99-29527. Invitation for Applications of Interest to Sell Intermediary Relending Program (IRP) Loans Under an Expanded Pilot

[Federal Register Volume 64, Number 218 (Friday, November 12, 1999)]
[Notices]
[Pages 61575-61580]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29527]


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DEPARTMENT OF AGRICULTURE

Rural Business--Cooperative Service


Invitation for Applications of Interest to Sell Intermediary 
Relending Program (IRP) Loans Under an Expanded Pilot

AGENCY: Rural Business-Cooperative Service, U.S. Department of 
Agriculture (USDA).

ACTION: Notice.

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SUMMARY: The Rural Business-Cooperative Service (RBS) announces an 
expanded pilot sale of Intermediary Relending Program intermediary 
loans made to third parties. RBS will competitively select and 
authorize several intermediaries to sell an aggregate amount of 
approximately $50 million of the existing IRP portfolios in Fiscal Year 
(FY) 2000 from among those intermediaries who have advanced at least 95 
percent of IRP funding received by the intermediary. This announcement 
is also intended to provide notice to potential purchasers and other 
parties interested in structuring the sale of ultimate recipient notes. 
The intended effect of this notice is to solicit applications of 
interest from intermediaries who wish to participate in the FY 2000 
loan sale. Selected applicants will be notified in writing and on the 
Agency web site. The benefit of this loan sale to the intermediary will 
be an increase in portfolio liquidity, allowing the intermediary to re-
loan money back into the community. The Agency advances loans to 
eligible intermediaries that subsequently reloan to eligible 
applicants, including individuals, public or private organizations, or 
other legal entities with authority to incur debt and carry out the 
purpose of the loan. During the application process for this pilot 
sale, an intermediary will express interest in selling its seasoned 
portfolio. The initial screening of the intermediaries and their 
portfolios will be the responsibility of the Rural Development State 
Offices. State Offices will make recommendations to the National 
Office, and the National Office will evaluate the applications of 
interest, along with State Office recommendations, and make the final 
selections for loan sales.
    RBS will maintain lists of intermediaries expressing interest in 
offering their portfolios for sale, potential buyers for those 
portfolios, and offerors of other services to buyers or sellers, e.g., 
financial advisors. However, only intermediaries selected through the 
invitation of applications of interest process will be authorized to 
sell third-party loans. Intermediary applications of interest must 
include (1) a history of the intermediary; (2) its latest annual 
report; (3) summary data on each loan in the portfolio including 
original and current amount, interest rate, terms, loan maturities, and 
loan performance; (4) delinquency rate on all loans in its portfolio; 
(5) reserves for loan payments; (6) the number of jobs created or 
saved; (7) the Standard Industrial Code for each loan recipient; (8) 
write-off of bad debts history; (9) a proposal that illustrates how the 
sale of the intermediary's portfolio supports Rural Development Mission 
Area target objectives, i.e., rural areas suffering fundamental, 
physical and economic stress, persistent poverty, out migration, or as 
identified in the Rural Development State Strategic Plan; (10) non-
federal fund leveraging of past or potential loans; and (11) the 
documentation of the need for added capital and unmet loan demand. It 
is important that the performance history of the overall portfolio, 
including any portion not proposed for sale, be fully detailed 
including the volume and frequency of any delinquencies or default.

DATES: The deadline for receipt of the applications of interest in the 
third-party sale must be received in the applicable Rural Development 
State Office (see addresses below) by 4:00 P.M. Eastern Standard Time 
on December 27, 1999.
    Applications received after that date will not be considered for 
participation in the expanded pilot. The comment period for information 
collection under the Paperwork Reduction Act of 1995 continues through 
January 11, 2000. Comments on the paperwork burden must be received by 
this date to be assured of consideration.

