CARH’S BROADCAST E-MAIL – Regulatory Alert

August 21, 2026

Today, Karissa Stiers, Acting Deputy Administrator and Field Operations Division Director, Multifamily Housing, Rural Housing Service, Rural Development sent out an announcement titled, 2027 Proposed Budgets Updated Submission Requirements.

The announcement states in full:

To advance the Trump Administration’s priority to streamline and modernize government services, the Multifamily Housing (MFH) Field Operations Division (FOD) centralizes the submission process for all 2027 proposed budgets. This approach improves consistency, reduces administrative burden and ensures timely receipt of every budget package.

Borrowers, owners, or management agents (submitting parties) must follow the guidelines in the 2027 Proposed Budget Submission Requirements Fact Sheet for proper Agency receipt of the 2027 proposed budget.

Proposed Budget Requirements: Each submitting party must submit to the agency a proposed property operating budget as a planning document for the property’s financial operations for the upcoming year. Submitting parties must use Handbook 2‑3560, Chapter 4, Section 4, Chapter 7, and 7 CFR 3560.205 and 3560.303 for requirements related to rent, utility allowances, and project budgeting.

Submitting parties must prepare all income, expense, and vacancy projections using realistic, data‑driven assumptions based on the property’s historical performance, current conditions, and the local market. Submitting parties must ensure every projected cost clearly benefits property residents and reflects reasonable, necessary, and non‑inflated expenses.

Submission Timeline (Handbook 2-3560, Exhibit 4-3):

  • Rent or Utility Allowance Change: Submitting parties must submit a proposed budget at least 90 days before the fiscal year start.
  • No Rent or Utility Allowance Change: Submitting parties must submit a proposed budget at least 60 days before the fiscal year start.

Complete Proposed Operating Budget Package (Handbook 2-3560, Exhibit 4-1):

  1. Form RD 3560‑7: Submitting parties must complete according to the form instructions.Properties with eight or more units, submitting parties must submit through the Management Interactive Network Connection (MINC) and include a budget narrative using the following outline:
    • Brief description of the property and summarize key indicators of the overall condition.
    • Confirm compliance and address any outstanding monitoring findings listed on the property’s MINC Task Calendar.
    • Explain planned capital expenditures and reserve withdrawals, including accessibility work from the property Transition Plan and projected capital needs over the next three years.
    • Discuss the property’s financial status and relevant factors (vacancy, workout plan status, debt deferrals, servicing actions). Document the property operating expenses are reasonable, typical, necessary, and clearly benefit residents.
    • Provide any supporting detail to justify property rent or utility allowance requests.
  2. Utility allowance documentation: Submitting parties must include documentation consistent with Handbook 2‑3560, Chapter 7, Section 1, and 7 CFR 3560.202.
  3. Handbook Letter 203: Submitting parties must include documentation when proposing rent or utility allowance changes. Submitting parties must provide initial notice to the Agency and post the notice in common areas and notify all property tenants.
  4. Capital Needs Assessment (CNA): Submitting parties requesting an increase to the Replacement Reserve Deposit must submit to the Agency a CNA. Submitting parties must review the current CNA during the property budget preparation, as capital expenditures may reduce estimated operating costs. Replacement Reserve increases must be consistent with comparable rents for the area.
  5. Any additional documentation: Submitting parties must include documentation that supports proposed property rent, utility allowance, or expense changes.

The Agency requests prompt and accurate budget submissions to ensure uninterrupted property operations and enable the Agency to efficiently review and respond. For questions, submitting parties should contact the assigned Agency servicing specialist. A full list of MFH Property Assignments is available by region and found at MFH Property Assignments by Region. Stay connected by subscribing to USDA Rural Development updates on the GovDelivery page.

The CARH national office has not yet reviewed in detail the procedures to be followed. However, the  Agency believes that the updated submission requirements will allow for a streamlined and faster budget approval process. Please let CARH know if you run into any issues or problems with this updated process.

For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.