rmajette on PROD1PC67 with NOTICES
Federal Register / Vol. 71, No. 18 / Friday, January 2
7, 2006 / Notices
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: email@example.com. 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
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