[Federal Register Volume 83, Number 124 (Wednesday, June 27, 2018)]
[Notices]
[Pages 30106-30113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13761]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Rural Housing Service


Notice of Solicitation of Applications for Section 514 Farm Labor 
Housing Loans and Section 516 Farm Labor Housing Grants for Off-Farm 
Housing for Fiscal Year 2018

AGENCY: Rural Housing Service, USDA.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Rural Housing Service (RHS) announces the timeframe to 
submit pre-applications for Section 514 Farm Labor Housing (FLH) loans 
and Section 516 FLH grants for the construction of new off-farm FLH 
units and related facilities for domestic farm laborers and for the 
purchase and substantial rehabilitation of non-FLH property. The 
intended purpose of the loans and grants are to increase the number of 
available housing units for domestic farm laborers. This Notice 
describes the method used to distribute funds, the application process, 
and submission requirements.
    The Agency will publish the amount of funding received from the 
Consolidated Appropriations Act, 2018 (Pub. L. 115-141, March 23, 2018) 
on its website at: https://www.rd.usda.gov/newsroom/notices-solicitation-applications-nosas. Expenses incurred in developing 
applications will be at the applicant's risk.
    Pursuant to section 759 of the Consolidated Appropriations Act, 
2018 (Pub. L. 115-141, March 23, 2018), the Agency will set aside 10 
percent of the FLH funds for project proposals in persistent poverty 
counties. The Agency will also assign additional points to pre-
applications for projects based in or serving census tracts with 
poverty rates equal to or greater than 20 percent over the last 30 
years. This emphasis will support Rural Development's mission of 
improving the quality of life for rural Americans and commitment to 
directing resources to those who most need them.

DATES: The deadline for receipt of all applications in response to this 
Notice is 5:00 p.m., local time to the appropriate Rural Development 
State

[[Page 30107]]

Office on August 27, 2018. Rural Development will not consider any 
application that is received after the deadline unless the date and 
time is extended by another Notice published in the Federal Register. 
Applicants mailing applications must provide sufficient time to permit 
delivery on or before the deadline. Acceptance by a post office or 
private mailer does not constitute delivery. Facsimile (FAX) and 
postage due applications will not be accepted.

ADDRESSES: Applicants wishing to submit an application in response to 
this Notice must contact the Rural Development State Office serving the 
State of the proposed off-farm FLH project in order to receive further 
information and copies of the application package. You may find the 
addresses and contact information for each State Office at, http://www.rd.usda.gov/contact-us/state-offices. 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: Mirna Reyes-Bible, Senior Finance and 
Loan Analyst, Preservation and Direct Loan Division, STOP 0781 (Room 
1263-S), USDA Rural Development, 1400 Independence Avenue SW, 
Washington, DC 20250-0781, telephone: (202) 720-1753 (this is not a 
toll free number), or via email: [email protected].

SUPPLEMENTARY INFORMATION: 

Preface

    The Agency encourages applications that will support 
recommendations made in the Rural Prosperity Task Force report to help 
improve life in rural America at: www.usda.gov/ruralprosperity. 
Applicants are encouraged to consider projects that provide measurable 
results in helping rural communities build robust and sustainable 
economies through strategic investments in infrastructure, partnerships 
and innovation. Key strategies include:

 Achieving e-Connectivity for Rural America
 Developing the Rural Economy
 Harnessing Technological Innovation
 Supporting a Rural Workforce
 Improving Quality of Life

Overview

    Federal Agency: Rural Housing Service.
    Funding Opportunity Title: Notice of Solicitation Applications for 
Section 514 Farm Labor Housing Loans and Section 516 Farm Labor Housing 
Grants for Off-Farm Housing for Fiscal Year 2018.
    Announcement Type: Solicitation of pre-applications from qualified 
applicants for FY 2018.
    Catalog of Federal Domestic Assistance Numbers (CFDA): 10.405 and 
10.427.

