80_FR_34647 80 FR 34531 - Reserve Account

80 FR 34531 - Reserve Account

DEPARTMENT OF AGRICULTURE
Rural Housing Service

Federal Register Volume 80, Issue 116 (June 17, 2015)

Page Range34531-34533
FR Document2015-14783

The Rural Housing Service (RHS or ``Agency'') is amending its regulation to change the requirements of the reserve account for direct Multifamily Housing (MFH) loans. The intended effect of this action is to address the reserve account requirement of the Agency to countersign with the borrower when a Section 538 guaranteed loan is involved, and to also clarify that reserve account funds cannot be used to pay for fees associated with the Section 538 guaranteed loan program.

Federal Register, Volume 80 Issue 116 (Wednesday, June 17, 2015)
[Federal Register Volume 80, Number 116 (Wednesday, June 17, 2015)]
[Rules and Regulations]
[Pages 34531-34533]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-14783]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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Federal Register / Vol. 80, No. 116 / Wednesday, June 17, 2015 / 
Rules and Regulations

[[Page 34531]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 3560

RIN 0575-AC99


Reserve Account

AGENCY: Rural Housing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Housing Service (RHS or ``Agency'') is amending its 
regulation to change the requirements of the reserve account for direct 
Multifamily Housing (MFH) loans. The intended effect of this action is 
to address the reserve account requirement of the Agency to countersign 
with the borrower when a Section 538 guaranteed loan is involved, and 
to also clarify that reserve account funds cannot be used to pay for 
fees associated with the Section 538 guaranteed loan program.

DATES: The effective date for this final rule is August 17, 2015.

FOR FURTHER INFORMATION CONTACT: Tammy S. Daniels, Financial and Loan 
Analyst, Multi-Family Housing Guaranteed Loan Division, Rural Housing 
Service, U.S. 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: tammy.daniels@wdc.usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12866--Classification

    This rule has been determined to be not significant and, therefore, 
was not reviewed by the Office of Management and Budget under Executive 
Order 12866.

Executive Order 12988--Civil Justice Reform

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. If this rule is adopted: (1) Unless otherwise 
specifically provided, all State and local laws that are in 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 
U.S. Department of Agriculture (7 CFR part 11) must be exhausted before 
bringing suit.

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 States is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This executive order imposes requirements on Rural Development (RD) 
in the development of regulatory policies that have tribal implications 
or preempt tribal laws. RD has determined that the final rule does not 
have a substantial direct effect on one or more Indian tribe(s) or on 
either the relationship or the distribution of powers and 
responsibilities between the Federal Government and Indian tribes. 
Thus, this final rule is not subject to the requirements of Executive 
Order 13175. If a tribe determines that this rule has implications of 
which RD is not aware and would like to engage with RD on this rule, 
please contact RD's Native American Coordinator at: AIAN@wdc.usda.gov.

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. 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.

Paperwork Reduction Act

    The information collection requirements contained in this 
regulation have been approved by OMB and have been assigned OMB control 
number 0575-0189. There are no new reporting and recordkeeping 
requirements associated with this regulatory action.

E-Government Act Compliance

    RHS is committed to complying with the E-Government Act by 
promoting the use of the Internet and other information technologies in 
order to provide increased opportunities for citizen access to 
Government information, services, and other purposes.

Unfunded Mandate Reform Act (UMRA)

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local and tribal 
Governments or the private sector. Therefore, this rule is not subject 
to the requirements of sections 202 and 205 of the UMRA.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' RHS determined that the action 
does not constitute a major Federal action significantly affecting the 
quality of the environment. Therefore, in accordance with the National 
Environmental Policy Act of 1969, Pub. L. 91-190, an Environmental 
Impact Statement is not required.

Programs Affected

    The programs affected by this regulation are listed in the Catalog 
of Federal Domestic Assistance under numbers 10.405--Farm Labor Housing 
Loans and Grants; 10.415--RRH Loans; and 10.427--Rural Rental 
Assistance Payments.

