[Federal Register: January 27, 2006 (Volume 71, Number 18)]
[Notices]
[Page 4559-4566]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ja06-30]
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DEPARTMENT OF AGRICULTURE
Rural Housing Service
Notice for Requests for Proposals for Guaranteed Loans Under the
Section 538 Guaranteed Rural Rental Housing Program (GRRHP) for Fiscal
Year 2006
AGENCY: Rural Housing Service, USDA.
ACTION: Notice.
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SUMMARY: This is a request for proposals for loan guarantees under the
section 538 Guaranteed Rural Rental Housing Program (GRRHP) pursuant to
7 CFR 3565.4 for Fiscal Year (FY) 2006 subject to the availability of
funding. FY 2006 funding for the section 538 program is $99 million.
Applicants will submit proposals in the form of ''RESPONSES.'' The
commitment of program dollars will be made to applicants of selected
responses that have fulfilled the necessary requirements for
obligation. The commitment of program dollars will be made to
applicants of selected responses that have fulfilled the necessary
requirements for obligation, to the extent an appropriation act
provides funding for GRRHP for FY 2006. Expenses incurred in developing
applications will be at the applicant's risk. The following paragraphs
outline the timeframes, eligibility requirements, lender
responsibilities, and the overall response and application processes.
The GRRHP operates under 7 CFR part 3565. The GRRHP Origination and
Servicing Handbook (HB-1-3565) is available to provide lenders and the
general public with guidance on program administration. HB-1-3565,
which contains a copy of 7 CFR part 3565 in Appendix 1, can be found at
the Rural Development Instructions Web site address http://www.rurdev.usda.gov/regs/hblist.html#hbw6
.
Eligible lenders are invited to submit responses for the
development or acquisition with rehabilitation of affordable rental
housing to serve rural America. In addition, this fiscal year,
guarantees will be available for the revitalization, repair, and
transfer cost of existing direct section 515 housing (transfer costs
are subject to Agency approval and must be an eligible use of loan
proceeds as listed in 7 CFR 3565.205). In order to be considered,
direct section 515 housing projects must need repairs and/or undergo
revitalization of a minimum of $6,500 per unit.
The Rural Housing Service (RHS) will review responses submitted by
eligible lenders, on the lender's letterhead, and signed by both the
prospective borrower and lender. Although a complete application is not
required in response to this Notice of Funding Availability (NOFA),
eligible lenders may submit a complete application concurrently with
the response. However, submitting a complete application will not have
an effect on the response's score.
DATES: The RHS will review and score all responses received through
June 16, 2006. Those responses that are selected that subsequently
submit complete applications and meet all Federal environmental
requirements will receive commitments to the extent an appropriation
act provides funding for GRRHP for FY 2006 until all funds are
expended. Responses received prior to June 16, 2006, that meet program
criteria, but score less than 25 points or score 25 points or more but
have a development cost ratio of equal to or more than 70 percent may
be selected for obligation after June 16, 2006, with the highest
scoring responses receiving priority as long as funds remain available.
The Agency will continue to select the highest scoring NOFA responses
received after June 16, 2006, notwithstanding the score, as long as the
response meets program criteria and funds remain available. A notice
will be placed in the Federal Register when all funds are committed for
FY 2006.
Eligible lenders mailing a response or application must provide
sufficient time to permit delivery to the ``Submission Address'' on or
before the closing deadline date and time. Acceptance by
[[Page 4560]]
a U.S. Post Office or private mailer does not constitute delivery.
Postage due responses and applications will not be accepted.
Submission Address: Eligible lenders will send responses to the
Multi-Family Housing Director in the State Office where the project
will be located. The lender will also send a copy of its NOFA response
(copies of ``Lender Certification'' letter and ``Project Specific
Data'' sheets only; do not include any application supporting
documentation, i.e., market studies, plans/specs, etc.) to: C.B.
Alonso, Senior Loan Specialist, Guaranteed Rural Rental Housing
Program, Multi-Family Housing Processing Division, U.S. Department of
Agriculture, South Agriculture Building, Room 1271, STOP 0781, 1400
Independence Avenue, SW., Washington, DC 20250-0781.
Rural Development State Offices, their addresses, telephone
numbers, and person to contact follows: [This information may also be
found at http://www.rurdev.usda.gov/recd_map.html.]
Note: Telephone numbers listed are not toll-free.
Alabama State Office, Suite 601, Sterling Centre, 4121 Carmichael
Road, Montgomery, AL 36106-3683. (334) 279-3455. TDD (334) 279-3495.
James B. Harris.
Alaska State Office, 800 West Evergreen, Suite 201, Palmer, AK
99645. (907) 761-7740. TDD (907) 761-8905. Deborah Davis.
Arizona State Office, Phoenix Courthouse and Federal Building, 230
North First Ave., Suite 206. Phoenix, AZ 85003-1706. (602) 280-8765.
TDD (602) 280-8706. Don Irby.
Arkansas State Office, 700 W. Capitol Ave., Room 3416, Little Rock,
AR 72201-3225. (501) 301-3250. TDD (501) 301-3063. Gregory Kemper.