ADDRESSES: Applications to participate in the expanded pilot sale 
should be mailed to the Rural Development State Office in the State in 
which the intermediary is headquartered. Listed below are the following 
addresses for Rural Development State Offices:

Alabama
    USDA Rural Development State Office, Sterling Center, Suite 601, 
4121 Carmichael Road, Montgomery, AL 36106-3683 [phone]
Alaska
    USDA Rural Development State Office, 800 West Evergreen, Suite 201, 
Palmer, AK 99645-6539, [phone]
Arizona
    USDA Rural Development State Office, 3003 North Central Avenue, 
Suite 900, Phoenix, AZ 85012-2906, [phone]
Arkansas
    USDA Rural Development State Office, 700 West Capitol Avenue, Room 
3416, Little Rock, AR 72201-3225, [phone]
California
    USDA Rural Development State Office, 430 G Street, Agency 4169, 
Davis, CA 95616-4169, [phone]
Colorado
    USDA Rural Development State Office, 655 Parfet Street, Room E-100, 
Lakewood, CO 80215, [phone]
Delaware-Maryland
    USDA Rural Development State Office, 4607 South DuPont Highway, 
Camden, DE 19934-9998, [phone]
Florida/Virgin Islands
    USDA Rural Development State Office, 4440 NW. 25th Place, 
Gainesville, FL 32614-7010, [phone]
Georgia
    USDA Rural Development State Office, Stephens Federal Building, 355 
E. Hancock Avenue, Athens, GA 30601-2768, [phone]
Hawaii
    USDA Rural Development State Office, Federal Building, Room 311, 
154 Waianuenue Avenue, Hilo, HI 96720, [phone]
Idaho
    USDA Rural Development State Office, 9173 West Barnes Drive, Suite 
A1, Boise, ID 83709, [phone]
Illinois
    USDA Rural Development State Office, Illini Plaza, Suite 103, 1817

[[Page 61576]]

South Neil Street, Champaign, IL 61820, [phone]
Indiana
    USDA Rural Development State Office, 5975 Lakeside Boulevard, 
Indianapolis, IN 46278, [phone]
Iowa
     USDA Rural Development State Office, Federal Building, Room 873, 
210 Walnut Street, Des Moines, IA 50309, [phone]
Kansas
    USDA Rural Development State Office, 1200 SW. Executive Drive, 
Topeka, KS 66604, [phone]
Kentucky
    USDA Rural Development State Office, 771 Corporate Drive, Suite 
200, Lexington, KY 40503, [phone]
Louisiana
    USDA Rural Development State Office, 3727 Government Street, 
Alexandria, LA 71302, [phone]
Maine
    USDA Rural Development State Office, 444 Stillwater Avenue, Suite 
2, Bangor, ME 04402-0405, [phone]
Massachusetts/Rhode Island/Connecticut
    USDA Rural Development State Office, 451 West Street, Amherst, MA 
01002, [phone]
Michigan
    USDA Rural Development State Office, 3001 Coolidge Road, Suite 200, 
East Lansing, MI 48823, [phone]
Minnesota
    USDA Rural Development State Office, 410 AgriBank Building, 375 
Jackson Street, St. Paul, MN 55101-1853, [phone]
Mississippi
    USDA Rural Development State Office, Federal Building, Suite 831, 
100 West Capitol Street, Jackson, MS 39269, [phone]
Missouri USDA Rural Development State Office, 601 Business Loop 70 
West, Parkade Center, Suite 235, Columbia, MO 65203, [phone]
Montana
    USDA Rural Development State Office, 900 Technology Blvd., Unit 1, 
Suite B, Bozeman, MT 59715, [phone]
Nebraska
    USDA Rural Development State Office, Federal Building, Room 152, 
100 Centennial Mall N, Lincoln, NE 68508, [phone]
Nevada
    USDA Rural Development State Office, 1390 South Curry Street, 
Carson City, NV 89703-9910, [phone]
New Jersey
    USDA Rural Development State Office, Tarnsfield Plaza, Suite 22, 
790 Woodlane Road, Mt. Holly, NJ 08060, [phone]
New Mexico
    USDA Rural Development State Office, 6200 Jefferson Street, NE., 
Room 255, Albuquerque, NM 87109, [phone]
New York
    USDA Rural Development State Office, The Galleries of Syracuse 441 
South Salina Street, Suite 357, Syracuse, NY 13202-2541, [phone]
North Carolina
    USDA Rural Development State Office, 4405 Bland Road, Suite 260, 
Raleigh, NC 27609, [phone]
North Dakota
    USDA Rural Development State Office, Federal Building, Room 208, 
220 East Rosser, Bismarck, ND 58502-1737, [phone]
Ohio
    USDA Rural Development State Office, Federal Building, Room 507, 
200 North High Street, Columbus, OH 43215-2477, [phone]
Oklahoma
    USDA Rural Development State Office, 100 USDA, Suite 108, 
Stillwater, OK 74074-2654, [phone]
Oregon
    USDA Rural Development State Office, 101 SW Main Street, Suite 
1410, Portland, OR 97204-3222, [phone]
Pennsylvania
    USDA Rural Development State Office, One Credit Union Place, Suite 
330, Harrisburg, PA 17110-2996, [phone]
Puerto Rico
    USDA Rural Development State Office, New San Juan Office Building, 
Room 501, 159 Carlos E. Chardon Street, Hato Rey, PR 00918-5481, (787) 
766-5095
South Carolina
    USDA Rural Development State Office, Strom Thurmond Federal 
Building, 1835 Assembly Street, Room 1007, Columbia, SC 29201, (803) 
765-5163
South Dakota
    USDA Rural Development State Office, Federal Building, Room 210, 
200 4th Street, SW., Huron, SD 57350, [phone]
Tennessee
    USDA Rural Development State Office, 3322 West End Avenue, Suite 
300, Nashville, TN 37203-1084, [phone]
Texas
    USDA Rural Development State Office, Federal Building, Suite 102, 
101 South Main, Temple, TX 76501, [phone]
Utah
    USDA Rural Development State Office, Wallace F. Bennett Federal 
Building, 125 South State Street, Room 4311, Salt Lake City, UT 84147-
0350, [phone]
Vermont/New Hampshire
    USDA Rural Development State Office, City Center, 3rd Floor 89 Main 
Street, Montpelier, VT 05602, [phone]
Virginia
    USDA Rural Development State Office, Culpeper Building, Suite 238, 
1606 Santa Rosa Road, Richmond, VA 23229, [phone]
Washington
    USDA Rural Development State Office, 1835 Black Lake Boulevard, 
SW., Suite B, Olympia, WA 98512-5715, [phone]
West Virginia
    USDA Rural Development State Office, Federal Building, 75 High 
Street, Room 320, Morgantown, WV 26505-7500, [phone]
Wisconsin
    USDA Rural Development State Office, 4949 Kirschling Court, Stevens 
Point, WI 54481, [phone]
Wyoming
    USDA Rural Development State Office, 100 East B, Federal Building, 
Room 1005, Casper, WY 82602, [phone]