Executive Order 12372--Intergovernmental Consultation

    These loans are subject to the provisions of Executive Order 12372, 
which require intergovernmental

[[Page 34532]]

consultation with State and local officials. RHS conducts 
intergovernmental consultations for each loan in accordance with 2 CFR 
part 415, subpart C.

I. Background Information

    Reserve accounts are established by the recipient of direct MFH 
loans (the ``borrower'') to meet the major capital expenses of a 
housing project. The amount of the payments to the reserve account is 
established in the loan documents, beginning with the first loan 
payment or the date specified in the loan documents. The current 
requirement at 7 CFR 3560.306(e)(2) states that reserve accounts 
require the Agency to countersign with the borrower on all withdrawals. 
The Section 538 Guaranteed Rural Rental Housing (GRRH) program often 
provides funding to an existing direct MFH loan property. Loan funds 
provided by the lender and guaranteed by the GRRH program are critical 
to the rehabilitation and preservation of older existing direct MFH 
loan properties. The GRRH program regulation at 7 CFR 3565.402(a) 
requires that all property reserve accounts be held by the lender, 
which eliminates the unauthorized use of these funds by the borrower 
since the borrower does not have access to the funds. When an approved 
Section 538 lender lends funds to an existing direct MFH loan-financed 
property, this brings 7 CFR 3560.306 and 3565.402 into conflict, 
pitting the requirement for the Agency to countersign for funds 
pursuant to 7 CFR 3560.306, against the requirement that lenders have 
unfettered control of funds consistent with 7 CFR 3565.402. The GRRH 
program loan guarantees are sold on the secondary market as long as the 
loan is closed and is not in default. In most cases, the Section 538 
loans on direct MFH loan-financed properties are transferred to Ginnie 
Mae. Ginnie Mae requires that property reserve accounts be pledged as 
collateral for the loan and that it has unfettered access to those 
accounts. In order to meet this secondary market requirement, the 
reserve accounts must be titled exclusively in the lender's name. In 
order to meet Ginnie Mae's requirements, the reserve accounts cannot be 
countersigned with any other party. Requiring the Agency's signature on 
all withdrawals ensures that the borrower does not have uncontrolled 
use of the funds and this requirement will remain unchanged for 
properties that only have direct MFH loans. However, this amendment 
would relieve the Agency of its countersignature responsibility for 
properties with Section 538 funding, and thereby comply with Ginnie 
Mae's requirements, described above. The Agency's interest in the 
reserve accounts would still be protected by the change being made in 
the regulation, since the lender is required to get prior Agency 
approval before funds disbursement. Therefore, funds from the lender-
controlled reserve account cannot be used for items not agreed to by 
the Agency.
    Additionally, RHS is amending 7 CFR 3560.306(g) to clarify that 
reserve account funds cannot be used to pay fees associated with the 
loan guarantee. Lenders are currently using the replacement reserve 
account to pay fees associated with the loan guarantee, i.e., the 
annual renewal fee. These fees are considered a project expense and 
must be paid from the operating account, not the replacement reserve 
account.

II. Discussion of the Comments Received

    The Agency received three responses to the proposed rule published 
in the Federal Register on August 13, 2014, (79 FR 47383). The comments 
came from RD employees who work with the RD Multi-Family Housing 
programs. The topics of discussion included: Putting in language 
regarding the Section 514/516 Farm Labor Housing program; including all 
lenders in the amendment, not just Section 538 lenders; and, providing 
additional guidance on how to implement the new requirements involving 
direct MFH/538 transactions.
    The comments were as follows:
    1. One commenter wanted the Agency to address how the release of 
the reserves will be internally implemented. The Agency will address 
this in our internal guidance, HB-1-3565, on how to implement reserve 
requirements on direct MFH loan transactions.
    2. One commenter requested that the proposed rule change include 
language to reflect that the Section 514/516 Farm Labor Housing loan 
and grant program transactions be included in the final rule. The rule 
has been changed to reflect that it pertains to all direct Multi-family 
housing loans; therefore, references to Section 515 loans have been 
replaced with ``direct MFH loans.''
    3. One commenter requested that the amendment address all lenders, 
not just Section 538 lenders, when loan funds are leveraged for the 
construction and/or rehabilitation of project involving direct MFH 
loans. The agency will not make a change to address all lenders through 
this regulation change because the change is only intended to resolve 
the conflict between 7 CFR parts 3560 and 3565. In other words, the 
Agency will only address transactions involving an approved Section 538 
lender. In a direct MFH loan transaction involving lenders other than a 
Section 538 lender, the rules in 7 CFR 3560.306 will prevail so that 
the direct MFH loan borrower will maintain control of the reserve 
account through supervised bank accounts.

