John Pentecost
Office of the Administrator
Rural Housing Service, USDA
Washington, D.C.
Addressing CARH:
One thing I’ve noticed about this organization is that you let us know
what’s on your mind. And of course, the Administrator lets us know what’s on
your mind. And then we try and tell you what’s on our mind. So it works
fairly well.
The Interim Rule on Guaranteed 538 loans is going to USDA for the final
clearances within the Department. Over at OMB we are looking for a very
early
July date for that to be out. In that context then, it will be a 60 day
comment period even though the NOFA and the Interim Rule will be published
at
the same time, there will be a comment period. I think it will be, and the
Administrator’s always suggested this from your group, that we have some
kind
of a meeting mid-period of that comment process. What we find if we get a
chance to talk to you mid-period, it helps us on the comments and helps you
understand a little bit about where we’re going with the Regulations and
what
we’re trying to achieve. And, makes our life a little bit easier in sort of
turning the regulation over. We will not have an FY 99 program until that
Regulation goes Final. It will be very important to us to get the comments,
make sure the public understands the impact of the program, understands what
we’re trying to achieve with it, that we fine tune it, and then get it back
out as quickly as possible.
In that context then, what we’re looking at in terms of time line for
the
Final will be in May 1999. We’re going to try to beat that because we feel
that every year the program has come out so late in the Fiscal Year that we
haven’t gotten some of the best products out. So we’re going to try to aim
for April 1999.
Handbooks
We’re also developing Handbooks with this. I think that what you’ll
find,
and I’m talking about Handbooks, you will find the Handbook, NOFA and
regulations all work together as a package. But the Handbooks are much like
the processes and the procedures, focused particularly at our field staff,
who need to have some details in how to administer it, but also to give you
some processes, helpful hints and so on. One of the things our attorneys
tell
us, and this applies to whatever we’re doing, is that we cannot impose a
burden on the public, we cannot impose a requirement on the public unless we
have some way of informing them. So we’re going to be very very careful of
that.
Our attorneys were very very helpful in getting the Guaranteed
Regulation
out. We had things in there like “adequate capitalization,” “adequate
liquidity;” it didn’t work at all. They said no — be specific. So we put
some very specific language in there. I think you’ll find the same thing
with
the other programs.
The Handbooks are in the final stages of development. They should be out
about the same time as the Regulation comes out. I think you’ll find they’ll
be helpful. Again, they won’t impose any burden or requirement on you that
isn’t already outlined or at least stipulated in the Regulation as the
authority to require.
Millennium
Reinvention. The 515 program and the Labor Housing program are finally
coming together. The schedule for that is the Proposed Rule for December
1998; that seems like a long way away, but it’s right around the corner. The
Final Rule will be about 11 months later in November of 1999. I was talking
to Chuck Wehrwein the other day and I was sort of worried about this. He
said, “Look, this is probably the biggest rule process for Affordable
Housing
that’s happening in the United States; so, don’t worry about it or fret over
it, but recognize it as a rule for the millennium, and go forward.” So,
it’ll
be available for the millennium program and it’ll be a Regulation that will
be, I think, the most effective and progressive and forward looking
Regulation that will be available for Affordable Housing. I think Chuck will
start doing the same thing over at HUD now, sort of following our example
for
a change.
One of our teams came in from our local offices, one from the State
Office and one from the County Offices; they took a swipe in recommending
that we eliminate about 25% of our Forms for the 515 program. And that’s
from
our own staff — they’re saying the Forms are obsolete, they’re no longer
important. There are many other changes that would save tremendous amounts
of
time: Tenant Certifications — with Industry Interface there are some things
we can do with that now; and on Budgets as well. So that when we come out
with the Final Regulation, we hope to have a whole cloth that has changes to
Form, changes to the Regulations, that make sense, save you time, save the
program money. It come down to, in dealing with an aging portfolio, your
time, your money, and the Agency subsidies. If we don’t save those things,
we
not going to have anything at all.
We are developing the Handbooks. They are in really preliminary draft
form. They are following the Regulation, so if the Regulations are changing,
we’re also seeing that the Handbooks have counterpart changes. And that’s a
very sort of intricate sort of process and sort of a dance — you find
something in the Handbook, you look at the Regulation: change one, change
the
other. And it’s a puzzle; those of you that have written policies and
regulations in one life or another know that it’s sort of like a big jigsaw
puzzle; unfortunately it’s like one of those one-color jobs, too. It gets a
little puzzling sometimes.
In the Labor Housing program, we’re testing in a way the new application
process that we hope to apply for the 515 program. And that is, having a
response that just responds to the NOFA and the selection process rather
than
having a full preapplication. So it will simplify your time, your cost, gets
the selection out of the way; and then move forward very quickly into a
further Application by those only who are highly selected and likely to be
funded. So that should really save you some time, save us some time, and get
us moving off the dime very quickly. We look forward to the process; we’ll
test it with the Labor Housing program to see whether we can fine tune it a
little bit for the regular 515 program.
That’s going to be very interesting. We’ll be watching that one
carefully
because it is about saving time, saving money, using the best practices out
there.
We talked about the opportunity and having the continuing opportunity
for
input in the Handbooks and Regulations. We want to afford that. I think Pat
was absolutely; we are talking about needing some help. That’s the bottom
line. We’re in this together; it‘s not a battle, but it is a contentious
process at times. But again, we haven’t circled the wagons — we don’t
intend
to. Because we know that your eyes and your operations, just like out field
staff, have a different perspective, a different attitude. And what we have
to do is develop a national program that reflects the various states. So we
will be looking for that input and looking at it in a constructive process.
Again, if you want to provide input, wonderful; do it. And, we’re also
asking
for it to be constructive. Let us know exactly what your recommendations are
— it’s nice to throw stones, it’s sort of a cathartic process, but it would
be better to give some really positive recommendations. One thing I will say
is that we would like some positive comments, too. If there’s something that
you like in this. This represents a lot of work by a lot of people; so if
there’s something your really like, “Atta Boys” are appreciated. We get one
occasionally from Jan, but, also from our partners and constituents would be
appreciated.
We are aiming for a consistent national program. And that is going to
involve training — training under this program; we’re already starting to
look at training. In terms of our capacity — to bring everyone from the
field in, to talk to every Borrower, to talk to every potential applicant —
it is very very limited. So we have to use forums like this; we have to use
state meetings as a way to get the word out on where the changes are and how
they’re going to be implemented. We need help, but we all need to be hearing
about the same thing. So our focus is going to be on providing the kind of
training materials to our field staff that they in turn can pass on to you.
The other thing we’ve talked about a little bit is joint training
efforts
so the field can hear the same thing you do. I think it is very important
that if the field starts hearing something different than what you’re
hearing, we need to know about it. We all need to be singing out of the same
hymnal. That is very important.