[Federal Register Volume 75, Number 216 (Tuesday, November 9, 2010)]
[Notices]
[Pages 68748-68754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28253]
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Notices
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
and investigations, committee meetings, agency decisions and rulings,
delegations of authority, filing of petitions and applications and agency
statements of organization and functions are examples of documents
appearing in this section.
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Federal Register / Vol. 75, No. 216 / Tuesday, November 9, 2010 /
Notices
[[Page 68748]]
DEPARTMENT OF AGRICULTURE
Rural Housing Service
Notice of Funding Availability (NOFA): Section 515 Multi-Family
Housing Preservation Revolving Loan Fund (PRLF) Demonstration Program
for Fiscal Year 2011
AGENCY: Rural Housing Service, USDA.
ACTION: Notice.
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Overview Information
SUMMARY: The Rural Housing Service of Rural Development announces the
availability of funds and the timeframe to submit applications 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 demonstration program to provide revolving
loans for the preservation and revitalization of low-income Multi-
Family Housing (MFH). 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
NOFA is 5 p.m., Eastern Time, January 10, 2011. 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,
and postage due applications will not be accepted.
FOR FURTHER INFORMATION CONTACT: Timothy James, Financial and Loan
Analyst, Multi-Family Housing STOP 0781 (Room 1263-S), U.S. Department
of Agriculture, Rural Housing Service, or Michael Steininger, Director
Guaranteed Loan Division, Multi-Family Housing STOP 0781 (Room 1263-S)
1400 Independence Avenue, SW., Washington, DC 20250-0781 or by
telephone at (202) 720-1094 or (202) 720-1610, TDD (302) 857-3585 or
via e-mail at [email protected] or
[email protected] (Please note the phone numbers are not toll
free numbers.)
SUPPLEMENTARY INFORMATION:
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)) Because this NOFA will receive less than 10 respondents,
the Paperwork Reduction Act does not apply.
Programs Affected
This program is listed in the Catalog of Federal Domestic
Assistance under Number 10.415.
Overview
The Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies Appropriations Act, 2010 (Act) (Division A of Pub.
L. 111-80), October 21, 2009 provided funding for, and authorizes Rural
Development to, establish a revolving loan fund demonstration program
for the preservation and revitalization of the Sections 515, 514 and
516 Multi-Family Housing portfolio. The Multi-Family Housing program is
authorized by Sections 514, 515 and 516 of the Housing Act of 1949 as
amended, provides Rural Development the authority to make loans for low
income Multi-Family Housing, farm labor housing, and related
facilities.
Program Administration
I. Funding Opportunities Description
This NOFA 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 515,
514 and 516 Multi-Family Housing portfolio. Rural Development's
regulations for the Section 514, 515 and 516 Multi-Family Housing
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, Section 514, 515, and 516 Multi-Family Housing 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 Credit 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
The Act, 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 Multi-Family housing project. The total amount of funding
available for this program is $14,099,227. Loans to intermediaries
under this demonstration program shall have an interest rate of no more
than one percent and the Secretary of Agriculture may defer the
interest and principal payment to Rural Development for up to three
years during the first three 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,
[[Page 68749]]
including housing tax credits for rural housing assistance and to
entities with experience in the administration of revolving loan funds
and the preservation of Multi-Family Housing.
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 PRLF loans
will have an obligation expiration period of two years from the date of
obligation.
Prior fiscal years PRLF loans that were obligated and not closed
within the above two years obligation period must be de-obligated to
allow more immediate program use unless a six month extension is
granted by the National 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 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 Multi-
Family Housing 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 not 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.
(iv) A plan showing Rural Development, that the ultimate recipients
will only use the funds to preserve low-income Multi-Family Housing
projects.
(c) 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 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.
(d) 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.
(e) The intermediary and its principal officers (including
immediate family) must have no legal or financial interest in the
ultimate recipient.
(f) 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 $96,491.00 ($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.
(g) 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 80 percent of each 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(2) of this NOFA;
(iii) The delinquency rate of the outstanding loans of the
intermediary's PRLF revolving fund does not exceed 4 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) Subsequent loans will not exceed $1 million each and 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 NOFA 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 Section 515, 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 workout 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 be ineligible to receive a loan from the
PRLF.
(c) PRLF loan funds may not be used to satisfy the delinquency. 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.
[[Page 68750]]
Other Administrative Requirements
(1) The following policies and regulations apply to loans to
intermediaries made in response to this NOFA:
(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 certified public accountant. 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 Office Management and Budget (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 workout 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 reports will include OMB Standard Form 269,
Financial Status Report and OMB Standard Form 272, Federal Cash
Transaction Report. These reports 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, in the event the intermediary's financial
condition deteriorates or the intermediary takes action detrimental to
prudent fund operation or fails to take action required of a prudent
lender, the intermediary 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) RHS 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 less 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 NOFA.