A. Federal Award Description

    Pre-applications will only be accepted through the date and time 
listed in this Notice. All awards are subject to availability of 
funding. Individual requests may not exceed $3 million (total loan and 
grant). A State Office may not receive more than 30 percent of FLH 
funding available in FY 2018.
    If there are insufficient applications from around the country to 
exhaust the Section 514 and Section 516 funds available, the Agency may 
then exceed the 30 percent cap per State. Section 516 off-farm FLH 
grants may not exceed 90 percent of the total development cost (TDC) of 
the housing as defined in 7 CFR 3560.11.
    If leveraged funds are going to be used and are in the form of tax 
credits, the applicant must include in its pre-application written 
evidence that a tax credit application has been submitted and accepted 
by the Housing Finance Agency (HFA). All applications that receive any 
leveraged funds must have firm commitments in place within 12 months of 
the issuance of a ``Notice of Pre-Application Review Action,'' Handbook 
Letter 106 (3560). Applicants without written evidence that a tax 
credit application has been submitted and accepted by HFA must certify 
in writing they will apply for tax credits to HFA and obtain a firm 
commitment within 12 months of the issuance of a ``Notice of Pre-
Application Review Action.''
    Rental Assistance (RA) and operating assistance will be available 
for new construction in FY 2018. Operating assistance is explained at 7 
CFR 3560.574 and may be used in lieu of tenant-specific RA in off-farm 
FLH projects that serve migrant farm workers as defined in 7 CFR 
3560.11, that are financed under Section 514 or Section 516 (h) of the 
Housing Act of 1949, as amended (42 U.S.C. 1484 and 1486(h) 
respectively), and otherwise meet the requirements of 7 CFR 3560.574.
    In order to maximize the use of our limited supply of FLH funds, we 
may contact eligible Notice of Solicitation Applications (NOSA) 
responses selected for an award in point score order starting with the 
higher scores, with proposals to modify the transaction's proportions 
of grant and loan funds. In addition, if funds remain after the highest 
scoring eligible NOSA responses are selected for awards, we may contact 
those eligible responses not selected for awards, in point score order 
starting with the highest scores, to ascertain whether those 
respondents will accept those remaining funds.

B. Eligibility Information

1. Eligibility

    Housing Eligibility--housing that is constructed with FLH loans 
and/or grants must meet Rural Development's design and construction 
standards contained in 7 CFR part 1924, subparts A and C. Once 
constructed, off-farm FLH must be managed in accordance with 7 CFR part 
3560. In addition, off-farm FLH must be operated on a non-profit basis 
and tenancy must be open to all qualified domestic farm laborers, 
regardless at which farm they work. Section 514(f)(3) of the Housing 
Act of 1949, as amended (42 U.S.C. 1484(f)(3)) defines domestic farm 
laborers to include any person regardless of the person's source of 
employment, who receives a substantial portion of his/her income from 
the primary production of agricultural or aqua cultural commodities in 
the unprocessed or processed stage, and also includes the person's 
family.
    Tenant Eligibility--tenant eligibility is limited to persons who 
meet the definition of a ``disabled domestic farm laborer,'' or a 
``domestic farm laborer,'' or ``retired domestic farm laborer,'' as 
defined in Section 514(f)(3) of the Housing Act of 1949, as further 
amended through the Consolidated Appropriations Act, 2018. See 42 
U.S.C. 1484(f)(3).
    Applicant Eligibility--
    (a) To be eligible to receive a Section 516 grant for off-farm FLH, 
the applicant must be a broad-based non-profit organization, including 
community and Faith-Based organizations, a non-profit organization of 
farm workers, a Federally recognized Indian tribe, an agency or 
political subdivision of a State or local Government, or a public 
agency (such as a housing authority). The applicant must be able to 
contribute at least one-tenth of the TDC from non-Rural Development 
resources which can include leveraged funds.
    (b) To be eligible to receive a Section 514 loan for off-farm FLH, 
the applicant must be a broad-based non-profit organization, including 
community and Faith-Based organizations, a non-profit organization of 
farm workers, a Federally recognized Indian tribe, an agency or 
political subdivision of a State or local Government, a public agency

[[Page 30108]]

(such as a housing authority), or a limited partnership which has a 
non-profit entity as its general partner, and
    (i) Be unable to provide the necessary housing from its own 
resources;
    (ii) Except for State or local public agencies and Indian tribes, 
be unable to obtain similar credit elsewhere at rates that would allow 
for rents within the payment ability of eligible residents.
    (iii) Broad-based non-profit organizations must have a membership 
that reflects a variety of interests in the area where the housing will 
be located.
    2. Cost Sharing or Matching--Section 516 grants for off-farm FLH 
may not exceed 90 percent of the TDC as provided in 7 CFR 
3560.562(c)(1).
    3. Other Requirements--the following requirements apply to loans 
and grants made in response to this Notice:
    (a) 7 CFR part 1901, subpart E, regarding equal opportunity 
requirements;
    (b) For grants only, 2 CFR parts 200 and 400, which establishes the 
uniform administrative and audit requirements for grants and 
cooperative agreements to State and local Governments and to non-profit 
organizations;
    (c) 7 CFR part 1901, subpart F, regarding historical and 
archaeological properties;
    (d) 7 CFR part 1970, regarding environmental review and 
documentation requirements;
    (e) 7 CFR part 3560, subpart L, regarding the loan and grant 
authorities of the off-farm FLH program;
    (f) 7 CFR part 1924, subpart A, regarding planning and performing 
construction and other development;
    (g) 7 CFR part 1924, subpart C, regarding the planning and 
performing of site development work;
    (h) For construction financed with a Section 516 grant, the 
provisions of the Davis-Bacon Act (40 U.S.C. 276(a)-276(a)-5) and 
implementing regulations published at 29 CFR parts 1, 3, and 5;
    (i) All other requirements contained in 7 CFR part 3560, regarding 
the Sections 514/516 off-farm FLH programs; and
    (j) Please note that grant applicants must obtain a Dun and 
Bradstreet Data Universal Numbering System (DUNS) number and maintain 
registration in the Central Contractor Registration (CCR) prior to 
submitting a pre-application pursuant to 2 CFR 25.200(b). In addition, 
an entity applicant must maintain registration in the CCR database at 
all times during which it has an active Federal award or an application 
or plan under consideration by the Agency. Similarly, all recipients of 
Federal financial assistance are required to report information about 
first-tier sub-awards and executive compensation in accordance with 2 
CFR part 170. So long as an entity applicant does not have an exception 
under 2 CFR 170.110(b), the applicant must have the necessary processes 
and systems in place to comply with the reporting requirements should 
the applicant receive funding. See 2 CFR 170.200(b).

