[Federal Register Volume 80, Number 70 (Monday, April 13, 2015)]
[Notices]
[Pages 19630-19631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-08351]


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 Notices
                                                 Federal Register
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 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 
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  Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / 
Notices  

[[Page 19630]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service


Notice of Intent To Accept Applications To Be an Intermediary 
Under the Loan Application Packaging Pilot Program Within the Section 
502 Direct Single Family Housing Program

AGENCY: Rural Housing Service, USDA.

ACTION: Notice.

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SUMMARY: In Fiscal Year (FY) 2010, the Agency undertook a pilot program 
to evaluate how the loan application packaging process could be 
improved for the Section 502 Direct Single Family Housing program, 
which is authorized in Title V, Section 1480 (k) of the Housing Act. 
This pilot program introduced the use of intermediaries in the 
packaging process. Intermediaries reach out to other nonprofits to 
serve as loan application packagers, ensure those packagers are 
qualified and trained, perform quality assurance reviews to prevent the 
submission of incomplete or ineligible loan application packages to the 
Agency, and serve as a liaison between the Agency and the packager.
    Through this notice, the Agency will accept applications to be an 
intermediary under the pilot program. Approval will be subject to fully 
meeting the conditions outlined within this notice, sanctioning by the 
Single Family Housing Direct Loan Division following an application 
review (which will include input from the applicable Rural Development 
State Office), and signoff by the Rural Housing Service Administrator.

DATES: Eligible parties interested in serving as a new intermediary 
under this pilot must submit the requested items to the Single Family 
Housing Direct Loan Division by May 13, 2015.

ADDRESSES: Submissions may be sent electronically to 
[email protected] or by mail to Brooke Baumann, Branch 
Chief, Single Family Housing Direct Loan Division, USDA Rural 
Development, 1400 Independence Avenue SW., Room 2211, Washington, DC 
20250-0783.

FOR FURTHER INFORMATION CONTACT: Brooke Baumann, Branch Chief, Single 
Family Housing Direct Loan Division, USDA Rural Development, Stop 0783, 
1400 Independence Avenue SW., Washington, DC 20250-0783, Telephone: 
202-690-4250. Email: [email protected].

SUPPLEMENTARY INFORMATION: As noted in the summary, intermediaries 
reach out to other nonprofits to serve as loan application packagers, 
ensure those packagers are qualified and trained, perform quality 
assurance reviews to prevent the submission of incomplete or ineligible 
loan application packages to the Agency, and serve as a liaison between 
the Agency and the packager.
    Each pilot intermediary signs a Memorandum of Understanding (MOU) 
with the Agency, which details the roles and responsibilities of all 
parties.
     Under the pilot program, the intermediary and/or nonprofit 
packager may charge the borrower a loan application packaging fee not 
to exceed $1,500 to be paid at closing; the Agency does not dictate how 
or whether the intermediary and packager split the fee. Pursuant to 
Agency regulations at 7 CFR 3550.52(d)(6), program funds may be used to 
pay the packaging fee, provided that this does not cause the loan to 
exceed the maximum allowable loan amount and the borrower has repayment 
ability for the fee. The maximum allowable loan amount is normally 
limited to 100 percent of market value (7 CFR 3550.63(b)) as determined 
by an appraisal.
     Under the pilot program, if the maximum packaging fee 
cannot be included in the Section 502 Direct Loan, the intermediary 
and/or packager shall seek a seller concession to cover the fee; assist 
the applicant in seeking funds from outside sources to cover the fee; 
provided that those sources take the form of a soft, silent or 
forgivable subordinate affordable housing product; and/or reduce the 
fee to an amount that can be included in the Section 502 Direct Loan or 
paid using a seller concession or outside sources of funds. In no event 
will the borrower or the Agency be responsible for paying the packaging 
fee to the extent that the maximum fee cannot be paid at closing using 
one of these options. It is understood by all parties that a packaging 
fee may be charged only for closed loans.
    On December 16, 2014, President Barack Obama signed into law the 
Consolidated and Further Continuing Appropriations Act, 2015 (Act), 
Public Law 113-235, which provides fiscal year (FY) 2015 full-year 
appropriations through September 30, 2015, for all agencies except the 
Department of Homeland Security. Sec. 729 of the Act provides that the 
Agency will continue agreements with the current intermediaries in the 
pilot program \1\ and enter into additional agreements that increase 
the number of pilot intermediaries to at least 10.
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    \1\ The existing five intermediaries in the pilot program are 
Federation of Appalachian Housing Enterprises, NeighborWorks Dakota 
Home Resources, Northeast South Dakota Community Action Program, 
Rural Community Assistance Corporation, and Texas Community Capital.
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    Sec. 729 applies only to the pilot program in FY 2015; it does not 
concern any rulemaking process. This notice solicits applications for 
intermediaries in the pilot program only, and does not guarantee an 
intermediary's role or status when their pilot program MOU expires \2\ 
or when the final rule for the certified loan application packaging 
process proposed in the Federal Register on August 23, 2013 (78 FR 
52460) becomes effective, whichever is earlier. Through this notice, 
five new intermediaries are sought.
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    \2\ The current MOUs expire upon December 31, 2015, or the 
effective date of the final rule for the certified loan application 
packaging process, whichever is earlier. The current pilot 
intermediaries are not guaranteed an intermediary role beyond their 
participation in the pilot program.
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    To qualify and apply to be a new intermediary under the pilot, an 
interested party must submit documentation demonstrating that it meets 
all of the following conditions:
     Be a nonprofit organization or other public agency.
     Be tax exempt under the Internal Revenue Code and be 
engaged in affordable housing in accordance with their regulations, 
articles of incorporation, or bylaws.
     Have at least five years of verifiable experience with the 
Agency's direct single family housing loan programs.
     Develop quality control procedures designed to prevent 
submission of incomplete or ineligible application

