CODE OF FEDERAL REGULATIONS
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The Code of Federal Regulations is a codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government. The Code is divided into 50 titles which represent broad areas subject to Federal regulation. Each title is divided into chapters which usually bear the name of the issuing agency. Each chapter is further subdivided into parts covering specific regulatory areas.
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Title 7—
The Food and Nutrition Service current regulations in the volume containing parts 210-299, include the Child Nutrition Programs and the Food Stamp Program. The regulations of the Federal Crop Insurance Corporation are found in the volume containing parts 400-699.
All marketing agreements and orders for fruits, vegetables and nuts appear in the one volume containing parts 900-999. All marketing agreements and orders for milk appear in the volume containing parts 1000-1199. Part 900—General Regulations is carried as a note in the volume containing parts 1000-1199, as a convenience to the user.
Redesignation tables appear in the Finding Aids section of the volumes containing parts 210-299 and parts 1600-1899.
For this volume, Melanie L. Marcec was Chief Editor. The Code of Federal Regulations publication program is under the direction of Frances D. McDonald, assisted by Alomha S. Morris.
(This book contains parts 1940 to 1949)
Nomenclature changes to chapter XVIII appear at 61 FR 1109, Jan. 16, 1996, and at 61 FR 2899, Jan. 30, 1996.
5 U.S.C. 301; 7 U.S.C. 1989; and 42 U.S.C. 1480.
(a) This subpart contains the major environmental policies of the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354. It also provides the procedures and guidelines for preparing the environmental impact analyses required for a series of Federal laws, regulations, and Executive orders within one environmental document. The timing and use of this environmental document within the FmHA or its successor agency under Public Law 103-354 decision-making process is also outlined.
(b) This subpart is intended to be consistent with the Council on Environmental Ouality's (CEQ) Regulations for Implementing the Procedural Provisions of the National Environmental
(c) This subpart is designed to integrate the requirements of NEPA with other planning and environmental review procedures required by law, or by Agency practice, so that all such procedures run concurrently rather than consecutively. The environmental document, which results from the implementation of this subpart, provides on a project basis a single reference point for the Agency's compliance and/or implementation of the following requirements and policies:
(1) The National Environmental Policy Act, 42 U.S.C. 4321;
(2) Safe Drinking Water Act—Section 1424(e), 42 U.S.C. 300h;
(3) Endangered Species Act, 16 U.S.C. 1531;
(4) Wild and Scenic Rivers Act, 16 U.S.C. 1271;
(5) The National Historic Preservation Act, 16 U.S.C. 470 (See subpart F of part 1901 of this chapter for more specific implementation procedures);
(6) Archaeological and Historic Preservation Act, 16 U.S.C. 469 (See subpart F of part 1901 of this chapter for more specific implementation procedures);
(7) Coastal Zone Management Act—Section 307(c) (1) and (2), 16 U.S.C. 1456;
(8) Farmland Protection Policy Act, subtitle I, Pub. L. 97-98;
(9) Coastal Barrier Resources Act, Pub. L. 97-348;
(10) Executive Order 11593, Protection and Enhancement of the Cultural Environment (See subpart F of part 1901 of this chapter for more specific implementation procedures);
(11) Executive Order 11514, Protection and Enhancement of Environmental Quality;
(12) Executive Order 11988, Floodplain Management;
(13) Executive Order 11990, Protection of Wetlands;
(14) Title 7, parts 1b and 1c, Code of Federal Regulations, Department of Agriculture's National Environmental Policy Act; Final Policies and Procedures;
(15) Title 7, part 3100, Code of Federal Regulations, Department of Agriculture's Enhancement, Protection, and Management of the Cultural Environment (See subpart F of part 1901 of this chapter for more specific implementation procedures);
(16) Title 7, part 658, Code of Federal Regulations, Department of Agriculture, Soil Conservation Service, Farmland Protection Policy;
(17) Title 87, part 12, Code of Federal Regulations, Highly Erodible Land and Wetland Conservation;
(18) Departmental Regulation 9500-3, Land Use Policy (See exhibit A of this subpart);
(19) Departmental Regulation 9500-4, Fish and Wildlife Policy.
(d) The primary objectives of this subpart are for the Agency to make better decisions by taking into account potential environmental impacts of proposed projects and by working with FmHA or its successor agency under Public Law 103-354 applicants, other Federal agencies, Indian tribes, State and local governments, and interested citizens and organizations in order to formulate actions that advance the program goals in a manner that will protect, enhance, and restore environmental quality. To accomplish these objectives, the identification of potentially significant impacts on the human environment is mandated to occur early in the Agency's planning and decisionmaking processes. Important decision points are identified. The completion of the environmental review process is coordinated with these decision points, and this review must be completed prior to the Agency's first major decision on whether or not to participate in the proposal. This early availability of the results of the environmental review process is intended to ensure that Agency decisions are based on an understanding of their environmental consequence, as well as the consequences of alternative courses of action.
(e) Reducing delays, duplication of effort, and superfluous analyses are provided for in this subpart. FmHA or its successor agency under Public Law
(f) Public involvement is desirable, and to facilitate public involvement, environmental documents will be available to interested citizens as early in the decisionmaking process as possible and before decisions are made. Provisions are included for citizens or interested parties to express their views and any concerns.
(g) The FmHA or its successor agency under Public Law 103-354 officials responsible for the environmental review process are identified.
(h) The FmHA or its successor agency under Public Law 103-354 actions covered by this subpart include:
(1) Financial assistance to include grants, loans, and guarantees,
(2) Subdivision approvals,
(3) The management, leasing and sale of inventory property, and
(4) Other major federal actions such as proposals for legislation and the issuance of regulations.
Following is a list of definitions that apply to the implementation of this subpart. Please note that § 1940.301(b) of this subpart refers to the Council on Environmental Quality's Regulations for Implementing the Procedural Provisions of the National Environmental Policy Act, 40 CFR parts 1500-1508. Consequently, the definitions contained in part 1508 of the Council's regulations apply to this subpart, as well as those listed below.
(a)
(b)
(1) Form FmHA or its successor agency under Public Law 103-3541940-22, “Environmental Checklist for Categorical Exclusions,”
(2) Form FmHA or its successor agency under Public Law 103-354 1940-21, “Environmental Assessment of Class I Action,”
(3) Environmental Assessment for Class II Actions (exhibit H of this subpart), and
(4) Environmental Impact Statements (EIS).
(c)
(1) A one-percent chance flood or based flood—A flood of a magnitude that occurs once every 100 years on the average. Within any one-year period there is one chance in 100 of the occurrence of such a flood. Most importantly, however, the cumulative risk of flooding increases with time. Statistically, there is about one chance in five that a flood of this magnitude will occur within a 20-year period, the length of time commonly defined as the useful life of a facility. Over a 30-year period, the life of a typical mortgage, the probability of such a flood occurring increases to greater than one chance in four.
(2) A 0.2-percent chance flood—A flood of a magnitude that occurs once every 500 years on the average. (Within any one-year period there is one chance in 500 of the occurrence of such a flood.) As with the one-percent chance flood, the cumulative risk of this flood occurring also increases with time.
