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USDA-RD's October Policy Changes and Updates for Multifamily Rural Housing Programs

USDA-Rural Development has made a number of policy changes that affect its multifamily housing programs. They are as follows:

· Administrative Notices (AN)

o AN 4679 “Implementation of 2010 Census Data for Rural Development Programs” (September 27, 2012)

AN 4679 provides guidance to RD National and State Office staff regarding the implementation of the 2010 Census data for use in the administration of direct loan, loan guarantee and grant programs across RD. The intended outcome is to instruct and inform RD National and State Office staff on appropriate data to be used as a source for population and income information needed for eligibility determinations and underwriting of applications for assistance filed pursuant to RD programs. In addition, this AN is being provided in advance of the transition to new data sources to allow for an orderly and consistent implementation across RD programs and to facilitate outreach that will provide current and potential applicants sufficient notice.

A copy of AN 4679 may be found here:

o AN 4689 “Design/Build and Construction Management Proposals for 514/515 Housing Projects” (October 4, 2012)

AN 4689 provides guidance to Rural Development staff and to define the process of requesting and obtaining National Office concurrence in the use of design/build or construction management proposals. The AN specifically clarifies the requirements in RD Instruction 1924-A, sections 1924.6(a) and 1924.13(e).

A copy of AN 4689 may be found here:

· October Unnumbered Letters (UL)

o “Changes in Federally Mandated Exclusions from Income” (October 9, 2012)

The UL provides additional guidance on recently published exclusions to Multi-Family Housing (MFH) income for properties in the Federal Register on July 24, 2012. The Federal Register Notice included a comprehensive list of benefits that currently qualify for the income exclusion in either any federal program or in specific federal programs.

Borrowers of all MFH properties must verify and document in the tenant’s file all income, assets, expenses, deductions, family characteristics, and any other factors that affect family eligibility or level of assistance. Annual income is defined in 7 CFR 3560.153 and is calculated in accordance with 24 CFR 5.609, which further defines which sources of income to count and which to exclude.

o “Guidance on the Use of the Section 538 Guaranteed Rural Rental Housing Program with Section 515 Properties” (October 9, 2012)

The UL clarifies issues concerning the use of Section 538 loan guarantees with existing affordable housing properties financed with Section 515 direct loans, and to provide guidance when using the Section 538 program in the revitalization and preservation of these Section 515 properties.

o “Program Loan Cost Expense Funds FY 2013 Allocations and Requirements Under the Credit Reform Act of 1990” (October 19, 2012)

The Office of Management and Budget (OMB) has approved this year’s apportionment of recoverable Direct Loan Financing and Liquidating Program Loan Cost Expense (PLCE) funds for Rural Development Housing and Community Facilities Programs. Your State’s annual FY 2013 Direct Loan Financing Account and Liquidating Account allocations are provided in Attachment 1. These allocations are based on your FY 2012 obligations of these funds. Your FY 2013 allocations have been posted in the Type 60 Financial Management Modernization Initiative (FMMI) funds control system.

Copies of all of the October ULs may be found here:

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