[[Page 19631]]

packages to the Agency. This condition will require a detailed outline 
of the interested party's intended procedures.
     Have the capacity to serve as an intermediary in one or 
more of the following states not currently served under the existing 
pilot program: Alaska, Arkansas, Connecticut, Delaware, Florida, 
Georgia, Idaho, Illinois, Iowa, Kansas, Louisiana, Maine, Maryland, 
Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, New 
Hampshire, New Jersey, New York, North Carolina, Oklahoma, 
Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Vermont, 
Virgin Islands, Washington, and Wisconsin. (Applications that propose 
covering any of the following states will be automatically removed from 
consideration since the existing intermediaries are tasked with serving 
all or part of these states: Alabama, Arizona, California, Colorado, 
Hawaii, Indiana, Kentucky, Michigan, Montana, Nevada, New Mexico, North 
Dakota, Ohio, Oregon, South Dakota, Tennessee, Texas, Utah, Virginia, 
West Virginia, and Wyoming.) This condition will require a detailed 
outline of the interested party's action plan and experience. The 
outline should include, but is not limited to: What state or states the 
party wishes to cover, how they are well-equipped to handle the 
proposed coverage area, how they intend on creating affiliations with 
eligible nonprofit packagers, confirmation that they will not serve 
dual roles (i.e., the intermediary and the packager's employer must 
have different tax identification numbers and cannot have the same 
board of directors) unless they intend on operating under the program's 
general provisions for some packages which means the packaging fee 
cannot exceed $750, their ability to target very-low income persons in 
rural areas interested in homeownership, and their ability to target 
underserved areas.
     Ensure that their quality assurance staff completes an 
Agency-approved loan application packaging course and successfully pass 
the corresponding test.
     Not be the developer, builder, seller of, or have any 
other such financial interest in, the property for which the 
application package is submitted.
     Acknowledge qualifying as an intermediary for the pilot 
does not imply any guaranteed qualification under the certified loan 
application packaging process final rule once effective.
    The above conditions generally mimic those outlined in the proposed 
rule to create a certified loan application packaging process.
    If selected as a new intermediary, a MOU between the intermediary 
and the Agency must be signed. The MOU will detail the roles and 
responsibilities of all parties; and will be in effect through 
September 30, 2015, or up until the effective date of the final rule on 
the certified loan application packaging process, whichever should 
occur first. This notice should not be construed as containing all 
those roles and responsibilities.

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, familial status, parental status, 
religion, sexual orientation, political beliefs, genetic information, 
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).
    If you wish to file a Civil Rights program complaint of 
discrimination, complete the USDA Program Discrimination Complaint 
Form, found online at: http://www.ascr.usda.gov/complaint_filing_cust.html or at any USDA Office, or call (866) 632-
9992 to request the form. Send your completed complaint form or letter 
by mail to: U.S. Department of Agriculture, Director, Office of 
Adjudication, 1400 Independence Avenue SW., Washington, DC 20250; by 
fax at (202) 690-7442; or, by email at: [email protected]. 
Individuals who are deaf, hard of hearing or have speech disabilities 
and who wish to file a program complaint should please contact USDA 
through the Federal Relay Service at (800) 877-8339 or (800) 845-6136 
(in Spanish). USDA is an equal opportunity provider and employer. The 
full ``Non-Discrimination Statement'' is found at: http://www.usda.gov.wps/portal/usda/usdahome?navtype=Non_Discrimination.

    Dated: April 1, 2015.
Tony Hernandez,
Administrator, Rural Housing Service.
[FR Doc. 2015-08351 Filed 4-10-15; 8:45 am]
 BILLING CODE 3410-XV-P