FOR FURTHER INFORMATION CONTACT: David W. Lewis, Rural Business-
Cooperative Service, USDA, Room 6858-S, Mail Stop 3224, South 
Agriculture Building, 1400 Independence Avenue, SW., Washington, D.C. 
20250-3224, Telephone [phone].

SUPPLEMENTARY INFORMATION: IRP regulations are published in 7 CFR part 
4274, subpart D. Section 1323 of the Food and Security Act of 1985 
(Public Law (Pub. L.) 99-198) (7 U.S.C. 1932 Note) as amended by Pub. 
L. 99-425, in 1988, authorized the Secretary to make loans to entities 
for the purposes and subject to the terms and conditions specified in 
the first, second, and last sentences of section 623(a) of the 
Community Economic Development Act of 1981 (42 U.S.C. 9812(a)). The 
intermediary loans previously approved and administered by the U.S. 
Department of Health and Human Services under 45 CFR part 1076, which 
were transferred to the USDA under the

[[Page 61577]]

provisions of Section 1323 of the Food Security Act of 1985, Public Law 
99-198, will not be eligible for participation in the pilot sale.
    The Agency initiated a pilot program through a Memorandum of 
Understanding with the Colorado Housing and Finance Authority (CHFA) in 
May 1997 to allow CHFA to sell its ultimate recipient portfolio on the 
secondary market. CHFA was created to address the critical funding 
needs of community-based development lenders in Colorado. Since the 
sale of IRP notes is not addressed in the RBS regulations governing the 
IRP, only a pilot program was authorized. In consultation with the 
Office of Management and Budget (OMB) and the U.S. Department of the 
Treasury, RBS has decided to expand the pilot sale, on a limited basis, 
in order to gather additional information and experience for 
consideration in establishing a permanent sales program.