C. Application and Submission Information

1. Pre-Application Submission

    The application process will be in two phases: The initial pre-
application (or proposal) and the submission of a final application. 
Only those pre-applications or proposals that are selected for further 
processing will be invited to submit final applications. In the event 
that a proposal is selected for further processing and the applicant 
declines, the next highest ranked unfunded pre-application may be 
selected for further processing. All pre-applications for Sections 514 
and 516 funds must be filed with the appropriate Rural Development 
State Office and must meet the requirements of this Notice. Incomplete 
pre-applications will not be reviewed and will be returned to the 
applicant. No pre-application will be accepted after the deadline 
unless date and time are extended by another Notice published in the 
Federal Register.
    Pre-applications can be submitted either electronically using the 
FLH Pre-Application form found at: http://www.rd.usda.gov/programs-services/farm-labor-housing-direct-loans-grants or in hard copy to the 
appropriate Rural Development Office where the project will be located. 
Follow the link to find the appropriate Rural Development State Office 
address for requesting and submitting a pre-application at: https://www.rd.usda.gov/about-rd/offices/state-offices. Applicants are strongly 
encouraged; but not required, to submit the pre-application 
electronically. The electronic form contains a button labeled ``Send 
Form.'' By clicking on the button, the applicant will see an email 
message window with an attachment that includes the electronic form the 
applicant filled out as a data file with a .pdf extension. In addition, 
an auto-reply acknowledgement will be sent to the applicant when the 
electronic Loan Proposal form is received by the Agency unless the 
sender has software that will block the receipt of the auto-reply 
email. The State Office will record pre-applications received 
electronically by the actual date and time when all attachments are 
received at the State Office.
    Submission of the electronic Section 514 Loan Proposal form does 
not constitute submission of the entire proposal package which requires 
additional forms and supporting documentation as listed within this 
Notice. You may use one of the following options for submitting the 
entire proposal package comprising of all required forms and documents. 
On the Loan Proposal form you can indicate the option you will be using 
to submit each required form and document.
    (a) Electronic Media Option. Submit all forms and documents as 
read-only Adobe Acrobat files on electronic media such as CDs, DVDs or 
USB drives. For each electronic device submitted, the applicant should 
include a Table of Contents of all documents and forms on that device. 
The electronic media should be submitted to the Rural Development State 
Office listed in this Notice where the property is located. Any forms 
and documents that are not sent electronically, including the check for 
credit reports, must be mailed to the Rural Development State Office.
    (b) Email Option. On the Loan Proposal form you will be asked for a 
submission email address. This email address will be used to establish 
a folder on the U.S. Department of Agriculture (USDA) server with your 
unique email address. Once the Loan Proposal form is processed, you 
will receive an additional email notifying you of the email address 
that you can use to email your forms and documents. Please Note: All 
forms and documents must be emailed from the same submission email 
address. This will ensure that all forms and documents you send will be 
stored in the folder assigned to that email address. Any forms and 
documents that are not sent via the email option must be submitted on 
an electronic media or in hard copy to the Rural Development State 
Office.
    (c) Hard Copy Submission to the Rural Development State Office. If 
you are unable to send the proposal package electronically using either 
of the options listed above, you may send a hard copy of all forms and 
documents to the Rural Development State Office where the property is 
located. Hard copy pre-applications received on or before the deadline 
will receive the close of business time of the day received as the 
receipt time. Assistance for filing electronic and hard copy pre-
applications can be obtained from any Rural Development State Office.
    For electronic submissions, there is a time delay between the time 
it is sent and the time it is received depending on network traffic. As 
a result, last-minute submissions sent before the deadline

[[Page 30109]]

date and time could be received after the deadline date and time 
because of the increased network traffic. Applicants are reminded that 
all submissions received after the deadline date and time will be 
rejected, regardless of when they were sent.
    If a pre-application is accepted for further processing, the 
applicant must submit a complete, final application, acceptable to 
Rural Development prior to the obligation of Rural Development funds. 
If the pre-application is not accepted for further processing the 
applicant will be notified of appeal rights under 7 CFR part 11.

