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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, to change program requirements at the property level that will reduce operating costs for the project owner by changing financial reporting requirements for properties receiving assistance from both RD and HUD.  The current reporting requirements are redundant with HUD reporting requirements.  Rural Development (RD) is establishing a rule-based reporting threshold, similar to that of U.S. Department of Housing and Urban Development (HUD), so that property managers only need to complete one audit rather than two.  RD’s Financial Reporting also aligns with HUD’s provisions by using a modified version of the "HUD IG Audit Guide.”