California State Office, 430 G Street, 4169, Davis, CA
95616-4169. (530) 792-5830. TDD (530) 792-5848. Stephen Nnodim.
Colorado State Office, 655 Parfet Street, Room E100, Lakewood, CO
80215. (720) 544-2923. TDD (800) 659-2656. Jamie Spakow.
Connecticut: Served by Massachusetts State Office.
Delaware and Maryland State Office, 4607 South Dupont Highway, PO
Box 400, Camden, DE 19934-9998. (302) 697-4353. TDD (302) 697-4303.
W. Drew Clendaniel.
Florida & Virgin Islands State Office, 4440 NW. 25th Place,
Gainesville, FL 32606-6563. (352) 338-3465. TDD (352) 338-3499.
Elizabeth M. Whitaker.
Georgia State Office, Stephens Federal Building, 355 E. Hancock
Avenue, Athens, GA 30601-2768. (706) 546-2164. TDD (706) 546-2034.
Wayne Rogers.
Hawaii State Office, (Services all Hawaii, American Samoa Guam, and
Western Pacific), Room 311, Federal Building, 154 Waianuenue Avenue,
Hilo, HI 96720. (808) 933-8305. TDD (808) 933-8321. Jack Mahan.
Idaho State Office, Suite A1, 9173 West Barnes Dr., Boise, ID 83709,
(208) 378-5630. TDD (208) 378-5644. Roni Atkins.
Illinois State Office, 2118 West Park Court, Suite A, Champaign, IL
61821-2986. (217) 403-6222. TDD (217) 403-6240. Barry L. Ramsey.
Indiana State Office, 5975 Lakeside Boulevard, Indianapolis, IN
46278. (317) 290-3100 (ext. 423). TDD (317) 290-3343. John Young.
Iowa State Office, 210 Walnut Street Room 873, Des Moines, IA 50309.
(515) 284-4666. TDD (515) 284-4858. Ambrose H. McGuire.
Kansas State Office, 1303 SW. First American Place, Suite 100,
Topeka, KS 66604-4040. (785) 271-2721. TDD (785) 271-2767. Tim
Rogers.
Kentucky State Office, 771 Corporate Drive, Suite 200, Lexington, KY
40503. (859) 224-7325. TDD (859) 224-7422. Paul Higgins.
Louisiana State Office, 3727 Government Street, Alexandria, LA
71302. (318) 473-7962. TDD (318) 473-7655. Yvonne R. Emerson.
Maine State Office, 967 Illinois Ave., Suite 4, PO Box 405, Bangor,
ME 04402-0405. (207) 990-9110. TDD (207) 942-7331. Dale D. Holmes.
Maryland: Served by Delaware State Office.
Massachusetts, Connecticut, & Rhode Island State Office, 451 West
Street, Amherst, MA 01002. (413) 253-4333. TDD (413) 253-4590.
Donald Colburn.
Michigan State Office, 3001 Coolidge Road, Suite 200, East Lansing,
MI 48823. (517) 324-5192. TDD (517) 337-6795. Ghulam R. Sumbal.
Minnesota State Office, 375 Jackson Street Building, Suite 410, St.
Paul, MN 55101-1853. (651) 602-7782. TDD (651) 602-7830. Jackie
Morris.
Mississippi State Office, Federal Building, Suite 831, 100 W.
Capitol Street, Jackson, MS 39269. (601) 965-4325. TDD (601) 965-
5850. Darnella Smith-Murray.
Missouri State Office, 601 Business Loop 70 West, Parkade Center,
Suite 235, Columbia, MO 65203. (573) 876-0990, TDD (573) 876-9480,
Anita J. Dunning.
Montana State Office, 900 Technology Blvd. Suite B, Bozeman, MT
59715. (406) 585-2565. TDD (406) 585-2562. Deborah Chorlton.
Nebraska State Office, Federal Building, Room 152, 100 Centennial
Mall N, Lincoln, NE 68508. (402) 437-5594. TDD (402) 437-5093. Byron
L. Fischer.
Nevada State Office, 1390 South Curry Street, Carson City, NV 89703-
9910. (775) 887-1222 (ext. 25). TDD (775) 885-0633. William Brewer.
New Hampshire State Office, Concord Center, Suite 218, Box 317, 10
Ferry Street, Concord, NH 03301-5004. (603) 223-6046. TDD (603) 229-
0536. Robert McDonald.
New Jersey State Office, 5th Floor North Suite 500, 8000 Midlantic
Dr., Mt. Laurel, NJ 08054. (856) 787-7740. TDD (856) 787-7784.
George Hyatt, Jr.
New Mexico State Office, 6200 Jefferson St., NE., Room 255,
Albuquerque, NM 87109. (505) 761-4944. TDD (505) 761-4938. Walter
Taylor.
New York State Office, The Galleries of Syracuse, 441 S. Salina
Street, Suite 357 5th Floor, Syracuse, NY 13202. (315) 477-6419. TDD
(315) 477-6447. George N. Von Pless.
North Carolina State Office, 4405 Bland Road, Suite 260, Raleigh, NC
27609. (919) 873-2066. TDD (919) 873-2003. William Hobbs.
