[Federal Register Volume 79, Number 184 (Tuesday, September 23, 2014)]
[Notices]
[Pages 56762-56768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-22512]



[[Page 56762]]

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DEPARTMENT OF AGRICULTURE

Rural Housing Service


Notice of Funding Availability for Section 515 Multi-Family 
Housing Preservation Revolving Loan Fund Demonstration Program for 
Fiscal Year 2014

AGENCY: Rural Housing Service, USDA.

ACTION: Notice.

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SUMMARY: The Rural Housing Service of Rural Development previously 
announced in a Notice published June 5, 2013, (78 FR 33800), the 
availability of funds and the timeframe to submit applications for 
loans to both private non-profit organizations, and State and local 
housing finance agencies, to carry out a demonstration program to 
provide revolving loans for the preservation and revitalization of low-
income Multi-Family Housing (MFH). Rural Development did not receive 
sufficient applications to use all the available funds. As a result, 
Rural Development is soliciting additional applications under this 
Notice for the remaining funding. This Notice also eliminates the $1 
million cap on subsequent loans for existing intermediaries. Housing 
that is assisted by this demonstration program must be financed by 
Rural Development through its MFH loan program under Sections 515, 514 
and 516 of the Housing Act of 1949. The goals of this demonstration 
program will be achieved through loans made to intermediaries. The 
intermediaries will establish their programs for the purpose of 
providing loans to ultimate recipients for the preservation and 
revitalization of low-income Sections 515, 514 and 516 MFH as 
affordable housing.

DATES: The deadline for receipt of all applications in response to this 
Notice is 5:00 p.m., Eastern Time. December 22, 2014. The application 
closing deadline is firm as to date and hour. Rural Development will 
not consider any application that is received after the closing 
deadline. Applicants intending to mail applications must provide 
sufficient time to permit delivery on or before the closing deadline. 
Acceptance by a post office or private mailer does not constitute 
delivery. Facsimile, electronic transmissions, and postage due 
applications will not be accepted.

ADDRESSES: Applicants should submit applications to USDA Rural Housing 
Service; Attention: Tonya Boykin, Administrative Assistant; Multi-
Family Housing STOP 0782 (Room 1263-S); 1400 Independence Avenue SW., 
Washington, DC 20250-0782.
    Rural Development will date and time stamp incoming applications to 
evidence timely receipt and, upon request, will provide the applicant 
with a written acknowledgment of receipt.

FOR FURTHER INFORMATION CONTACT: Sherry Engel, Finance and Loan 
Analyst, Multi-Family Housing, U.S. Department of Agriculture, Rural 
Development, 4949 Kirschling Court, Stevens Point, Wisconsin 54481 or 
by telephone at (715) 345-7677 or via email at: 
[email protected] or Tiffany Tietz, Finance and Loan Analyst, 
Multi-Family Housing, U.S. Department of Agriculture, Rural 
Development, 3260 Eagle Park Drive, Suite 107, Grand Rapids, Michigan 
49525 or by telephone at (616) 942-4111, Extension 126, TDD (302) 857-
3585 or via email at: [email protected]. (Please note the 
phone numbers are not toll free numbers).

SUPPLEMENTARY INFORMATION:

Overview

    Federal Agency: Rural Housing Service.
    Funding Opportunity Title: Section 515 Multi-Family Housing 
Preservation Revolving Loan Fund Demonstration Program for Fiscal Year 
2014.
    Announcement Type: Funding Request.
    Catalog of Federal Domestic Assistance Number: 10.415.
    Date: The deadline for receipt of all applications in response to 
this Notice is 5:00 p.m., Eastern Time, on December 22, 2014. The 
application closing deadline is firm as to date and hour. Rural 
Development will not consider any application that is received after 
the closing deadline. Applicants intending to mail applications must 
provide sufficient time to permit delivery on or before the closing 
deadline. Acceptance by a post office or private mailer does not 
constitute delivery. Facsimile, electronic transmissions and postage 
due applications will not be accepted.

Paperwork Reduction Act

    Under the Paperwork Reduction Act, 44 U.S.C. 3501 (2005) et seq., 
OMB must approve all ``collections of information'' by Rural 
Development. The Act defines ``collection of information'' as a 
requirement for ``answers to . . . identical reporting or recordkeeping 
requirements imposed on ten or more persons . . .'' (44 U.S.C. 
3502(3)(A)). However, because it is anticipated that this Notice will 
receive less than ten respondents, the Paperwork Reduction Act does not 
apply.