2. Pre-Application Requirements

    (a) The pre-application must contain the following:
    (1) A summary page listing the following items. This information 
should be double-spaced between items and not be in narrative form.
    i. Applicant's name.
    ii. Applicant's Taxpayer Identification Number.
    iii. Applicant's address.
    iv. Applicant's telephone number.
    v. Name of applicant's contact person, telephone number, and 
address.
    vi. Amount of loan and/or grant requested.
    vii. For grants of Federal financial assistance (including loans 
and grants, cooperative agreements, etc.), the applicant's DUNS number 
and registration in the CCR database in accordance with 2 CFR part 25. 
As required by OMB, all grant applicants must provide a DUNS number 
when applying for Federal grants, on or after October 1, 2003. 
Organizations can receive a DUNS number at no cost by calling the 
dedicated toll-free number at (866) 705-5711 or via the internet at: 
http://www.dnb.com/. Additional information concerning this requirement 
can be obtained on the Grants.gov website at www.grants.gov. Similarly, 
applicants may register for the CCR at: https://www.uscontractorregistration.com/ or by calling (877) 252-2700.
    (2) Awards made under this Notice are subject to the provisions 
contained in Consolidated Appropriations Act, 2018 (Pub. L. 115-141, 
March 23, 2018) sections 745 and 746 regarding corporate felony 
convictions and corporate Federal tax delinquencies.
    (3) A narrative verifying the applicant's ability to meet the 
eligibility requirements stated earlier in this Notice. If an applicant 
is selected for further processing, Rural Development will require 
additional documentation as set forth in a Conditional Commitment in 
order to verify the entity has the legal and financial capability to 
carry out the obligation of the loan.
    (4) Standard Form 424, ``Application for Federal Assistance,'' can 
be obtained at: http://www.grants.gov or from any Rural Development 
State Office listed in Section VII of this Notice.
    (5) For loan pre-applications, current (within 6 months of pre-
application date) financial statements with the following paragraph 
certified by the applicant's designated and legally authorized signer:
    ``I/we certify the above is a true and accurate reflection of our 
financial condition as of the date stated herein. This statement is 
given for the purpose of inducing the United States of America to make 
a loan or to enable the United States of America to make a 
determination of continued eligibility of the applicant for a loan as 
requested in the loan application of which this statement is a part.''
    (6) For loan pre-applications, a check for $24 from applicants made 
out to the U.S. Department of Agriculture. This will be used to pay for 
credit reports obtained by Rural Development.
    (7) Evidence that the applicant is unable to obtain credit from 
other sources. Letters from credit institutions which normally provide 
real estate loans in the area should be obtained and these letters 
should indicate the rates and terms upon which a loan might be 
provided. (Note: Not required from State or local public agencies or 
Indian tribes.)
    (8) If an FLH grant is desired, a statement concerning the need for 
an FLH grant. The statement should include preliminary estimates of the 
rents required with and without a grant.
    (9) A statement of the applicant's experience in operating labor 
housing or other rental housing. If the applicant's experience is 
limited, additional information should be provided to indicate how the 
applicant plans to compensate for this limited experience (i.e., 
obtaining assistance and advice of a management firm, non-profit group, 
public agency, or other organization which is experienced in rental 
management and will be available on a continuous basis).
    (10) A brief statement explaining the applicant's proposed method 
of operation and management (i.e., on-site manager, contract for 
management services, etc.). As stated earlier in this Notice, the 
housing must be managed in accordance with the program's management 
regulation, 7 CFR part 3560.
    (11) Provide your entity's projected Return on Investment (ROI) for 
the requested funds to demonstrate the effectiveness and efficiency of 
your proposal. Please include the methodology and assumptions you used 
in the ROI calculation. Also include a detailed examination of outputs 
and outcomes.
    (12) Applicants must also provide:
    (i) A copy of, or an accurate citation to, the special provisions 
of State or Tribal law under which they are organized, a copy of the 
applicant's charter, Articles of Incorporation, and by-laws;
    (ii) The names, occupations, and addresses of the applicant's 
members, directors, and officers; and
    (iii) If a member or subsidiary of another organization, the 
organization's name, address, and nature of business.
    (13) A preliminary market survey or market study to identify the 
supply and demand for farm labor housing in the market area. The market 
area must be clearly identified and may include only the area from 
which tenants can reasonably be drawn for the proposed project. 
Documentation must be provided to justify a need within the intended 
market area for the housing of domestic farm laborers. The 
documentation must take into account disabled and retired farm workers. 
The preliminary survey should address or include the following items:
    (i) The annual income level of farmworker families in the area and 
the probable income of the farm workers who will likely occupy the 
proposed housing;
    (ii) A realistic estimate of the number of farm workers who remain 
in the area where they harvest and the number of farm workers who 
normally migrate into the area. Information on migratory workers should 
indicate the average number of months the migrants reside in the area 
and an indication of what type of family groups are represented by the 
migrants (i.e., single individuals as opposed to families);
    (iii) General information concerning the type of labor intensive 
crops grown in the area and prospects for continued demand for farm 
laborers;
    (iv) The overall occupancy rate for comparable rental units in the 
area and the rents charged and customary rental practices for these 
units (i.e., will they rent to large families, do they require annual 
leases, etc.);
    (v) The number, condition, adequacy, rental rates and ownership of 
units currently used or available to farm workers;
    (vi) A description of the units proposed, including the number, 
type, size, rental rates, amenities such as carpets and drapes, related 
facilities