North Dakota State Office, Federal Building, Room 208, 220 East
Rosser, PO Box 1737, Bismarck, ND 58502. (701) 530-2049. TDD (701)
530-2113. Donald L. Warren.
Ohio State Office, Federal Building, Room 507, 200 North High
Street, Columbus, OH 43215-2477. (614) 255-2418. TDD (614) 255-2554.
Gerald Arnott.
Oklahoma State Office, 100 USDA, Suite 108, Stillwater, OK 74074-
2654. (405) 742-1070. TDD (405) 742-1007. Anita Kinyon.
Oregon State Office, 101 SW Main, Suite 1410, Portland, OR 97204-
3222. (503) 414-3325. TDD (503) 414-3387. Jillene Davis.
Pennsylvania State Office, One Credit Union Place, Suite 330,
Harrisburg, PA 17110-2996. (717) 237-2281. TDD (717) 237-2261. Frank
Wetherhold.
Puerto Rico State Office, 654 Munoz Rivera Avenue, IBM Plaza, Suite
601, Hato Rey, PR 00918. (787) 766-5095 (ext. 249). TDD (787) 766-
5332. Pedro Gomez.
Rhode Island: Served by Massachusetts State Office.
South Carolina State Office, Strom Thurmond Federal Building, 1835
Assembly Street, Room 1007, Columbia, SC 29201. (803) 253-3432. TDD
(803) 765-5697. Larry D. Floyd.
South Dakota State Office, Federal Building, Room 210, 200 Fourth
Street, SW., Huron, SD 57350. (605) 352-1132. TDD (605) 352-1147.
Roger Hazuka or Pam Reilly.
Tennessee State Office, Suite 300, 3322 West End Avenue, Nashville,
TN 37203-1084. (615) 783-1375. TDD (615) 783-1397. Don Harris.
Texas State Office, Federal Building, Suite 102, 101 South Main,
Temple, TX 76501. (254) 742-9758. TDD (254) 742-9712. Gayle Ledyard.
Utah State Office, Wallace F. Bennett Federal Building, 125 S. State
Street, Room 4311, Salt Lake City, UT 84147-0350. (801) 524-4325.
TDD (801) 524-3309. David E. Brown.
Vermont State Office, City Center, 3rd Floor, 89 Main Street,
Montpelier, VT 05602. (802) 828-6021. TDD (802) 223-6365. Robert
McDonald.
Virgin Islands: Served by Florida State Office.
Virginia State Office, Culpeper Building, Suite 238, 1606 Santa Rosa
Road, Richmond, VA 23229. (804) 287-1596. TDD (804) 287-1753. Eileen
Nowlin.
Washington State Office, 1835 Black Lake Blvd., Suite B, Olympia, WA
98512. (360) 704-7730. TDD (360) 704-7760. Robert Lund.
Western Pacific Territories: Served by Hawaii State Office.
West Virginia State Office, Federal Building, 75 High Street, Room
320, Morgantown, WV 26505-7500. (304) 284-4872. TDD (304) 284-4836.
David Cain.
Wisconsin State Office, 4949 Kirschling Court, Stevens Point, WI
54481. (715) 345-7615 (ext. 151). TDD (715) 345-7614. Peter Kohnen.
[[Page 4561]]
Wyoming State Office, PO Box 11005, Casper, WY 82602. (307) 233-
6715. TDD (307) 233-6733. Alan Brooks.
FOR FURTHER INFORMATION CONTACT: C.B. Alonso, Senior Loan Specialist,
Guaranteed Rural Rental Housing Program, Multi-Family Housing
Processing Division, U.S. Department of Agriculture, South Agriculture
Building, Room 1271, STOP 0781, 1400 Independence Avenue, SW.,
Washington, DC 20250-0781. Email: cb.alonso@wdc.usda.gov. Telephone:
(202) 720-1624. This number is not toll-free. Hearing or speech-
impaired persons may access that number by calling the Federal
Information Relay Service toll-free at (800) 877-8339.
Eligibility of Prior Year Selected Notices of Funding Availability
Responses: NOFA response selections prior to FY 2005 that did not
develop into a complete application or where funds were not obligated
have been cancelled. A new NOFA response for the project may be
submitted subject to the conditions of this NOFA.
FY 2005 NOFA responses that were selected by the Agency, and a
complete application (including all Federal environmental documents
required by 7 CFR part 1940, subpart G, a Form RD 3565-1, and the
$2,500 application fee) was submitted by the lender within 90 days from
the date of notification of response selection (unless an extension was
granted by the State office), will be eligible for FY 2006 program
dollars and will compete in the FY 2006 priority scoring without having
to complete a FY 2006 NOFA response.
General Program Information
Program Purpose: The purpose of the GRRHP is to increase the supply
of affordable rural rental housing, through the use of loan guarantees
that encourage partnerships between the RHS, private lenders, and
public agencies.
Responses Must Be Submitted by: The Agency will only accept
responses from GRRHP eligible or approved lenders as described in 7 CFR
3565.102 and 3565.103 respectively.