(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 NOFA. 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 workout plan. Rural Development may approve changes in
forms, security policy, or workout 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 NOFA or other Rural Development regulations.
The intermediary must comply with the workout 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 workout plan by a
date two years from the date of the loan agreement. 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 workout plan within the two-year
period. Rural Development, at its sole discretion, may allow the
intermediary additional time to use the loan funds by delaying
cancellation of the funds by not more than three additional years. If
any loan funds have not been used by five years from the date of the
loan agreement, the
[[Page 68751]]
approval will be canceled for any funds that have not been delivered to
the intermediary and the intermediary will return, as an extra payment
on the loan, any funds it has received and not used in accordance with
the workout 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 one percent interest
rate. The loan will be deferred for up to three 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 514, 515, and 516 funds.
They must also be consistent with the requirements of Title V of the
Housing Act of 1949, as amended.
(g) 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.
(ii) Such other information as Rural Development may request on
specific cases.
(h) 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 T516 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.
(i) The Intermediary shall pledge as collateral for non-Rural
Development funds its PRLF Revolving Fund, including its portfolio of
investments derived from the proceeds of other funds and this loan
award.
(ii) 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
Submission Address
Applications should be submitted to USDA Rural Housing Service;
Attention: Timothy James, Financial and Loan Analyst, Multi-Family
Housing STOP 0781 (Room 1263-S), U.S. Department of Agriculture, Rural
Housing Service, 1400 Independence Avenue, SW., Washington, DC 20250-
0781 or Michael Steininger, Director Guaranteed Loan Division, Multi-
Family Housing STOP 0781 (Room 1263-S) or by telephone at (202) 720-
1094 or (202) 720-1610, TDD (302) 857-3585 or via e-mail or
[email protected], [email protected] (Please
note the phone numbers are not toll free numbers.)
The application process is in two steps: First, all applicants will
submit proposals to the National Office for loan committee review. The
initial loan committee will determine if the borrower is eligible,
score the application, and rank the applicants according to the
criteria established in this NOFA. 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 the 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 to State offices to
intermediaries must close on or before the second anniversary of the
dated pre-approval letter mentioned above.
[[Page 68752]]
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.
(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 workout 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:
(a) Document the intermediary's ability to administer this
demonstration program in accordance with the provisions of this NOFA.
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 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 NOFA;
(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) Providing technical assistance to ultimate recipients is not
required as part of this program. However if the intermediary provides
technical assistance, 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 the PRLF must extend to include a year with 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://www.rurdev.usda.gov/regs/forms/0400-04.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://www.rurdev.usda.gov/regs/forms/1910-11.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 NOFA, 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 NOFA.
(15) A borrower authorization statement allowing Rural Development
[[Page 68753]]
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 determinations and for
the selection of applications for further processing based on the
selection criteria contained in this NOFA 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 NOFA.
Selection Criteria
Selection criteria points will be allowed only for factors
evidenced by well documented, reasonable 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 that
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 part 3560 Section 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 project cost--15 points.
(b) The intermediary will provide loans to the 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:
(i) At least 10 percent but less than 25 percent of the total
development costs--5 points;
(ii) At least 25 percent but less than 50 percent of total
development costs--10 points; or
(iii) 50 percent or more of total development costs--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
loan account. The intermediary shall contribute funds not derived from
Rural Development into a separate bank account or accounts according to
their ``workout 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 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
515 Multi-Family Housing.
The amount of non-Agency derived funds contributed to the PRLF will
equal the following percentage of Rural Development PRLF loan:
(a) At least 5 percent but less than 15 percent--15 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 Multi-
Family Housing, 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 Multi-
Family Housing 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) The DER is the financial ratio used to determine how much debt
an applicant has relative to its equity. DER is calculated from the
balance sheet by adding the short term or current debt plus the long
term debt, and then dividing that number by the intermediary's equity.
In order to receive points the intermediary must submit a summary of
how the DER was calculated.
(5) 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; economic
development plan from the local community, particularly a plan prepared
as part of a request for an Empowerment Zone/Enterprise Community
designation; 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.
[[Page 68754]]
(3) The Rural Housing Service (RHS) 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).
(5) To file a complaint of discrimination, write to USDA, Director,
Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC
20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD).
USDA is an equal opportunity provider, employer, and lender. The U.S.
Department of Agriculture prohibits discrimination in all its programs
and activities on the basis of race, color, national origin, age,
disability, and where applicable, sex, marital status, familial status,
parental status, religion, sexual orientation, genetic information,
political beliefs, reprisal, or because all or 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).
Dated: November 1, 2010.
Tammye H. Trevi[ntilde]o,
Administrator, Rural Housing Service.
[FR Doc. 2010-28253 Filed 11-8-10; 8:45 am]
BILLING CODE 3410-XV-P