Paperwork Reduction Act:

    The reporting requirements contained in this regulation have 
received temporary emergency clearance by the Office of Management and 
Budget (OMB) under Control Number 0570-0036. However, in accordance 
with the Paperwork Reduction Act of 1995, RBS will seek standard OMB 
approval of the reporting requirements contained in this notice and 
hereby opens a 60-day public comment period.
    Abstract: RBS, an Agency within the Rural Development area of USDA, 
administers the Intermediary Relending Program which provides loans to 
non-profit organizations, public agencies, Indian Tribes, and 
cooperatives to establish a revolving loan program. The revolving loan 
program provides financial assistance to business facilities and 
community development projects in rural areas.
    Estimate of Burden: .22 hours.
    Respondents: Intermediaries and ultimate recipients.
    Estimated Number of Respondents: 1,000.
    Estimated Number of Responses per Respondent: 19.41.
    Estimated Total Annual Burden on Respondents: 4,308 hours.
    Copies of this information collection can be obtained from Tracy 
Gillin, Regulations and Paperwork Management Branch, [phone].
    Comments: Comments are invited on: (a) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Agency, including whether the information will 
have practical utility; (b) the accuracy of the Agency estimate of the 
burden of the proposed collection of information including the validity 
of the methodology and assumptions used; (c) ways to enhance the 
quality, utility, and clarity of the information to be collected; and 
(d) ways to minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology. Comments on the 
paperwork burden may be sent to Tracy Gillin, Regulations and Paperwork 
Management Branch, Rural Development, U.S. Department of Agriculture, 
Stop 0742, 1400 Independence Avenue, SW., Washington, D.C. 20250. All 
responses to this notice will be summarized and included in the request 
for OMB approval. All comments will also become a matter of public 
record.

Criteria For Participation in the Ultimate Recipient Portfolio 
Sale:

    The expansion of the pilot sale will be conducted on a competitive 
basis and under criteria set by RBS. The following criteria are set 
forth and must be met (with adequate documentation provided) to be 
considered under this pilot sale.
    1. Intermediaries must express interest in selling their entire 
ultimate recipient portfolio classified as seasoned loans (loans 
outstanding for at least 12 months). The following qualifications also 
apply:
    a. The loans must be current according to their promissory notes 
and other agreements.
    b. The current 30-day or more delinquency rate based on the number 
of loans outstanding for the entire IRP portfolio, including the 
portion not proposed to be offered for sale, must not exceed 3 percent.
    c. In the aggregate, loans will be sold at ``hold'' or ``market'' 
value.
    d. Notes will be sold without recourse to the intermediary.
    e. Annual portfolio writeoffs by the intermediary of its loans 
based on the number of loans outstanding will not exceed an average of 
1 percent over the past 3 years.
    f. All due diligence expenses in connection with the sale will be 
paid by the purchaser and reflected in any sale contract entered into 
between intermediary and purchaser.
    g. Due diligence expenses will only be authorized by the Agency to 
be paid if the intermediary portfolio is selected for the loan sale. 
The intermediary will be released from any subsequent liability in 
regard to the sale of notes sold as non-recourse loans.
    h. Intermediaries agree to use sale proceeds only to make new loans 
under 7 CFR part 4274, subpart D.
    i. The sales proceeds will be tracked separately and will be 
deposited into the intermediary's revolving loan fund, recapitalizing 
the fund for the purpose of making new loans in accordance with the 
eligible purposes outlined in the current Agency regulations, work 
plan, and loan agreements.
    2. Intermediaries who have advanced at least 95 percent of the 
aggregate total funds loaned them by RBS under this program and who 
meet the stated criteria are eligible to apply for participation in 
this expanded pilot. The intermediary must provide documentation for 
the unmet demand for third-party loans and its ability to re-lend all 
of the proceeds to eligible projects within 3 years from the date of 
the loan sale before it will be considered for participation in this 
expanded pilot. This documentation must include a list of loans turned 
down for lack of funds and the aggregate number and amount of viable 
loans considered but not made. The intermediary may provide a survey 
indicating demand for additional funds. The intermediary must provide 
documentation evidencing project cost leveraging, reserves for losses, 
and loans made in Rural Development mission areas, targeted areas, and 
population. Refer to State Offices for details on target areas. The 
intermediary must reloan 95 percent of the replenished capital within 
the 3-year period following loan sale closing or at the end of the 3-
year period must immediately make extra principal repayments on its IRP 
loan(s) in the full amount of the undisbursed portion as required by 
current IRP regulations. Intermediaries selected to participate in the 
expanded third-party sale must maintain their IRP loans with the Agency 
in a current status. There will be no moratorium or deferment of 
payments granted to the intermediary to advance the new funds, and 
proceeds from the sale can be used for Agency debt service.
    Intermediaries must have sufficient alternative sources of funds to 
ensure IRP loan repayment. Intermediaries permitted to sell their loan 
portfolios will be ineligible to apply for further IRP loans from RBS 
unless 95 percent of funds received from the sale have been advanced. 
Upon selection of the IRP application for the loan sale, all pending 
IRP applications for funding from the annual Agency appropriation cycle 
will be held in suspense. If the intermediary is unable to sell its 
loans under terms approved by RBS, the suspended IRP applications for 
funding will be reactivated for further funding