Background

    Past fiscal years' appropriations acts provided funding for, and 
authorized Rural Development to conduct a revolving loan fund 
demonstration program for the preservation and revitalization of 
Sections 515, 514 and 516 MFH portfolios. The money provided under the 
previous appropriations acts was authorized to remain available until 
expended. Sections 514, 515 and 516 of the Housing Act of 1949 as 
amended, provide Rural Development the authority to make loans for low-
income Multi-Family Housing, Farm Labor Housing (FLH), and related 
facilities.
I. Funding Opportunities Description
    This Notice requests applications from eligible applicants for 
loans to establish and operate revolving loan funds for the 
preservation of low-income MFH properties within the Rural Development 
Sections 514, 515 and 516 MFH portfolios. Rural Development's 
regulations for the Section 514, 515 and 516 MFH Program are published 
at 7 CFR part 3560.
    Housing that is constructed or repaired must meet the Rural 
Development design and construction standards and the development 
standards contained in 7 CFR part 1924, subparts A and C, respectively. 
Once constructed, Sections 514, 515, and 516 MFH must be managed in 
accordance with the program's regulation, 7 CFR part 3560. Tenant 
eligibility is limited to persons who qualify as a very low- or low-
income household or who are eligible under the requirements established 
to qualify for housing benefits provided by sources other than Rural 
Development, such as U.S. Department of Housing and Urban Development 
Section 8 assistance or Low Income Housing Tax Credits assistance, when 
a tenant receives such housing benefits. Additional tenant eligibility 
requirements are contained in 7 CFR Sections 3560.152, 3560.577, and 
3560.624.
II. Award Information
    Past appropriations acts made funding available for loans to 
private non-profit organizations, or such non-profit organizations' 
affiliate loan funds and State and local housing finance agencies, to 
carry out a housing demonstration program to provide revolving loans 
for the preservation of low-income MFH project. The total amount of 
funding available for this program is $16,426,512.04. This funding 
consists of carryover funds from previous fiscal years. Loans to