(d)
(1) Base floodplain (or 100-year floodplain)—The area subject to inundation from a flood of a magnitude that occurs once every 100 years on the average (the flood having a one-percent chance of being equalled or exceeded in any given year).
(2) Critical action floodplain (or 500-year floodplain)—The area subject to inundation from a flood of a magnitude that occurs once every 500 years on the average (the flood having 0.2-percent chance of being equalled or exceeded in any given year).
(e)
(f)
(1) The deletion, relocation, redesign or other modifications of the project's elements;
(2) The dedication to open space of environmentally sensitive areas of the project site, which would otherwise be adversely affected by the action or its indirect impacts;
(3) Soil erosion and sedimentation plans to control runoff during land-disturbing activities;
(4) The establishment of vegetative buffer zones between project sites and adjacent land uses;
(5) Protective measures recommended by environmental and conservation agencies having jurisdiction or special expertise regarding the project's impacts;
(6) Storm water management plans to control potential downstream flooding effects that would result from a project;
(7) Zoning; and
(8) Reuse of existing facilities as opposed to new construction.
(g)
(h)
(1) Alternative project sites or designs,
(2) Alternative projects with similar benefits as the proposed actions, and
(3) The no-action alternative.
(i)
(1)
(2)
(i) The District Office staff member having primary responsibility for assembling the associated pre-application, application or other case materials, analyzing the materials and developing recommendations for the approval official, or
(ii) A County Office staff member having the same responsibilities as the District Office member, if the action is initiated at the County Office level.
(3)
(i) The appropriate State Office Loan Specialist, if not the State Environmental Coordinator (SEC),
(ii) An architect or engineer on the Chief's staff who is not the SEC, or
(iii) A District or County Office staff member located within the office in which the action is initiated and having the responsibilities outlined in paragraph (i)(2)(i) of this section.
(4)
(5)
(6)
(j)
(a) FmHA or its successor agency under Public Law 103-354 will consider environmental quality as equal with economic, social, and other relevant factors in program development and decision-making processes.
(b) In assessing the potential environmental impacts of its actions, FmHA or its successor agency under Public Law 103-354 will consult early with appropriate Federal, State, and local agencies and other organizations to provide decision-makers with both the technical and human aspects of environmental planning.
(c) When adverse environmental impacts are identified, either direct or indirect, an examination will be made of alternative courses of action, including their potential environmental impacts. The objective of the environmental review will be to develop a feasible alternative with the least adverse environmental impact. The alternative of not proceeding with the proposal will also be considered particularly with respect to the need for the proposal.
(d) If no feasible alternative exists, including the no-action alternative, measures to mitigate the identified adverse environmental impacts will be included in the proposal.
(e) The performance of environmental reviews and the consideration of alternatives will be initiated as early as possible in the FmHA or its successor agency under Public Law 103-354 application review process so that the Agency will be in the most flexible and objective position to deal with these considerations.
(a)
(i) There is no practicable alternative to the proposed action,
(ii) The proposal conforms to the planning criteria identified in paragraph (a)(2) of this section, and
(iii) The proposal includes all practicable measures for reducing the adverse impacts and the amount of conversion/encroachment.
(A) For Farmer Program loans and guarantees, and loans to Indian Tribes and Tribal Corporations, exhibit M of this subpart imposes additional and more restrictive requirements regarding wetland and highly erodible land conservation.
(B) Unless otherwise exempted by the provisions of exhibit M, the proceeds of any Farmer Program loan or loan to an Indian Tribe or Tribal Corporation made or guaranteed by FmHA or its successor agency under Public Law 103-354 cannot be used.
(
(
(2) It is also recognized that unless carefully reviewed, some proposals designed to serve the needs of rural communities can adversely affect the existing economic base and settlement patterns of the community, as well as create development pressures on land and environmental resources essential to farm economies. An example of such a proposal might be the extension of utilities and other types of infrastructure beyond a community's existing settlement pattern and into important farmlands for the purpose of commercial or residential expansion, even though there is available space within the existing settlement pattern for such expansion. Not only may the loss of important farmlands unnecessarily result, but the community may be faced with the economic costs of providing public services to outlying areas, as well as the deterioration of its central business or commercial area; the latter may not be able to compete with the newer, outlying commercial establishments. These results are undesirable, and to avoid their occurrence, projects designed to meet rural community needs (i.e., residential, industrial, commercial, and public facilities) will not be approved unless the following conditions are met.
(i) The project is planned and sited in a manner consistent with the policies of this section, the Farmland Protection Policy Act, and Departmental Regulation 9500-3 (exhibit A of this subpart).
(ii) The project is not inconsistent with an existing comprehensive and enforceable plan that guides growth and reflects a realistic strategy for protecting natural resources, and the project is compatible, to the extent practicable, with State, unit of local government, and private programs and
(iii) The project will encourage long-term, economically viable public investment by fostering or promoting development patterns that ensure compact community development, that is, development that is limited to serving existing settlement patterns or is located in existing settlement patterns, e.g., the rehabilitation and renovation of existing structures, systems and neighborhoods; infilling of development; the provision of a range of moderate-to-high residential densities appropriate to local and regional needs. When these development patterns or types are not practicable, the development must be contiguous with the existing settlement pattern and provide for a range of moderate-to-high residential densities appropriate to local and regional needs. It is recognized that some FmHA or its successor agency under Public Law 103-354 Community Programs projects are designed to serve rural residents, such as rural water and waste disposal systems and, therefore, cannot be limited in service area to these areas contiguous with existing settlement patterns. These types of projects will be designed to primarily serve existing structures and rural residents in noncontiguous areas. Any additional capacity within the system will be limited to meet reasonable growth needs, and, to the extent practicable, be designed to meet such needs within existing settlements and areas contiguous to them.
(3) The conditions specified in paragraph (a)(2) of this section should not be construed as advocating excessive densities, congestion, or loss of open space amenities within rural communities. Desirable living conditions can be obtained under these objectives, along with economic and social benefits for the community and the surrounding farm operations. Additionally, these conditions should not be construed as requiring localities to develop plans which contain the conditions. In any instance in which these planning conditions or criteria do not exist within the project area, project reviews will not be postponed until the criteria are adopted. Rather, projects will be reviewed and funding decisions made in light of a project's consistency with the contents of this subpart (excluding paragraph (a)(2)(ii) of this section, which would not be applicable).
(b)
(1) Jeopardize the continued existence of any plant or wildlife species listed by the Secretary of the Interior or Commerce as endangered or threatened; or
(2) Destroy or adversely modify the habitats of listed species when such habitats have been determined critical to the species' existence by the Secretary of the Interior or Commerce, unless FmHA or its successor agency under Public Law 103-354 has been granted an exemption for such proposal by the Endangered Species Committee pursuant to paragraph (h) of section 7 of the Endangered Species Act.
(c)
(d)
(e)
(1) Such activity meets the criteria for an exception, as defined in section 6 of the Act, and
(2) Consultation regarding the activity has been completed with the Secretary of the Interior.