List of Subjects in 7 CFR Part 3560

    Accounting, Administrative practice and procedure, Aged, Farm labor 
housing, Foreclosure, Grant programs--Housing and community 
development, Government property management, Handicapped, Insurance, 
Loan programs--Agriculture, Loan programs--Housing and community 
development, Low and moderate income housing, Migrant labor, Mortgages, 
Nonprofit organizations, Public housing, Rent subsidies, Reporting and 
recordkeeping requirements, Rural housing.


    Therefore, chapter XXXV, title 7 of the Code of Federal 
Regulations, is amended as follows:

PART 3560--DIRECT MULTI-FAMILY HOUSING LOANS AND GRANTS

0
1. The authority citation for part 3560 continues to read as follows:

    Authority: 42 U.S.C. 1480.

Subpart G--Financial Management

0
2. Amend Sec.  3560.306 by revising paragraph (e)(2) and adding 
paragraph (g)(5) to read as follows:


Sec.  3560.306  Reserve account.

* * * * *
    (e) * * *
    (2) Reserve accounts must be supervised accounts that require the 
Agency to countersign on all withdrawals; except, this requirement is 
not applicable when loan funds guaranteed by the Section 538 GRRH 
program are used for the construction and/or rehabilitation of a direct 
MFH loan project. Direct MFH loan borrowers, who are exempted from the 
supervised account and countersigned requirement, as described above, 
must follow Section 538 GRRH program regulatory requirements pertaining 
to reserve accounts. In all cases, Section 538 lenders must get prior 
written approval from the Agency before reserve account funds involving 
a direct MFH loan project can be disbursed to the borrower.
* * * * *
    (g) * * *

[[Page 34533]]

    (5) Funds from the replacement reserve account cannot be used to 
pay any fees associated with the Section 538 GRRH loan guarantee, as 
determined by the Agency.
* * * * *

    Dated: May 18, 2015.
Tony Hernandez,
Administrator, Rural Housing Service.
[FR Doc. 2015-14783 Filed 6-16-15; 8:45 am]
 BILLING CODE 3410-XV-P



                                                                                                                                                                                                34531

                                              Rules and Regulations                                                                                          Federal Register
                                                                                                                                                             Vol. 80, No. 116

