Rural Development sent out the following Multifamily Housing Stakeholder Announcement:

Washington D.C., December 31, 2024 – The Rural Housing Service (RHS) Office of Multifamily Housing (MFH) published a final rule in the Federal Register December 31, 2024, with an effective date of January 30, 2025 (Federal Register/Vol. 89, No. 250).  This regulatory update amends the current regulation for the following Multifamily Housing Direct Loan and Grant Programs: Section 515 (Rural Rental Housing Loans), Section 514 (Farm Labor Housing Loans), and Section 516 (Farm Labor Housing Grants).

The Final Rule amends 7 CFR 3560 to update the process for obtaining and submitting credit reports required to determine credit worthiness and eligibility for Multifamily Housing programs. The updated process requires applicants to submit a credit report as part of their application package, as opposed to the current process in which the Agency is responsible for ordering credit reports for borrowers after application receipt. This regulatory update will align the Agency with current publicly financed multifamily affordable housing industry standards and create an efficiency for applicants and borrowers by streamlining the application process.

The final rule amends 7 CFR 3560 by:

  • Adding the definition of Current Comprehensive Credit Report to 7 CFR § 3560.11.
  • Updating 7 CFR 56(d)(5) to include the requirements of a valid credit report which must address both the entity and the actual individual principals, partners, members, etc., within the applicant entity, including any sub-entities who are responsible for controlling the ownership and operations of the entity.
  • Updating 7 CFR 3560.405 to include the requirement for a credit report in cases of change to the borrower’s organization structure or entity’s controlling interest.
  • Updating 7 CFR 3560.406 to include the requirement for a credit report for approval of transfers and sales.
  • Establishing a new Subpart R to provide detailed requirements of the credit report process.

In addition, the final rule includes conforming changes to rescind 7 CFR 1910, subparts B and C, and 7 CFR 1955.118, which are outdated.

Questions or requests for clarification may be directed to the MFH Program Support Branch at MFH.ProgramSupport@usda.gov.