SUPPLEMENTARY INFORMATION:

Authority

The RHS administers the 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. As set forth in 7 CFR part 3565, the Agency will publish any changes to the fees in a Notice in the Federal Register .

Background

Under the GRRHP, RHS guarantees loans to develop housing and related facilities in rural areas. Section 538(g) authorizes the Secretary of Agriculture to charge lenders certain fees for loan guarantees (see, 42 U.S.C. 1490p-2(g)). The Agency uses these fees to offset the cost of loan guarantees under the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).

Revision

On March 3, 2022, the Agency announced four categories for initial and annual guarantee fees: a Standard Reduced Fee and further reduced fees for Workforce Housing; preservation of existing Section 515, 514/516 Rural Development Properties; and Section 538 New Construction/Substantial Rehabilitation with Green (87 FR 12077).

To align with Executive Order 14148, which revoked certain climate-related executive orders, Executive Order 14394, which promotes leveraging Opportunity Zones for construction, and current Administration priorities, the Agency is replacing the Section 538 “New Construction/Substantial Rehabilitation with Green Category” with Section 538 “New Construction/Substantial Rehabilitation of Properties Located in Qualified Opportunity Zones.”

The Agency sets the fee structure for the Section 538 New Construction/Substantial Rehabilitation of Properties Located in Qualified Opportunity Zones at 60 basis points for the initial guarantee fee and 25 basis points for the annual guarantee fee.

A Qualified Opportunity Zone is an economically distressed community where new investments may qualify for preferential tax treatment if they meet certain conditions. Localities qualify as Qualified Opportunity Zones when the State nominates them, and the Internal Revenue Service certifies the nomination. Lenders must state and certify in the lender's narrative that the property will be located in a designated Qualified Opportunity Zone.

The revised fee structure is as follows:

The Agency will continue to apply the further reduced Green category fee to complete the applications that it approved and obligated before the effective date of the new fee category. Applications that were eligible but not obligated before the effective date will not qualify for this further reduced fee. However, the Agency will allow applicants who submitted applications before implementation of the new fee category, and whose applications the Agency has not yet obligated, to revise those applications to demonstrate that the property is located in a Qualified Opportunity Zone, if applicable. Lenders should contact the appropriate Multifamily Housing Production and Preservation, Processing and Report Review Branch processor for guidance on submitting a revised application to ( printed page 61821) obtain the further reduced fee for Section 538 New Construction/Substantial Rehabilitation in Qualified Opportunity Zones. Applications that do not meet the eligibility criteria for any further reduced fee will receive the standard reduced fee of 65 basis points for the initial guarantee fee and 35 basis points for the annual guarantee fee.

Non-Discrimination Statement

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, 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.

Persons with disabilities who require alternative means of communication for program information ( e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the State or local Agency that administers the program or contact USDA through the Telecommunications Relay Service at 711 (voice and TTY). Additionally, program information may be made available in languages other than English.

To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at How to File a Program Discrimination Complaint ( www.usda.gov/​oascr/​how-to-file-a-program-discrimination-complaint) and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Mail Stop 9410, Washington, DC 20250-9410; (2) fax: (202) 690-7442; or (3) email: program.intake@usda.gov.

91 FR 61820