                                                                                                                                                             Wednesday, June 17, 2015



                                              This section of the FEDERAL REGISTER                    Executive Order 12988—Civil Justice                    This rulemaking action does not involve
                                              contains regulatory documents having general            Reform                                                 a new or expanded program nor does it
                                              applicability and legal effect, most of which                                                                  require any more action on the part of
                                              are keyed to and codified in the Code of                   This rule has been reviewed under
                                                                                                      Executive Order 12988, Civil Justice                   a small business than required of a large
                                              Federal Regulations, which is published under                                                                  entity.
                                              50 titles pursuant to 44 U.S.C. 1510.                   Reform. If this rule is adopted: (1)
                                                                                                      Unless otherwise specifically provided,                Paperwork Reduction Act
                                              The Code of Federal Regulations is sold by              all State and local laws that are in
                                              the Superintendent of Documents. Prices of                                                                       The information collection
                                                                                                      conflict with this rule will be
                                              new books are listed in the first FEDERAL                                                                      requirements contained in this
                                                                                                      preempted; (2) no retroactive effect will
                                              REGISTER issue of each week.                                                                                   regulation have been approved by OMB
                                                                                                      be given to this rule except as
                                                                                                                                                             and have been assigned OMB control
                                                                                                      specifically prescribed in the rule; and
                                                                                                                                                             number 0575–0189. There are no new
                                              DEPARTMENT OF AGRICULTURE                               (3) administrative proceedings of the
                                                                                                                                                             reporting and recordkeeping
                                                                                                      National Appeals Division of the U.S.
                                                                                                                                                             requirements associated with this
                                              Rural Housing Service                                   Department of Agriculture (7 CFR part
                                                                                                                                                             regulatory action.
                                                                                                      11) must be exhausted before bringing
                                              7 CFR Part 3560                                         suit.                                                  E-Government Act Compliance
                                                                                                      Executive Order 13132—Federalism                          RHS is committed to complying with
                                              RIN 0575–AC99                                                                                                  the E-Government Act by promoting the
                                                                                                        The policies contained in this rule do               use of the Internet and other
                                              Reserve Account                                         not have any substantial direct effect on              information technologies in order to
                                                                                                      States, on the relationship between the                provide increased opportunities for
                                              AGENCY:    Rural Housing Service, USDA.                 national government and the States, or                 citizen access to Government
                                                                                                      on the distribution of power and                       information, services, and other
                                              ACTION:   Final rule.                                   responsibilities among the various                     purposes.
                                                                                                      levels of government. Nor does this rule
                                              SUMMARY:   The Rural Housing Service                    impose substantial direct compliance                   Unfunded Mandate Reform Act
                                              (RHS or ‘‘Agency’’) is amending its                     costs on State and local governments.                  (UMRA)
                                              regulation to change the requirements of                Therefore, consultation with States is                   This rule contains no Federal
                                              the reserve account for direct                          not required.                                          mandates (under the regulatory
                                              Multifamily Housing (MFH) loans. The                                                                           provisions of Title II of the UMRA) for
                                              intended effect of this action is to                    Executive Order 13175, Consultation
                                                                                                      and Coordination With Indian Tribal                    State, local and tribal Governments or
                                              address the reserve account requirement                                                                        the private sector. Therefore, this rule is
                                              of the Agency to countersign with the                   Governments
                                                                                                                                                             not subject to the requirements of
                                              borrower when a Section 538                                This executive order imposes                        sections 202 and 205 of the UMRA.
                                              guaranteed loan is involved, and to also                requirements on Rural Development
                                              clarify that reserve account funds                      (RD) in the development of regulatory                  Environmental Impact Statement
                                              cannot be used to pay for fees associated               policies that have tribal implications or                This document has been reviewed in
                                              with the Section 538 guaranteed loan                    preempt tribal laws. RD has determined                 accordance with 7 CFR part 1940,
                                              program.                                                that the final rule does not have a                    subpart G, ‘‘Environmental Program.’’
                                                                                                      substantial direct effect on one or more               RHS determined that the action does not
                                              DATES:  The effective date for this final               Indian tribe(s) or on either the                       constitute a major Federal action
                                              rule is August 17, 2015.                                relationship or the distribution of                    significantly affecting the quality of the
                                              FOR FURTHER INFORMATION CONTACT:                        powers and responsibilities between the                environment. Therefore, in accordance
                                              Tammy S. Daniels, Financial and Loan                    Federal Government and Indian tribes.                  with the National Environmental Policy
                                              Analyst, Multi-Family Housing                           Thus, this final rule is not subject to the            Act of 1969, Pub. L. 91–190, an
                                              Guaranteed Loan Division, Rural                         requirements of Executive Order 13175.                 Environmental Impact Statement is not
                                              Housing Service, U.S. Department of                     If a tribe determines that this rule has               required.
                                              Agriculture, STOP 0781, 1400                            implications of which RD is not aware
                                                                                                      and would like to engage with RD on                    Programs Affected
                                              Independence Avenue SW.,
                                              Washington, DC 20250–0781,                              this rule, please contact RD’s Native                    The programs affected by this
                                              Telephone: (202) 720–0021 (this is not                  American Coordinator at: AIAN@                         regulation are listed in the Catalog of
                                              a toll-free number); email:                             wdc.usda.gov.                                          Federal Domestic Assistance under
                                              tammy.daniels@wdc.usda.gov.                                                                                    numbers 10.405—Farm Labor Housing
                                                                                                      Regulatory Flexibility Act
                                                                                                                                                             Loans and Grants; 10.415—RRH Loans;
                                              SUPPLEMENTARY INFORMATION:                                 The rule has been reviewed with                     and 10.427—Rural Rental Assistance
srobinson on DSK5SPTVN1PROD with RULES