Qualifying Properties: Qualifying properties include new
construction for multi-family housing units or the acquisition of
existing structures with a minimum per unit rehabilitation expenditure
requirement in accordance with 7 CFR 3565.252.
In addition, this fiscal year, guarantees will be available for the
revitalization, repair and transfer cost of existing direct section 515
housing (transfer costs are subject to Agency approval and must be an
eligible use of loan proceeds as listed in 7 CFR 3565.205). In order to
be considered, direct section 515 housing projects must need repairs
and/or undergo revitalization of a minimum of $6,500 per unit.
Eligible Financing Sources: Any form of Federal, state, and
conventional sources of financing can be used in conjunction with the
loan guarantee, including Home Investment Partnership Program (HOME)
grant funds, tax exempt bonds, and low income housing tax credits.
Maximum Guarantee: The Agency can guarantee the ``permanent''
portion or both the ``construction and permanent'' portions of a
construction/permanent loan. The Agency cannot, however, guarantee only
the ``construction'' portion of a construction/permanent loan.
The maximum guarantee for a permanent loan will be 90 percent of
the unpaid principal and interest up to default and accrued interest 90
calendar days from the date the liquidation plan is approved by the
Agency, as defined in 7 CFR 3565.452. Penalties incurred as a result of
default are not covered by the guarantee. The Agency may provide a
lesser guarantee based upon its evaluation of the credit quality of the
loan. The Agency liability under any guarantee will decrease or
increase, in proportion to any increase or decrease in the amount of
the unpaid portion of the loan, up to the maximum amount specified in
the Loan Note Guarantee.
The maximum guarantee of construction advances will not at any time
exceed the lesser of 90 percent of the amount of principal and interest
up to default advanced for eligible uses of loan proceeds or 90 percent
of the original principal amount and interest up to default of the
loan. Penalties incurred as a result of default are not covered by the
guarantee. The Agency may provide a lesser guarantee based upon its
evaluation of the credit quality of the loan.
Reimbursement of Losses: Any losses will be split on a pro-rata
basis between the lender and the RHS from the first dollar lost.
Interest Rate: RHS will accept the best rate negotiated between the
lender and prospective borrower. The lender is not required to provide
the interest rate in the response unless applying for interest credit.
The interest rate must be fixed over the term of the loan.
Interest Credit: For at least 20 percent of the loans made during
each fiscal year, the Agency will provide assistance in the form of
interest credit, to the extent necessary to reduce the agreed-upon rate
of interest to the Long Term Monthly Applicable Federal Rate (AFR) as
such term is used in section 42(I)(2)(D) of the Internal Revenue Code
of 1986, 26 U.S.C. 7805, Sec. 1.42-1T. The interest credit will be paid
following the January 1st of the year in which the project has reached
occupancy standards, and the permanent loan note guarantee is issued.
If 20 percent of the loans have not received interest credit by June
16, 2006, then RHS will award interest credit to those loans that
initially requested interest credit and have the highest interest
credit priority score until at least 20 percent of the loans have
received interest credit. Requests for interest credit must be made in
the response. When interest credit assistance is requested, lenders
must state in the response the maximum basis points above the Long Term
Monthly AFR that will be used to calculate the interest rate. Priority
points will be given for basis points equal to or less than 250 above
the Long Term Monthly AFR. Lenders are not permitted to make requests
for interest credit after the selection process has taken place.
Due to limited funding and in order to distribute interest credit
assistance as broadly as possible, the Agency has decided to limit the
interest credit to $1.5 million per loan. For example, if an eligible
request were made for interest credit on a loan of $2.5 million, up to
$1.5 million of the loan would receive interest credit. Interest credit
is not available for construction loans. Interest credit is only
available for permanent loans. Lenders with projects that are viable
with or without interest credit are encouraged to submit a response
reflecting financial and market feasibility under both funding options.
Responses requesting consideration under both options will not affect
interest credit selection. Due to limited interest credit funds and the
responsibility of RHS to target and give priority to rural areas most
in need, responses requesting interest credit must score a minimum of
55 points under the criteria established in this NOFA. In the event of
ties, selection between responses will be by lot.
Surcharges for Guarantee of Construction Advances: There is no
surcharge for the guarantee of construction advances for FY 2006.
Program Fees for FY 2006: As a condition of receiving a loan
guarantee, the Agency will charge the following guarantee fees to the
lender.
(1) Initial guarantee fee. The Agency will charge an initial
guarantee fee equal to one percent of the guarantee amount. For
purposes of calculating this fee, the guarantee amount is the product
of the percentage of the guarantee times the
[[Page 4562]]
initial principal amount of the guaranteed loan.
(2) Annual guarantee fee. An annual guarantee fee of at least 50
basis points (one-half percent) of the outstanding principal amount of
the loan as of December 31 will be charged each year or portion of a
year that the guarantee is in effect.
(3) There is a non-refundable application fee of $2,500 when the
application is submitted.
(4) There is a flat fee of $500 when a lender requests RHS to
extend the term of a guarantee commitment.
(5) There is a flat fee of $500 when a lender requests RHS to
reopen an application when a commitment has expired.