(f)
(g)
(1) Are caused or encouraged by actions or programs of a Federal Agency, or
(2) Require licensing or approval by a Federal Agency, unless other needs clearly override the benefits derived from retention of such lands.
(h)
(a)
(1) Incorporating environmental quality considerations into FmHA or its successor agency under Public Law 103-354 program and decision-making processes,
(2) Obtaining the views of the public and government agencies on potential environmental impacts associated with FmHA or its successor agency under Public Law 103-354 projects, and
(3) Using all practicable means to avoid or to minimize any possible adverse environmental effects of FmHA or its successor agency under Public Law 103-354 actions.
(b)
(1) The guide will serve as a mechanism for assembling an inventory of the locations within the State of those natural resources, land uses, and environmental factors that have been specified by Federal, State and local authorities as deserving some degree of protection or special consideration;
(2) The guide will summarize the various standards or types of Federal, State, or local protection that apply to the natural resources, land uses, and environmental factors listed in the inventory; and
(3) Applications for individual projects must be reviewed for consistency with the guide.
(c)
(d)
(e)
(f)
(g)
(2) If the information obtained, as a result of the consultation and investigations conducted by FmHA or its successor agency under Public Law 103-354, indicates the presence of an historic or cultural property within the area of potential environmental impact that, in the opinion of the SHPO and FmHA or its successor agency under Public Law 103-354, appear to meet the National Register Criteria (36 CFR 60.4), the property will be considered eligible for the National Register of Historic Places. If the SHPO and FmHA or its successor agency under Public Law 103-354 do not agree on the property's eligibility for the National Register or if the Secretary of the Interior or the Advisory Council on Historic Preservation so requests, FmHA or its successor agency under Public Law 103-354 will request a determination of eligibility from the Keeper of the National Register in accordance with 36 CFR part 63. Consultations will be initiated with the SHPO and the Advisory Council on Historic Preservation in accordance with 36 CFR part 800, through the implementation of subpart F of part 1901 of this chapter, to determine the most appropriate course of action to protect all National Register and eligible properties within the area of potential environmental impact.
(3) Further instructions detailing the procedures to be followed in considering and protecting historic and cultural properties and the responsible Agency officials are contained in subpart F of part 1901 of this chapter. These procedures will be followed whenever a proposal, considered by FmHA or its successor agency under Public Law 103-354, has the potential to affect National Register or eligible properties.
(h)
(i)
(j)
(k)
(a)
(b)
(2) The specific responsibilities of the Deputy Administrator—Program Operations are as follows:
(i) Provide for the Agency an interdisciplinary approach to environmental impact analysis and problem resolution, as required by the CEQ regulations;
(ii) Provide the leadership and technical expertise for the implementation of the Agency's environmental policies with special emphasis being placed on those policies relating to natural resource management, energy conservation, and orderly community development;
(iii) Coordinate the implementation of this subpart with affected program offices;
(iv) Provide policy direction and advice on the implementation of this subpart to Agency staff, particularly to SECs and technical support personnel within State Offices;
(v) Consult and coordinate, as needed or upon request, with the Department's interagency committees dealing with environmental, land use, and historic preservation matters;
(vi) Monitor the Agency's record in complying with this subpart;
(vii) Provide training programs and materials for the Agency staff assigned the functions identified in this subpart;
(viii) Review, as necessary, applications for funding assistance, proposed policies and regulations, and recommend their approval, disapproval, or modification after analyzing and considering their anticipated adverse environmental impacts, their benefits, and their consistency with the requirements of this subpart;
(ix) Develop and direct Agency procedures for complying with environmental legislation, Executive orders, and regulations, including, but not limited to, those listed in § 1940.301(c) of this subpart;
(x) Maintain a position identified as the Senior Environmental Specialist (hereafter called the Environmental Specialist), who will serve as the responsible Agency official under the National Environmental Policy Act and the National Historic Preservation Act, maintain liaison on environmental matters with interested public groups and Federal agencies, and serve as the focal point for developing and coordinating the Agency's procedures for the requirements listed in § 1940.301(c) of this subpart; and
(xi) Review and evaluate legislative and administrative proposals in terms of their environmental impact.
(c)
(1) Ensure, as necessary, that environmental assessments and EISs for proposed program regulations are prepared by their staff;
(2) Ensure that all proposed actions that fall under the requirements of this subpart, and that are submitted to the National Office for approval or concurrence, contain adequate analyses and documentation of their potential environmental impacts (Transfer of program funds from National Office to State Office control to enable the State Office to approve an application is not considered to be National Office approval of or concurrence in an application);
(3) Consider and include, in the development of program regulations, feasible policies and mechanisms that promote program goals in a manner that either enhances environmental quality or reduces unnecessary adverse environmental impacts; and
(4) Designate one or more staff members to serve as a program environmental coordinator, having generally the same duties and responsibilities within the program office as the SEC has within the State Office (See § 1940.307(b) of this subpart).
(a)
(1) Serve as the responsible FmHA or its successor agency under Public Law 103-354 official at the State Office level for ensuring compliance with the requirements of this subpart; and
(2) Appoint one individual to serve as the SEC. Thereafter, the SEC will report directly to the State Director on the environmental matters contained in this subpart.
(b)
(1) Act as advisor to the State Director on environmental matters and coordinate the requirements of this subpart;
(2) Review those Agency actions which are not categorically excluded from this subpart (see §§ 1940.311 and 1940.312 of this subpart) and which require the approval and/or clearance of the State Office and recommend to the approving official either project approval, disapproval, or modification after analyzing and considering the—
(i) Anticipated adverse environmental impacts,
(ii) The anticipated benefits, and
(iii) The action's consistency with this subpart's requirements;
(3) Represent the State Director at conferences and meetings dealing with environmental matters of a State Office nature;
(4) Maintain liaison on State Office environmental matters with interested public groups and local, State, and other Federal agencies;
(5) Serve as the State Director's alternate on State-level USDA committees dealing with environmental, land use and historic preservation matters;
(6) Solicit, whenever necessary, the expert advice and assistance of other professional staff members within the State Office in order to adequately implement this subpart;
(7) Provide technical assistance as needed on a project-by-project basis to State, District, and County Office staffs;
(8) Develop controls for avoiding or mitigating adverse environmental impacts and monitor their implementation;
(9) Provide assistance in resolving post-approval environmental matters at the State Office level;
(10) Maintain records for those actions required by this subpart;
(11) Coordinate for the State Director the development of the State Office natural resource management guide;
(12) Provide direction and training to State, District, and County Office staffs on the requirements of this subpart; and
(13) Coordinate for the State Director the monitoring of the State Office's compliance with this subpart and keep the State Director advised of the results of the monitoring process.
(c)
(1) Be responsible for the adequacy of the environmental impact reviews required by this subpart for all program actions to be approved at the State Office level or concurred in at that level;
(2) Coordinate the above reviews as early as possible with the SEC, so that the latter can assist in addressing the resolution of any unresolved or difficult environmental issues in a timely manner; and
(3) Incorporate into projects and actions measures to avoid or reduce potential adverse environmental impacts identified in environmental reviews.
