Notice of Availability of Funds; Multi-Family Housing, Single Family Housing

AGENCY:

Rural Housing Service, USDA.

ACTION:

Notice.

SUMMARY:

The Rural Housing Service (RHS) announces the availability of housing funds for fiscal year 2004 (FY 2004). This action is taken to comply with 42 U.S.C. 1490p, which requires that RHS publish in the Federal Register notice of the availability of any housing assistance.

EFFECTIVE DATE:

March 17, 2004.

FOR FURTHER INFORMATION CONTACT:

For information regarding this notice contact Lou Paulson, Management Analyst, Single Family Housing Direct Loan Division, telephone (202) 720-1478, for single family housing (SFH) issues and Tammy S. Daniels, Loan Specialist, Multi-Family Housing Processing Division, telephone (202) 720-0021, for multi-family housing (MFH) issues, U.S. Department of Agriculture, 1400 Independence Ave. SW., Washington, DC, 20250. (The telephone numbers listed are not toll free numbers). For information on applying for assistance, visit our Internet Web site at http://offices.usda.gov and select your State or check the blue pages in your local telephone directory under “Rural Development” for the office serving your area. Near the end of this Notice is a listing of Rural Development State Directors, State Office addresses, and phone numbers.

SUPPLEMENTARY INFORMATION:

Programs Affected

The following programs are subject to the provisions of Executive Order 12372 that requires intergovernmental consultation with State and local officials. These programs or activities are listed in the Catalog of Federal Domestic Assistance under Nos.

10.405 Farm Labor Housing (LH) Loans and Grants

10.410 Very Low to Moderate Income Housing Loans

10.411 Rural Housing Site Loans and Self-Help Housing Land Development Loans

10.415 Rural Rental Housing Loans

10.417 Very Low Income Housing Repair Loans and Grants

10.420 Rural Self-Help Housing Technical Assistance

10.427 Rural Rental Assistance Payments

10.433 Rural Housing Preservation Grants

10.442 Housing Application Packaging Grants

Discussion of Notice

Part 1940, subpart L of 7 CFR contains the “Methodology and Formulas for Allocation of Loan and Grant Program Funds.” To apply for assistance under these programs or for more information, contact the Rural Development Office for your area.

Multi-Family Housing (MFH)

I. General

A. This provides guidance on MFH funding for the Rural Rental Housing program (RRH) for FY 2004 (it does not include carryover funds). Allocation computations have been performed in accordance with 7 CFR 1940.575 and 1940.578. For FY 2004, State Directors, under the Rural Housing Assistance Grants (RHAG), will have the flexibility to transfer their initial allocations of budget authority between the Single Family Housing (SFH) Section 504 Rural Housing Grants and Section 533 Housing Preservation Grant (HPG) programs.

B. MFH loan and grant levels for FY 2004 are as follows:

MFH Loan Programs Credit Sales—*$1,491,149

Section 514 Farm Labor Housing (LH) loans—*$42,574,374

Section 515 Rural Rental Housing (RRH) loans—*$115,857,375

Section 521 Rental Assistance (RA) and 502(c)(5)(C) Advance—*$574,689,210

Section 516 LH grants—*$17,900,759

Sections 525 Technical and Supervisory Assistance grants (TSA) and 509 Housing Application Packaging grants—$1,024,754

(HAPG) (Shared between single and multi-family housing)—(includes carryover)

Section 533 Housing Preservation grants (HPG)—*$8,882,000

Section 538 Guaranteed Rural Rental Housing program—*$99,410,000

Processing Worker Housing Grants—$4,970,500

* Does not include disaster or regular program carryover

II. Funds Not Allocated to States

A. Credit Sales Authority. For FY 2004, $1,491,149 will be set aside for credit sales to program and nonprogram buyers. Credit sale funding will not be allocated by State.

B. Section 538 Guaranteed Rural Rental Housing Program. Guaranteed loan funds will be made available under a Notice of Funding Availability (NOFA) being published in this Federal Register. Additional guidance is provided in the NOFA.