                                              Executive Order 12866—Classification                    regard to the requirements of the                      Payments.
                                                                                                      Regulatory Flexibility Act (5 U.S.C.
                                                This rule has been determined to be                   601–612). The undersigned has                          Executive Order 12372—
                                              not significant and, therefore, was not                 determined and certified by signature                  Intergovernmental Consultation
                                              reviewed by the Office of Management                    on this document that this rule will not                 These loans are subject to the
                                              and Budget under Executive Order                        have a significant economic impact on                  provisions of Executive Order 12372,
                                              12866.                                                  a substantial number of small entities.                which require intergovernmental


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                                              34532            Federal Register / Vol. 80, No. 116 / Wednesday, June 17, 2015 / Rules and Regulations

                                              consultation with State and local                       properties with Section 538 funding,                   and 3565. In other words, the Agency
                                              officials. RHS conducts                                 and thereby comply with Ginnie Mae’s                   will only address transactions involving
                                              intergovernmental consultations for                     requirements, described above. The                     an approved Section 538 lender. In a
                                              each loan in accordance with 2 CFR part                 Agency’s interest in the reserve                       direct MFH loan transaction involving
                                              415, subpart C.                                         accounts would still be protected by the               lenders other than a Section 538 lender,
                                                                                                      change being made in the regulation,                   the rules in 7 CFR 3560.306 will prevail
                                              I. Background Information
                                                                                                      since the lender is required to get prior              so that the direct MFH loan borrower
                                                 Reserve accounts are established by                  Agency approval before funds                           will maintain control of the reserve
                                              the recipient of direct MFH loans (the                  disbursement. Therefore, funds from the                account through supervised bank
                                              ‘‘borrower’’) to meet the major capital                 lender-controlled reserve account                      accounts.
                                              expenses of a housing project. The                      cannot be used for items not agreed to
                                              amount of the payments to the reserve                   by the Agency.                                         List of Subjects in 7 CFR Part 3560
                                              account is established in the loan                        Additionally, RHS is amending 7 CFR                    Accounting, Administrative practice
                                              documents, beginning with the first loan                3560.306(g) to clarify that reserve                    and procedure, Aged, Farm labor
                                              payment or the date specified in the                    account funds cannot be used to pay                    housing, Foreclosure, Grant programs—
                                              loan documents. The current                             fees associated with the loan guarantee.               Housing and community development,
                                              requirement at 7 CFR 3560.306(e)(2)                     Lenders are currently using the                        Government property management,
                                              states that reserve accounts require the                replacement reserve account to pay fees                Handicapped, Insurance, Loan
                                              Agency to countersign with the                          associated with the loan guarantee, i.e.,              programs—Agriculture, Loan
                                              borrower on all withdrawals. The                        the annual renewal fee. These fees are                 programs—Housing and community
                                              Section 538 Guaranteed Rural Rental                     considered a project expense and must                  development, Low and moderate
                                              Housing (GRRH) program often provides                   be paid from the operating account, not                income housing, Migrant labor,
                                              funding to an existing direct MFH loan                  the replacement reserve account.                       Mortgages, Nonprofit organizations,
                                              property. Loan funds provided by the                                                                           Public housing, Rent subsidies,
                                              lender and guaranteed by the GRRH                       II. Discussion of the Comments
                                                                                                      Received                                               Reporting and recordkeeping
                                              program are critical to the rehabilitation                                                                     requirements, Rural housing.
                                              and preservation of older existing direct                  The Agency received three responses
                                              MFH loan properties. The GRRH                           to the proposed rule published in the                    Therefore, chapter XXXV, title 7 of
                                              program regulation at 7 CFR 3565.402(a)                 Federal Register on August 13, 2014,                   the Code of Federal Regulations, is
                                              requires that all property reserve                      (79 FR 47383). The comments came                       amended as follows:
                                              accounts be held by the lender, which                   from RD employees who work with the