[[Page 30110]]

such as a laundry room or community room and other facilities providing 
supportive services in connection with the housing and the needs of the 
prospective tenants such as a health clinic or day care facility, 
estimated development timeline, estimated TDC, and applicant 
contribution; and
    (vii) The applicant must also identify all other sources of funds, 
including the dollar amount, source, and commitment status. (Note: A 
Section 516 grant may not exceed 90 percent of the TDC of the housing.)
    (14) The applicant must submit a checklist, certification, and 
signed affidavit by the project architect or engineer, as applicable, 
for any energy programs the applicant intends to participate in.
    (15) The following forms are required:
    (i) A prepared HUD Form 935.2A, ``Affirmative Fair Housing 
Marketing Plan (AFHM) Multi-Family Housing,'' in accordance with 7 CFR 
1901.203(c). The plan will reflect that occupancy is open to all 
qualified ``domestic farm laborers,'' regardless of which farming 
operation they work and that they will not discriminate on the basis of 
race, color, sex, age, disability, marital or familial status or 
National origin in regard to the occupancy or use of the units. The 
form can be found at: http://portal.hud.gov/hudportal/documents/huddoc?id=935-2a.PDF.
    (ii) A proposed operating budget utilizing Form RD 3560-7, 
``Multiple Family Housing Project Budget/Utility Allowance,'' can be 
found at: http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD3560-7.PDF.
    (iii) An estimate of development cost utilizing Form RD 1924-13, 
``Estimate and Certificate of Actual Cost,'' can be found at: http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD1924-13.PDF.
    (iv) Form RD 3560-30, ``Certification of no Identity of Interest 
(IOI),'' can be found at: http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD3560-30.PDF and Form RD 3560-31, ``Identity of 
Interest Disclosure/Qualification Certification,'' can be found at: 
http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD3560-31.PDF.
    (v) Form HUD 2530, ``Previous Participation Certification,'' can be 
found at: http://portal.hud.gov/hudportal/documents/huddoc?id=2530.pdf.
    (vi) If requesting RA or Operating Assistance, Form RD 3560-25, 
``Initial Request for Rental Assistance or Operating Assistance,'' can 
be found at: http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD3560-25.PDF.
    (vii) Form RD 400-4, ``Assurance Agreement,'' can be found at: 
http://forms.sc.egov.usda.gov/efcommon/eFileServices/eForms/RD400-4.PDF. Applicants for revitalization, repair, and rehabilitation 
funding are to apply through the Multifamily Preservation and 
Revitalization (MPR) Demonstration program.
    (viii) Evidence of compliance with Executive Order 12372. The 
applicant must send a copy of Form SF-424, ``Application for Federal 
Assistance,'' to the applicant's State clearinghouse for 
intergovernmental review. If the applicant is located in a State that 
does not have a clearinghouse, the applicant is not required to submit 
the form. Applications from Federally recognized Indian tribes are not 
subject to this requirement.
    (16) Evidence of site control, such as an option contract or sales 
contract. In addition, a map and description of the proposed site, 
including the availability of water, sewer, and utilities and the 
proximity to community facilities and services such as shopping, 
schools, transportation, doctors, dentists, and hospitals.
    (17) Preliminary plans and specifications, including plot plans, 
building layouts, and type of construction and materials. The housing 
must meet Rural Development's design and construction standards 
contained in 7 CFR part 1924, subparts A and C and must also meet all 
applicable Federal, State, and local accessibility standards.
    (18) A supportive services plan, which describes services that will 
be provided on-site or made available to tenants through cooperative 
agreements with service providers in the community, such as a health 
clinic or day care facility. Off-site services must be accessible and 
affordable to farm workers and their families. Letters of intent from 
service providers are acceptable documentation at the pre-application 
stage.
    (19) A Sources and Uses Statement which shows all sources of 
funding included in the proposed project. The terms and schedules of 
all sources included in the project should be included in the Sources 
and Uses Statement.
    (20) A separate one-page information sheet listing each of the 
``Pre-Application Scoring Criteria,'' contained in this Notice, 
followed by a reference to the page numbers of all relevant material 
and documentation that is contained in the proposal that supports the 
criteria.
    (21) Applicants are encouraged, but not required, to include a 
checklist of all of the pre-application requirements and to have their 
pre-application indexed and tabbed to facilitate the review process;
    (22) Evidence of compliance with the requirements of the applicable 
State Housing Preservation Office (SHPO), and/or Tribal Historic 
Preservation Officer (THPO). A letter from SHPO and/or THPO where the 
off-farm FLH project is located, signed by their designee will serve as 
evidence of compliance.
    (23) Environmental information pursuant to the requirements in 7 
CFR 1970.

