 and 7 CFR 3565.17 (Demonstration Programs) for Fiscal Year
(FY) 2010. The Demonstration Program's purpose is to test the viability
and efficacy of a continuous loan note guarantee through the
construction and permanent loan financing phases of a project. Those
applications that meet the Demonstration Program's qualifying criteria
and are selected to participate will be offered one loan note guarantee
upon closing of the construction loan that will be in effect throughout
both of the project's construction and permanent phases without
interruption.
The Agency will permit approximately $10 million of program loan
authority on loans that have already been obligated to participate in
this Demonstration Program. 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.
Eligible Lenders wishing to have their GRRHP obligated, but
unfunded guaranteed 538 applications considered for the FY 2010
Demonstration Program must send a signed request on its letterhead with
the proposed project details as outlined in the ``DEMONSTRATION PROGRAM
RESPONSE SUBMISSION ADDRESS'' section of this Notice. No other
applications will be considered.
Demonstration Program Guidelines
The following guidelines are being provided to facilitate a
structured implementation of the program:
1. Demonstration guarantee. The Demonstration guarantee is a
guarantee that will be offered to selected lenders who submit
applications in response to this Notice. The Demonstration guarantee
will consist of one loan note guarantee that will be issued upon
closing of the construction loan and will be in effect throughout both
of the project's construction and permanent financing phases without
interruption.
2. Conditional commitment. Upon approval of an eligible previously
obligated guaranteed 538 application from an approved lender, the
Agency will modify the outstanding conditional commitment to provide a
Demonstration guarantee for the construction and permanent financing
phases of the project.
3. Guarantee percentage and payment. Both construction loan
advances and permanent loans are eligible for a guarantee subject to
the following limitations:
Construction loan advances and permanent loans. The Agency can
guarantee the ``construction and permanent'' financing phases of a
project. The Agency cannot, however, guarantee only the
``construction'' financing phase of a project. Guarantees under the
Demonstration guarantee will cover construction loan advances and the
subsequent permanent loan. 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; and 90 percent of the original principal amount
and interest up to default of a 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.
4. Ability. A lender making a construction loan must demonstrate an
ability to originate and service construction loans.
5. Guarantee during construction. The Agency will issue a
Demonstration guarantee only to an approved lender.
6. Demonstration guarantee program compliance requirement. For a
Demonstration guarantee, after the loan note guarantee is issued, the
following items will have to be submitted and approved by the Agency
within the timeframe stipulated by the Agency:
(i) A certificate of substantial completion;
(ii) A certificate of occupancy or similar evidence of local
approval;
(iii) A final cost certification in a form acceptable to the
Agency;
(iv) A complete copy of the permanent loan closing docket; if a
separate closing is conducted for the permanent loan; and
(v) Any other information necessary for the Agency to comply with
its regulations.
Items (i), (ii), and (iii) are only required if the project is
constructed. To facilitate the implementation of the program, an
addendum may be attached to certain program forms to include relevant
Demonstration Program requirements.
The selected applicants will be subject to the Demonstration
Program guidelines in this Notice, and GRRHP's controlling statute,
regulations, and handbook as amended. The GRRHP operates under the
Housing Act of 1949, as amended, particularly section 538, and
regulations at 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.
Demonstration Program Eligibility: GRRHP obligated applications
that meet the following criteria will be eligible for consideration to
be selected into the Demonstration Program:
1. The project must have been awarded and continue to receive Low
Income Housing Tax Credits.
2. The project must have a loan to cost (LTC) ratio equal to or
lower than 50%.
3. The Lender must have submitted a timely response to this Notice
in accordance with the ``DEMONSTRATION PROGRAM RESPONSE SUBMISSION
ADDRESS'' section of this Notice.
[[Page 25830]]
4. A Lender must have submitted its application under the GRRHP
2009 Notice published January 21, 2009, Volume 74 FR 3551-3558, or the
GRRHP 2009 Notice published on June 26, 2009, Volume 74 FR 30503-30510
or the GRRHP 2010 Notice published February 26, 2010, Volume 75 FR
8896-8902.
