[Federal Register Volume 87, Number 130 (Friday, July 8, 2022)]
[Rules and Regulations]
[Pages 40709-40710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-14523]



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 Rules and Regulations
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
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  Federal Register / Vol. 87, No. 130 / Friday, July 8, 2022 / Rules 
and Regulations  

[[Page 40709]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 3550

[Docket No. RHS-22-SFH-0016]


Single Family Housing Section 504 Repair Pilot

AGENCY: Rural Housing Service, USDA.

ACTION: Notification of waivers.

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SUMMARY: The Rural Housing Service (RHS or the Agency), a Rural 
Development agency of the United States Department of Agriculture 
(USDA), is issuing this document to waive two regulatory requirements 
for the Section 504 Direct Single Family Housing Loans and Grants 
(DSFHLG) pilot program. The Agency's intention is to evaluate the 
existing regulations and remove regulatory barriers to assist eligible 
applicants with improved ease of use for very low-income homeowners 
seeking to repair or rehabilitate their homes. This document briefly 
discusses the new waivers and provides contact information for 
additional details about the pilot program.

DATES: The effective date of the two regulatory waivers is July 8, 
2022. The duration of the pilot program is anticipated to continue 
until July 8, 2024, at which time the RHS may extend the pilot program 
(with or without modifications) or terminate it depending on the 
workload and resources needed to administer the program, feedback from 
the public, and the effectiveness of the program. If the pilot program 
is extended or terminated, the RHS will notify the public.

FOR FURTHER INFORMATION CONTACT: Anthony Williams, Management and 
Program Analyst, Special Programs, Single Family Housing Direct Loan 
Division, Rural Development, U.S. Department of Agriculture, Email: 
[email protected]; Phone: (202) 720-9649.

SUPPLEMENTARY INFORMATION: 

Authority

    Title V, Section 504 of the Housing Act of 1949, as amended; 42 
U.S.C. 1474.

Background

    The RHS offers a variety of programs to build or improve housing 
and essential community facilities in rural areas. The Agency offer 
loans, grants, and loan guarantees for single- and multifamily housing, 
child-care centers, fire and police stations, hospitals, libraries, 
nursing homes, schools, first responder vehicles and equipment, housing 
for farm laborers, and much more. RHS also provides technical 
assistance loans and grants in partnership with non-profit 
organizations, Indian tribes, state and Federal government agencies, 
and local communities.
    The RHS Single Family Housing Direct Loans and Grants Program 
(SFHDLGP) Division implements the Section 504 loan/grant program under 
7 CFR part 3550 with the objective to assist very low-income owner 
occupants of modest single-family homes in rural areas repair or 
rehabilitate their homes. Loan funds are available for repairs to 
improve or modernize a home, make it safer or more sanitary, or remove 
health and safety hazards. The eligibility requirements, as described 
in 7 CFR 3550.103, states that homeowner must be unable to obtain 
affordable credit elsewhere at reasonable terms and conditions, but 
must demonstrate a reasonable ability to repay the Section 504 loan. 
For homeowners 62 years old and over who cannot obtain a loan, grant 
funds are available to correct health or safety hazards, or remodel 
dwellings to make them accessible to a household member with a 
disability.
    RHS may authorize limited demonstration programs to test new 
approaches to offering housing under the statutory authority granted to 
the Secretary, as set forth in 7 CFR 3550.7. Such demonstration 
programs may not be consistent with some of the provisions contained in 
this part. However, any program requirements that are statutory will 
remain in effect.
    In 2019, the Agency initiated the Section 504 pilot program to 
evaluate existing regulations and remove regulatory barriers to assist 
very low-income homeowners seeking to repair or rehabilitate their 
homes. The pilot program has been successful in creating additional 
opportunities and greater accessibility for eligible applicants. All 
but two of the waived regulatory requirements were included in the 
Direct Singe Family Loans and Grants Programs final rule (87 FR 6761), 
which became effective on March 9, 2022.

Continuation of Section 504 Pilot Regulatory Waivers

    The Agency is continuing the Section 504 Pilot Program with the two 
waivers that were not included in the final rule (87 FR 6761) published 
on February 7, 2021. The Agency plans to further evaluate and test 
these waivers with the intention that, if successful, it will codify 
them into 7 CFR part 3550 to be applied program wide.
    The first waiver is that pilot applicants are not subject to the 
site requirement outlined in 7 CFR 3550.105(b) which states that the 
site must not be large enough to be subdivided into more than one site 
under existing local zoning ordinances. While pilot applicants can have 
subdividable sites, their homes must meet the other property standards 
found in 7 CFR 3550.106(a).
    The second waiver is that pilot applicants are not subject to the 
same threshold outlined in 7 CFR 3550.111 which requires an appraisal 
when the Section 504 debt to be secured exceeds $15,000 or whenever the 
Agency determines that an appraisal is necessary to establish the 
adequacy of the security. A ``subject to repairs'' appraisal and 
appraisal fee will be required when the assessed valuation by local 
authorities does not support a fully secured interest by the Agency, or 
when the sum of all secured (RD or non-RD) indebtedness including the 
proposed repair loan, exceeds $25,000.

Eligibility Requirements

    Eligible participants in the Section 504 program must abide by the 
statutory requriements set forth in 7 CFR part 3550. The following 
twenty-three (23) States and U.S. Territories are selected to provide 
wide geographic and historic production variation for the pilot: 
California, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maine, Michigan, 
Mississippi, New Jersey, New Mexico, New York, North Carolina, Ohio, 
Oregon, Pennsylvania, Puerto Rico, South Carolina, Texas, Tennessee,

[[Page 40710]]

Virginia, Washington, and West Virginia. If an existing borrower in a 
pilot state qualifies for a subsequent loan or grant, the pilot 
conditions can apply to the subsequent request as appropriate. Non-
pilot states may request case-by-case administrative waivers (if 
justified) that mirror the allowances in the pilot.

Paperwork Reduction Act

    The regulatory waivers for this pilot contains no new reporting or 
recordkeeping burdens under Office of Management and Budget (OMB) 
control number 0575-0179 that would require approval under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

Non-Discrimination Statement

    In accordance with Federal civil rights laws and USDA civil rights 
regulations and policies, the USDA, its Mission Areas, agencies, staff 
offices, 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.
    Program information may be made available in languages other than 
English. Persons with disabilities who require alternative means of 
communication to obtain program information (e.g., Braille, large 
print, audiotape, American Sign Language) should contact the 
responsible Mission Area, agency, or staff office; the USDA TARGET 
Center at (202) 720-2600 (voice and TTY); or the Federal Relay Service 
at (800) 877-8339.
    To file a program discrimination complaint, a complainant should 
complete a Form AD-3027, USDA Program Discrimination Complaint Form, 
which can be obtained online at https://www.ascr.usda.gov/complaint_filing_cust.html, from any USDA office, by calling (866) 632-
9992, or by writing a letter addressed to USDA. The letter must contain 
the complainant's name, address, telephone number, and a written 
description of the alleged discriminatory action in sufficient detail 
to inform the Assistant Secretary for Civil Rights (ASCR) about the 
nature and date of an alleged civil rights violation. The completed AD-
3027 form or letter must be submitted 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; or
    (2) Fax: (833) 256-1665 or (202) 690-7442; or
    (3) Email: [email protected].

Joaquin Altoro,
Administrator, Rural Housing Service.
[FR Doc. 2022-14523 Filed 7-7-22; 8:45 am]
BILLING CODE 3410-XV-P