(a) The District Director will be responsible for carrying out the actions required by this subpart to be completed at the District Office level.
(b) The County Supervisor will be responsible for carrying out the actions required by this subpart to be completed at the County Office level.
(c) In discussing FmHA or its successor agency under Public Law 103-354 assistance programs with potential applicants, District Directors and County Supervisors will inform them of the
(a) FmHA or its successor agency under Public Law 103-354 expects applicants and transferees (
(b) As specified in paragraph (c) of this section, applicants for FmHA or its successor agency under Public Law 103-354 assistance will be required to provide information necessary to FmHA or its successor agency under Public Law 103-354 to evaluate their proposal's potential environmental impacts and alternatives to them. For example, the applicant will be required to provide a complete description of the project elements and the proposed site(s) to include location maps, topographic maps, and photographs when needed. The applicant will also be required to provide data on any expected gaseous, liquid and solid wastes to be produced, including hazardous wastes as defined by the Resource Conservation and Recovery Act or State law, and all permits and/or correspondence issued by the appropriate local, State, and Federal agencies which regulate treatment and disposal practices.
(c) Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information,” will be used for obtaining environmental information from applicants whose proposals require an environmental assessment under the requirements of this subpart. These same applicants must notify the appropriate State Historic Preservation Officer of the filing of the application and provide a detailed project description as specified in Item 2 of Form FmHA or its successor agency under Public Law 103-354 1940-20 and the FMI. If the applicant's proposal meets the definition of a Class II action as defined in § 1940.312 of this subpart, all of Form FmHA or its successor agency under Public Law 103-354 1940-20 must be completed. If the applicant's proposal meets the definition of a Class I action as defined in § 1940.311 of this subpart, the entire form need not be completed, but just the face of the form and categories (1), (2), (13), (15), (16), and (17) of Item 1b of the FMI. As an exception to the foregoing statement, an applicant for an action that is normally categorically excluded but requires a Class I assessment for any of the reasons stated in § 1940.317(e) of this subpart is not required to complete Form FmHA or its successor agency under Public Law 103-354 1940-20. Additionally, for Class I actions within the Farm Programs, a site visit by the FmHA or its successor agency under Public Law 103-354 official completing the environmental assessment obviates the need for the applicant to complete any of the form, and the adoption by FmHA or its successor agency under Public Law 103-354 of a Soil Conservation Service (SCS) environmental assessment or evaluation for the action obviates the need to complete the form for either a Class I or Class II action.
(d) Applicants will ensure that all required materials are current, sufficiently detailed and complete, and are submitted directly to the FmHA or its successor agency under Public Law 103-354 office processing the application. Incomplete materials or delayed submittals may seriously jeopardize consideration or postponement of a proposed action by FmHA or its successor agency under Public Law 103-354.
(e) During the period of application review and processing, applicants will not take any actions with respect to their proposed undertakings which are the subject of the application and which would have an adverse impact on the environment or limit the range of
(f) Applicants are required to provide public notification and to fully cooperate in holding public information meetings as described in §§ 1940.318(e), 1940.320 (c) and (g), and 1940.331 (b) and (c) of this subpart.
(g) Any applicant that is directly and adversely affected by an administrative decision made by FmHA or its successor agency under Public Law 103-354 under this subpart may appeal that decision under the provisions of subpart B of part 1900 of this chapter.
(a)
(1) A floodplain,
(2) A wetland,
(3) Important farmlands, or prime forestlands or rangelands,
(4) A listed species or critical habitat for an endangered species,
(5) A property that is listed on or may be eligible for listing on the National Register of Historic Places,
(6) An area within an approved State coastal zone management program,
(7) A coastal barrier or a portion of a barrier within the Coastal Barrier Resources System,
(8) A river or portion of a river included in, or designated for, potential addition to the Wild and Scenic Rivers System,
(9) A sole source aquifer recharge area, or
(10) A State water quality standard (including designated and/or existing beneficial uses and antidegradation requirements).
(i) Whether location within one of the preceding resource areas is sufficient to require a further review or a potential impact to one of them must also be identified to require a review is determined by FmHA or its successor agency under Public Law 103-354's completion of Form FmHA or its successor agency under Public Law 103-354 1940-22 in accordance with the FMI and § 1940.317 of this subpart.
(ii) When the categorical exclusion classification is lost, as specified in § 1940.317 of this subpart, the action must be reviewed under the requirements of paragraph (g) of that section. This requirement serves to implement § 1508.4 of the CEQ regulations which requires Federal agencies to detect extraordinary circumstances in which a normally excluded action may have a significant environmental effect.
(iii) Further guidance on the use of these exclusions is contained in § 1940.317 of this subpart.
(b)
(2) The approval of an individual building lot that is located on a scattered site and either not part of a subdivision or within a subdivision not requiring FmHA or its successor agency under Public Law 103-354's approval;
*(3) Rehabilitation, replacement, or renovation of any existing housing units, with no expansion in the number of units;
(4) Self-Help Technical Assistance Grants;
*(5) The approval of a subdivision that consists of four or fewer lots and is not part of, or associated with, building lots or subdivisions;
(6) Technical Supervisory Assistance Loans and Grants;
(7) Weatherization of any existing housing unit(s), unless the property is listed in the National Register of Historic Places or may be eligible for listing, or is located either within the Coastal Barrier Resources System or in a listed or potentially eligible historic district, in which case the application will require a Class I assessment as specified in § 1940.317(g) of this subpart;
(8) The financing of housing construction or the approval of lots in a previously approved FmHA or its successor agency under Public Law 103-354 subdivision provided that
(i) The action is consistent with all previously adopted stipulations for the multi-family housing project or subdivision, and
(ii) The FmHA or its successor agency under Public Law 103-354 environmental impact review that was previously completed for the original application is still current with respect to applicable environmental requirements and conditions present at the site, and it assessed the lots or expansion for which approval is being requested;
(9) The purchase of any existing, non-FmHA or its successor agency under Public Law 103-354 owned housing unit(s), unless the property is listed in the National Register of Historic Places or may be eligible for listing, or is located either within a 100-year floodplain, the Coastal Barrier Resources System, or in a listed or potentially eligible historic district, in which case the application will require a Class I assessment as specified in § 1940.317(g) of this subpart; and
(10) Appraisals of nonfarm tracts and small farms for rural housing loans.
(c)
*(2) Projects that solely involve the acquisition, construction, reconstruction, renovation, or installation of facilities, structures or businesses, for replacement or restoration purposes, with minimal change in use, size, capacity, purpose or location from the original facility (e.g., replacement in-kind of utilities such as water or sewer lines and appurtenances, reconstruction of curbs and sidewalks, street repaving, and building modifications, renovations, and improvements);
(3) Project management actions relating to invitation for bids, contract award, and the actual physical commencement of construction activities;
(4) Financial assistance for a technical assistance grant under the nonprofit national corporation loan and grant program;
(5) Projects that solely involve the purchase and installation of office equipment, public safety equipment, or motor vehicles; and
(6) Amendments to approved projects meeting the criteria of paragraph (e)(2) of this section.
