View Rule

The purpose of the Guaranteed Rural Rental Housing Program (GRRHP) is to increase the supply of affordable rural rental housing by using loan guarantees to encourage partnerships between the Rural Housing Service (RHS or Agency) Multi-Family Housing (MFH) Program, private lenders, and public agencies. 7 CFR part 3565 sets forth the regulation requirements for the GRRHP which prescribes the policies, authorizations, and procedures for the guarantee of multifamily loans authorized by section 538, title V, of the Housing Act of 1949.   

The RHS published a proposed rule on January 31, 2023 [88 FR 6209] to amend the current regulations 7 CFR part 3565.5(b) by aligning the GRRHP current criteria of priority projects with the Housing Act of 1949. 7 CFR part 3565 sets the regulation requirements of the GRRHP which prescribes the policies, authorizations, and procedures for the guarantee of multifamily loans authorized by Section 538, Title V, of the Housing Act of 1949. A 60-day comment period was provided for the proposed rule, which closed on April 3, 2023. RHS received 8 comments from 6 respondents. One of the comments was not applicable to the contents of the rule and two other respondents submitted their comments twice. One respondent works for a non-profit Agency, three respondents are students, of which one of these students submitted their comment to the Agency twice).  The last respondent is a member of the public, who also submitted their comment to the Agency twice. All comments were supportive of the rule and the Agency intends to publish a final rule implementing the changes in the proposed rule. 

 The GRRHP uses priority points to rank and score applications that are based on criteria that frequently evolve and change depending on the housing market demands, as well as current and future Administrations’ priorities. Currently, 7 CFR part 3565.5(b) does not afford the flexibility the Agency requires in its decision making to fully address these evolving priorities without a regulatory change to the criteria.

Specifically, the intended change would aim to better align the current regulation with the language in the Housing Act, 1949 as amended, which would allow RHS to choose priorities applicable to the market demands and Administration priorities. As mandated by title V of the Housing Act of 1949, the Agency must give priority to rural areas in which borrowers can best use and need guaranteed loans. The agency is reevaluating the current prioritization in smaller rural communities, in the neediest communities having the highest percentage of leveraging, having the lowest interest rate, having the highest ratio of 3-5-bedroom units to total units, or on tribal lands.

The Agency expects the final rule will improve the customer experience with timelier and proactive responses to housing market demands without frequent changes to the GRRHP regulation. This is expected to be accomplished by providing the much-needed flexibility required in the Agency’s decision making to fully address evolving priorities in the housing market demands, as needed, as well as with current and future Administrations’ priorities. The Agency would also be in a stronger position to meet the current and future demands of the housing market, which ultimately would allow the Agency to be more responsive to the needs of the program’s rural stakeholders.