D. Pre-Application Review Information

    1. Selection Criteria. Section 514 FLH loan funds and Section 516 
FLH grant funds will be distributed to States based on a national 
competition, as follows:
    (a) Rural Development State Office will accept, review, and score 
pre-applications in accordance with this Notice. The scoring factors 
are:
    (1) The presence of construction cost savings, including donated 
land and construction leverage assistance, for the units that will 
serve program-eligible tenants. The savings will be calculated as a 
percentage of the Rural Development TDC. The percentage calculation 
excludes any costs prohibited by Rural Development as loan expenses, 
such as a developer's fee. Construction cost savings includes, but is 
not limited to, funds for hard construction costs, and State or Federal 
funds which are applicable to construction costs. A minimum of 10 
percent cost savings is required to earn points; however, if the total 
percentage of cost savings is less than 10 percent and the proposal 
includes donated land, 2 points will be awarded for the donated land. 
To count as cost savings for purposes of the selection criteria, the 
applicant must submit written evidence from the third-party funder that 
an application for those funds has been submitted and accepted points 
will be awarded in accordance with the following table using rounding 
to the nearest whole number.

------------------------------------------------------------------------
                          Percentage                             Points
------------------------------------------------------------------------
75 or more...................................................         20
60-74........................................................         18
50-59........................................................         16
40-49........................................................         12
30-39........................................................         10
20-29........................................................          8
10-19........................................................          5
0-9..........................................................          0
------------------------------------------------------------------------


[[Page 30111]]

    (2) The presence of operational cost savings, such as tax 
abatements, non-Rural Development tenant subsidies or donated services 
are calculated on a per-unit cost savings for the sum of the savings. 
Savings must be available for at least 5 years and documentation must 
be provided with the application demonstrating the availability of 
savings for 5 years. To calculate the savings, take the total amount of 
savings and divide it by the number of units in the project that will 
benefit from the savings to obtain the per-unit cost savings. For non-
Rural Development tenant subsidy, if the value changes during the 5-
year calculation, the applicant must use the lower of the non-Rural 
Development tenant subsidy to calculate per-unit cost savings. For 
example, a 10-unit property with 100 percent designated farm labor 
housing units receiving $20,000 per year non-Rural Development subsidy 
yields a cost savings of $100,000 ($20,000 x 5 years); resulting to a 
$10,000 per-unit cost savings ($100,000/10 units).
    Use the following table to apply points:

------------------------------------------------------------------------
                    Per-unit cost savings                        Points
------------------------------------------------------------------------
Above $15,000................................................         50
$10,001--$15,000.............................................         35
$7,501--$10,000..............................................         20
$5,001--$7,500...............................................         15
$3,501--$5,000...............................................         10
$2,001--$3,500...............................................          5
$1,000--$2,000...............................................          2
------------------------------------------------------------------------

    (3) 10 points will be awarded to projects in persistent poverty 
counties. A county is considered persistently poor if 20 percent or 
more of its population was living in poverty over the last 30 years 
(measured by the 1990, 2000 and 2010 decennial censuses and 2007-2011 
American Community Survey 5-year estimates).
    (4) Presence of tenant services.
    Two points will be awarded for each resident service included in 
the tenant services plan up to a maximum of 10 points. Plans must 
detail how the services are to be administered, who will administer 
them, and where they will be administered. All tenant service plans 
must include letters of intent that clearly state the service that will 
be provided at the project for the benefit of the residents from any 
party administering each service, including the applicant. These 
services may include, but are not limited to, transportation related 
services, on-site English as a Second Language (ESL) classes, move-in 
funds, emergency assistance funds, homeownership counseling, food 
pantries, after school tutoring, and computer learning centers.
    (5) Energy Initiative Scoring Points (the aggregate points for all 
the Energy Initiative categories may not exceed 20 points).
    Properties may receive points for energy initiatives in the 
categories of energy conservation, energy generation, water 
conservation and green property management. Depending on the scope of 
work (SOW), properties may earn ``energy initiative'' points in either 
one of two categories: (1) New Construction or (2) Purchase and 
Rehabilitation of an Existing Non-Farm Labor Housing Building. Projects 
will be eligible for one category of the two, but not both.
    Energy programs including LEED for Homes, Green Communities, etc., 
will each have an initial checklist indicating prerequisites for 
participation in its energy program. The applicable energy program 
checklist will establish whether prerequisites for the energy program's 
participation will be met. All checklists must be accompanied by a 
signed affidavit by the project architect or engineer stating that the 
goals are achievable and the project has been enrolled in these 
programs if enrollment is applicable to that program. In addition, 
projects that apply for points under the energy generation category 
must include calculations of savings of energy. Compare property energy 
usage of three scenarios: (1) Property built to required code of State 
with no renewables, to (2) property as-designed with commitments to 
stated energy conservation programs without the use of renewables and 
(3) property as-designed with commitments to stated energy conservation 
programs and the use of proposed renewables. Use local average metrics 
for weather and utility costs and detail savings in kilowatts and 
dollars. Provide payback calculations. These calculations must be done 
by a licensed engineer or credentialed renewable energy provider. 
Include with application, the provider/engineer's credentials including 
qualifications, recommendations, and proof of previous work. The 
checklist, affidavit, calculations and qualifications of engineer/
energy provider must be submitted together with the loan application.
    Enrollment in the EPA Portfolio Manager Program. All projects 
awarded scoring points for energy initiatives must enroll the project 
in the EPA Portfolio Manager Program to track post-construction energy 
consumption data. More information about this program may be found at: 
http://www.energystar.gov/buildings/facility-owners-and-managers/existing-buildings/use-portfolio-manager.
    (ii) Energy Conservation for New Construction or Purchase and 
Rehabilitation of an Existing Non-Farm Labor Housing Building. Projects 
may be eligible for scoring points when the pre-application includes a 
written certification by the applicant to participate and achieve 
certification in the following energy efficiency programs. The points 
will be allocated as follows:
     Participation in the EPA's Energy Star for Homes V3 
program. (2 points) http://www.energystar.gov/index.cfm?c=bldrs_lenders_raters.pt_bldr.

