The Rural Housing Service (RHS) published a proposed rule June 2, 2003 (68 FR 32872), to streamline and consolidate 14 regulations into 7 CFR 3560, which sets forth requirements, policies, and procedures for originating, processing, and servicing Rural Development's Multi-Family Housing (MFH) direct loans and grants. The programs covered by this part are authorized by title V of the Housing Act of 1949. An interim rule was published November 26, 2004 (69 FR 69032-69176) to implement those changes, with an effective date of February 24, 2005. This proposed rule is to amend the interim rule 7 CFR 3560 regulations to change program requirements at the property level that will reduce operating costs for the project owner and thereby reduce financial reporting requirements, address operational issues regarding rent increases, surplus cash, and allow for a performance assessment of management agents against which the management fee will be calculated, and provide for establishment of a priority order for renewal of Rental Assistance contracts. The change will also make technical corrections to clarify reference and formatting issues in the regulation.