Proposed Rule2024-25713
Clarification on the Requirement To Record the Guaranteed Rural Rental Housing Program Deed Restriction
Primary source
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Published
November 5, 2024
Issuing agencies
Agriculture DepartmentRural Housing Service
Abstract
The Rural Housing Service (RHS or the Agency), a Rural Development agency of the United States Department of Agriculture (USDA), proposes to amend the current regulation for the Multifamily Housing (MFH) Guaranteed Rural Rental Housing Program (GRRHP). The intent of this proposed rule is to codify the restrictive use language within the GRRHP regulation to clarify that a separate deed restriction must be recorded. This change will allow the Agency to maintain and preserve affordable housing for low- and moderate-income households.
Full Text
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<title>Federal Register, Volume 89 Issue 214 (Tuesday, November 5, 2024)</title>
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[Federal Register Volume 89, Number 214 (Tuesday, November 5, 2024)]
[Proposed Rules]
[Pages 87801-87803]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-25713]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 89, No. 214 / Tuesday, November 5, 2024 /
Proposed Rules
[[Page 87801]]
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Part 3565
[Docket No. RHS-24-MFH-0016]
RIN 0575-AD34
Clarification on the Requirement To Record the Guaranteed Rural
Rental Housing Program Deed Restriction
AGENCY: Rural Housing Service, Department of Agriculture (USDA).
ACTION: Proposed rule.
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SUMMARY: The Rural Housing Service (RHS or the Agency), a Rural
Development agency of the United States Department of Agriculture
(USDA), proposes to amend the current regulation for the Multifamily
Housing (MFH) Guaranteed Rural Rental Housing Program (GRRHP). The
intent of this proposed rule is to codify the restrictive use language
within the GRRHP regulation to clarify that a separate deed restriction
must be recorded. This change will allow the Agency to maintain and
preserve affordable housing for low- and moderate-income households.
DATES: Comments on the proposed rule must be received on or before
January 6, 2025.
ADDRESSES: Comments may be submitted electronically by the Federal
eRulemaking Portal: Go to <a href="http://regulations.gov">regulations.gov</a> and, in the ``Search Field''
box, labeled ``Search for dockets and documents on agency actions,''
enter the following docket number: RHS-24-MFH-0016) or RIN# 0575-AD34,
then click search. To submit or view public comments, select the
following document title: (MFH Rural Rental Housing Deed Restriction
Proposed Rule) from the ``Search Results,'' and select the ``Comment''
button. Before inputting your comments, you may also review the
``Commenter's Checklist'' (optional). Insert your comments under the
``Comment'' title, click ``Browse'' to attach files (if available).
Input your email address and select ``Submit Comment.'' Information on
using Regulations.gov, including instructions for accessing documents,
submitting comments, and viewing the docket after the close of the
comment period, is available through the site's ``FAQ'' link.
Other Information: Additional information about Rural Development
and its programs is available on the internet at <a href="http://rd.usda.gov">rd.usda.gov</a>.
All comments will be available for public inspection online at the
Federal eRulemaking Portal (<a href="http://regulations.gov">regulations.gov</a>).
FOR FURTHER INFORMATION CONTACT: Tammy Daniels, Finance and Loan
Analyst, Multi-Family Housing Production and Preservation Division,
Rural Housing Service, United States Department of Agriculture, STOP
0781, 1400 Independence Avenue SW, Washington, DC 20250-0781,
Telephone: (202) 720-0021 (this is not a toll-free number); email:
<a href="/cdn-cgi/l/email-protection#b5c1d4d8d8cc9bd1d4dbdcd0d9c6f5c0c6d1d49bd2dac3"><span class="__cf_email__" data-cfemail="a6d2c7cbcbdf88c2c7c8cfc3cad5e6d3d5c2c788c1c9d0">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
The RHS offers a variety of programs to build or improve housing
and essential community facilities in rural areas. RHS offers loans,
grants, and loan guarantees for single- and multifamily housing,
childcare centers, fire and police stations, hospitals, libraries,
nursing homes, schools, first responder vehicles and equipment, and
housing for farm laborers. RHS also provides technical assistance loans
and grants in partnership with non-profit organizations, Indian tribes,
state and Federal government agencies, and local communities.