                                              eliminates the unauthorized use of these                RD Multi-Family Housing programs.                      PART 3560—DIRECT MULTI-FAMILY
                                              funds by the borrower since the                         The topics of discussion included:                     HOUSING LOANS AND GRANTS
                                              borrower does not have access to the                    Putting in language regarding the
                                              funds. When an approved Section 538                     Section 514/516 Farm Labor Housing                     ■ 1. The authority citation for part 3560
                                              lender lends funds to an existing direct                program; including all lenders in the                  continues to read as follows:
                                              MFH loan-financed property, this brings                 amendment, not just Section 538                            Authority: 42 U.S.C. 1480.
                                              7 CFR 3560.306 and 3565.402 into                        lenders; and, providing additional
                                              conflict, pitting the requirement for the               guidance on how to implement the new                   Subpart G—Financial Management
                                              Agency to countersign for funds                         requirements involving direct MFH/538
                                              pursuant to 7 CFR 3560.306, against the                                                                        ■ 2. Amend § 3560.306 by revising
                                                                                                      transactions.
                                              requirement that lenders have                              The comments were as follows:                       paragraph (e)(2) and adding paragraph
                                              unfettered control of funds consistent                     1. One commenter wanted the Agency                  (g)(5) to read as follows:
                                              with 7 CFR 3565.402. The GRRH                           to address how the release of the                      § 3560.306    Reserve account.
                                              program loan guarantees are sold on the                 reserves will be internally implemented.
                                                                                                                                                             *     *    *     *     *
                                              secondary market as long as the loan is                 The Agency will address this in our
                                                                                                                                                               (e) * * *
                                              closed and is not in default. In most                   internal guidance, HB–1–3565, on how
                                              cases, the Section 538 loans on direct                  to implement reserve requirements on                     (2) Reserve accounts must be
                                              MFH loan-financed properties are                        direct MFH loan transactions.                          supervised accounts that require the
                                              transferred to Ginnie Mae. Ginnie Mae                      2. One commenter requested that the                 Agency to countersign on all
                                              requires that property reserve accounts                 proposed rule change include language                  withdrawals; except, this requirement is
                                              be pledged as collateral for the loan and               to reflect that the Section 514/516 Farm               not applicable when loan funds
                                              that it has unfettered access to those                  Labor Housing loan and grant program                   guaranteed by the Section 538 GRRH
                                              accounts. In order to meet this                         transactions be included in the final                  program are used for the construction
                                              secondary market requirement, the                       rule. The rule has been changed to                     and/or rehabilitation of a direct MFH
                                              reserve accounts must be titled                         reflect that it pertains to all direct Multi-          loan project. Direct MFH loan
                                              exclusively in the lender’s name. In                    family housing loans; therefore,                       borrowers, who are exempted from the
                                              order to meet Ginnie Mae’s                              references to Section 515 loans have                   supervised account and countersigned
                                              requirements, the reserve accounts                      been replaced with ‘‘direct MFH loans.’’               requirement, as described above, must
                                              cannot be countersigned with any other                     3. One commenter requested that the                 follow Section 538 GRRH program
                                              party. Requiring the Agency’s signature                 amendment address all lenders, not just                regulatory requirements pertaining to
                                              on all withdrawals ensures that the                     Section 538 lenders, when loan funds                   reserve accounts. In all cases, Section
srobinson on DSK5SPTVN1PROD with RULES




                                              borrower does not have uncontrolled                     are leveraged for the construction and/                538 lenders must get prior written
                                              use of the funds and this requirement                   or rehabilitation of project involving                 approval from the Agency before reserve
                                              will remain unchanged for properties                    direct MFH loans. The agency will not                  account funds involving a direct MFH
                                              that only have direct MFH loans.                        make a change to address all lenders                   loan project can be disbursed to the
                                              However, this amendment would                           through this regulation change because                 borrower.
                                              relieve the Agency of its                               the change is only intended to resolve                 *     *    *     *     *
                                              countersignature responsibility for                     the conflict between 7 CFR parts 3560                    (g) * * *