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intermediaries under this demonstration program shall have an interest 
rate of no more than 1 percent and the Secretary of Agriculture may 
defer the interest and principal payment to Rural Development for up to 
three years during the first 3 years of the loan. The term of such 
loans shall not exceed 30 years. Funding priority will be given to 
entities with equal or greater matching funds from third parties, 
including housing tax credits for rural housing assistance and to 
entities with experience in the administration of revolving loan funds 
and the preservation of MFH.
    Funding Restrictions
    No loan made to a single intermediary applicant under this 
demonstration program may exceed $2,125,000 and any such loan may be 
limited by geographic area so that multiple loan recipients are not 
providing similar services to the same service areas. All Preservation 
Revolving Loan Fund (PRLF) obligations will have an obligation 
expiration period of 2 years from the date of obligation.
    Prior Fiscal Year's PRLF loans that were obligated and not closed 
within the above 2-year obligation period must be de-obligated to allow 
more immediate program use unless a 6-month extension is granted by the 
National Office. The request for an extension will be sent to the 
National Office by the relevant State Office.
    Loans made to the PRLF ultimate recipient must meet the intent of 
providing decent, safe, and sanitary rural housing and be consistent 
with the requirements of Title V of the Housing Act of 1949, as 
amended.
III. Eligibility Information
    Applicant Eligibility
    (1) Eligibility Requirements--Intermediary.
    (a) The types of entities which may become intermediaries are 
private non-profit organizations, which may include faith and community 
based organizations, or such non-profit organizations' affiliate loan 
funds and State and local housing finance agencies.
    (b) The intermediary must have:
    i. The legal authority necessary for carrying out the proposed loan 
purposes and for obtaining, giving security, and repaying the proposed 
loan.
    ii. A proven record of successfully assisting low-income MFH 
projects. Such record will include recent experience in loan making and 
loan servicing that is similar in nature to the loans proposed for the 
PRLF demonstration program. The applicant must provide documentation of 
a delinquency and loss rate note which does not exceed four percent. 
The applicant will be responsible for providing such information to 
Rural Development.
    iii. A staff with loan making and servicing experience.
    vi. A plan showing Rural Development, that the ultimate recipients 
will only use the funds to preserve low-income MFH projects.
    (b) No loans will be extended to an intermediary unless:
    i. There is adequate assurance of repayment of the loan evidenced 
by the fiscal and managerial capabilities of the proposed intermediary.
    ii. The amount of the loan, together with other funds available, is 
adequate to complete the preservation or revitalization of the project.
    iii. The intermediary's prior calendar year audit is an unqualified 
audited opinion signed by an independent Certified Public Accountant 
(CPA) acceptable to the Agency and performed in accordance with 
Generally Accepted Government Auditing Standards (GAGAS). The 
unqualified audited opinion must provide a statement relating to the 
accuracy of the financial statements.
    (c) Intermediaries, and the principals of the intermediaries, must 
not be suspended, debarred, or excluded based on the ``List of Parties 
Excluded from Federal Procurement and Nonprocurement Programs''. In 
addition, intermediaries and their principals must not be delinquent on 
Federal debt or be Federal judgment debtors.
    (d) The intermediary and its principal officers (including 
immediate family) must have no legal or financial interest in the 
ultimate recipient.
    (e) The intermediary's Debt Service Coverage Ratio (DSCR) must be 
greater than 1.25 for the fiscal year immediately prior to the year of 
application. The DSCR is the financial ratio the loan committee will 
use to determine an applicant's capacity to borrow and service 
additional debt. The loan committee will use the intermediary's 
Earnings Before Interest and Taxes (EBIT) to determine DSCR. EBIT is 
determined by adding net income or net loss to depreciation and 
interest expense. The loan committee will compare the principal and 
interest payment multiplied by the DSCR to the EBIT derived from the 
applicants consolidated income statement. For example, if an applicant 
requests a loan amount of $2,000,000 at a one percent interest rate 
amortized over 30 years, the principal and interest payments will be 
$77,193, annually. Therefore, an applicant who requests $2,000,000 
needs an EBIT of at least $96,491 ($77,193 x 1.25). Only debt service 
from unrestricted revolving loans will be considered in the above 
calculation. An unrestricted loan is an account in which the 
accumulated revenues are not dictated by a donor or sponsor.
    (f) Intermediaries that have received one or more PRLF loans may 
apply for and be considered for subsequent PRLF loans provided all the 
following are met:
    i. For prior PRLF loans at least 50 percent of an intermediary's 
PRLF loans must have been disbursed to eligible ultimate recipients;
    ii. Intermediaries requesting subsequent loans must meet the 
requirements of section III (1), Applicant Eligibility, of this Notice;
    iii. The delinquency rate of the outstanding loans of the 
intermediary's PRLF revolving fund does not exceed four percent at the 
time of application for the subsequent loan;
    iv. The intermediary is in compliance with all applicable 
regulations and its loan agreements with Rural Development;
    v. Not more than one loan will be approved by Rural Development for 
an intermediary in any single fiscal year unless the request is 
authorized by a PRLF appropriation; and
    vi. Total outstanding PRLF indebtedness of an intermediary to Rural 
Development will not exceed $15 million at any time.
    Only eligible applicants will be scored and ranked. Funding 
priority will be given to entities with equal or greater matching 
funds, including housing tax credits for rural housing assistance. 
Refer to the Selection Criteria section of the Notice for further 
information on funding priorities.
    (2) Eligibility Requirements--Ultimate Recipients.
    (a) To be eligible to receive loans from the PRLF, ultimate 
recipients must:
    i. Currently have a Rural Development Sections 515, or 514 loans, 
or 516 grant for the property to be assisted by the PRLF demonstration 
program.
    ii. Certify that the principal officers (including their immediate 
family) of the ultimate recipient, hold no legal or financial interest 
in the intermediary.
    iii. Be in compliance with all Rural Development program 
requirements or have an Agency approved work plan in place which will 
correct a non-compliance status.
    (b) Any delinquent debt to the Federal Government including a non-
tax judgment lien (other than a judgment in the U.S. tax courts), by 
the ultimate recipient or any of its principals, shall cause the 
proposed ultimate recipient to

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be ineligible to receive a loan from the PRLF. PRLF may not be used to 
satisfy the delinquency.
    (c) The ultimate recipient cannot be currently debarred or 
suspended from Federal Government programs.
    (d) There is a continuous need for the property in the community as 
affordable housing.