(d)
(2) Financial assistance for the purchase of livestock and essential farm equipment, including crop storing and drying equipment, provided such equipment is not to be used to accommodate shifts in land use beyond the limits
(3) Financial assistance for:
(i) The payment of annual operating expenses, which does not cover activities specifically addressed in this section or § 1940.311 or § 1940.312 of this subpart;
(ii) Family living expenses, and
(iii) Refinancing debts;
*(4) Financial assistance for the construction of essential farm dwellings and service buildings of modest design and cost, as well as repairs and improvements to them;
(5) Financial assistance for onsite water supply facilities to serve a farm dwelling, farm buildings, and livestock needs;
(6) Financial assistance for the installation or enlargement of irrigation facilities, including storage reservoirs, diversion dams, wells, pumping plants, canals, pipelines, and sprinklers designed to irrigate less than 80 acres, provided that neither a State water quality standard, a property listed or potentially eligible for listing on the National Register of Historic Places, a river or portion of a river included in, or designated for, potential addition to the Wild and Scenic Rivers System, nor a wetland is affected. If a wetland is affected, the application will fall under Class II as defined in § 1940.312 of this subpart. Potential effects to a water quality standard, an historic property or the Wild and Scenic Rivers System require that a review be initiated under a Class I assessment as specified in § 1940.317(g) of this subpart.
(7) Financial assistance that solely involves the replacement or restoration of irrigation facilities, to include those facilities described in paragraph (d)(6) of this section, with minimal change in use, size, capacity, or location from the original facility(s) provided that neither a State water quality standard, a property listed or potentially eligible for listing on the National Register of Historic Places, a river or portion of a river included in or designated for potential addition to the Wild and Scenic Rivers System, nor a wetland is affected. If a wetland is affected, the application will fall under Class II as defined in § 1940.312 of this subpart. Potential effects to a water quality standard, an historic property, or the Wild and Scenic Rivers System require that a Class I assessment be completed as specified in § 1940.317(g) of this subpart. Also, to qualify for this exclusion, the facilities to be replaced or restored must have been used for similar irrigation purposes at least two out of the last three consecutive growing seasons. Otherwise, the action will be viewed as an installation of irrigation facilities.
(8) Financial assistance for the development of farm ponds or lakes of no more than 5 acres in size, provided that, neither a State water quality standard, a property listed or potentially eligible for listing on the National Register of Historic Places, a river or portion of a river included in or designated for potential addition to the Wild and Scenic Rivers System, nor a wetland is affected. If a wetland is affected, the application will fall under Class II as defined in § 1940.312 of this subpart. Potential effects to a water quality standard, an historic property, or the Wild and Scenic Rivers System require that a review be initiated under a Class I assessment as specified in § 1940.317(g) of this subpart;
*(9) Financial assistance for the conversion of:
(i) Land in agricultural production to pastures or forests, or
(ii) Pastures to forests;
*(10) Financial assistance for land-clearing operations of no more than 15 acres, provided no wetlands are affected, and financial assistance for any amount of land involved in tree harvesting conducted on a sustained yield basis and according to a Federal, State or other governmental unit approved forestry management and marketing plan; and
(11) Financial assistance for the conversion of no more than 160 acres of pasture to agricultural production, provided that in a conversion to agricultural production no State water quality standard or wetlands are affected. If a wetland is affected, the application will fall under Class II as defined in § 1940.312 of this subpart. If a water quality standard would be impaired or antidegradation requirement
(e)
(2) For actions other than those covered by exhibit M of this subpart, loan-closing and servicing activities, transfers, assumptions, subordinations, construction management activities and amendments and revisions to approved projects, including the provision of additional financial assistance that do not alter the purpose, operation, location, or design of the project as originally approved;
(3) The issuance of regulations and instructions, as well as amendments to them, describing administrative and financial procedures for processing, approving, and implementing the Agency's financial assistance programs;
(4) Procurement activities for goods and services, routine facility operations, personnel actions, and other such management activities related to the operation of the Agency;
(5) Reduction in force or employee transfers resulting from workload adjustments, reduced personnel or funding levels, skill imbalances, or other similar circumstances; and
*(6) The lease or disposal of real property by FmHA or its successor agency under Public Law 103-354 whenever the transaction is either not controversial for environmental reasons or will not result in a change in use of the real property within the reasonably foreseeable future.
The Agency's proposals and projects that are not identified in § 1940.310 of this subpart as categorical exclusions require the preparation of an environmental assessment in order to determine if the proposal will have a significant impact on the environment. For purposes of implementing NEPA, the actions listed in this section are presumed to be major Federal actions. If an action has a potential to create a significant environmental impact, an EIS must be prepared. (In situations when there is clearly a potential for a significant impact, the EIS may be initiated directly without the preparation of an assessment.) It is recognized that many of the applications funded annually by FmHA or its successor agency under Public Law 103-354 involve small-scale projects having limited environmental impacts. However, because on occasion they have the potential to create a significant impact, each must be assessed to determine the degree of impact. The scope and level of detail of an assessment for a small-scale action, though, need only be sufficient to determine whether the potential impacts are substantial and further analysis is necessary. Therefore, for the purpose of implementing NEPA, FmHA or its successor agency under Public Law 103-354 has classified its smaller scale approval actions as Class I actions. The format which will be used for accomplishing the environmental assessment of a Class I action is provided in Form FmHA or its successor agency under Public Law 103-354 1940-21. An important aspect of this classification method is that it allows FmHA or its successor agency under Public Law 103-354's environmental review staff to concentrate most of its time and efforts on those actions having the potential for more serious or complex environmental impacts. Additional guidance on the application of NEPA to Class I actions is provided in § 1940.319 of this subpart.
(a)
(1) Financial assistance for a multi-family housing project, including labor housing which comprises at least 5 units, but no more than 25 units; and
(2) Financial assistance for or the approval of a subdivision, as well as the expansion of an existing one which involves at least 5 lots but no more than 25 lots; and
(3) Financial assistance for a housing preservation grant.
(b)
(1) Financial assistance for water and waste disposal facilities and natural gas facilities that meet all of the following criteria:
(i) There will not be a substantial increase in the volume of discharge or the loading of pollutants from any existing or expanded sewage treatment facilities, or a substantial increase in an existing withdrawal from surface or ground waters. A substantial increase may be evidenced by an increase in hydraulic capacity or the need to obtain a new or amended discharge or withdrawal permit.
(ii) There will not be either a new discharge to surface or ground waters or a new withdrawal from surface or ground waters such that the design capacity of the discharge or withdrawal facility exceeds 50,000 gallons per day and provided that the potential water quality impacts are documented in a manner required for a Class II assessment and attached as an exhibit to the Class I assessment.
(iii) From the boundaries listed below, there is no extension, enlargement or construction of interceptors, collection, transmission or distribution lines beyond a one-mile limit estimated from the closest point of the boundary most applicable to the proposed service area:
(A) The boundary formed by the corporate limits of the community being served.