5. The application to be considered must have been obligated from
October 1, 2009 to December 17, 2010. However, if the Demonstration
Program funds have not been fully utilized by December 17, 2010, the
Agency may consider applications obligated on or after October 1, 2008.
6. The Lender must not have closed the construction loan prior to
its selection to participate in the Demonstration Program.
Demonstration Program Selection Process
Selections from qualified applications that have requested
consideration and met all requirements for this Demonstration Program
will be based on priority scores they received on their previously
submitted applications, with the highest scoring applications being
selected first, until all available Demonstration Program authority is
used. In the event of a tie, priority will be given to the application
that is in the smaller rural community, and in case of a subsequent tie
to the application that has the lowest LTC ratio.
The first round of selections into the Demonstration Program will
be made on May 20, 2010. In the event there are not enough qualified
requests for selection into the Demonstration Program to utilize all
the available Demonstration Program authority, then until all funds are
exhausted, an additional selection process will be conducted on the 3rd
Friday of each month starting September 17, 2010. December 17, 2010,
will be the last possible selection date unless the Final Rule is
published as explained below. All applicants will be notified of the
selection results no later than 30 business days from the date of
selection.
DATES: Effective Dates: The GRRHP intends to incorporate the guarantee
offered under this demonstration as a permanent part of the program. To
that end we have published in the Federal Register (January 29, 2009,
Volume 75 FR 4707-4710) a proposed rule for ``Continuous Construction-
Permanent Loan Guarantees.'' This Notice will terminate upon the
earlier of either the publication date of the final rule or December
17, 2010.
Demonstration Program Response Submission Address
Eligible lenders wishing to have their obligated applications
considered for selection into the Demonstration Program must submit a
signed request (not to exceed one page) on its letterhead that includes
the following information:
1. Developer's Name
2. Borrower's Name
3. Project's Name
4. Project's Address (City and State)
5. Project Type (Family, Senior, or Mixed)
6. Project's Total Units
7. Project's Total Development Cost (TDC)
8. Amount of 538 Loan Guarantee
9. Amount of Tax Credits Awarded
10. Amount and Source of Other Financing
11. Loan to Cost (LTC) %
12. Area Population
13. Date obligated or date of Conditional Commitment
Send the Demonstration Program Response Submission Letter with all of
the information listed above, along with a copy of the State Office's
``Proceed with Application/NOFA Response Selection'' letter and a copy
of the tax credit award notification to: Tammy S. Daniels, Financial
and Loan Analyst, Multi-Family Housing Guaranteed Loan Division,
Guaranteed Rural Rental Housing Program, USDA Rural Development, South
Agriculture Building, Room 1233, STOP 0781, 1400 Independence Avenue,
SW., Washington, DC 20250-0781.
Requests may also be faxed to 202-690-3444 or sent by email (signed
PDF copies of the above submissions) to [email protected].
Eligible lenders mailing a request must provide sufficient time to
permit delivery to the submission address. If all the funds set aside
for the Demonstration Program have not been utilized, the Agency will
continue to accept requests for inclusion into the FY 2010
Demonstration Program until December 17, 2010 or publication of the
final rule if earlier. Acceptance by a U.S. Post Office or private
mailer does not constitute delivery. Postage due responses and
applications will not be accepted.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, the
information collection requirements contained in this Notice is
approved by the Office of Management and Budget (OMB) under OMB Control
Number 0575-0174.
Nondiscrimination Statement
``The U.S. Department of Agriculture (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, familial status, parental status, religion, sexual
orientation, genetic information, political beliefs, reprisal, or
because all or a 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 and employer.''
Dated: May 3, 2010.
Tammye Trevi[ntilde]o,
Administrator, Rural Housing Service.
[FR Doc. 2010-10929 Filed 5-7-10; 8:45 am]
BILLING CODE 3410-XV-P