[[Page 61578]]

consideration under the available Agency appropriation.
    3. All sales will be ``hold'' or ``market value'' without recourse 
to the intermediary. If there is Community Reinvestment Act credit 
associated with the loans, the amount of such credit is to be 
permanently noted, as it may influence the value to a final purchaser. 
RBS interprets any financial contribution by the intermediary, other 
than meeting its own expenses associated with the sale, as potentially 
weakening the financial strength of the intermediary to meet its long-
term obligation to RBS. Intermediary affiliate resources or 
contributions from private sources used in ``hold'' or ``market value'' 
sale of the ultimate recipient portfolio will not be either a debt or a 
contingent liability of the intermediary and will be highly scrutinized 
by the Agency. Only intermediaries selected for the loan sale are 
authorized to sell their ultimate recipient portfolio.
    4. RBS may authorize the non-recourse sale of less than a total 
portfolio. The sale may be structured as a sale of whole loans or as 
any related structure.
    5. The intermediary will advertise the sale of its loans in media 
with significant national distribution to attract the greatest possible 
interest from a diverse client base. Advertising costs may be shared on 
a cooperative basis with other participating intermediaries to assist 
in defraying advertising expenses. Such cost will be the responsibility 
of the intermediary. It is the intent of RBS to develop a coordinated 
approach to soliciting interest from eligible intermediaries and 
potential purchasers of the portfolio to ensure an equitable 
opportunity to participate and to obtain the best prices for the 
portfolios.
    6. Intermediaries may retain or offer to retain servicing rights to 
their portfolio loans sold in the pilot as authorized by the Agency. In 
the event the intermediary retains servicing rights, the intermediary 
will analyze the portfolios it manages, the staffing and process it 
maintains to make and service loans in each portfolio, and the steps it 
expects to take to maintain adequate staffing to service and make loans 
and present such analysis to RBS. The intermediary will be required to 
obtain certification from the purchaser that the sale of servicing will 
not result in an acceleration of ultimate recipient loans and that 
appropriate and adequate servicing will continue following the loan 
sale.
    7. Recapitalized funds realized from the loan sale will be reloaned 
for eligible purposes in accordance with current IRP regulations found 
at 7 CFR part 4274, subpart D, and 7 CFR part 1951, subpart R; the 
approved work plan; and processed under the same procedure as third-
party loans made from Agency (Federal) funds. Recapitalized funds 
resulting from the sale, even though not Agency IRP loan funds, will be 
administered in accordance with current regulations and the approved 
work plan. The Agency will exercise the same oversight responsibilities 
as required for projects receiving IRP Federal funds directly from the 
Agency. These responsibilities include Agency review of individual 
third-party loans prior to approval, conduct of environmental reviews, 
and the requirement that 25 percent of the loan amount for all third-
party loans be financed from other sources until funds have revolved. 
Proceeds from the sale shall only be used for recapitalization of the 
IRP revolving fund and will not be co-mingled with funds from other 
programs until funds have revolved.
    8. All reserves and other cash in the IRP revolving fund not 
immediately needed for loans to ultimate recipients or other authorized 
uses will be deposited in Federal Deposit Insurance Corporation (FDIC) 
accounts in banks or other financial institutions. Such accounts will 
be fully covered by FDIC or fully collateralized with U.S. Government 
obligations and must be interest bearing. Any interest earned thereon 
remains a part of the IRP revolving fund.
    9. In order to participate in the pilot program, the intermediary 
must have no more than an average of 1 percent in annual writeoffs over 
the past 3 years in the same portfolio, measured as the percentage of 
the total seasoned portfolio. Intermediary applications for the pilot 
program will be evaluated on the RBS point scoring system on a 
nationwide basis.