(B) If there are developed areas immediately contiguous to the corporate limits of a community, the boundary formed by the limits of these developed areas.
(C) If an unincorporated area is to be served, the boundary formed by the limits of the developed areas.
(iv) The proposal is designed for predominantly residential use with other new or expanded users being small-scale commercial enterprises having limited secondary impacts.
(v) For a proposed expansion of sewage treatment or water supply facilities, such expansions would serve a population that is no more than 20 percent greater than the existing population.
(vi) The proposal is not controversial for environmental reasons, nor have relevant questions been raised regarding its environmental impact which cannot be addressed in a Class I assessment.
(2) Financial assistance for group homes, detention facilities, nursing homes, or hospitals, providing a net increase in beds of not more than 25 percent or 25 beds, whichever is greater; and
(3) Financial assistance for the construction or expansion of facilities, such as fire stations, real stores, libraries outpatient medical facilities, service industries, additions to manufacturing plants, office buildings, and wholesale industries, that:
(i) Are confined to single, small sites; and
(ii) Are not a source of substantial traffic generation; and
(iii) Do not produce either substantial amounts of liquid or solid wastes or any of the following type(s) of wastes:
(A) Gaseous, liquid, or solid waste that is hazardous toxic, radioactive, or odorous;
(B) Either a liquid waste, whether or not disposed of on-site, that cannot be accepted by a publicly owned treatment works without first receiving pretreatment, or a liquid waste discharge that is a point source subject to a Federal, or State discharge permit; or
(C) Gaseous waste or air pollutant that will be emitted either from a new source at a rate greater than one hundred tons per year or from an expanded source at a rate greater than twenty-five tons per year.
(4) Financial assistance for a livestock-holding facility or feed-lot meeting the criteria of § 1940.311(c)(8) of this subpart.
(c)
(1) Financial assistance for the installation or enlargement of irrigation facilities including storage reservoirs, diversion dams, wells, pumping plants, canals, pipelines, and sprinklers designed to irrigate at least 80 acres, but no more than 160 acres and provided that no wetlands are affected, in which case the application will fall under Class II as defined in § 1940.312 of this subpart:
(2) Financial assistance for the development of farm ponds or lakes of more than 5 acres in size, but no more than 10 acres, provided that no wetlands are affected. If wetlands are affected, the application will fall under Class II as defined in § 1940.312 of this subpart;
(3) Financial assistance for land-clearing operations encompassing over 15 acres, but no more than 35 acres, provided that no wetlands are affected. If wetlands are affected, the application will fall under Class II as defined in § 1940.312 of this subpart;
(4) Financial assistance for the construction of energy producing facilities designed for on-farm needs such as methane digestors and fuel alcohol production facilities;
(5) Financial assistance for the conversion of more than 160 acres of pasture to agricultural production, but no more than 320 acres, provided that in a conversion to agricultural production no wetlands are affected, in which case the application will fall under Class II as defined in § 1940.312 of this subpart;
(6) Financial assistance to grazing associations;
(7) Financial assistance for the use of a farm or portion of a farm for recreational purposes or nonfarm enterprises utilizing no more than 10 acres, provided that no wetlands are affected. If wetlands are affected, the application will fall under Class II as defined in § 1940.312 of this subpart; and
(8) Financial assistance for a livestock-holding facility or feedlot having a capacity of at least one-half of those listed in § 1940.312(c)(9) of this subpart. (If the facility is located near a populated area or could potentially violate a State water quality standard, it will be treated as a Class II action as required by § 1940.312(c)(10) of this subpart.)
(d)
(2) Loan-closing and servicing activities, transfers, assumptions, subordinations, construction management activities, and amendments and revisions to all approved actions listed either in this section or equivalent in size or type to such actions and that alter the purpose, operation, location or design of the project as originally approved;
(3) The lease or disposal of real property by FmHA or its successor agency under Public Law 103-354 which meets either the following criteria:
(i) The lease or disposal may result in a change in use of the real property in the reasonably foreseeable future, and such change is equivalent in magnitude or type to either the Class I actions defined in this section or the categorical exclusions defined in § 1940.310 of this subpart; or
(ii) The lease or disposal is controversial for environmental reasons, and the real property is equivalent in size or type to either the Class I actions defined in this section or the categorical exclusions defined in § 1940.310 of this subpart.
Class II actions are basically those which exceed the thresholds established for Class I actions and, consequently, have the potential for resulting in more varied and substantial environmental impacts. A more detailed environmental assessment is, therefore, required for Class II actions in order to determine if the action requires an EIS. The format that will be used for completing this assessment is included as exhibit H of this subpart. Further guidance on Class II actions is contained in § 1940.318 of this subpart. Class II actions are presumed to be major Federal actions and are defined as follows:
(a)
(1) Financial assistance for a multi-family housing project, including labor housing, which comprises more than 25 units; and
(2) Financial assistance for, or the approval of, a subdivision as well as the expansion of an existing one, which involves more than 25 lots.
(b)
(2) Non-technical assistance grant or loan guarantee under nonprofit national corporation loan and grant program.
(c)
(1) Financial assistance for the installation or enlargement of irrigation facilities including storage reservoirs, diversion dams, wells, pumping plants, canals, pipelines, and sprinklers either designed to irrigate more than 160 acres or that would serve any amount of acreage and affects a wetland;
(2) Financial assistance for the development of farm ponds or lakes either larger than 10 acres in size or for any smaller size that would affect a wetland;
(3) Financial assistance for land-clearing operations either encompassing more than 35 acres or affecting a wetland, if less than 35 acres is involved;
(4) Financial assistance for the construction or enlargement of aquaculture facilities;
(5) Financial assistance for the conversion of more than 320 acres of pasture to agricultural production or for any smaller conversion of pasture to agricultural production that affects a wetland;
(6) Financial assistance to an individual farmer or an association of farmers for water control facilities such as dikes, detention reservoirs, stream channels, and ditches;
(7) Financial assistance for the use of a farm or portion of a farm for recreational purposes or nonfarm enterprises either utilizing more than 10 acres or affecting a wetland, if less than 10 acres is involved.
(8) Financial assistance for alteration of a wetland;
(9) Financial assistance for a livestock-holding facility or feedlot located in a sparsely populated farming area having a capacity as large or larger than one of the following capacities; 1,000 slaughter steers and heifers; 700 mature dairy cattle (whether milkers or dry cows); 2,500 swine; 10,000 sheep; 55,000 turkeys; 100,000 laying hens or broilers when facility has unlimited continuous flow watering systems; 30,00 laying hens or broilers when facility has liquid manure handling system; 500 horses; and 1,000 animal units from a combination of slaughter steers and heifers, mature dairy cattle, swine, and sheep; (The term
(10) Financial assistance for a livestock-holding facility or feedlot which either could potentially violate a State water quality standard or is located near a town or collection of rural homes which could be impacted by the facility, particularly with respect to noise, odor, visual, or transportation impacts and having a capacity of at least one-half of those listed in paragraph (c)(9) of this section.