Other Administrative Requirements

    (1) The following policies and regulations apply to loans to 
intermediaries made in response to this Notice:
    (a) PRLF intermediaries will be required to provide Rural 
Development with the following reports:
    i. An annual audit;
    A. The dates of the audit report period need not coincide with 
other reports on the PRLF. Audit reports shall be due 90 days following 
the audit period. The audit period will be set by the intermediary. The 
intermediary will notify Rural Development of the date. Audits must 
cover all of the intermediary's activities. Audits will be performed by 
an independent CPA. An acceptable audit will be performed in accordance 
with GAGAS and include such tests of the accounting records as the 
auditor considers necessary in order to express an unqualified audited 
opinion on the financial condition of the intermediary.
    B. It is not intended that audits required by this program be 
separate from audits performed in accordance with State and local laws 
or for other purposes. To the extent feasible, the audit work for this 
program should be done in connection with these other audits. 
Intermediaries covered by OMB Circular A-133 should submit audits made 
in accordance with that circular.
    ii. Quarterly or semiannual performance reports (due to Rural 
Development 30 days after the end of the fiscal quarter or half);
    A. Performance reports will be required quarterly during the first 
year after loan closing. Thereafter, performance reports will be 
required semiannually. Also, Rural Development may resume requiring 
quarterly reports if the intermediary becomes delinquent in repayment 
of its loan or otherwise fails to fully comply with the provisions of 
its work plan or Loan Agreement, or Rural Development determines that 
the intermediary's PRLF is not adequately protected by the current 
financial status and paying capacity of the ultimate recipients.
    B. These performance reports shall contain information only on the 
PRLF, or if other funds are included, the PRLF portion shall be 
segregated from the others; and in the case where the intermediary has 
more than one PRLF from Rural Development, a separate report shall be 
made for each PRLF.
    C. The performance report will include OMB Standard Form 425, 
Federal Financial Report. This report will provide information on the 
intermediary's lending activity, income and expenses, financial 
condition and a summary of names and characteristics of the ultimate 
recipients the intermediary has financed.
    iii. Annual proposed budget for the following year; and other 
reports as Rural Development may require from time to time regarding 
the conditions of the loan.
    (b) Security will consist of a pledge by the intermediary of all 
assets now or hereafter placed in the PRLF, including cash and 
investments, notes receivable from ultimate recipients, and the 
intermediary's security interest in collateral pledged by ultimate 
recipients. Except for good cause shown, Rural Development will not 
obtain assignments of specific assets at the time a loan is made to an 
intermediary or ultimate recipient. The intermediary will covenant in 
the loan agreement that if the intermediary's financial condition 
deteriorates or the intermediary takes action detrimental to prudent 
fund operation, or the intermediary fails to take action required of a 
prudent lender, then it will provide additional security, execute any 
additional documents, and undertake any reasonable acts Rural 
Development may request to protect Rural Development's interest or to 
perfect a security interest in any asset, including physical delivery 
of assets and specific assignments to Rural Development. All debt 
instruments and collateral documents used by an intermediary in 
connection with loans to ultimate recipients may be assignable.
    (c) Rural Development may consider, on a case by case basis, 
subordinating its security interest on the ultimate recipient's 
property to the lien of the intermediary so that Rural Development has 
a junior lien interest when an independent appraisal verifies the Rural 
Development subordinated lien will continue to be fully secured.
    (d) The term of the loan to an ultimate recipient may not exceed 
the lessor of 30 years or the remaining term of the Rural Development 
loan.
    (e) When loans are made to ultimate recipients restrictive-use 
provisions must be incorporated, as outlined in 7 CFR Section 3560.662.
    (f) The policies and regulations contained in 7 CFR Part 1901, 
Subpart F regarding historical and archaeological properties apply to 
all loans funded under this Notice.
    (g) The policies and regulations contained in 7 CFR Part 1940, 
Subpart G regarding environmental assessments apply to all loans to 
ultimate recipients funded under this Notice. Loans to intermediaries 
under this program will be considered a categorical exclusion under the 
National Environmental Policy Act, requiring the completion of Form RD 
1940-22, ``Environmental Checklist for Categorical Exclusions,'' by 
Rural Development.
    (h) An Intergovernmental Review will be conducted in accordance 
with the procedures contained in 7 CFR Part 3015, Subpart V, if the 
applicant is a cooperative.
    (2) The intermediary agrees to the following:
    (a) To obtain written Rural Development approval, before the first 
lending of PRLF funds to an ultimate recipient, of:
    i. All forms to be used for relending purposes, including 
application forms, loan agreements, promissory notes, and security 
instruments; and
    ii. The intermediary's policy with regard to the amount and form of 
security to be required.
    (b) To obtain written approval from Rural Development before making 
any significant changes in forms, security policy, or the 
intermediary's work plan. Rural Development may approve changes in 
forms, security policy, or work plans at any time upon a written 
request from the intermediary and determination by Rural Development 
that the change will not jeopardize repayment of the loan or violate 
any requirement of this NOTICE or other Rural Development regulations. 
The intermediary must comply with the work plan approved by Rural 
Development so long as any portion of the intermediary's PRLF loan is 
outstanding;
    (c) To allow Rural Development to take a security interest in the 
PRLF, the intermediary's portfolio of investments derived from the 
proceeds of the loan award, and other rights and interests as Rural 
Development may require;
    (d) To return, as an extra payment on the loan any funds that have 
not been used in accordance with the intermediary's work plan by a date 
two years from the date of the loan agreement, unless an extension has 
been granted. The intermediary acknowledges that Rural Development may 
cancel the approval of any funds not yet delivered to the intermediary 
if funds have not been used in accordance with the intermediary's work 
plan within the 2-year period. Rural

