Multi-Family Housing and Community Facilities Updates to Federal Financial Assistance Guidance

<RULE> DEPARTMENT OF AGRICULTURE <SUBAGY>Rural Housing Service</SUBAGY> <CFR>7 CFR Parts 1942, 3560, 3570, and 5001</CFR> <DEPDOC>[Docket Number: RHS-24-ADMIN-0040]</DEPDOC> <SUBJECT>Multi-Family Housing and Community Facilities Updates to Federal Financial Assistance Guidance</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Rural Housing Service, USDA. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Rural Housing Service (RHS or Agency), an agency in the United States Department of Agriculture (USDA) Rural Development (RD) Mission area, is issuing a final rule to update the Multi-Family Housing (MFH) and Community Facility (CF) regulations by updating the audit and financial statement language to align with the Office of Management and Budget (OMB) 2024 revisions. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective December 6, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD>   Julie Felhofer, Policy & Budget Branch Chief, United States Department of Agriculture, 1400 Independence Avenue SW, Washington, DC 20250-1548. Telephone: (715) 295-4069. Email: <E T="03">Julie.Felhofer@usda.gov</E> . Nathan Chitwood, Director, Community Facilities, United States Department of Agriculture, 1400 Independence Avenue SW, Washington, DC 20250-1548. Telephone: (573) 876-0965. Email: <E T="03">Nathan.Chitwoodt@usda.gov</E> . </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> RD is a mission area within USDA comprised of the RHS, the Rural Business-Cooperative Service, and Rural Utilities Service, that strives to increase economic opportunity and improve the quality of life for all rural Americans. RD invests in rural America with loan, grant, and loan guarantee programs to help drive economic security and prosperity. USDA's RHS offers a variety of programs to build or improve housing and essential community facilities in rural areas. The Agency offers loans, grants and loan guarantees for single- and multi-family housing, childcare centers, fire and police stations, hospitals, libraries, nursing homes, schools, first responder vehicles and equipment, housing for farm laborers and much more. Multi-Family housing programs assist rural property owners through loans, loan guarantees, and grants that enable owners to develop and rehabilitate properties for low-income, elderly, and disabled individuals and families as well as domestic farm laborers. Community Facilities Programs offer direct loans, loan guarantees and grants to develop or improve essential public services and facilities in communities across rural America. These amenities help increase the competitiveness of rural communities in attracting and retaining businesses that provide employment and services for their residents. OMB revised several parts of OMB Guidance for Grants and Agreements which is now called OMB Guidance for Federal Financial Assistance which are applicable to all federal agencies. This guidance can be found in Title 2 of the Code of Federal Regulations (CFR) (2 CFR part 200). The revisions were published in the <E T="04">Federal Register</E> on April 22, 2024, at 89 FR 30046, and are required to be implemented by October 1, 2024. This final rule is being published as a technical-administrative correction to ensure the Agency's audit and financial statement requirements align with the OMB revisions made to 2 CFR part 200. <HD SOURCE="HD1">II. Summary of Changes</HD> This rulemaking makes the following changes: (1) Updates § 1942.17 to increase the $750,000 audit threshold to $1,000,000. (2) Updates § 3560.308 to increase the $750,000 audit threshold to $1,000,000. (3) Updates § 3570.51 to remove the 2 CFR issue date. (4) Updates § 3570.80 to replace the term “applicant” with “recipient” or “subrecipient.” <HD SOURCE="HD1">III. Executive Orders</HD> <HD SOURCE="HD2">Executive Order 12372—Intergovernmental Consultation</HD> These loans are subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. RHS conducts intergovernmental consultations for each loan in accordance with 2 CFR part 415, subpart C. <HD SOURCE="HD2">Executive Order 12866—Regulatory Planning and Review</HD> This final rule is exempt from OMB review for purposes of Executive Order 12866 and, therefore, has not been reviewed by OMB. <HD SOURCE="HD2">Executive Order 12988—Civil Justice Reform</HD> This final rule has been reviewed under Executive Order 12988. In accordance with this rule: (1) unless otherwise specifically provided, all State and local laws that conflict with this rule will be preempted; (2) no retroactive effect will be given to this rule except as specifically prescribed in the rule; and (3) administrative proceedings of the National Appeals Division of the Department of Agriculture (7 CFR part 11) must be exhausted before bringing suit in court that challenges action taken under this rule. <HD SOURCE="HD2">Executive Order 13132—Federalism</HD> The policies contained in this final rule do not have any substantial direct effect on States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Nor does this final rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with the States is not required. <HD SOURCE="HD2">Executive Order 13175—Consultation and Coordination With Indian Tribal Governments</HD> This final rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes or on the distribution of power and responsibilities between the Federal government and Indian tribes. Consultation is also required for any regulation that preempts tribal law or that imposes substantial direct compliance costs on Indian tribal governments and that is not required by statute. The Agency has determined that this final rule does not, to its knowledge, have tribal implications that require formal tribal consultation under Executive Order 13175. If a Tribe requests consultation, the RHS will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress. <HD SOURCE="HD2">Congressional Review Act</HD> This final rule is not subject to the Congressional Review Act (“CRA”) (5 U.S.C. 801 <E T="03">et seq.</E> ), as the CRA provides an exemption for any rule relating to agency management or personnel and for rules relating to agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties. <HD SOURCE="HD2">Assistance Listing Number</HD> The Assistance Listing Numbers assigned to the programs affected by this final rule are 10.405—“Farm Labor Housing Loans and Grants,” 10.415—“Rural Rental Housing Loans,” 10.427—“Rural Rental Assistance Payments,” and 10.766—“Community Facilities Loans and Grants.” The Assistance Listings are available at <E T="03">SAM.gov</E> . <HD SOURCE="HD2">Paperwork Reduction Act</HD> This final rule contains no reporting or recordkeeping provisions under OMB Control Numbers 0575-0015 and 0575-0089 requiring OMB approval under the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). <HD SOURCE="HD2">National Environmental Policy Act</HD> In accordance with the National Environmental Policy Act of 1969, Public Law 91-190, this final rule has been reviewed in accordance with 7 CFR part 1970 (“Environmental Policies and Procedures”). The Agency has determined that: (i) this action meets the criteria established in 7 CFR 1970.53(f); (ii) no extraordinary circumstances exist; and (iii) the action is not “connected” to other actions with potentially significant impacts, is not considered a “cumulative action” and is not precluded by 40 CFR 1506.1. Therefore, the Agency has determined that this action does not have a significant effect on the human environment, and therefore neither an Environmental Assessment nor an Environmental Impact Statement is required. <HD SOURCE="HD2">Regulatory Flexibility Act Certification</HD> This final rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned has determined and certified by signature on this document that this final rule will not have a significant economic impact on a substantial number of small entities since this rulemaking action does not involve a new or expanded program nor does it require any more action on the part of a small business than required of a large entity. <HD SOURCE="HD2">Administrative Pay-As-You-Go Act of 2023</HD> Section 270 of the Administrative Pay-As-You-Go Act of 2023 (Pub. L. 118-5, div. B, title III, 137 Stat 31) amended 5 U.S.C. 801(a)(2)(A) to require U.S. Government Accountability Office (GAO) to assess agency compliance with the Act, which establishes requirements for administrative actions that affect direct spending, in GAO's major rule reports. The Act does not apply to this rule because it does not increase direct spending. <HD SOURCE="HD2">Unfunded Mandates Reform Act</HD> Title II of the Unfunded Mandates Reform Act (UMRA), Public Law 104-4 (2 U.S.C. 1501 <E T="03">et seq.</E ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 25k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━