(6) There is a flat fee of $1,250 when a lender requests RHS to
approve the transfer of property and assumption of the loan to an
eligible prospective borrower.
(7) There is no lender application fee for lender approval in FY
2006.
Eligible Lenders: An eligible lender for the section 538 GRRHP as
required by 7 CFR 3565.102 must be a licensed business entity or
Housing Finance Agency (HFA) in good standing in the state or states
where it conducts business. Lender eligibility requirements are
contained in 7 CFR 3565.102. Below is a list of some of the eligible
lender criteria under 7 CFR 3565.102:
(1) Licensed business entity that meets the qualifications and has
the approval of the Secretary of Housing and Urban Development (HUD) to
make multi-family housing loans that are insured under the National
Housing Act. A complete list of HUD approved lenders can be found on
the HUD Web site at http://www.hud.gov.
(2) A licensed business entity that meets the qualifications and
has the approval of the Ginnie Mae or Freddie Mac or Fannie Mae
corporations to make multi-family housing loans that are sold to the
same corporations. A complete list of Freddie Mac approved lenders can
be found in Freddie Mac's Web site at http://www.freddiemac.com Fannie Mae approved lenders are found at http://www.fanniemae.com. For a list
of Ginnie Mae issuers, contact Ginnie Mae at http://www.ginniemae.gov.
(3) A state or local HFA with a top-tier rating from Moody's or
Standard & Poors, or member of the Federal Home Loan Bank system, and
the demonstrated ability to underwrite, originate, process, close,
service, manage, and dispose of multi-family housing loans in a prudent
manner.
(4) Be a GRRHP approved lender, defined as an entity with a current
executed multi-family housing Lender's Agreement with RHS.
(5) Lenders that can demonstrate the capacity to underwrite,
originate, process, close, service, manage, and dispose of multi-family
housing loans in a prudent manner. In order to be approved the lender
will have to have an acceptable level of financial soundness as
determined by a lender rating service. The submission of materials
demonstrating capacity will be required if the lender's response is
selected. Lenders who are otherwise ineligible may become eligible if
they maintain a correspondent relationship with an eligible lender that
does have the capacity to underwrite, originate, process, close,
service, manage, and dispose of multi-family housing loans in a prudent
manner. In this case, the eligible lender must submit the response and
application. All contractual and legal documentation will be signed
between RHS and the lender that submitted the response and application.
GRRHP Lender Approval Application: Lenders whose responses are
selected will be notified by the RHS to submit a request for GRRHP
lender approval application within 30 days of notification. Lenders who
request GRRHP approval must meet the standards in the 7 CFR 3565.102
and 103. Lenders that have received GRRHP lender approval in the past
and are in good standing do not need to reapply for GRRHP lender
approval.
Submission of Documentation For GRRHP Lender Approval: All lenders
that have not yet received GRRHP lender approval must submit a complete
lender application to: Director, Multi-Family Housing Processing
Division, Rural Housing Service, U.S. Department of Agriculture, Room
1263, STOP 0781, 1400 Independence Avenue, SW., Washington, DC 20250-
0781. Lender applications must be identified as ``Section 538
Guaranteed Rural Rental Housing Program'' on the envelope.
As RHS does not have a formal application form, a complete
application consists of a cover letter requesting GRRHP lender approval
and the following documentation:
(1) Request for GRRHP lender approval on the lender's letterhead;
(2) Lenders who are HUD, Ginnie Mae, Freddie Mac or Fannie Mae
multi-family approved lenders are required to show evidence of this
status, such as a copy of a letter designating the distinction;
(3) The lender's Loan Origination, Loan Servicing, and Portfolio
Management Handbooks. These handbooks should detail the lender's
policies and procedures on loan origination through termination for
multi-family loans;
(4) Portfolio performance data;
(5) Copies of standard documents that will be used in processing
GRRHP loans;
(6) Resumes and qualifications of key personnel that will be
involved in the GRRHP;
(7) Identification of standards and processes that deviate from
those outlined in the GRRHP Origination and Servicing Handbook (HB-1-
3565) found at http://www.rurdev.usda.gov/regs/hblist.html#hbw6;
(8) A copy of the most recent audited financial statements;
(9) Lender specific information including: (a) Legal name and
address, (b) list of principal officers and their responsibilities, (c)
certification that the officers and principals of the lender have not
been debarred or suspended from Federal programs, (d) Form AD 1047, (e)
certification that the lender is not in default or delinquent on any
Federal debt or loan, or possesses an outstanding finding of deficiency
in a federal housing program, and (f) certification of the lender's
credit rating; and
(10) Documentation on bonding and insurance.
Additional Construction Lender Requirements
The Agency can guarantee the ``permanent'' portion or both the
``construction and permanent'' portions of a construction/permanent
loan. The Agency will not, however, guarantee only the ``construction''
portion of a construction/permanent loan.