IRP Ranking Criteria

    Priority points are determined as follows:

(Maximum Number of Points Including Administrator Priority Points: 100)

    1. Percent of Portfolio Loaned--Maximum Points: 10.
    a. Intermediary that has loaned out all of the IRP Federal funds 
(10 points).
    b. Intermediary that has loaned out between 97-99 percent of the 
IRP Federal funds (8 points).
    c. Intermediary that has loaned out 95 up to 97 percent of the IRP 
Federal funds (5 points).
    2. Delinquencies--Maximum Points: 10.
    a. Intermediary that has no ultimate recipient delinquency in its 
portfolio (10 points).
    b. Intermediary that has 1 percent or less delinquencies in its 
portfolio based on number of outstanding loans (8 points).
    c. Intermediary that has more than 1 percent but less than 2 
percent delinquencies in its portfolio based on number of outstanding 
loans (5 points).
    d. Intermediary that has between 2 percent up to and including 3 
percent portfolio delinquency rate inclusive on the number of 
outstanding loans (3 points).
    3. Writeoffs of Bad Loans--Maximum Points: 10.
    a. Intermediary that has no writeoffs of ultimate recipient loans 
over the past 3 fiscal years (10 points).
    b. Intermediary that has written off 1 percent or less of its 
ultimate recipient loans over the past 3 fiscal years (8 points).
    4. Maturity of Loans--Maximum Points: 10.
    a. Intermediary that has an average ultimate recipient loan 
portfolio maturity of more than 10 years (10 points).
    b. Intermediary that has an average ultimate recipient loan 
portfolio maturity of 7 but less than 10 years (8 points).
    c. Intermediary that has an average ultimate recipient loan 
portfolio maturity of 5 but less than 7 years (5 points).
    d. Intermediary that has an average ultimate recipient loan 
portfolio with maturity of 3 but less than 5 years (3 points).
    e. Intermediary that has an average ultimate recipient loan 
portfolio maturity of 1 but less than 3 years (1 point).
    5. Leverage: Intermediary that has Obtained Non-Federal Loan or 
Grant Funds to Pay a Portion of the Cost of the Ultimate Recipient 
Projects--Maximum Points: 10.
    a. Fifty percent or more of the total project cost (10 points).
    b. At least 25 percent but less than 50 percent of the total 
project cost (8 points).
    c. At least 10 percent but less than 25 percent of the total 
project cost (5 points).
    6. Rural Area--Maximum Points: 10.
    a. Intermediary that has made 2 or more ultimate recipient loans or 
has made 25 percent of the total loans, whichever is the greater, to 
ultimate recipients in unincorporated areas, and cities or towns with 
populations of 10,000 or less based on 1990 census data (10 points).

[[Page 61579]]

    b. Intermediary that has made ultimate recipient loans in 
unincorporated areas, and cities or towns with population more than 
10,000 up to and including 20,000 based on 1990 census data (5 points).
    7. Reserves for Loan Payments--Maximum Points: 10. Intermediary 
that has established a sufficient cash reserve to make RBS loan 
payments for at least 1 year (10 points).
    8. Community Reinvestment Act Requirements--Maximum Points: 10. 
Intermediary's ultimate recipient loans that meet Community 
Reinvestment Act requirements (10 points).
    9. Loans Sold at Par Value--Maximum Points: 5. A par sale is 
defined as the receipt of sufficient funds from the sale of all 
principal and interest outstanding on the loans sold to third parties.
    10. Presidential/Administration Priority Areas: Empowerment Zones/
Enterprise Communities, Pacific Northwest/Alaskan Initiative, Rural 
Development Mission Area, Targeted Areas and Population--Maximum 
Points: 15.
    a. Intermediary that has loaned 50 percent or more of its IRP funds 
in targeted area populations (15 points).
    b. Intermediary that has loaned between 25 up to 50 percent in 
targeted area populations (10 points).
    c. Intermediary that has loaned less than 25 percent of its IRP 
funds in targeted area populations (5 points).

