The Rural Housing Service (RHS) is proposing to amend 7 CFR 3560 to update the definition of Non-Profit to include a limited partnership with a non-profit general partner to be considered a nonprofit organization for the RHS Multi-Family Housing (MFH) section 515 program. This is intended to provide consistency with the MFH section 514/516 program.

The Agency is actively pursuing a range of strategies to preserve the MFH portfolio, which has more than 400,000 units nationwide with an average property age around 35 years. More than 60 percent of all MFH properties will reach loan maturity by 2040, resulting in a significant loss of affordable housing in rural communities unless action is taken to facilitate preservation by new and current MFH owners. Expanding the definition of a nonprofit organization is intended to allow more entities to access Agency resources and incentives designated for nonprofits while maintaining the integrity of the nonprofit requirement. By expanding the nonprofit definition to include that entity structure (which is already an option available under section 514/516), the Agency can support organizations seeking third-party funding and reduce some complexities in the sale to nonprofit and transfer processes. For nonprofit organizations seeking to acquire and preserve properties without low income housing tax credits (LIHTC), the option for a nonprofit corporation or limited liability corporation can allow them to limit risk to the nonprofit entity that occurs when the nonprofit directly owns properties.