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                                                               Federal Register / Vol. 80, No. 116 / Wednesday, June 17, 2015 / Rules and Regulations                                           34533

                                                (5) Funds from the replacement                        accommodating up to 19 passengers.                     or unusual design feature, these special
                                              reserve account cannot be used to pay                   The GVII series will certify a base                    conditions would also apply to the other
                                              any fees associated with the Section 538                configuration GVII–G500, which                         model under § 21.101.
                                              GRRH loan guarantee, as determined by                   incorporates a low, swept-wing design                    In addition to the applicable
                                              the Agency.                                             with winglets and a T-tail. The airplanes              airworthiness regulations and special
                                              *     *    *     *    *                                 have two aft-fuselage-mounted Pratt &                  conditions, the Model GVII series
                                                                                                      Whitney turbofan engines. Avionics                     airplanes must comply with the fuel-
                                                Dated: May 18, 2015.
                                                                                                      include four primary display units and                 vent and exhaust-emission requirements
                                              Tony Hernandez,                                         multiple touchscreen controllers. The                  of 14 CFR part 34, and the noise-
                                              Administrator, Rural Housing Service.                   flight-control system is a three-axis, fly-            certification requirements of 14 CFR
                                              [FR Doc. 2015–14783 Filed 6–16–15; 8:45 am]             by-wire system using active control/                   part 36. The FAA must issue a finding
                                              BILLING CODE 3410–XV–P                                  coupled side sticks.                                   of regulatory adequacy under § 611 of
                                                                                                         The GVII–G500 has a wingspan of 87                  Public Law 92–574, the ‘‘Noise Control
                                                                                                      ft. and a length of 91 ft. Maximum                     Act of 1972.’’
                                              DEPARTMENT OF TRANSPORTATION                            takeoff weight is 76,850 lbs. Maximum                    The FAA issues special conditions, as
                                                                                                      takeoff thrust is 15,135 lbs., maximum                 defined in 14 CFR 11.19, under § 11.38,
                                              Federal Aviation Administration                         range is 5,000 nautical miles (nm), and                and they become part of the type-
                                                                                                      maximum operating altitude is                          certification basis under § 21.17(a)(2) for
                                              14 CFR Part 25                                          51,000 ft.                                             new type certificates, and § 21.101 for
                                                                                                         The Model GVII series airplanes are
                                              [Docket No. FAA–2014–1079; Special                                                                             amended type certificates.
                                              Conditions No. 25–585–SC]
                                                                                                      equipped with two side-stick controllers
                                                                                                      instead of the conventional control                    Novel or Unusual Design Features
                                              Special Conditions: Gulfstream Model                    columns and wheels. This side-stick
                                                                                                                                                               The Gulfstream Model GVII series
                                              GVII Series Airplanes; Limit Pilot                      controller is designed for one-hand
                                                                                                                                                             airplanes will incorporate the following
                                              Forces for Side-Stick Controller                        operation. The requirement of Title 14,
                                                                                                                                                             novel or unusual design feature:
                                                                                                      Code of Federal Regulations (14 CFR)
                                              AGENCY:  Federal Aviation                               25.397(c), which defines limit pilot                     A side-stick controller for one-hand
                                              Administration (FAA), DOT.                              forces and torques for conventional                    operation requiring wrist motion only,
                                              ACTION: Final special conditions.                       wheel or stick controls, is not adequate               not arms.
                                                                                                      for a side-stick controller. Special                   Discussion
                                              SUMMARY:    These special conditions are
                                                                                                      conditions are necessary to specify the
                                              issued for the Gulfstream Model GVII–                                                                             Current regulations reference pilot-
                                                                                                      appropriate loading conditions for this
                                              G500 (GVII series) airplanes. These                                                                            effort loads for the flight deck pitch-and-
                                                                                                      controller design.
                                              airplanes will have a novel or unusual                                                                         roll controls that are based on two-
                                              design feature when compared to the                     Type-Certification Basis                               handed effort. Special conditions are
                                              state of technology envisioned in the                      Under the provisions of Title 14, Code              required for the Gulfstream Model GVII
                                              airworthiness standards for transport-                  of Federal Regulations (14 CFR) 21.17,                 series airplanes based on similar
                                              category airplanes.                                     Gulfstream must show that the Model                    airplane programs that include side-
                                                 This design feature is associated with               GVII–G500 airplane meets the                           stick controllers. These special
                                              side-stick controllers that require                     applicable provisions of 14 CFR part 25,               conditions are also appropriate for the
                                              limited pilot force because they are                    as amended by Amendments 25–1                          Model GVII series airplane’s side-stick
                                              operated by one hand only. The                          through 25–137.                                        controller.
                                              applicable airworthiness regulations do                    The certification basis of the GVII–                   These special conditions contain the
                                              not contain adequate or appropriate                     G500 airplane is 14 CFR part 25,                       additional safety standards that the
                                              safety standards for this design feature.               effective February 1, 1965, including                  Administrator considers necessary to
                                              These special conditions contain the                    Amendments 25–1 through 25–137; 14                     establish a level of safety equivalent to
                                              additional safety standards that the                    CFR part 34, as amended by                             that established by the existing
                                              Administrator considers necessary to                    Amendments 34–1 through the most                       airworthiness standards.
                                              establish a level of safety equivalent to               current amendment at the time of design
                                              that established by the existing                                                                               Discussion of Comments
                                                                                                      approval; and 14 CFR part 36,
                                              airworthiness standards.                                Amendment 36–29. In addition, the                        Notice of proposed special conditions
                                              DATES: Effective July 17, 2015.                         certification basis includes special                   no. 25–15–01–SC for the Gulfstream
                                              FOR FURTHER INFORMATION CONTACT:                        conditions and equivalent-safety                       Model GVII series airplanes was
                                              Todd Martin, FAA, Airframe and Cabin                    findings related to the flight-control                 published in the Federal Register on
                                              Safety Branch, ANM–115, Transport                       system.                                                February 26, 2015 (80 FR 10422). No
                                              Airplane Directorate, Aircraft                             If the Administrator finds that the                 substantive comments were received,
                                              Certification Service, 1601 Lind Avenue                 applicable airworthiness regulations                   and the special conditions are adopted
                                              SW., Renton, Washington, 98057–3356;                    (i.e., 14 CFR part 25) do not contain                  as proposed.
                                              telephone 425–227–1178; facsimile                       adequate or appropriate safety standards               Applicability
                                              425–227–1320.                                           for the Model GVII series airplanes
                                              SUPPLEMENTARY INFORMATION:                              because of a novel or unusual design                     As discussed above, these special
                                                                                                      feature, special conditions are                        conditions apply to Gulfstream Model
srobinson on DSK5SPTVN1PROD with RULES




