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FTA Issues Interim Guidance and Response to Public Comments on New Asset Disposition Option


On October 31, 2023, the Federal Transit Administration (FTA) published interim guidance (Guidance) and responses to public comments to clarify options for asset disposition as amended by the National Defense Authorization Act for Fiscal Year 2022 (NDAA), 88 FR 74563.  FTA previously published a Notice of Availability of the proposed Guidance and a request for public comments on March 15, 2023, 88 FR 16076.  The interim guidance is effective as of October 31, 2023.

The FTA issued the Guidance to explain changes made to 49 U.S.C. § 5334(h)(1) in the NDAA, section 6609 (P.L. 117-81; 135 stat. 2446).  These changes added a new disposition option for real property acquired or improved with Federal assistance that are no longer needed for their originally authorized purpose.  In addition to the statutory criteria found in § 5334(h)(1), FTA may now also authorize the transfer of  real property to a local government authority, nonprofit organization, or other third-party entity if the property will be used for transit-oriented development that includes affordable housing. 

FTA also made the following changes to the proposed Guidance based on public comments received in response to the March 15, 2023, Notice of Availability:

  • Special Purpose Entities that use Low Income Housing Tax Credits are treated as nonprofits if the entity maintains control over the project. 
  • FTA clarified the Area Median Income (AMI) requirements. Out of the 40 percent of housing units that must be offered to tenants whose income level is at or below 60 percent AMI, 20 percent of those units must be offered to tenants whose income level is at or below 30 percent AMI. 
  • FTA clarified that this provision applies to assets that have been acquired or improved with FTA assistance, including FTA-administered Federal funds that have been transferred from other Department of Transportation Operating Administrations. However, this provision does not apply to assets acquired or improved with FTA-administered RAISE grants.
  • FTA clarified the options available for compliance monitoring to include third-party oversight.

The FTA Guidance can be found here:

If you have any questions about the Guidance or the FTA’s response to comments, please contact Chuck Spitulnik or Ayelet Hirschkorn