A lender making a construction loan must demonstrate an ability to
originate and service construction loans, in addition to meeting the
other requirements of 7 CFR part 3565, subpart C. A lender who
originates and services construction/permanent loans must agree to
manage the construction and draw activities in the manner described in
Chapter 5 of HB-1-3565. Lenders must meet either the basic or the
demonstrated eligibility test in paragraphs 2.4 and 2.5 of HB-1-3565
and the lender approval requirements set forth in paragraph 2.6 of HB-
1-3565. Lenders must clearly identify policies and processes for
multifamily construction lending. Lenders must also provide a summary
of their multifamily construction lending activity in the same form as
specified in paragraph 2.5 of HB-1-3565. The Agency may, at its
discretion, consider other types of construction loans--such as those
for commercial development--as a
[[Page 4563]]
substitute for multifamily construction experience.
Lender Responsibilities: Lenders will be responsible for the full
range of loan origination, underwriting, management, servicing,
compliance issues, and property disposition activities associated with
their projects. The lender will be expected to provide guidance to the
prospective borrower on the RHS requirements during the application
phase. Once the guarantee is issued, the lender is expected to service
each loan it underwrites or contract these services to another capable
entity.
Discussion of NOFA
Content of NOFA Responses: All responses require lender information
and project specific data. Incomplete responses will not be considered
for funding. Lenders will be notified of incomplete responses. Complete
responses are to include a signed cover letter from the lender on the
lender's letterhead and the following information:
(1) Lender certification--The lender must certify that the lender
will make a loan to the prospective borrower for the proposed project,
under specified terms and conditions subject to the issuance of the
GRRHP guarantee. Lender certification must be on the lender's
letterhead and signed by both the lender and the prospective borrower.
(2) Project specific data--The lender must submit the project
specific data below on the lender's letterhead, signed by both the
lender and the prospective borrower.
Lender Name Insert the lender's name.
------------------------------------
Lender Tax ID Insert lender's tax ID .
------------------------------------
Lender Contact Name Name of the lender contact for
loan.
------------------------------------
Mailing Address Lender's complete mailing address.
------------------------------------
Phone Phone for lender contact.
------------------------------------
Fax Insert lender's fax .
------------------------------------
E-mail Address Insert lender contact e-mail
address.
------------------------------------
Borrower Name and Organization Type State whether borrower is a Limited
Partnership, Corporation, Indian
Tribe, etc.
------------------------------------
Tax Classification Type State whether borrower is for
profit, not for profit, etc.
------------------------------------
Borrower Tax ID Insert borrower's tax ID .
------------------------------------
Borrower Address, including County Insert borrower's address and
county.
------------------------------------
Borrower Phone Insert borrower's phone .
------------------------------------
Principal or Key Member for the Insert name and title.
Borrower
------------------------------------
Borrower Information and Statement Attach relevant information.
of Housing Development Experience
------------------------------------
New Construction, Acquisition With State whether the project is new
Rehabilitation, or the construction or acquisition with
Revitalization, Repair, and rehabilitation. Transfer costs are
Transfer Cost of Existing Direct subject to Agency approval and
Section 515 Housing must be an eligible use of loan
proceeds listed in 7 CFR 3565.205.
------------------------------------
Project Location Town or City Town or city in which the project
is located.
------------------------------------
Project County County in which the project is
located.
------------------------------------
Project State State in which the project is
located.
------------------------------------
Project Zip Code Insert zip code.
------------------------------------
[[Page 4564]]
Project Congressional District Congressional District for project
location.
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Project Name Insert project name.
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Project Type Family, senior (all residents 55
years or older), or mixed.
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Property Description and Proposed Provide as an attachment.
Development Schedule
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Total Project Development Cost Enter amount for total project.
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of Units Insert the of units in
the project.
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Ratio of 3-5 bedroom units to total Insert percentage of 3-5 bedroom
units units to total units.
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Cost Per Unit Total development cost divided by
of units.
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Rent Proposed rent structure.
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Median Income for Community Provide median income for the
community.
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Evidence of Site Control Attach relevant information.
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Description of Any Environmental Attach relevant information.
Issues
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Loan Amount Insert the loan amount.
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Interest Credit (IC) Is interest credit requested for
this loan? (Yes or No)
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Basis Points over the Long Term Lenders seeking interest credit
Monthly Applicable Federal Rate must provide the maximum basis
points above the Long Term Monthly
AFR that will be used to calculate
the interest rate. Priority points
will only be given for basis
points equal to or less than 250
above the Long Term Monthly AFR.
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If Above Is Yes, Should Proposal Be If Yes, proposal must show
Considered Under Non-Interest financial feasibility for Non-IC
Credit Selection If Scoring Does consideration.
Not Meet the Minimum Point
Threshold of 55 Points for an
Interest Credit Award?
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Borrower's Proposed Equity Insert amount.
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Tax Credits Will the project be allocated tax
credits? How much? What is the
estimated value of the tax credits
awarded?
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Other Sources of Funds List all funding sources other than
tax credits and amounts for each
source.
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Loan to Total Development Cost Guaranteed loan divided by the
total development costs of
project.
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Debt Coverage Ratio Net Operating Income divided by
debt service payments.
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Percentage of Guarantee Percentage guarantee requested.
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Collateral Attach relevant information.
