This article is reprinted with the permission of Nixon Peabody LLP

Over the past year the White House has sought to align federal rental policy. Sometimes called “Harmonization,” these efforts have focused on several areas where federal programs work in tandem among the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Treasury (essentially the Internal Revenue Service’s Low-Income Housing Tax Credit Program), and the U.S. Department of Agriculture (USDA) (mainly Rural Housing Services’ multifamily programs operated through Rural Development). The White House has convened several working group meetings culminating in a roll out meeting this past July 27. The Administration published its report called Federal Rental Alignment Opportunities—Conceptual Proposals, and sought comments over the summer. The report is broken out by its 11 subject areas: physical inspections, income reporting and definitions, subsidy layering reviews, reduction in state-to-state variability for income definition, financial reporting, common energy efficiency requirements, appraisal primer, market study standards, capital needs assessment, improve sharing of data on owner defaults, and compliance (fair housing MOUs).

The Administration is now starting implementation through pilot programs for physical inspections and subsidy layering reviews. The physical inspection pilot will involve limited numbers of properties in Michigan, Minnesota, Ohio, Oregon, Washington State, and Wisconsin. The subsidy layering pilot will be implemented in certain transactions in North Carolina, South Carolina, Michigan, and Nevada.

The physical inspection pilots have started their roll outs in the past two weeks in different states. Each pilot is focused on executing Memoranda of Understanding (“MOU”) in each pilot state between HUD, USDA, and the state Housing Finance Agency. Indications are that the Uniform Physical Condition Standard or UPCS would become the common inspection standard.

Similarly, the subsidy layering pilot will be implemented by state-specific MOUs between HUD, RD, and the state Housing Finance Agency.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.


Today’s federal register contains a Notice of Funding Availability for Rural Housing Service’s FY 2011 515 Multi-Family Housing Preservation Revolving Loan Fund (PRLF) Demonstration Program. The Agency originally issued a NOFA on  November 9, 2010 (75 FR 68748), but did  not receive sufficient applications to use all available funds. Projects that receive awards through this program must be financed by RD through the  section 515, 514 or 516 programs.


The total amount of funding available for this program is $7,038,926.76.


The deadline for receipt of all applications in response to this Notice is 5 p.m., Eastern Time, September 21, 2011.


Sherry Engel, Financial and Loan Analyst, Multi-Family Housing, U.S. Department of Agriculture, Rural Housing Service, 4949 Kirschling Court, Stevens Point, Wisconsin 54481 or Timothy James, Financial and Loan Analyst, Multi-Family Housing, STOP 0781 (Room 1263-S), U.S. Department of Agriculture, Rural Housing Service, 1400 Independence Avenue, SW., Washington, DC 20250-0781 or by telephone at: (715) 345-7677 or (202) 720-1610, TDD (302) 857-3585 or via e-mail at: sherry.engel@wdc.usda.gov or timothy.james@wdc.usda.gov. (Please note the phone numbers are not toll free numbers.)



Yesterday, The USDA announced the availability of funding for the Rural Development Voucher Program. Specifically, the notice announces  $13,972,000 in funds made available through the Department of Defense and full-year continuing Appropriations Act 2011 Public Law 112-10 (April 15, 2011). The voucher program is designed to provide assistance to eligible impacted families when an owner prepays a Section 515 Rural Rental Housing Program loan or  USDA action results in a foreclosure.


Stephanie B.M. White, Director, Multi-Family Housing Portfolio Management Division, Rural Development, U.S. Department of Agriculture, 1400 Independence Avenue, SW., STOP 0782, Washington, DC 20250-0782, telephone (202) 720-1615. Persons with hearing or speech impairments may access this number via TDD by calling the toll-free Federal Information Relay Service at 800-877-8339.


Last Thursday, The house passed H.R. 2112, the appropriations bill for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs for the fiscal year 2012.  Here is a breakdown of what the bill means for rural development programs:

  • $846 million for the Section 502 single-family subsidized direct loan program, $276 million less than FY 2011
  • $24 billion for the Section 502 unsubsidized guaranteed loan program, the same as FY 2011
  • $59 million for the Section 515 rural rental housing program, $11 million less than in FY 2011
  • No funding for the section 538 multifamily loan guarantee program