OR

     Participation in the Green Communities program by the 
Enterprise Community Partners. (4 points) http://www.enterprisecommunity.com/solutions-and-innovation/enterprise-green-communities.

OR

     Participation in one of the following programs will be 
awarded points for certification.

    Note:  Each program has four levels of certification. State the 
level of certification that the applicant plans will achieve in 
their certification:

     LEED for Homes program by the United States Green Building 
Council (USGBC): http://www.usgbc.org.

--Certified Level (2 points), OR
--Silver Level (4 points), OR
--Gold Level (6 points), OR
--Platinum Level (8 points)

    Applicant must state the level of certification that the 
applicant's plans will achieve in their certification in its pre-
application.

OR

     Home Innovation's and The National Association of Home 
Builders (NAHB) ICC 700 National Green Building Standard TM: http://www.nahb.org/.

--Green-Bronze Level (2 points), OR
--Silver Level (4 points), OR
--Gold Level (6 points), OR
--Emerald Level (8 points).

    Applicant must state the level of certification that the 
applicant's plans will achieve in their certification in its pre-
application.

AND

     Participation in the Department of Energy's Zero Energy 
Ready program. (2 points) http://www.energy.gov/eere/buildings/zero-energy-ready-home.

AND

     Participation in local green/energy efficient building 
standards. Applicants who participate in a city, county, or 
municipality program (2 points).

[[Page 30112]]

    (iii) Energy Conservation for Rehabilitation. Pre-applications for 
the purchase and rehabilitation of non-program MFH and related 
facilities in rural areas may be eligible for scoring points when the 
pre-application includes a written certification by the applicant to 
participate in one of the following energy efficiency programs. Again, 
the certification must be accompanied by a signed affidavit by the 
project architect or engineer stating that the goals are achievable. 
Points will be awarded as follows:
     Participation in the Green Communities program by the 
Enterprise Community Partners (3 points) http://www.enterprisecommunity.com/solutions-and-innovation/enterprise-green-communities. At least 30 percent of the points needed to qualify for 
the Green Communities program must be earned under the Energy 
Efficiency section of Green Communities.

AND

     Participation in local green/energy efficient building 
standards. Applicants who participate in a city, county or municipality 
program (2 points). The applicant should be aware of and look for 
additional requirements that are sometimes embedded in the third-party 
program's rating and verification systems.
    (iv) Energy Generation. Pre-applications for new construction or 
purchase and rehabilitation of non-program multi-family projects which 
participate in the above-mentioned programs and receive scoring points 
for installation of on-site renewable energy sources. Energy analysis 
of preliminary building plans using industry-recognized simulation 
software must document the projected total energy consumption of all of 
the building components and building site usage. Projects with an 
energy analysis of the preliminary or rehabilitation building plans 
that propose a 10 percent to 100 percent energy generation commitment 
(where generation is considered to be the total amount of energy needed 
to be generated on-site to make the building a net-zero consumer of 
energy) will be awarded points as follows:

 0 to 9 percent commitment to energy generation--0 points
 10 to 20 percent commitment to energy generation--1 point
 21 to 40 percent commitment to energy generation--2 points
 41 to 60 percent commitment to energy generation--3 points
 61 to 80 percent commitment to energy generation--4 points
 81-100 percent or more commitment to energy generation--5 
points