III. Farm Labor Housing (LH) Loans and Grants

The Administrator has the authority to transfer the allocation of budget authority between the two programs. Upon NOFA closing, the Administrator will evaluate the responses and determine proper distribution of funds between loans and grants.

A. Section 514 Farm LH Loans.

1. These loans are funded in accordance with 7 CFR 1940.579(a).

FY 2004 Appropriation—$42,574,374

Available for Off-Farm Loans—$35,774,000

Available for On-Farm Loans—$2,000,000

National Office Reserve—$4,800,374

2. Off-farm loan funds will be made available under a NOFA being published in this Federal Register. Additional guidance is provided in the NOFA.

B. Section 516 Farm LH Grants.

1. Grants are funded in accordance with 7 CFR 1940.579(b). Unobligated prior year balances and cancellations will be added to the amount shown.

FY 2004 Appropriation—$17,900,759

Available for LH Grants for Off-Farm—$13,400,759

Available for Technical Assistance Grants—$1,500,000

National Office Reserve—$3,000,000

2. Labor Housing grant funds for Off-Farm will be made available under a NOFA being published in this Federal Register. Additional guidance is provided in the NOFA.

C. Labor Housing Rental Assistance (RA) will be held in the National Office for use with LH loan and grant applications. RA is only available with a LH loan of at least 5 percent of the total development cost. Projects without a LH loan cannot receive RA.

IV. Section 515 RRH Loan Funds

FY 2004 Section 515 Rural Rental Housing allocation (Total)—$115,857,375

New Construction funds and set-asides—$30,057,375

New construction loans—$7,837,344

Set-aside for nonprofits—$10,427,163

Set-aside for underserved counties and colonias—$5,792,868

Earmark for EZ, EC, or REAP Zones—$5,000,000

State RA designated reserve—$1,000,000

Rehab and repair funds and equity—$60,800,000

Rehab and repair loans—$55,800,000

Designated equity loan reserve—$5,000,000

General Reserve—$25,000,000

A. New construction loan funds. New construction loan funds will be made available using a national NOFA being published in this Federal Register. Additional guidance is provided in the NOFA.

B. National Office New Construction Set-asides. The following legislatively mandated set-asides of funds are part of the National office set-aside:

1. Nonprofit Set-aside. An amount of $10,427,163 has been set aside for nonprofit applicants. All Nonprofit loan proposals must be located in designated places as defined in 7 CFR 1944-E.

2. Underserved Counties and Colonias Set-Aside. An amount of $5,792,868 has been set aside for loan requests to develop units in the underserved 100 most needy counties or colonias as defined in section 509(f) of the Housing Act of 1949 as amended. Priority will be given to proposals to develop units in colonias or tribal lands.

3. EZ, EC or REAP Zone Earmark. An amount of $5,000,000 has been earmarked for loan requests to develop units in EZ or EC communities or REAP Zones until June 30, 2004.

C. Rental Assistance (RA). Limited new construction RA will be held in the National office for use with Section 515 Rural Rental Housing loans.

D. Designated Reserves for State RA. An amount of $1 million of Section 515 loan funds has been set aside for matching with projects in which an active State sponsored RA program is available. The State RA program must be comparable to the RHS RA program.

E. Repair and Rehabilitation Loans. Tenant health and safety continues to be the top priority. Repair and rehabilitation funds must be first targeted to RRH facilities that have physical conditions that affect the health and safety of tenants and subsequently made available to facilities that have deferred maintenance. All funds will be held in the National office and will be distributed based upon indicated rehabilitation needs in the MFH survey conducted in November 2003.

F. Designated Reserve for Equity Loans. An amount of $5 million has been designated for the equity loan preservation incentive described in 7 CFR 1965-E. The $5 million will be further divided into $4 million for equity loan requests currently on the pending funding list and $1 million to facilitate the transfer of properties from for-profit owners to nonprofit corporations and public bodies. Funds for such transfers would be authorized only for for-profit owners who are currently on the pending funding list who agree to transfer to nonprofit corporations or public bodies rather than to remain on the pending list. If insufficient transfer requests are generated to utilize the full $1 million set aside for nonprofit and public body transfers, the balance will revert to the existing pending equity loan funding list.

