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| USDA/RHS | RIN: 0575-AD50 | Publication ID: Spring 2025 |
| Title: ●Subsequent Loan Use to include acquisition as an eligible form of assistance | |
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Abstract:
Between now and 2050, the Rural Housing Service (RHS) risks losing 330,000 affordable units to the maturing mortgage and Section 521 Rental Assistance termination risk. Pursuant to 7 CFR 3560.73(a)(Subsequent loans; applicability), the Agency may make a subsequent loan to a borrower to complete, improve, repair, or make modifications to MFH projects initially financed by the Agency or for equity preservation purposes. The regulation does not explicitly prohibit acquisition as an eligible use; however, it does not specify acquisition is an eligible use. Similar assistance is available if and only if an owner requests prepayment as described in 7 CFR 3560.652 (Prepayment and restrictive-use categories); however, that process is lengthy, burdensome to the borrower and the Agency, and rife with legal vulnerabilities. The inclusion of acquisition as an eligible use in section 3560.73 would free up credit in preservation transactions without requiring the owner and the Agency to navigate a time-consuming and burdensome threat to prepay the Agency loan with the added risk of an owner exiting the portfolio.
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| Agency: Department of Agriculture(USDA) | Priority: Substantive, Nonsignificant |
| RIN Status: First time published in the Unified Agenda | Agenda Stage of Rulemaking: Proposed Rule Stage |
| Major: Undetermined | Unfunded Mandates: No |
| EO 14192 Designation: Not subject to, not significant | |
| CFR Citation: 7 CFR 3560 | |
| Legal Authority: 42 U.S.C. 1484-86 42 U.S.C. 1480(k) | |
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Legal Deadline:
None |
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Timetable:
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| Regulatory Flexibility Analysis Required: No | Government Levels Affected: None |
| Federalism: No | |
| Included in the Regulatory Plan: No | |
| RIN Data Printed in the FR: No | |
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Agency Contact: Daniel Rogers Director of Processing and Preservation Department of Agriculture Rural Housing Service 1400 Independence Avenue SW, Washington, DC 20250 Phone:202 400-0127 Email: daniel.rogers2@usda.gov |
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