RHS administers the Section 538 Guaranteed Rural Rental Housing
Program (GRRHP) under the authority of the Housing Act of 1949, as
amended (42 U.S.C. 1490p-2) and operates under 7 CFR part 3565. Under
the GRRHP, RHS guarantees loans for the development of housing and
related facilities in rural areas. To preserve affordable housing, the
GRRHP regulation requires properties that are financed with a Section
538 GRRHP loan be used for occupancy by low- and moderate-income
households and remain as affordable rental housing for the original
term of the loan. The Agency is proposing to require a separate deed
restriction containing restrictive use language, stating that the
housing must remain available for occupancy by low- and moderate-income
households for the original term of the guaranteed loan, and be
recorded along with other legally recorded documents. For the
restriction to remain in place upon prepayment of the mortgage, the
deed restriction must be recorded. The current regulation does not
specify that the deed restriction be recorded.
II. Purpose of the Proposed Rule
The purpose of this proposed rule is to clarify that the deed
restriction must be recorded to ensure affordable rural rental housing
is preserved after prepayment of the mortgage. The current regulation
does not specify that a separate deed restriction is to be recorded.
Restrictive use provisions contained in the mortgage or deed of trust
may be released along with the mortgage or deed of trust upon
prepayment of the loan. However, documents recorded separately from the
mortgage or deed of trust will survive if the loan is prepaid. If the
deed is not recorded, the Agency will be at risk of not being able to
enforce the restrictive use requirement and fulfill the need for
affordable housing in rural areas. The proposed rule will require that
applicants record a separate deed restriction.
III. Summary of Changes
The proposed changes would amend 7 CFR 3565.352(b) by adding
language requiring that a separate deed restriction (containing the
restrictive use language) be recorded before other documentation
related to the transaction. This change would allow the Agency to
enforce the restrictive use requirement to maintain affordable housing
if the loan guaranteed by the Section 538 GRRHP is prepaid.
IV. Regulatory Information
Statutory Authority
The RHS administers the Section 538 Guaranteed Rural Rental Housing
Program (GRRHP) loans under the authority of the Housing Act of 1949,
as amended (42 U.S.C. 1490p-2) and operates under 7 CFR part 3565.
[[Page 87802]]
Executive Order 12372, Intergovernmental Review of Federal Programs
These loans are subject to the provisions of Executive Order 12372,
which require intergovernmental consultation with State and local
officials. RHS conducts intergovernmental consultations for each loan
in accordance with 2 CFR part 415, subpart C.
Executive Order 12866, Regulatory Planning and Review
This proposed rule has been determined to be non-significant and,
therefore, was not reviewed by the Office of Management and Budget
(OMB) under Executive Order 12866.
Executive Order 12988, Civil Justice Reform
This rule has been reviewed under Executive Order 12988. In
accordance with this rule: (1) unless otherwise specifically provided,
all State and local laws that conflict with this rule will be
preempted; (2) no retroactive effect will be given to this rule except
as specifically prescribed in the rule; and (3) administrative
proceedings of the National Appeals Division of the Department of
Agriculture (7 CFR part 11) must be exhausted before bringing suit in
court that challenges action taken under this rule.
Executive Order 13132, Federalism
The policies contained in this rule do not have any substantial
direct effect on States, on the relationship between the National
Government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on state and local
governments. Therefore, consultation with the States is not required.
Executive Order 13175, Consultation and Coordination With Indian Tribal
Governments
This proposed rule has been reviewed in accordance with the
requirements of Executive Order 13175, Consultation and Coordination
with Indian Tribal Governments. Executive Order 13175 requires Federal
agencies to consult and coordinate with tribes on a government-to-
government basis on policies that have tribal implications, including
regulations, legislative comments or proposed legislation, and other
policy statements or actions that have substantial direct effects on
one or more Indian tribes, on the relationship between the Federal
government and Indian tribes or on the distribution of power and
responsibilities between the Federal government and Indian tribes.