                                              Background                                              prescribed under § 21.16.                              GVII series airplanes. Should
                                                On March 29, 2012, Gulfstream                            Special conditions are initially                    Gulfstream apply later for a change to
                                              Aerospace applied for a type certificate                applicable to the model for which they                 the type certificate to include another
                                              for their new Model GVII–G500                           are issued. Should the type certificate                model incorporating the same or similar
                                              airplane.                                               for that model be amended later to                     novel or unusual design feature, these
                                                The Model GVII series airplanes are                   include any other model that                           special conditions would apply to that
                                              large-cabin business jets capable of                    incorporates the same or similar novel                 model as well.


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Document Created: 2015-12-15 14:23:01
Document Modified: 2015-12-15 14:23:01
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThe effective date for this final rule is August 17, 2015.
ContactTammy S. Daniels, Financial and Loan Analyst, Multi-Family Housing Guaranteed Loan Division, Rural Housing Service, U.S. 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: [email protected]
FR Citation80 FR 34531 
RIN Number0575-AC99
CFR AssociatedAccounting; Administrative Practice and Procedure; Aged; Farm Labor Housing; Foreclosure; Grant Programs-Housing and Community Development; Government Property Management; Handicapped; Insurance; Loan Programs-Agriculture; Loan Programs-Housing and Community Development; Low and Moderate Income Housing; Migrant Labor; Mortgages; Nonprofit Organizations; Public Housing; Rent Subsidies; Reporting and Recordkeeping Requirements and Rural Housing

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