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Development, at its sole discretion, may allow the intermediary 
additional time to use the loan funds by delaying cancellation of the 
funds by no more than three additional years. If any loan funds have 
not been used by 5 years from the date of the loan agreement, the 
approval will be canceled for any funds that have not been delivered to 
the intermediary and, in addition, the intermediary will return, as an 
extra payment on the loan, any funds it has received and not used in 
accordance with the work plan. In accordance with the Rural Development 
approved promissory note, regular loan payments will be based on the 
amount of funds actually drawn by the intermediary.
    (e) The intermediary will be required to enter into a Rural 
Development approved loan agreement and promissory note. The 
intermediary will receive a 30-year loan at a 1 percent interest rate. 
The loan will be deferred for up to 3 years if requested in the 
intermediary's work plan.
    (f) Loans made to the PRLF ultimate recipient must meet the intent 
of providing decent, safe, and sanitary rural housing by preserving and 
regulating existing properties financed with Sections 514, 515, and 516 
funds. They must also be consistent with the requirements of Title V of 
the Housing Act of 1949, as amended.
    (d) When an intermediary proposes to make a loan from the PRLF to 
an ultimate recipient, Rural Development concurrence is required prior 
to final approval of the loan. The intermediary must submit a request 
for Rural Development concurrence of a proposed loan to an ultimate 
recipient. Such request must include:
    i. Certification by the intermediary that:
    A. The proposed ultimate recipient is eligible for the loan;
    B. The proposed loan is for eligible purposes;
    C. The proposed loan complies with all applicable statutes and 
regulations; and
    D. Prior to closing the loan to the ultimate recipient, the 
intermediary and its principal officers (including immediate family) 
hold no legal or financial interest in the ultimate recipient, and the 
ultimate recipient and its principal officers (including immediate 
family) hold no legal or financial interest in the intermediary.
    ii. Copies of sufficient material from the ultimate recipient's 
application and the intermediary's related files, to allow Rural 
Development to determine the:
    A. Name and address of the ultimate recipient;
    B. Loan purposes;
    C. Interest rate and term;
    D. Location, nature, and scope of the project being financed;
    E. Other funding included in the project;
    F. Nature and lien priority of the collateral; and
    G. Environmental impacts of this action. This will include an 
original Form RD 1940-20, ``Request for Environmental Information,'' 
completed and signed by the intermediary. Attached to this form will be 
a statement stipulating the age of the building to be rehabilitated and 
a completed and signed Federal Emergency Management Agency (FEMA) Form 
81-93, ``Standard Flood Hazard Determination.'' If the age of the 
building is over 50 years or if the building is either on or eligible 
for inclusion in the National Register of Historic Places, then the 
intermediary will immediately contact Rural Development to begin 
Section 106 of the National Historic Preservation Act of 1966 
consultation with the State Historic Preservation Officer. If the 
building is located within a 100-year flood plain, then the 
intermediary will immediately contact Rural Development to analyze any 
effects as outlined in 7 CFR part 1940, Subpart G, Exhibit C. The 
intermediary will assist Rural Development in any additional 
requirements necessary to complete the environmental review.
    iii. Such other information as Rural Development may request on 
specific cases.
    (e) Upon receipt of a request for concurrence in a loan to an 
ultimate recipient Rural Development will:
    i. Review the material submitted by the intermediary for 
consistency with Rural Development's preservation and revitalization 
principles which include the following;
    A. There is a continuing need for the property in the community as 
affordable housing. If Rural Development determines there is no 
continuing need for the property the ultimate recipient is ineligible 
for the loan;
    B. When the transaction is complete, the property will be owned and 
controlled by eligible Section 514, 515, or 516 borrowers;
    C. The transaction will address the physical needs of the property;
    D. Existing tenants will not be displaced because of increased post 
transaction rents;
    E. Post transaction basic rents will not exceed comparable market 
rents; and
    F. Any equity loan amount will be supported by a market value 
appraisal.
    ii. The Intermediary shall pledge as collateral for non-Rural 
Development funds its PRLF, including its portfolio of investments 
derived from the proceeds of other funds and this loan award.
    iii. Issue a letter concurring with the loan when all requirements 
have been met or notify the intermediary in writing the reasons for 
denial when Rural Development determines it is unable to concur with 
the loan.
IV. Application and Submission Information
    The application process is a two-step process: First, all 
applicants will submit proposals to the National Office for loan 
committee review. The loan committee will determine if the borrower is 
eligible, score the application, and rank the applicants according to 
the criteria established in this Notice. Only eligible borrowers will 
be scored. The loan committee will select proposals for further 
processing. In the event that a proposal is selected for further 
processing and the applicant declines, the next highest ranked unfunded 
applicant may be selected. Second, after the loan is obligated to the 
intermediary but prior to loan closing, the State Office in the 
applicant's residence or State where the applicant will be doing its 
intermediary work will provide written approval of all forms to be used 
for relending purposes, including application forms, loan agreements, 
promissory notes, and security instruments. Additionally, the State 
Office will provide written approval of the applicant's binding policy 
with regard to the amount and form of security to be required.
    Once the loan closes, the applicant will be required to comply with 
the terms of its work plan which describes how the money will be used, 
the loan agreement, the promissory note and any other loan closing 
documents. At the time of loan closing, Rural Development and loan 
recipient shall enter into a loan agreement and a promissory note 
acceptable to Rural Development. Loans obligated by State Offices to 
intermediaries must close on or before the second anniversary of the 
dated pre-approval letter mentioned above. Applicants who have not 
closed by this date must de-obligate PRLF funds to allow further 
program use of funds.

