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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, regulations to change program requirements at the property level that will reduce operating costs for the project owner by changing financial 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). RD’s Financial Reporting also aligns with HUD’s provisions by using a modified version of the "HUD IG Audit Guide.”