Processing Requests for Section 515 Rural Rental Housing (RRH) Loans, Exhibit A-8; Reopening of Comment Period

DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Business--Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Part 1944

RIN 0575-AB93

Processing Requests for Section 515 Rural Rental Housing (RRH)

Loans, Exhibit A-8; Reopening of Comment Period

AGENCIES: Rural Housing Service, Rural Business--Cooperative Service,

Rural Utilities Service, and Farm Service Agency, USDA.

ACTION: Reopening of comment period on proposed rule.

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SUMMARY: The Rural Housing Service (RHS) is reopening the comment

period for proposed revisions to Exhibit A-8, Outline of A Professional

Market Study, of the Section 515 RRH loans regulation. The proposed

revisions were published in the Federal Register on January 17, 1996

(61 FR 1153).

DATES: Written comments must be received on or before August 7, 1997.

ADDRESSES: Written comments may be submitted, in duplicate, to the

Chief, Regulations and Paperwork Management Branch, U.S. Department of

Agriculture, Stop 0743, 1400 Independence Avenue SW, Washington, D.C.

20250. Comments may be submitted via the Internet by addressing them to

``[email protected]'' and must contain the word ``market'' in the

subject. All written comments will be available for public inspection

at the above address during normal working hours.

FOR FURTHER INFORMATION CONTACT: Linda Armour, Senior Loan Specialist,

Multi-Family Housing Processing Division, RHS, U.S. Department of

Agriculture, Room 5349--South Building, Stop 0781, Washington, D.C.

20250, telephone (202) 720-1608.

SUPPLEMENTARY INFORMATION:

Background

On January 17, 1996, the Rural Housing Service published a proposed

rule in the Federal Register (61 FR 1153), which included proposed

changes to Exhibit A-8, Outline of a Professional Market Study, of 7

CFR part 1944, subpart E. The final rule, which was subsequently

published in the Federal Register on May 7, 1997 (62 FR 25071) did not

include any of the proposed revisions to Exhibit A-8 for the reasons

discussed later in this document. The final rule advised that the

comment period would be reopened in a separate rulemaking document for

the proposed revisions to Exhibit A-8 only.

The proposed rule invited comments on the merits of changing the

manner of calculating market demand in Exhibit A-8, Outline of a

Professional Market Study. The current method of determining the number

of units needed is based on an estimate of the change in income-

eligible renter households since the last census (projected for 2 years

from the date of the study), plus 20 percent of renter households

living in substandard housing and 20 percent of rent-overburdened

households, minus units being developed or in the planning stages. The

method presented in the proposed rule estimates the total current

number of income-eligible households, minus the current stock of

available comparable rental units and units being developed or planned.

Only 2 commentors addressed this proposed change; one supported the

change, the other opposed it.

Since only 2 comments were received and because the opinions were

divided, we feel this issue merits further consideration. We believe

there are benefits to both of the methods discussed above. In addition,

a third important indicator of demand is found by analyzing existing

rental stock based on the number of single-family, mobile home, and

multi-family rentals, a survey of existing multi-family rentals with

their rent structure, current vacancy rates by unit size, length of

rent-up, and the extent of waiting and inquiry lists. Therefore, we are

considering an option whereby estimates of demand would be provided

using all three methods; the recommended number of units would be based

on the smaller number unless justification for a higher number could be

demonstrated. We are inviting comments from all interested parties on

these proposed changes.

Dated: June 30, 1997.

Ronnie O. Tharrington,

Acting Administrator, Rural Housing Service.

[FR Doc. 97-17688 Filed 7-7-97; 8:45 am]

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