BILLING CODE 3410-XV-U

DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Part 3550
[Docket No. RHS-24-SFH-0017]
Single Family Housing Section 504 Repair Pilot

AGENCY: Rural Housing Service, USDA.
ACTION: Notification of waivers.
SUMMARY: The Rural Housing Service (RHS or the Agency), a Rural Development
agency of the United States Department of Agriculture (USDA), is issuing this document to
continue to waive two regulatory requirements for the Section 504 Direct Single Family
Housing Loans and Grants (DSFHLG) pilot program while the Agency contemplates a future
rulemaking to remove regulatory barriers to assist eligible applicants with improved ease of
use for very low-income homeowners seeking to repair or rehabilitate their homes. This
document briefly discusses the waivers that the Agency intends to continue and provides
contact information for additional details about the pilot program.
DATES: Effective dates: The effective date of the two regulatory waivers is June 24, 2024. The
duration of the pilot program is anticipated to continue until June 24, 2026, at which time the
RHS may extend the pilot program (with or without modifications) or terminate it depending on
the workload and resources needed to administer the program, feedback from the public, funding
constraints and the effectiveness of the program. If the pilot program is extended or terminated,
the RHS will notify the public.
FOR FURTHER INFORMATION CONTACT: Anthony Williams, Management and
Program Analyst, Special Programs, Single Family Housing Direct Loan Division, Rural

Development, U.S. Department of Agriculture, Email: anthonyl.williams@usda.gov; Phone:
(202) 720-9649.
SUPPLEMENTARY INFORMATION:
Authority
Title V, Section 504 of the Housing Act of 1949, as amended; 42 U.S.C. 1474.
Background
The RHS offers a variety of programs to build or improve housing and essential
community facilities in rural areas. The Agency offer loans, grants, and loan guarantees for
single- and multifamily housing, child-care centers, fire and police stations, hospitals, libraries,
nursing homes, schools, first responder vehicles and equipment, housing for farm laborers and
much more. RHS also provides technical assistance loans and grants in partnership with nonprofit organizations, Indian tribes, state and Federal government agencies, and local
communities.
The RHS Single Family Housing Direct Loans and Grants Program (SFHDLGP)
Division implements the Section 504 loan/grant program under 7 CFR part 3550 with the
objective to assist very low-income owner occupants of modest single-family homes in rural
areas repair or rehabilitate their homes. Loan funds are available for repairs to improve or
modernize a home, make it safer or more sanitary, or remove health and safety hazards. The
eligibility requirements, as described in 7 CFR 3550.103, states that homeowner must be unable
to obtain affordable credit elsewhere at reasonable terms and conditions but must demonstrate a
reasonable ability to repay the Section 504 loan. For homeowners 62 years old and over, grant
funds are available to correct health or safety hazards, or remodel dwellings to make them
accessible to a household member with a disability.
RHS may authorize limited demonstration programs to test new approaches to offering
housing under the statutory authority granted to the Secretary, as set forth in 7 CFR 3550.7. Such

demonstration programs may not be consistent with some of the provisions contained in this part.
However, any program requirements that are statutory will remain in effect.
In 2019, the Agency initiated the Section 504 pilot program to evaluate existing
regulations and remove regulatory barriers to assist very low-income homeowners seeking to
repair or rehabilitate their homes. The pilot program has been successful in creating additional
opportunities and greater accessibility for eligible applicants. All but two of the waived
regulatory requirements were included in the Direct Singe Family Loans and Grants Programs
Final rule (87 FR 6761), which became effective on March 9, 2022.
Section 504 Pilot Regulatory Waivers
The Agency is continuing the Section 504 Pilot Program with the two waivers that were
not included in the Final rule (87 FR 6761), but were subsequently included in the notification of
waivers (87 FR 40709) published in the Federal Register on July 8, 2022 (which expires on July
8, 2024). The Agency anticpates a rulemaking in the future that will codify the waivers into 7
CFR part 3550, and which will be applied program-wide.
The first waiver is that pilot applicants are not subject to the site requirement outlined in
7 CFR 3550.105(b) which states that “the site must not be large enough to be subdivided into
more than one site under existing local zoning ordinances.” While pilot applicants can have
subdividable sites, their homes must meet the other site requirements found in 7 CFR
3550.105(a) and the dwelling requirements found in 7 CFR 3550.106.
The second waiver is that pilot applicants are not subject to the same appraisal threshold outlined
in 7 CFR 3550.111, which requires an appraisal when the Section 504 debt to be secured exceeds
$15,000 or whenever the Agency determines that an appraisal is necessary to establish the
adequacy of the security. A “subject to repairs” appraisal and appraisal fee will be required
when the assessed valuation by local authorities does not support a fully secured interest by the
Agency, or when the sum of all secured (Rural Development or non-Rural Devleopment)
indebtedness including the proposed repair loan, exceeds $25,000.

Eligibility Requirements
Eligible participants in the Section 504 program must abide by the requriements set forth
in 7 CFR part 3550. The following twenty-three (23) States and U.S. Territories are selected to
provide wide geographic and historic production variation for the pilot: California, Hawaii,
Illinois, Indiana, Iowa, Kentucky, Maine, Michigan, Mississippi, New Jersey, New Mexico, New
York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, South Carolina, Texas,
Tennessee, Virginia, Washington, and West Virginia. If an existing borrower in a pilot state
qualifies for a subsequent loan or grant, the pilot conditions can apply to the subsequent request
as appropriate. Non-pilot states may request case-by-case administrative waivers (if justified)
that mirror the allowances in the pilot.
Paperwork Reduction Act
The regulatory waivers for this pilot contains no new reporting or recordkeeping burdens
under OMB control number 0575-0179 that would require approval under the Paperwork
Reduction Act of 1995 (44 U.S.C. Chapter 35).
Non-Discrimination Statement
In accordance with Federal civil rights laws and USDA civil rights regulations and
policies, the USDA, its Mission Areas, agencies, staff offices, employees, and institutions
participating in or administering USDA programs are prohibited from discriminating based on
race, color, national origin, religion, sex, gender identity (including gender expression), sexual
orientation, disability, age, marital status, family/parental status, income derived from a public
assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any
program or activity conducted or funded by USDA (not all bases apply to all programs).
Remedies and complaint filing deadlines vary by program or incident.
Program information may be made available in languages other than English. Persons
with disabilities who require alternative means of communication to obtain program information
(e.g., Braille, large print, audiotape, American Sign Language) should contact the responsible

Mission Area, agency, or staff office; the USDA TARGET Center at (202) 720-2600 (voice and
TTY); or the Federal Relay Service at (800) 877-8339.
To file a program discrimination complaint, a complainant should complete a Form AD3027, USDA Program Discrimination Complaint Form, which can be obtained online at
http://www.ascr.usda.gov/complaint_filing_cust.html, from any USDA office, by calling (866)
632-9992, or by writing a letter addressed to USDA. The letter must contain the complainant’s
name, address, telephone number, and a written description of the alleged discriminatory action
in sufficient detail to inform the Assistant Secretary for Civil Rights (ASCR) about the nature
and date of an alleged civil rights violation. The completed AD-3027 form or letter must be
submitted to USDA by:
(1) Mail: U.S. Department of Agriculture
Office of the Assistant Secretary for Civil Rights
1400 Independence Avenue, SW
Washington, DC 20250-9410; or
(2) Fax: (833) 256-1665 or (202) 690-7442; or
(3) Email: Program.Intake@usda.gov.

Joaquin Altoro,
Administrator,
Rural Housing Service.
[FR Doc. 2024-13697 Filed: 6/21/2024 8:45 am; Publication Date: 6/24/2024]