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[[Page 4565]]
Empowerment Zone (EZ) or Enterprise Yes or No. Is the project in a
Community (EC), Colonia or Tribal recognized EZ or EC, Colonia or on
Lands an Indian Reservation?
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Population Must be within the 20,000
population limit set for the
program.
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Is a Guarantee for Construction State yes or no. The Agency can
Being Requested? Are Advances guarantee the ``permanent''
Being Requested? portion or both the ``construction
and permanent'' portions of a
construction/permanent loan. The
Agency will not, however,
guarantee only the
``construction'' portion of a
construction/permanent loan.
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Loan Term Up to a 40-year amortized loan.
Balloon mortgages with a minimum
25-year term are eligible.
------------------------------------------------------------------------
Scoring of Priority Criteria for Selection of Projects: All 2006
NOFA responses will be scored based on the criteria set forth below to
establish their priority for obligation of funds. Per 7 CFR 3565.5 (b),
priority will be given to projects: in smaller rural communities, in
the most needy communities having the highest percentage of leveraging,
having the lowest interest rate, having the highest ratio of 3-5
bedroom units to total units, or located in Empowerment Zones/
Enterprise Communities or on tribal lands. In addition, the Agency may,
at its sole discretion, set aside assistance for or rank projects that
meet important program goals.
In order to meet program goals, the Agency will award additional
points to Fiscal Year 2006 NOFA responses for the revitalization,
repair, and transfer cost of existing direct Section 515 housing.
Prior to June 16, 2006, projects with an overall score of 25 points
and a loan to development cost ratio less than 70 percent will be
processed and, when ready, obligated on a first-come-first-serve basis,
provided funds are available. Projects that score less than 25 points,
and projects that score 25 points or more and do not have a loan to
development cost ratio less than 70 percent, may be processed up to the
point of obligation, but they will not be obligated until after June
16, 2006. Each month after June 16, 2006, the Agency will select the
highest scoring proposals, in light of the remaining funding, until all
funds are expended. A notice will be placed in the Federal Register
when all funds are committed for FY 2006.
Subject to available funding, all projects scoring 55 points or
more on the seven priority criteria below, and that request and
demonstrate a need for an interest credit subsidy, will receive
interest credit awards.
The seven priority criteria for projects are listed below.
Priority 1--Projects located in eligible rural communities with the
lowest populations will receive the highest points.
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Population size Points
------------------------------------------------------------------------
0-5,000 people................................................. 15
5,001-10,000 people............................................ 10
10,001-15,000 people........................................... 5
15,001-20,000 people........................................... 0
------------------------------------------------------------------------
Priority 2--The most needy communities as determined by the median
income from the most recent census data will receive points. The RHS
will allocate points to projects located in communities having the
lowest median income. Points for median income will be awarded as
follows:
------------------------------------------------------------------------
Median income (dollars) Points
------------------------------------------------------------------------
Less than $35,000.............................................. 20
$35,000-less than $45,000...................................... 15
$45,000-less than $55,000...................................... 10
$55,000-less than $65,000...................................... 5
$65,000 or more................................................ 0
------------------------------------------------------------------------
Priority 3--Projects that demonstrate partnering and leveraging in
order to develop the maximum number of units and promote partnerships
with state and local communities will also receive points. Points will
be awarded as follows:
------------------------------------------------------------------------
Loan to total development cost ratio (percentage %) Points
------------------------------------------------------------------------
90-100......................................................... 0
Less than 90-70................................................ 15
Less than 70-50................................................ 20
Less than 50................................................... 30
------------------------------------------------------------------------
Priority 4--The development of projects on Tribal Lands, or in an
Empowerment Zone or Enterprise Community will receive points. The RHS
will attribute 20 points to projects that are developed in any of the
locations described in this priority. The development of projects in a
Colonia or in a place identified in the State's Consolidated Plan or
State Needs Assessment as a high need community for multi-family
housing will receive points. The RHS will attribute 20 points to
projects that are developed in any of the locations described in this
priority.
Priority 5--The RHS will award points to projects with the highest
ratio of 3-5 bedroom units to total units as follows:
------------------------------------------------------------------------
Ratio of 3-5 bedroom units to total units Points
------------------------------------------------------------------------
More than 50%.................................................. 6
21%-50%........................................................ 5
Less than 21%-more than 0%..................................... 1
------------------------------------------------------------------------
Priority 6--RHS will award points for basis points above the long
term monthly AFR used to calculate the interest rate. The score for
basis points is as follows:
------------------------------------------------------------------------
Basis points Points
------------------------------------------------------------------------
More than 250 basis points..................................... -20
200 to 250 basis points, inclusive............................. 10
100 to 199 basis points, inclusive............................. 15
0 to 99 basis points, inclusive................................ 20
------------------------------------------------------------------------
Priority 7--NOFA responses for the revitalization, repair, and
transfer cost of existing direct section 515 housing (transfer costs
are subject to Agency approval and must be an eligible use of loan
proceeds listed in 7 CFR 3565.205) will receive an additional 20
points.
