Multifamily Housing Section 538 Federal Register Notice and Handbook Corrections

On May 8, 2023, Rural Development sent out the following information:

On April 28, 2023, the Agency issued Section 538 Guaranteed Rural Rental Housing program guidance through updates in the Section 538 GRRHP Origination and Servicing Handbook and in a notice published in the Federal Register. Included in the guidance are instructions and the website links that are available to aid Lenders in determining borrower and property management eligibility.

The Agency erroneously included guidance stating lenders should access the GSA debarment list and CAIVRS (Credit Voice Response System) in the Do Not Pay (DNP) portal to determine eligibility for borrowers and property management.

It has been discovered that the DNP portal tool is accessible only by federal agencies, therefore:

• Lenders are required to verify the status of debarment and suspension at https://sam.gov as part of the determination of eligibility process of the borrower and property management.
• As a component of the complete application package, lenders must continue to certify and provide documentation that the borrower and management entity are not debarred or suspended and they are eligible to participate in federal programs.
• The determination of lender status in the DNP portal will be completed by the agency.

The Agency will publish a correction in the Federal Register and will update the Handbooks accordingly.