G. General Reserve. There is one general reserve fund of $25,000,000. Some examples of immediate allowable uses include, but are not limited to, hardships and emergencies, RH cooperatives or group homes, or RRH preservation.

V. Section 533 Housing Preservation Grants (HPG)

Total Available—$8,882,000

Less General Reserve—$888,200

Less Earmark for EZ, EC or REAP Zones—$894,690

Total Available for Distribution—$7,099,110

Amount available for allocation. See end of this Notice for HPG State allocations. Fund availability will be announced in a NOFA being published in the Federal Register.

The amount of $894,690 is earmarked for EZ, EC or REAP Zones until June 30, 2004.

Single Family Housing (SFH)

I. General. All SFH programs are administered through field offices. For more information or to make application, please contact the Rural Development office servicing your area. To locate these offices, contact the appropriate State Office from the attached State Office listing, visit our web site at http://offices.usda.gov or check the blue pages in your local telephone directory under “Rural Development” for the office serving your area.

A. This notice provides SFH allocations for FY 2004. Allocation computations have been made in accordance with 7 CFR 1940.563 through 1940.568. Information on basic formula criteria, data source and weight, administrative allocation, pooling of funds, and availability of the allocation are located on a chart at the end of this notice.

B. The SFH levels authorized for FY 2004 are as follows:

Section 502 Guaranteed Rural Housing (RH) loans

Nonsubsidized Guarantees—Purchase—**$2,531,712,184

Nonsubsidized Guarantees—Refinance—**$ 236,646,482

Section 502 Direct RH loans

Very low-income subsidized loans—*$594,614,642

Low-income subsidized loans—*$756,782,272

Credit sales (Nonprogram)—$10,000,000

Section 504 housing repair loans—*$34,797,119

Section 504 housing repair grants—*/**$30,275,770

Section 509 compensation for construction defects—**$282,177

Section 523 mutual and self-help housing grants—*/**$42,365,092

Section 523 Self-Help Site Loans—$2,420,714

Section 524 RH site loans—$5,045,000

Section 306C Water and waste disposal grants—**$1,297,122

Section 525 Supervisory and Technical Assistance and Section 509 Housing Application

Packaging Grants Total Available for single And multi-family—**$2,000,000

Natural disaster funds (Section 502 loans—**$2,353,166 *

Natural disaster funds (Section 504 loans)—**$14,966,367

Natural disaster funds (Section 504 grants)—**$3,670,079

*Includes funds for EZ/EC and REAP communities until June 30, 2004.

** Carryover funds are included in the balance.

C. SFH Funding Not Allocated to States. The following funding is not allocated to States by formula. Funds are made available to each state on a case-by-case basis.

1. Credit sale authority. Credit sale funds in the amount of $10,000,000 are available only for nonprogram sales of Real Estate Owned (REO) property.

2. Section 509 Compensation for Construction Defects. $282,177 is available for compensation for construction defects.

3. Section 523 Mutual and Self-Help Technical Assistance Grants. $42,365,092 is available for Section 523 Mutual and Self-Help Technical Assistance Grants. Of these funds, $994,100 is earmarked for EZ, EC or REAP Zones until June 30, 2004. A technical review and analysis must be completed by the Technical and Management Assistance (T&MA) contractor on all predevelopment, new, and existing (refunding) grant applications.

4. Section 523 Mutual and Self-Help Site Loans and Section 524 RH Site Loans. $2,420,714 and $5,045,000 are available for Section 523 Mutual Self-Help and Section 524 RH Site loans, respectively.

5. Section 306C WWD Grants to Individuals in Colonias. The objective of the Section 306C WWD individual grant program is to facilitate the use of community water or waste disposal systems for the residents of the colonias along the U.S.-Mexico border.