Application Requirements

    The application must contain the following:
    (1) A summary page, that is double-spaced and not in narrative 
form, that lists the following items:
    (a) Applicant's name.
    (b) Applicant's Taxpayer Identification Number.
    (c) Applicant's address.

[[Page 56766]]

    (d) Applicant's telephone number.
    (e) Name of applicant's contact person, telephone number, and 
address.
    (f) Amount of loan requested.
    (2) Form RD 4274-1, ``Application for Loan (Intermediary Relending 
Program).'' This form can be found at: http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD4274-1.PDF.
    (3) A written work plan and other evidence Rural Development 
require that demonstrates the feasibility of the intermediary's program 
to meet the objectives of this demonstration program. The plan must, at 
a minimum, include all of the following:
    (a) Document the intermediary's ability to administer this 
demonstration program in accordance with the provisions of this Notice. 
In order to adequately demonstrate the ability to administer the 
program, the intermediary must provide a complete listing of all 
personnel responsible for administering this program along with a 
statement of their qualifications and experience. The personnel may be 
either members or employees of the intermediary's organization or 
contract personnel hired for this purpose. If the personnel are to be 
contracted for, the contract between the intermediary and the entity 
providing such service will be submitted for Rural Development review, 
and the terms of the contract and its duration must be sufficient to 
adequately service the Rural Development loan through to its ultimate 
conclusion. If Rural Development determines the personnel lack the 
necessary expertise to administer the program, the loan request will be 
denied.
    (b) Document the intermediary's ability to commit financial 
resources under the control of the intermediary to the establishment of 
the demonstration program. This should include a statement of the 
sources of non-Rural Development funds for administration of the 
intermediary's operations and financial assistance for projects.
    (c) Demonstrate a need for loan funds. As a minimum, the 
intermediary should identify a sufficient number of proposed and known 
ultimate recipients to justify Agency funding of its loan request, or 
include well developed targeting criteria for ultimate recipients 
consistent with the intermediary's mission and strategy for this 
demonstration program, along with supporting statistical or narrative 
evidence that such prospective recipients exist in sufficient numbers 
to justify Rural Development funding of the loan request.
    (d) Include a list of proposed fees and other charges it will 
assess to the ultimate recipients.
    (e) Provide documentation to Rural Development the intermediary has 
secured commitments of significant financial support from public 
agencies and private organizations or have received tax credits for the 
calendar year prior to this Notice.
    (f) Include the intermediary's plan (specific loan purposes) for 
relending the loan funds. The plan must be of sufficient detail to 
provide Rural Development with a complete understanding of what the 
intermediary will accomplish by lending the funds to the ultimate 
recipient and the complete mechanics of how the funds will flow from 
the intermediary to the ultimate recipient. The service area, 
eligibility criteria, loan purposes, fees, rates, terms, collateral 
requirements, limits, priorities, application process, method of 
disposition of the funds to the ultimate recipient, monitoring of the 
ultimate recipient's accomplishments, and reporting requirements by the 
ultimate recipient's management must at least be addressed by the 
intermediary's relending plan.
    (g) Provide a set of goals, strategies, and anticipated outcomes 
for the intermediary's program. Outcomes should be expressed in 
quantitative or observable terms such as low-income housing complexes 
rehabilitated or low-income housing units preserved, and should relate 
to the purpose of this demonstration program; and
    (h) If the intermediary provides technical assistance, (providing 
technical assistance to ultimate recipients is not required as part of 
this program), the intermediary will provide specific information as to 
how and what type of technical assistance the intermediary will provide 
to the ultimate recipients and potential ultimate recipients. For 
instance describe the qualifications of the technical assistance 
providers, the nature of technical assistance that will be available, 
and expected and committed sources of funding for technical assistance. 
If other than the intermediary itself, describe the organizations 
providing such assistance and the arrangements between such 
organizations and the intermediary.
    (4) A pro forma balance sheet at start-up and projected balance 
sheets for at least three additional years; and projected cash flow and 
earnings statements for at least three years supported by a list of 
assumptions showing the basis for the projections. The projected 
earnings statement and balance sheet must include one set of 
projections that shows a full annual installment on the PRLF loan.
    (5) A written agreement of the intermediary to Rural Development 
agreeing to the audit requirements.
    (6) Form RD 400-4, ``Assurance Agreement.'' A copy of which can be 
obtained at: http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD400-4.PDF.
    (7) Complete organizational documents, including evidence of 
authority to conduct the proposed activities.
    (8) Most recent unqualified audit report signed by a CPA and 
prepared in accordance with GAGAS.
    (9) Form RD 1910-11, ``Applicant Certification Federal Collection 
Policies for Consumer or Commercial Debts,'' a copy of which can be 
obtained at: http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD1910-11.PDF.
    (10) Form AD-1047, ``Certification Regarding Debarment, Suspension, 
and other Responsibility Matters--Primary Covered Transactions,'' a 
copy of which can be obtained at: http://www.ocio.usda.gov/forms/doc/AD1047-F-01-92.PDF.
    (11) Exhibit A-1 of RD Instruction 1940-Q, ``Certification for 
Contracts, Grants, and Loans,'' a copy of which can be obtained at: 
http://www.rurdev.usda.gov/me/CBP/const/1940qa1.pdf.
    (12) Copies of the applicant's tax returns for each of the three 
years prior to the year of application, and most recent audited 
financial statements.
    (13) A separate one-page information sheet listing each of the 
``Selection Criteria'' contained in this Notice, followed by the page 
numbers of all relevant material and documentation that is contained in 
the proposal that supports these criteria. Applicants are also 
encouraged, but not required, to include a checklist of all of the 
application requirements and to have their application indexed and 
tabbed to facilitate the review process.
    (14) Financial statements (consolidated or unconsolidated) for the 
year prior to this Notice.
    (15) A borrower authorization statement allowing Rural Development 
the authorization to verify past and present earnings with the preparer 
of the intermediary's financial statements.
V. Application Review Information
    All applications will be evaluated by a loan committee. The loan 
committee will make recommendations to the Rural Housing Service 
Administrator concerning preliminary eligibility