(d)
(2) Loan-closing and servicing activities, transfers, assumptions, subordinations, construction management activities and amendments and revisions to all approved actions listed either in this section or equivalent in size or type to such actions and that alter the purpose, operation, location, or design of the project as originally approved;
(3) The approval of plans and State Investment Strategies for Energy Impacted Areas, designated under section 601 Energy Impacted Area Development Assistance Program, as well as the applications for financial assistance (excluding the award of planning funds) for Energy Impact Areas;
(4) Proposals for legislation as defined in CEQ's regulations, § 1508.17;
(5) The issuance of regulations and instructions, as well as amendments to these, that described either the entities, proposals and activities eligible for FmHA or its successor agency under Public Law 103-354 financial assistance, or the manner in which such proposals and activities must be located, constructed, or implemented; and
(6) The lease or disposal of any real property by FmHA or its successor agency under Public Law 103-354 which either does not meet the criteria for a categorical exclusion as stated in § 1940.310(e)(6) of this subpart or a Class I action as stated in § 1940.311(d)(3) of this subpart.
The environmental assessment process will be used, as defined in this subpart, to identify on a case-by-case basis those actions for which the preparation of an EIS is necessary. Given the variability of the types and locations of actions taken by FmHA or its successor agency under Public Law 103-354, no groups or set of actions can be identified which in almost every case would require the preparation of an EIS.
(a) EISs will be done for those Class I and Class II actions that are determined to have a significant impact on the quality of the human environment.
(b) In utilizing the criteria for a significant impact, the cumulative impacts of other FmHA or its successor agency under Public Law 103-354 actions planned or recently approved in the proposal's area of environmental impact, other related or similarly located Federal actions, and non-federal related actions must be given consideration. This is particularly relevant for frequently recurring FmHA or its successor agency under Public Law 103-354 actions that on an individual basis may have relatively few environmental impacts but create a potential for significantly impacts on a cumulative basis. Housing assistance is one such example. Consequently, in reviewing proposals for subdivisions and multi-family housing sites, consideration must be given to the cumulative impacts of other federally assisted housing in the area, including FmHA or its successor agency under Public Law 103-354's. The boundaries of the area to be considered should be based upon such factors as common utility or public service districts, common watersheds, and common commuting patterns to central employment or commercial areas. Additionally, the criteria for significant impacts utilized by the other involved housing agency(s), (VA and HUD, for example) must be reviewed when there is a potential for cumulative impacts. FmHA or its successor agency under Public Law 103-354 will consult with HUD for determining a significant impact whenever the total of HUD and FmHA or its successor agency under Public Law 103-354 housing units being planned within a common area of environmental impact exceeds the HUD thresholds listed in its NEPA regulations. (See 24 CFR part 50.)
(c) Because the environmental values and functions of floodplains and wetlands are of critical importance to man, and because these areas are often extremely sensitive to man-induced disturbances, actions which affect wetlands and floodplains will be considered to have a significant environmental impact whenever one or more of the following criteria are met:
(1) The public health and safety are identifiably affected, that is, whenever the proposed action may affect any standards promulgated under the Safe Drinking Water Act (42 U.S.C. 300f
(2) The preservation of natural systems is identifiably affected, that is, whenever the proposed action or related activities may potentially create or induce changes in the existing habitat that may affect species diversity and stability (both flora and fauna and over the short and long term) or affect ecosystem productivity over the long term.
(3) The proposal, if located or carried out within a floodplain, poses a greater than normal risk for flood-caused loss of life or property. Examples of such actions include facilities which produce, use, or store highly volatile, toxic, or water-reactive materials or facilities which contain occupants who may not be sufficiently mobile to avoid the loss of life or injury during flood and storm events (i.e., hospitals, nursing homes, schools).
(a) The FmHA or its successor agency under Public Law 103-354 office to which a potential applicant would go to seek program information and request application materials will notify the applicant of the major environmental requirements applicable to the type of assistance being sought. Emphasis should be placed on describing FmHA or its successor agency under Public Law 103-354's natural resource management policies, the nature and purpose of the environmental impact assessment process, and the permissible actions of the applicant during this process.
(b) When a preapplication is either filed by the applicant or required by FmHA or its successor agency under Public Law 103-354 for a project not categorically excluded, the prospective applicant will be requested to complete Form FmHA or its successor agency under Public Law 103-354 1940-20 at the time of the issuance of Form AD-622,
(c) When a preapplication is not filed, the prospective applicant will be required to complete Form FmHA or its successor agency under Public Law 103-354 1940-20 at the earliest possible time after FmHA or its successor agency under Public Law 103-354 is contacted for assistance but no later than when the application is filed with the appropriate FmHA or its successor agency under Public Law 103-354 office. (For the exception to this statement as regards Farm Programs' Class I actions, see § 1940.309(c) of this subpart.) FmHA or its successor agency under Public Law 103-354 will not consider the application to be complete, until FmHA or its successor agency under Public Law 103-354 staff have completed the environmental impact review, whether an assessment or EIS.
(d) For those applications that meet the requirements of a categorical exclusion, Form FmHA or its successor agency under Public Law 103-354 1940-22 will be completed by FmHA or its successor agency under Public Law 103-354 as early as possible after receipt of the application. The application will not be considered complete until either the checklist is successfully completed or the need for any further environmental review is identified and completed.
(a)
(b)
(2) Whenever the preparer and the SEC do not concur on either the adequacy of the assessment or the recommendations reached, the State Director, whether or not the approving official, will make the final decision on the matter or matters in disagreement. The State Director will also make the final decision whenever a State Office approving official disagrees with the joint recommendations of the preparer and the SEC. In either case, should the State Director desire, the matter will be forwarded to the National Office for resolution. The Program Support Staff will coordinate its resolution with the appropriate Assistant Administrator. Failure of these parties to resolve the matter will require a final decision by the Administrator. The State Director should also request the assistance of the National Office on actions that are too difficult to analyze at the State Office level.
(c)
(d)
(e)
(a) The use of categorical exclusions exempts properly defined actions or proposals from the review requirements of NEPA. It does not exempt proposals from the requirements of other environmental laws, regulations or Executive orders. Each proposal must be reviewed to determine the applicability of other environmental requirements. Extraordinary circumstances may cause an application to lose its categorical exclusion and require a Class I environmental assessment, as further specified in paragraph (e) of this section. Section 1508.4 of
(b) The approving official for an action will be responsible for ensuring that no action which requires an environmental assessment is processed as a categorical exclusion. In order to fulfill this responsibility, Form FmHA or its successor agency under Public Law 103-354 1940-22 will be completed for those actions that would normally be categorically excluded and as further defined in paragraph (c) of this section. When Form FmHA or its successor agency under Public Law 103-354 1940-22 must be prepared and the approving official delegates its preparation in accordance with § 1940.302(i) of this subpart, the approving official must sign the form as the concurring official. If that approving official must, prior to approval, forward the action to a District or State Office for review, a second concurrence must be executed by the Program Chief or District Director, as determined by the level of review being conducted. The checklist is filed with the application and serves as FmHA or its successor agency under Public Law 103-354's documentation of compliance with the environmental laws, regulations and Executive Orders listed on the checklist. Whenever the preparer is within the State Office or is in the National Office, the FmHA or its successor agency under Public Law 103-354 office where the processing of the application was initiated is responsible for providing sufficient site and project information in order to complete the checklist.