Additional Application Requirements for the IRP Pilot Sale

    The intermediary's application will also include the following:
    1. Company Name, Address, Contact Person, Telephone and Fax 
Numbers, and E-Mail and URL Addresses (Web Site).
    2. History of the Intermediary.
    3. Modified Work plan, Detailing Mission or Goals, Outreach Service 
Plan, etc.
    4. Summarize Each Ultimate Recipient Loan in the Format Outlined in 
Form RD 1951-4:
    a. Name and address of intermediary.
    b. Type of business.
    c. Use of loan funds.
    d. Original amount of loan.
    e. Date of loan.
    f. Unpaid balance.
    g. Interest rate.
    h. Terms of loan/date of final payment.
    i. Collateral, including lien position.
    j. Loan status.
    k. Number of consecutive loan payments ultimate recipient has made 
in accordance with the promissory note.
    l. Standard Industrial Code on the ultimate recipient loan.
    5. Summarize the Intermediary Ultimate Recipient Portfolio.
    a. Range and average interest rates.
    b. Range and average repayment term.
    c. Percent of loans made for which intermediary received first 
lien.
    d. Percent of loans made with real estate collateral.
    e. Percent of loans made with machinery and equipment collateral.
    f. Percent of outstanding loans with current repayment status on 
report date.
    g. Percent of loans written off.
    h. Percent of loans made with one or more payments late by 30 days 
or more, since loan inception.
    i. Percent of loans made for which terms have been renegotiated.
    j. Use of leverage on each ultimate recipient loan.
    k. Population where ultimate recipient loans were made.
    l. Identify loans in mission area targeted areas.

Selections Announcement

    The Agency will announce on its Internet web site, 45 days after 
the end of the solicitation period, the intermediaries selected to 
participate in the expanded pilot, potential purchasers, and third 
parties interested in structuring the sale of ultimate recipient notes. 
The Business Programs web site is located at www.rurdev.usda.gov/rbs/
busp/bpdir.htm. Click on ``IRP 3rd Party Sale'' to receive updates on 
this loan sale on the Internet (e-mail and web site hot links 
included). The information will provide updated lists of interested 
intermediaries, third-party advisors, and third-party purchasers. The 
application can be found on the Agency web site. RBS employees will be 
notified of loan sale selections via memorandum and the Agency 
intranet. All intermediaries making an application of interest under 
the pilot program will also be notified, in writing, of their selection 
or non-selection and of third-party purchaser and financial advisory 
interest. To be included in the published listings, interested third 
parties (purchasers and advisors) must provide the following 
information:

Third-Party Purchasers Will Provide

    Third-party purchasers will provide the company name, address, 
contact person, telephone and fax numbers, e-mail address, and URL 
address (web site). The expression of interest must be in writing. A 
written letter accompanying the company history, expertise, examples, 
and references from the purchasers is required and will be submitted to 
the National Office, Attention: David Lewis, Loan Specialist, Business 
Programs Servicing Division, Rural Business-Cooperative Service, Rural 
Development, USDA, STOP 3224, 1400 Independence Avenue, SW., 
Washington, D.C. 20250-3224.

Advisors--Structuring the Sale

    Advisors will provide the company name, address, contact person, 
telephone and fax numbers, e-mail address, and URL address (web site). 
The expression of interest must be in writing. A written letter 
accompanying the company history, expertise, examples, and references 
from the advisors is required and will be submitted to the National 
Office, Attention: David Lewis, Loan Specialist, Business Programs 
Servicing Division, Rural Business-Cooperative Service, Rural 
Development, USDA, STOP 3224, 1400 Independence Avenue, SW., 
Washington, D.C. 20250-3224.

Other Matters

    1. Environmental Finding. A Finding of No Significant Impact with 
respect to the environment has been made in accordance with RBS 
regulations at 7 CFR part 1940, subpart G.
    2. Civil Rights Impact Analysis. It is the policy within the Rural 
Development mission area to ensure that the consequences of any 
proposed project approval do not negatively or disproportionately 
affect program beneficiaries by virtue of race, color, sex, national 
origin, religion, age, disability, and marital or familial status. To 
ensure that any proposal under this demonstration program complies with 
these objectives, the RBS approval official will complete Form RD 2006-
38, ``Civil Rights Impact Analysis Certification.''
    3. Executive Order 12612, Federalism. The General Counsel, as the 
Designated Official under section 6(a) of Executive Order 12612, 
Federalism, has determined that the policies and procedures contained 
in this Notice will not have substantial direct effects on States or 
their political subdivisions, or the relationship between the Federal 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. As a result, 
the Notice is not subject to review under the Order.
    4. Prohibition Against Advance Information on Funding Decisions. 
The requirements of the rule continue to apply until the announcement 
of the selection of successful applicants. RBS employees involved in 
the review of applications and in the making of funding decisions are 
restricted from providing advance information to any

[[Page 61580]]

person (other than an authorized employee of RBS) concerning funding 
decisions, or from otherwise giving any applicant an unfair competitive 
advantage.

    Dated: November 2, 1999.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 99-29527 Filed 11-10-99; 8:45 am]
BILLING CODE 3410-XY-U