Notifications: Responses will be reviewed for completeness and
eligibility. The RHS will notify those lenders whose responses are
selected via letter. The RHS will request lenders without GRRHP lender
approval to apply for GRRHP lender approval within 30 days upon receipt
of notification of selection. For information regarding GRRHP lender
approval, please refer to the section entitled ``SUBMISSION OF
[[Page 4566]]
DOCUMENTATION FOR GRRHP LENDER APPROVAL'' in this NOFA.
Lenders will also be invited to submit a complete application and
the required application fee of $2,500 to the Rural Development State
Office where the project is located.
Submission of GRRHP Applications: Notification letters will
instruct lenders to contact the Rural Development State Office
immediately following notification of selection to schedule required
agency reviews.
Rural Development State Office staff will work with lenders in the
development of an application package. In response to the NOFA, lenders
must submit a NOFA response to the office address identified in the
NOFA for the scoring and ranking of a proposed GRRHP project. The
lender must provide the requested information concerning the project,
to establish the purpose of the proposed project, its location, and how
it meets the established priorities for funding. The Agency will
determine the highest ranked responses based on priority criteria and a
threshold score.
NOFA responses will at least include the following [but the Agency,
at its sole discretion, may request additional information]:
(1) The Project
(a) A brief description of the proposed location of the project,
including town, county, state, and congressional district.
(b) A description of the property and improvements, including lot
size, number of units, building type, type of construction, etc.,
including preliminary drawings, if available.
(c) The proposed development schedule.
(d) Total project development cost.
(e) The proposed rent structure and area median income (HUD
published area median incomes can be found online at http://www.huduser.org
).
(f) Evidence of site control by the proposed borrower or a purchase
option.
(g) Description of any environmental issues that may affect the
project.
(h) Amount of loan to be guaranteed.
(i) Type of project (e.g. elderly or family).
(2) The Proposed Financing
(a) Proposed loan amount and the proposed borrower's equity.
(b) Proposed use of interest credit--If the lender proposes to use
interest credit, this section should include the maximum basis points
the lender will charge the borrower for the project. The interest rate
may not be lower than the published Long Term Monthly AFR at the
closing of the lender's loan. Selection and scoring criteria that the
project must meet to receive interest credit will be published in the
NOFA.
(c) Estimated development budget (total and cost/unit) and the
proposed sources and uses of funds. This information should include all
proposed financing sources--the amount, type, rates and terms of loans,
tax credits, or grant funds. Letters of application and commitment
letters should be included, if available.
(d) Estimated loan-to-development cost ratio for the guaranteed
loan.
(e) Proposed Agency guarantee percentage for guaranteed loan (under
no condition can the percentage exceed 90 percent of the loan amount).
(f) Collateral--all security, in addition to the real property,
proposed to secure the loan.
(3) The Proposed Borrower
(a) The name of the borrower and the type of ownership entity. List
the general partners if a limited partnership, officers if a
corporation or members of an Limited Liability Corporation.
(b) Borrower's contact name, mailing address, phone and fax
numbers, and e-mail address.
(c) Evidence that the borrower or principals of the ownership are
not barred from participating in Federal housing programs and are not
delinquent on any Federal debt.
(d) Borrower's unaudited or audited financial statements.
(e) Statement of borrower's housing development experience.
(4) Lender Eligibility and Approval Status
Evidence that the lender is either an approved lender for the
purposes of the GRRHP or that the lender is eligible to apply for
approved lender status. The lender's application for approved lender
status can be submitted with the NOFA response but must be submitted to
the National Office within 45 calendar days of the lender's receipt of
the ``notice to proceed with application processing'' letter.
(5) Competitive Criteria
Information that shows how the proposal is responsive to the
selection criteria specified in the NOFA.
(6) Lender Certification
A commitment letter signed by the lender, on the lender's
letterhead, indicating that the lender will make a loan to the borrower
for the proposed project, under specified terms and conditions subject
only to the issuance of a guarantee by the Agency.
The deadline for the submission of a complete application and
application fee is 90 days from the date of notification of response
selection. If the application and fee are not received by the
appropriate State Office within 90 days from the date of notification,
the selection is subject to cancellation, thereby allowing another
response that is ready to proceed with processing to be selected.
Obligation of Program Funds: The RHS will only obligate funds to
projects that meet the requirements for obligation, including
undergoing a satisfactory environmental review in accordance with the
National Environmental Protection Act (NEPA) and lenders who have
submitted the $2,500 application fee and completed Form RD 3565-1 for
the selected project.
Conditional Commitment: Once required documents for obligation and
the application fee are received and all NEPA requirements have been
met, the Rural Development State Office will issue a conditional
commitment, which stipulates the conditions that must be fulfilled
before the issuance of a guarantee, in accordance with 7 CFR 3565.303.
Issuance of Guarantee: The RHS State Office will issue a guarantee
to the lender for a project in accordance with 7 CFR 3565.303. No
guarantee can be issued without a complete application, review of
appropriate certifications, satisfactory assessment of the appropriate
level of environmental review, and the completion of any conditional
requirements.
Dated: January 18, 2006.
David J. Villano,
Acting Administrator, Rural Housing Service.
[FR Doc. E6-1054 Filed 1-26-06; 8:45 am]
BILLING CODE 3410-XV-P