[[Page 56767]]

determinations and for the selection of applications for further 
processing based on the selection criteria contained in this Notice and 
the availability of funds. The Administrator will inform applicants of 
the status of their application within 30 days of the loan application 
closing date set forth in this Notice.

Selection Criteria

    Selection criteria points will be allowed only for factors 
evidenced by well documented, reasonable work plans which provide 
assurance that the items have a high probability of being accomplished. 
The points awarded will be as specified in paragraphs (1) through (4) 
of this section. In each case, the intermediary's application must 
provide documentation that the selection criteria have been met in 
order to qualify for selection criteria points. If an application does 
not cover one of the categories listed, it will not receive points for 
those criteria.
    (1) Other funds. Points allowed under this paragraph are to be 
based on documented successful history or written evidence that the 
funds are available.
    (a) The intermediary will obtain non-Rural Development loan or 
grant funds or provide housing tax credits (measured in dollars) to pay 
part of the cost of the ultimate recipients' project cost. Points for 
the amount of funds from other sources are as follows:
    i. At least 10 percent but less than 25 percent of the total 
development cost (as defined in 7 CFR 3560.11)--5 points;
    ii. At least 25 percent but less than 50 percent of the total 
development cost--10 points; or
    iii. 50 percent or more of the total development cost--15 points.
    (b) The intermediary will provide loans to each ultimate recipient 
from its own funds (not loan or grant) to pay part of the ultimate 
recipients' project cost. The amount of the intermediary's own funds 
will average per project:
    i. At least 10 percent but less than 25 percent of the total 
development cost--5 points;
    ii. At least 25 percent but less than 50 percent of total 
development cost--10 points; or
    iii. 50 percent or more of total development cost--15 points.
    (2) Intermediary contribution. The Intermediary will contribute its 
own funds not derived from Rural Development. The non-Rural Development 
contributed funds will be placed in a separate account from the PRLF 
account. The intermediary shall contribute funds not derived from Rural 
Development into a separate bank account or accounts according to their 
``work plan''. These funds are to be placed into an interest bearing 
counter-signature-account for three years as set forth in the loan 
agreement. The counter-signature-account will require a signature from 
a Rural Development employee and an intermediary. After three years, 
these funds shall be commingled with the PRLF to provide loans to the 
ultimate recipient for the preservation and revitalization of Section 
514, or 515, or 516 Multi-Family Housing.
    The amount of non-Agency derived funds contributed to the PRLF will 
equal the following percentage of Rural Development PRLF:
    (a) At least 5 percent but less than 15 percent--5 points;
    (b) At least 15 percent but less than 25 percent--30 points; or
    (c) 25 percent or more--50 points.
    (3) Experience. The intermediary has actual experience in the 
administration of revolving loan funds and the preservation of MFH, 
with a successful record, for the following number of full years. 
Applicants must have actual experience in both the administration of 
revolving loan funds and the preservation of MFH in order to qualify 
for points under the selection criteria. If the number of years of 
experience differs between the two types of above listed experience, 
the type of experience with the lesser number of years will be used for 
the selection criteria.
    (a) At least one but less than three years--5 points;
    (b) At least three but less than five years--10 points;
    (c) At least five but less than 10 years--20 points; or
    (d) 10 or more years--30 points.
    (4) Administrative. The Administrator may assign up to 25 
additional points to an application to account for the following items 
not adequately covered by the other priority criteria set out in this 
section. The items that will be considered are the amount of funds 
requested in relation to the amount of need; a particularly successful 
affordable housing development record; a service area with no other 
PRLF coverage; a service area with severe affordable housing problems; 
a service area with emergency conditions caused by a natural disaster; 
an innovative proposal; the quality of the proposed program; a service 
area that includes a community or county designated as a Promise Zone 
or participating in the Stronger Economies Together (SET) initiative 
with USDA Rural Development or excellent utilization of an existing 
revolving loan fund program. The Administrator will document the 
reasons for the particular point allocation.
VI. Appeal Process
    All adverse determinations regarding applicant eligibility and the 
awarding of points as part of the selection process are appealable. 
Instructions on the appeal process will be provided at the time an 
applicant is notified of the adverse action.