Consultation is also required for any regulation that preempts tribal
law or that imposes substantial direct compliance costs on Indian
tribal governments and that is not required by statute.
The Agency has determined that this proposed rule does not, to our
knowledge, have tribal implications that require formal tribal
consultation under Executive Order 13175. If a Tribe requests
consultation, the RHS will work with the Office of Tribal Relations and
USDA Rural Development's Tribal Relations Team to ensure meaningful
consultation is provided where changes, additions and modifications
identified herein are not expressly mandated by Congress.
Regulatory Flexibility Act
The rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned has
determined and certified by signature on this document that this rule
will not have a significant economic impact on a substantial number of
small entities since this rulemaking action does not involve a new or
expanded program nor does it require any more action on the part of a
small business than required of a large entity.
Administrative Pay-As-You-Go-Act of 2023
Section 270 of the Administrative Pay-As-You-Go-Act of 2023 (Pub.
L. 118-5, div. B, title III, 137 Stat 31) amended 5 U.S.C. 801(a)(2)(A)
to require U.S. Government Accountability Office (GAO) to assess agency
compliance with the Act, which establishes requirements for
administrative actions that affect direct spending, in GAO's major rule
reports. The Act does not apply to this rule because it does not
increase direct spending.
Unfunded Mandate Reform Act (UMRA)
Title II of the UMRA, Public Law 104-4, establishes requirements
for Federal Agencies to assess the effects of their regulatory actions
on State, local, and tribal Governments and on the private sector.
Under section 202 of the UMRA, Federal Agencies generally must prepare
a written statement, including cost-benefit analysis, for proposed and
final Rules with ``Federal mandates'' that may result in expenditures
to State, local, or tribal Governments, in the aggregate, or to the
private sector, of $100 million or more in any one year. When such a
statement is needed for a rule, section 205 of the UMRA generally
requires a Federal Agency to identify and consider a reasonable number
of regulatory alternatives and adopt the least costly, more cost-
effective, or least burdensome alternative that achieves the objectives
of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of title II of the UMRA) for State, local, and tribal
Governments or for the private sector. Therefore, this rule is not
subject to the requirements of sections 202 and 205 of the UMRA.
National Environmental Policy Act
In accordance with the National Environmental Policy Act of 1969,
Public Law 91-190, this proposed rule has been reviewed in accordance
with 7 CFR part 1970 (``Environmental Policies and Procedures''). The
Agency has determined that (i) this action meets the criteria
established in 7 CFR 1970.53(f); (ii) no extraordinary circumstances
exist; and (iii) the action is not ``connected'' to other actions with
potentially significant impacts, is not considered a ``cumulative
action'' and is not precluded by 40 CFR 1506.1. Therefore, the Agency
has determined that the action does not have a significant effect on
the human environment, and therefore neither an Environmental
Assessment nor an Environmental Impact Statement is required.
Civil Rights Impact Analysis
Rural Development has reviewed this rule in accordance with USDA
Regulation 4300-4, Civil Rights Impact Analysis, to identify any major
civil rights impacts the rule might have on program participants on the
basis of age, race, color, national origin, sex, disability, marital or
familial status. Based on the review and analysis of the rule and all
available data, issuance of this proposed rule is not likely to
negatively impact low and moderate-income populations, minority
populations, women, Indian tribes or persons with disability, by virtue
of their age, race, color, national origin, sex, disability, or marital
or familial status. No major civil rights impact is likely to result
from this proposed rule.
Assistance Listing
The program affected by this regulation is listed in the Catalog of
Federal Domestic Assistance under numbers 10.438--Rural Rental Housing
Guaranteed Loans (Section 538).
Paperwork Reduction Act
The information collection requirements contained in this
[[Page 87803]]
regulation have been approved by OMB and have been assigned OMB control
number 0575-0189. This proposed rule contains no new reporting and
recordkeeping requirements that would require approval under the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
E-Government Act Compliance
Rural Development is committed to the E-Government Act, which
requires Government agencies in general to provide the public the
option of submitting information or transacting business electronically
to the maximum extent possible and to promote the use of the internet
and other information technologies to provide increased opportunities
for citizen access to Government information and services, and for
other purposes.
