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The Rural Housing Service (RHS) proposes to revise the definition of very low-, low-, and moderate-income in 7 CFR 3550.10 and make a corresponding change to the definition of low-income in 7 CFR 3555.10 to allow for income banding of all income categories within the single family housing programs.

Revise 7 CFR 3550.54(d) net family assets rural area to be in accordance with section 6305 of the Agriculture Improvement Act of 2018 (Farm Bill) and revise the definition of "very low."

Revise the methodology used to determine the area loan limits in 7 CFR 3550.63(a) to use a percentage(s) of the applicable local HUD section 203(b) limit as determined by the streamline this annual process and improve the reliability of the data set used to establish the area loan limits. This proposed action will also save the Agency more than $70,000 each year (which is the cost to obtain the construction cost data set from a nationally recognized residential cost provider).  The current process to annually establish the area loan limits uses a data set based on limiting nationalized parameters and requires a significant amount of staff time on all levels (field, state, and national). 

Revise 7 CFR 3550.68(b)(2) resulting from the income banding to state that a borrower currently receiving payment assistance method 1 will be converted to payment assistance method 2 should they receive a subsequent loan.