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USDA/RHS RIN: 0575-AD34 Publication ID: Fall 2023 
Title: 7 CFR Part 3565--Updates to the Rural Rental Housing Deed Restriction--Proposed 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), private lenders, and public agencies. 7 CFR part 3565 (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.

To preserve affordable housing, part 3565 requires that properties that are financed with a section 538 GRRHP loan be used for occupancy by low- and moderate-income households and remain as affordable rental housing for the original term of the loan. To codify this requirement, part 3565 requires restrictive use language to be outlined in a separate deed restriction. Part 3565, currently, does not specify that the separate deed restriction be recorded.  Only recorded documents will convey with the property if the mortgage and/or deed of trust is prepaid or if the loan transfers to new ownership.  The Agency is proposing to amend 7 CFR part 3565.352(b) by adding language that states the separate deed restriction (containing the restrictive use language) must be recorded.

The Agency expects that this regulatory change would provide a better customer experience by allowing the Agency to enforce the restrictive use requirement to maintain affordability if the loan guaranteed by the section 538 GRRHP is prepaid.

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 3565   
Legal Authority: 42 U.S.C. 1490p-2(l)(2)   
Legal Deadline:  None
Action Date FR Cite
Proposed Rule  05/00/2024 
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Small Entities Affected: No  Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Abby Boggs
Program Support Branch Chief, MFH
Department of Agriculture
Rural Housing Service
1400 independence Avenue SW,
Washington, DC 20250
Phone:615 480-1371