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USDA/RHS RIN: 0575-AD29 Publication ID: Fall 2023 
Title: 7 CFR 3560, Subparts A, B, and C -Changes Related to Insurance Requirements in Multi-Family Housing (MFH) and Farm Labor Housing (FLH) Direct Loan  

Under the authority of the Housing Act of 1949, (42 U.S.C. 1471 et seq.), as amended, the MFH Direct Loan and Grant Programs make direct loans or grants to provide affordable multi-family rental housing for low income, elderly, disabled individuals and families, or domestic farm workers in eligible rural areas. The program is implemented under 7 CFR 3560.

Borrowers are required to purchase and maintain property insurance on all buildings included as security for an Agency loan. Borrowers must also furnish fidelity coverage, liability insurance and various other insurance coverage required by the Agency to protect the security of the asset. Insurance protects the asset against loss or damage.  Failure to maintain adequate insurance coverage may lead to a non-monetary loan default.

The Rural Housing Service (RHS) proposes to amend 7 CFR 3560.4, 7 CFR 3560.62 and 7 CFR 3560.105 to implement changes related to insurance requirements for the MFH Direct Loan and Grant programs. These proposed changes to 7 CFR 3560 subparts A, B and C are intended to align insurance coverage types, amounts and deductibles with affordable housing industry standards, as well as simplify the coverage amounts and deductible limits. The intended outcome of these proposed changes is to simplify insurance coverage amounts and deductible limits which is expected to reduce Agency staff review time of insurance requirements and improve overall efficiency in managing the assets in the multi-family housing portfolio. Simplifying the coverage amounts and deductible limits will also provide a more positive customer experience.

Agency: Department of Agriculture(USDA)  Priority: Substantive, Nonsignificant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Proposed Rule Stage 
Major: No  Unfunded Mandates: No 
CFR Citation: 7 CFR 3560   
Legal Authority: 42 U.S.C. 1471, et seq.   
Legal Deadline:  None
Action Date FR Cite
Proposed Rule  10/25/2023  88 FR 73245   
Comment Period End  12/26/2023 
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Michael Resnik
Director, MFH Asset Management Division
Department of Agriculture
Rural Housing Service
1400 Independence Avenue SW,
Washington, DC 20250
Phone:202 430-3114