The total amount available to Arizona, California, New Mexico, and Texas will be $1,297,122 for FY 2004. This amount includes the carryover unobligated balance of $297,122 and the transferred amount of $1 million from the Rural Utilities Service (RUS) to RHS for processing individual grant applications.

6. Section 525 Technical and Supervisory Assistance (TSA) and Section 509 Housing Application Packaging Grants (HAPG). $2,000,000 is available for the TSA and HAPG programs. Funds are available on a limited basis for TSA grants. In accordance with the provisions of 7 CFR 1944.525, funding will be targeted nationally and then on an individual basis to States/areas with the highest degree of substandard housing and persons in poverty eligible to receive Agency housing assistance. States should submit proposals from potential applicants to the National Office for review and concurrence prior to authorizing an application.

Requests should be submitted to the National Office for HAPG based on projected usage of these funds for the quarter or as needed. HAPG requests should be submitted by e-mail to Gloria Denson, Senior Loan Specialist, SFH Direct Loan Division, (202) 720-1487. Reserve funds will be held at the National Office and requests from eligible States will be considered on a first-come, first-served basis. Additional guidance is provided in the NOFA.

7. Natural Disaster Funds. Funds are available until exhausted to those States with active Presidential Declarations.

8. Deferred Mortgage Payment Demonstration. There is no FY 2004 funding provided for deferred mortgage authority or loans for deferred mortgage assumptions.

II. State allocations.

A. Section 502 Nonsubsidized Guaranteed RH (GRH) Loans.

1. Purchase—Amount Available for Allocation.

Total Available—Purchase—$2,531,712,184

Less National Office General Reserve—$907,520,729

Less Special Outreach Area Reserve—$388,937,455

Basic Formula—Administrative Allocation—$1,235,254,000

a. National Office General Reserve. The Administrator may restrict access to this reserve for States not meeting their goals in special outreach areas.

b. Special Outreach Areas. FY 2004 GRH funding is allocated to States in two funding streams. Seventy percent of GRH funds may be used in any eligible area. Thirty percent of GRH funds are to be used in special outreach areas. Special outreach areas for the GRH program are defined as those areas within a State that are not located within a metropolitan statistical area (MSA).

c. National Office Special Area Outreach Reserve. A special outreach area reserve fund has been established at the National office. Funds from this reserve may only be used in special outreach areas.

2. Refinance—Amount available for allocation.

Total Available—Refinance—$236,646,482

Less National office general reserve—$236,646,482

Basic formula “ Administrative Allocation—$0

a. Refinance Funds. Refinance loan funds will be distributed from the National Office on a case-by-case basis.

b. National office general reserve. The Administrator may restrict access to this reserve for States not meeting their goals in special outreach areas.

B. Section 502 Direct RH loans.

1. Amount Available for Allocation.

Total Available—$1,351,396,914

Less Required Set Aside for

Underserved Counties and Colonias—$67,569,850

EZ, EC and REAP Earmark—$48,793,635

Less General Reserve—$168,999,915

Administrator's Reserve—$9,999,915

Hardships & Homelessness—$2,000,000

Rural Housing Demonstration Program—$2,000,000

Homeownership Partnership—$130,000,000

Program funds for the sale of REO properties—$25,000,000

Less Designated Reserve for Self-Help—$150,000,000

Basic Formula Administrative Allocation—$916,033,515

2. Reserves.

a. State Office Reserve. State Directors must maintain an adequate reserve to fund the following applications:

(i) Hardship and homeless applicants including the direct Section 502 loan and Section 504 loan and grant programs.

(ii) Rural Home Loan Partnerships (RHLP) and Community Development Financial Institutions (CDFI) loans.

(iii) Subsequent loans for essential improvements or repairs and transfers with assumptions.

(iv) States will leverage with funding from other sources.

(v) Areas targeted by the State according to its strategic plan.

b. National Office Reserves.

(i) General Reserve. The National office has a general reserve of $168,999,915 million. Of this amount, the Administrator's reserve is $9,999,915 million. One of the purposes of the Administrator's reserve will be for loans in Indian Country. Indian Country is defined as land inside the boundaries of Indian reservations, communities made up mainly of Native Americans, Indian trust and restricted land, and tribal allotted lands.