    Projects may participate in Power Purchase Agreements or Solar 
Leases to achieve their on-site renewable energy generation goals 
provided that the financial obligations of the lease/purchase 
agreements are clearly documented and included in the application, and 
qualifying ratios continue to be achieved.
    An additional 1 point will be awarded for off-grid systems, or 
elements of systems, provided that at least 5 percent of on-site 
renewable system is off-grid. See www.dsireusa.org for State and local 
specific incentives and regulations of energy initiatives.
    (v) Water Conservation in Irrigation Measures. Projects may be 
awarded 1 point for the use of an engineered recycled water (gray water 
or storm water) for landscape irrigation covering 50 percent or more of 
the property's site landscaping needs.
    (vi) Property Management Credentials. Projects may be awarded 1 
point if the designated property management company or individuals that 
will assume maintenance and operations responsibilities upon completion 
of construction work have a Credential for Green Property Management. 
Credentialing can be obtained from the National Apartment Association 
(NAA), National Affordable Housing Management Association, The 
Institute for Real Estate Management, U.S. Green Building Council's 
Leadership in Energy and Environmental Design for Operations and 
Maintenance (LEED OM), or another source with a certifiable 
credentialing program. Credentialing must be illustrated in the 
resume(s) of the property management team and included with the pre-
application.
    The National Office will rank all pre-applications nationwide and 
distribute funds to States in rank order, within funding and RA limits. 
When proposals have an equal score, preference will be given first to 
Indian tribes as defined in Sec.  3560.11 and then local non-profit 
organizations or public bodies whose principal purposes include low-
income housing that meet the conditions of Sec.  3560.55(c) and the 
following conditions:
     Is exempt from Federal income taxes under section 
501(c)(3) or 501(c)(4) of the Internal Revenue Service code;
     Is not wholly or partially owned or controlled by a for-
profit or limited-profit type entity;
     Whose members, or the entity, do not share an identity of 
interest with a for-profit or limited-profit type entity;
     Is not co-venturing with another entity; and
     The entity or its members will not be receiving any direct 
or indirect benefits pursuant to Low Income Housing Tax Credits.
    If there are two or more applications that have the same score and 
both cannot be funded, a lottery in accordance with 7 CFR 3560.56(c)(2) 
will be used to break the tie. If insufficient funds or RA remain for 
the next ranked proposal, that applicant will be given a chance to 
modify their pre-application to bring it within remaining funding 
levels. This will be repeated for each next ranked eligible proposal 
until an award can be made or the list is exhausted.
    Rural Development will notify all applicants whether their 
applications have been accepted or rejected and provide appeal rights 
under 7 CFR part 11, as appropriate.

E. Federal Award Administration Information

1. Federal Award Notices

    Applicants must submit their initial applications by the due date 
specified in this Notice. Once the applications have been scored and 
ranked by the National Office, the National Office will advise State 
Offices of the proposals selected for further processing, State Offices 
will respond to applicants by letter.
    If the application is not accepted for further processing, the 
applicant will be notified of appeal rights under 7 CFR part 11.

2. Administrative and National Policy

    All FLH loans and grants are subject to the Restrictive-Use 
Provisions contained in 7 CFR 3560.72(a)(2).

3. Reporting

    Borrowers must maintain separate financial records for the 
operation and maintenance of the project and for tenant services. 
Tenant services will not be funded by Rural Development. Funds 
allocated to the operation and maintenance of the project may not be 
used to supplement the cost of tenant services, nor may tenant service 
funds be used to supplement the project operation and maintenance. 
Detailed financial reports regarding tenant services will not be 
required unless specifically requested by Rural Development, and then 
only to the extent necessary for Rural Development and the borrower to 
discuss the affordability (and competitiveness) of the service provided 
to the tenant. The project audit, or verification of accounts on Form 
RD 3560-10, ``Borrower Balance Sheet,'' together with an accompanying 
Form RD 3560-7,

[[Page 30113]]

``Multiple Family Housing Project Budget Utility Allowance,'' must 
allocate revenue and expense between project operations and the service 
component.

F. Equal Opportunity and Non-Discrimination Requirements

    In accordance with Federal civil rights law and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, the USDA, its 
Agencies, offices, and employees, and institutions participating in or 
administering USDA programs are prohibited from discriminating based on 
race, color, national origin, religion, sex, gender identity (including 
gender expression), sexual orientation, disability, age, marital 
status, family/parental status, income derived from a public assistance 
program. Political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Persons with disabilities who require alternative means of 
communication for program information (e.g., Braille, large print, 
audiotape, American Sign Language, etc.) should contact the responsible 
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or 
contact USDA through the Federal Relay Service at (800) 877-8339. 
Additionally, program information may be made available in languages 
other than English.
    To file a program discrimination complaint, complete the USDA 
Program Discrimination Complaint Form, AD-3027, found online at: http://www.ascr.usda.gov/complaint_filing_cust.html, and at any USDA office 
or write a letter addressed to USDA and provide in the letter all of 
the information requested in the form. To request a copy of a complaint 
form, call, (866) 632-9992. Submit your completed form or letter to 
USDA by:
    (1) Mail: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 
20250-9410;
    (2) Fax: (202) 690-7442; or
    (3) Email at: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

    Dated: June 21, 2018.
Joel C. Baxley,
Administrator, Rural Housing Service.
[FR Doc. 2018-13761 Filed 6-26-18; 8:45 am]
BILLING CODE 3410-XV-P