Equal Opportunity and Nondiscrimination Requirements

    (1) In accordance with the Fair Housing Act, Title VI of the Civil 
Rights Act of 1964, the Equal Credit Opportunity Act, the Age 
Discrimination Act of 1975, Executive Order 12898, the Americans with 
Disabilities Act, and Section 504 of the Rehabilitation Act of 1973, 
neither the intermediary nor Rural Development will discriminate 
against any employee, proposed intermediary or proposed ultimate 
recipient on the basis of sex, marital status, race, familial status, 
color, religion, national origin, age, physical or mental disability 
(provided the proposed intermediary or proposed ultimate recipient has 
the capacity to contract), because all or part of the proposed 
intermediary's or proposed ultimate recipient's income is derived from 
public assistance of any kind, or because the proposed intermediary or 
proposed ultimate recipient has in good faith exercised any right under 
the Consumer Credit Protection Act, with respect to any aspect of a 
credit transaction anytime Rural Development loan funds are involved.
    (2) The policies and regulations contained in 7 CFR Part 1901, 
Subpart E apply to this program.
    (3) The Rural Housing Service Administrator will assure that equal 
opportunity and nondiscrimination requirements are met in accordance 
with the Fair Housing Act, Title VI of the Civil Rights Act of 1964, 
the Equal Credit Opportunity Act, the Age Discrimination Act of 1975, 
Executive Order 12898, the Americans with Disabilities Act, and Section 
504 of the Rehabilitation Act of 1973.
    (4) All housing must meet the accessibility requirements found at 7 
CFR Section 3560.60(d).
    The U.S. Department of Agriculture prohibits discrimination against 
its customers, employees, and applicants for employment on the basis of 
race, color, national origin, age, disability, sex, gender identity, 
religion, reprisal, and where applicable, political beliefs, marital 
status, familial or parental status, sexual orientation, or all or part 
of an individual's income is derived

[[Page 56768]]

from any public assistance program, or protected genetic information in 
employment or in any program or activity conducted or funded by the 
Department. (Not all prohibited bases will apply to all programs and/or 
employment activities.)
    If you wish to file an employment complaint, you must contact your 
Agency's EEO Counselor (PDF) within 45 days of the date of the alleged 
discriminatory act, event, or in the case of a personnel action. 
Additional information can be found online at http://www.ascr.usda.gov/complaint_filing_file.html.
    If you wish to file a Civil Rights program complaint of 
discrimination, complete the USDA Program Discrimination Complaint Form 
(PDF), found online at http://www.ascr.usda.gov/complaint_filing_cust.html, or at any USDA office, or 
call (886) 632-9992 to request the form. You may also write a letter 
containing all of the information requested in the form. Send your 
completed complaint form or letter to us by mail at U.S. Department of 
Agriculture, Director, Office of Adjudication, 1400 Independence Avenue 
SW., Washington, DC 20250-9410, by fax (202) 690-7442 or email at 
[email protected].
    Individuals who are deaf, hard of hearing or have speech 
disabilities and you wish to file either an EEO or program complaint 
please contact USDA through the Federal Relay Service at (800) 877-8339 
or (800) 845-6136 (in Spanish).
    Persons with disabilities, who wish to file a program complaint, 
please see information above on how to contact us by mail directly or 
by email. If you require alternative means for communication of program 
information (e.g., Braille, large print, audiotape, etc.) please 
contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

    Dated: September 15, 2014.
Tony Hernandez,
Administrator, Rural Housing Service.
[FR Doc. 2014-22512 Filed 9-22-14; 8:45 am]
BILLING CODE 3410-XV-P