(ii) Hardship and Homelessness Reserve. $2 million has been set aside for hardships and homeless.

(iii) Rural Housing Demonstration Program. $2 million dollars has been set aside for innovative demonstration initiatives.

(iv) Program Credit Sales. $25 million dollars has been set aside for program sales of REO property.

c. Homeownership Partnership. $130 million dollars has been set aside for Homeownership Partnerships. These funds will be used to expand existing partnerships and create new partnerships, such as the following:

(i) Department of Treasury, Community Development Financial Institutions (CDFI). Funds will be available to fund leveraged loans made in partnership with the Department of Treasury CDFI participants.

(ii) Partnership initiatives established to carry out the objectives of the rural home loan partnership (RHLP).

d. Designated Reserve for Self-Help. $150 million dollars has been set aside to assist participating Self-Help applicants. The National office will contribute 100 percent from the National office reserve. States are not required to contribute from their allocated Section 502 RH funds.

e. Underserved Counties and Colonias. An amount of $67,569,850 has been set aside for the 100 underserved counties and colonias.

f. Empowerment Zone (EZ) and Enterprise Community (EC) or Rural Economic Area Partnership (REAP) earmark. An amount of $48,793,635 has been earmarked until June 30, 2004, for loans in EZ, EC or REAP Zones.

g. State Office Pooling. If pooling is conducted within a State, it must not take place within the first 30 calendar days of the first, second, or third quarter. (There are no restrictions on pooling in the fourth quarter.)

h. Suballocation by the State Director. The State Director may suballocate to each area office using the methodology and formulas required by 7 CFR part 1940, subpart L. If suballocated to the area level, the Rural Development Manager will make funds available on a first-come, first-served basis to all offices at the field or area level. No field office will have its access to funds restricted without the prior written approval of the Administrator.

C. Section 504 Housing Loans and Grants. Section 504 grant funds are included in the Rural Housing Assistance Grant program (RHAG) in the FY 2004 appropriation.

1. Amount available for allocation.

Section 504 Loans

Total Available—$34,797,119

Less 5% for 100 Underserved Counties and Colonias—$1,739,856

EZ, EC or REAP Zone Earmark—$1,400,000

Less General Reserve—$1,500,113

Basic Formula—Administrative Allocation—$30,157,150

Section 504 Grants

Total Available—$30,275,770

Less 5% for 100 Underserved Counties and Colonias—$1,513,789

Less EZ, EC or REAP Earmark—$894,690

Less General Reserve—$1,599,982

Basic Formula-Administrative Allocation—$26,267,309

2. Reserves and Set-asides.

a. State Office Reserve. State Directors must maintain an adequate reserve to handle all anticipated hardship applicants based upon historical data and projected demand.

b. Underserved Counties and Colonias. Approximately $1,739,856 and $1,513,789 have been set aside for the 100 underserved counties and colonias until June 30, 2004, for the Section 504 loan and grant programs, respectively.

c. Empowerment Zone (EZ) and Enterprise Community (EC) or Rural Economic Area Partnership (REAP) Earmark (Loan Funds Only). $1,400,000 and $894,690 have been earmarked through June 30, 2004, for EZ, EC or REAPs for the Section 504 loan and grant programs, respectively.

d. General Reserve. $1.5 million for Section 504 loan hardships and $1.6 million for Section 504 grant extreme hardships have been set-aside in the general reserve. For Section 504 grants, an extreme hardship case is one requiring a significant priority in funding, ahead of other requests, due to severe health or safety hazards, or physical needs of the applicant.

1. Data derived from the 2000 U.S. Census is available on the web at http://199.159.140.1/census.

2. Due to the absence of Census data.

3. All dates are tentative and are for the close of business (COB). Pooled funds will be placed in the National office reserve and made available administratively. The Administrator reserves the right to redistribute funds based upon program performance.

4. Funds will be distributed cumulatively through each quarter listed until the National office year-end pooling date.