CARH’S BROADCAST E-MAIL – Regulatory Update

February 22, 2024

The Rural Housing Service (RHS) issued the following Stakeholder Announcement yesterday regarding set-aside unit preferences at Multifamily Housing properties. In the past, when owners wanted to include a set aside preference in a property, an individual waiver request was required. The change outlined in the announcement below, is meant to make the recapitalization process less burdensome and make properties more attractive to investors, thus increase scoring because of set-asides when owners apply for other sources of funding like housing credits.

Rural Housing Service is pleased to announce guidance on set-aside preferences at properties with other funding sources for Multifamily Housing (MFH) properties considering recapitalization and rehabilitation of the aging affordable Rural Development MFH portfolio. The Agency acknowledges that recapitalization and rehabilitation often requires third party funding sources. To receive consideration for these funding sources, owners must often commit to setting aside a small number of units with a preference for a certain population, e.g., residents with disabilities or residents coming from homelessness.  As such, owners and management agents may include set-aside or preference units for specific populations in their occupancy policy and management plan. All remaining provisions and procedures contained in Chapter 6 of HB 2-3560 remain unchanged.

If you have questions pertaining to the status of an application, please contact the appropriate MFH, Production and Preservation Division, Processing and Report Review Branch: