USDA Rural Development Updates FAQs

Regulation | April 06, 2020 | by Linda Couch

USDA Rural Development updated its FAQs for multifamily housing providers on April 6. USDA Multifamily Housing reminds owners that their assigned Servicing Official remains their primary contact.

USDA Rural Development updated its FAQs for multifamily housing providers on April 6. USDA Multifamily Housing reminds owners that their assigned Servicing Official remains their primary contact.

Of the issues touched upon in the April 6 FAQ, USDA says that, for tenants receiving Section 521 Rental Assistance, interim recertification should be completed as quickly as possible. USDA encourages owners to be “accurate but flexible,” including by receiving information by phone or email, and by making accommodations when income changes can’t be verified due to business closures. On the economic impact payment checks residents (and others) will be receiving, the FAQ reminds owners that these will not be included when recertifying a tenant’s income.  

If a Section 514, 515, or 538 borrower experiences financial hardship due to COVID-19 and is unable to make their mortgage payment, the FAQ reiterates that the CARES Act, Congress’s third COVID-19 relief bill, allows Multifamily borrowers experiencing a financial hardship due, directly or indirectly, to the COVID–19 emergency forbearance for up to 90 days

Regarding whether property owners and agents can use property or reserve funds to alleviate financial hardship caused by non-payment of rent by residents having trouble because of COVID-19, the FAQ answers affirmatively. Further, the FAQ says, for Section 515 properties, borrowers may utilize property operating accounts or make an authorized withdrawal of funds from a reserve account to meet an emergency shortfall in operating expenses when the emergency is beyond the control of the borrower and threatens life, safety, or the physical security of the project. Properties should reach out to their assigned Servicing Official if they anticipate needing reserve funds to pay operating expenses.

The FAQ also offers some tips on preventing coronavirus spread, such as offering electronic payment of rent, but not requiring it (and that no additional fees may be charged for this). The FAQ also says that digital signatures may be utilized during the recertification process as needed. Building management can also change but not remove access to essential shared amenities, such as to a laundry room, the FAQ says.