USDA Non-Discrimination Statement
In accordance with Federal civil rights laws and USDA civil rights
regulations and policies, the USDA, its Mission Areas, agencies, staff
offices, employees, and institutions participating in or administering
USDA programs are prohibited from discriminating based on race, color,
national origin, religion, sex, gender identity (including gender
expression), sexual orientation, disability, age, marital status,
family/parental status, income derived from a public assistance
program, political beliefs, or reprisal or retaliation for prior civil
rights activity, in any program or activity conducted or funded by USDA
(not all bases apply to all programs). Remedies and complaint filing
deadlines vary by program or incident.
Program information may be made available in languages other than
English. Persons with disabilities who require alternative means of
communication to obtain program information (e.g., Braille, large
print, audiotape, American Sign Language) should contact the
responsible Mission Area, agency, or staff office; or the 711 Relay
Service.
To file a program discrimination complaint, a complainant should
complete a Form AD-3027, USDA Program Discrimination Complaint Form,
which can be obtained online at <a href="http://usda.gov/sites/default/files/documents/ad-3027.pdf">usda.gov/sites/default/files/documents/ad-3027.pdf</a> from any USDA office, by calling (866) 632-9992, or by
writing a letter addressed to USDA. The letter must contain the
complainant's name, address, telephone number, and a written
description of the alleged discriminatory action in sufficient detail
to inform the Assistant Secretary for Civil Rights (ASCR) about the
nature and date of an alleged civil rights violation. The completed AD-
3027 form or letter must be submitted to USDA by:
a. Mail: U.S. Department of Agriculture, Office of the Assistant
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC
20250-9410; or
b. Fax: (833) 256-1665 or (202) 690-7442; or
c. Email: <a href="/cdn-cgi/l/email-protection#fc8c8e939b8e9d91d29592889d9799bc898f989dd29b938a"><span class="__cf_email__" data-cfemail="c7b7b5a8a0b5a6aae9aea9b3a6aca287b2b4a3a6e9a0a8b1">[email protected]</span></a>.
Severability
It is USDA's intention that the provisions of this rule shall
operate independently of each other. If this rule or any portion of
this rule is ultimately declared invalid or stayed as to a particular
provision, it is USDA's intent that the rule nonetheless be severable
and remain valid with respect to those provisions not affected by a
declaration of invalidity or stayed. USDA concludes it would separately
adopt all the provisions contained in this rule.
List of Subjects in 7 CFR Part 3565
Conflict of interest, Credit, Fair housing, Loan programs--housing
and community development, Low and moderate-income housing,
Manufactured homes, Mortgages, Rent subsidies, Reporting and
recordkeeping requirements, Rural areas.
For the reasons discussed in the preamble, the Agency proposes to
amend 7 CFR part 3565 as follows:
PART 3565--GUARANTEED RURAL RENTAL HOUSING PROGRAM
0
1. The authority citation for part 3565 continues to read as follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480.
Subpart H--Project Management
0
2. Amend Sec. 3565.352 by revising paragraph (b) to read as follows:
Sec. 3565.352 Preservation of affordable housing.
* * * * *
(b) Use restriction. For the original term of the guaranteed loan,
the housing must remain available for occupancy by low- and moderate-
income households, in accordance with subpart E of this part. This
requirement must be included in a deed restriction in a form acceptable
to the Agency. The deed restriction must be recorded separately, before
and with priority over other documents related to the transaction. The
restriction will apply unless the housing is acquired by foreclosure or
an instrument in lieu of foreclosure, or the Agency waives the
applicability of this requirement after determining that each of the
following three circumstances exist:
(1) There is no longer a need for low-and moderate-income housing
in the market area in which the housing is located;
(2) Housing opportunities for low-income households and minorities
will not be reduced as a result of the waiver; and
(3) Additional federal assistance will not be necessary as a result
of the waiver.
* * * * *
Joaquin Altoro,
Administrator, Rural Housing Service.
[FR Doc. 2024-25713 Filed 11-4-24; 8:45 am]
BILLING CODE 3410-XV-P
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