(c) Form FmHA or its successor agency under Public Law 103-354 1940-22 need not be completed for all categorical exclusions as defined in § 1940.310 of this subpart but only for those listed below. This list identifies the exclusions by their subject heading and paragraph number within § 1940.310 of this subpart. Additionally, for the housing assistance exclusion identified in § 1940.310(b)(8), for farm programs exclusions listed in § 1940.310(d)(2) and (3), and for community and business programs exclusions processed under § 1940.310(e)(2) of this subpart, a notation must be made in the docket materials or running record for the action by the processing official that the specific criteria of the applicable exclusion have been met for the action under review.
(1) Housing assistance—(b), (1), (2), (3), (5), (7), and (9);
(2) Community and Business Programs—(c) (1) and (2);
(3) Farm Programs—(d) (1) through (11);
(4) General exclusions—(e)(2), if action covered by exhibit M of the subpart, and (6).
(d) In applying the definition of a categorical exclusion to a project activity, the preparer must consider the following two elements in addition to the specific project elements for which approval is requested.
(1) If the application represents one of several phases of a larger proposal,
(2) If the application represents one segment of a larger project being funded by private parties or other government agencies, the size and elements of the entire project are used in determining the proper level of environmental assessment to be conducted by FmHA or its successor agency under Public Law 103-354. If an environmental assessment is required, it will address the environmental impacts of the entire project.
(e) Under any one of the following circumstances, an action that is normally categorically excluded loses its classification as an exclusion and must be reviewed in the manner described in paragraph (g) of this section. The following listing corresponds to the list of land uses and environmental resources contained in part 2 of Form FmHA or its successor agency under Public Law 103-354 1940-22.
(1) Wetlands—the proposed action:
(i) Would be located adjacent to a wetland or a wetland is within the project site, and
(ii) The action would affect the values and functions of the wetland by such means as converting, filling, draining, or directly discharging into it;
(2) Floodplains—the proposed action:
(i) Includes or involves an existing structure(s) located within a 100-year floodplain (500-year floodplain if critical action), or
(ii) Would be located within a 100-year floodplain (500-year floodplain if critical action) and would affect the values and functions of the floodplain by such means as converting, dredging, or filling or clearing the natural vegetation;
(3) Wilderness (designated or proposed)—the proposed action:
(i) Would be located in a wilderness area, or
(ii) Would affect a wilderness area such as by being visible from the wilderness area;
(4) Wild or Scenic River (proposed or designated or identified in the Department of the Interior's nationwide Inventory)—the proposed action:
(i) Would be located within one-quarter mile of the banks of the river,
(ii) Involves withdrawing water from the river or discharging water to the river via a point source, or
(iii) Would be visible from the river;
(5) Historical and Archeological Sites (listed on the National Register of Historic Places or which may be eligible for listing)—the proposed action:
(i) Contains a historical or archeological site within the construction site, or
(ii) Would affect a historical or archeological site;
(6) Critical Habitat or Endangered/Threatened Species (listed or proposed)—the proposed action:
(i) Contain a critical habitat within the project site,
(ii) Is adjacent to a critical habitat, or
(iii) Would affect a critical habitat or endangered/threatened species;
(7) Coastal Barrier Included in Coastal Barrier Resources System—the proposed action would be located within the Coastal Barrier Resources System;
(8) Natural Landmark (listed on National Registry of Natural Landmarks)—the proposed action either:
(i) Contains a natural landmark within the project site, or
(ii) Would affect a natural landmark;
(9) Important Farmlands—the proposed action would convert important farmland to a nonagricultural use(s) except when the conversion would result from the construction of on-farm structures necessary for farm operations;
(10) Prime Forest Lands—the proposed action would convert prime forest land to another use(s), except when the conversion would result from the construction of on-farm structures necessary for farm operations;
(11) Prime Rangelands—the proposed action would convert prime rangeland to another use(s) except when the conversion would result from the construction of on-farm structures necessary for farm operations;
(12) Approved Coastal Zone Management Area—the proposed action would be located within such area and no agreement exists with the responsible State agency obviating the need for a consistency determination for the type of action under consideration;
(13) Sole Source Aquifer Recharge Area—the proposed action would be located within such area and no agreement exists with the Environmental Protection Agency (EPA) obviating the need for EPA's review of the type of action under consideration; and
(14) State Water Quality Standard—the proposed action would impair a water quality standard, including designated and/or existing beneficial uses, or would not meet applicable antidegradation requirements for point or nonpoint sources.
(f) From the above paragraph (e), it should be noted that the location within the project site of any of the land uses and environmental resources identified in paragraphs (e) (1), (2), (9), (10), (11), (12), and (13) of this section is not sufficient for an action to lose its categorical exclusion. Rather, the land use or resource must be affected in the case of paragraphs (e) (1), (2), (9), (10), and (11) of this section. For paragraphs (e) (12), (13) and (14) of this section, further review and consultation can be avoided by written agreement with the responsible agency detailing the types of actions not requiring interagency review.
(g) Whenever a categorical exclusion loses its status as an exclusion for any of the reasons stated in paragraph (e) of this section, the environmental impacts of the action must be reviewed through the preparation of a Class I assessment, Form FmHA or its successor agency under Public Law 103-354 1940-21. Not all of the procedural requirements for a Class I assessment apply in this limited case, however. The following exemptions exists:
(1) No public notice provisions of this subpart apply.
(2) The applicant does not complete Form FmHA or its successor agency under Public Law 103-354 1940-20.
(3) The action does not require a Class II assessment should more than one important land resources be affected.
(a) The first step for the preparer (as defined in §§ 1940.302(i) and 1940.316 of this subpart) is to examine Form FmHA or its successor agency under Public Law 103-354 1940-20 submitted by the applicant to determine if it is complete, consistent, fully responsive to the items, signed, and dated. If not, it will be returned to the applicant with a request for necessary clarifications or additional data.
(b) Once adequate data has been obtained, the assessment will be initiated in the format and manner described in exhibit H of this subpart. In completing the assessment, appropriate experts from State and Federal agencies, universities, local and private groups will be contacted as necessary for their views. In so doing, the preparer should communicate with these agencies or parties in the most appropriate and expeditious manner possible, depending upon the seriousness of the potential impacts and the need for formal documentation. Appropriate experts must be contacted whenever required by a specific provision of this subpart or whenever the preparer does not have sufficient data or expertise available within FmHA or its successor agency under Public Law 103-354 to adequately assess the degree of a potential impact or the need for avoidance or mitigation. Comments from an expert must be obtained in writing whenever required by a specific provision of this subpart or the potential environmental impact is either controversial, complex, major, or apparently major. When correspondence is exchanged, it will be appended to the assessment. Oral discussions should be documented in the manner indicated in exhibit H of this subpart. On the other hand, there is no
(c) At the earliest possible stage in the assessment process, the preparer will identify the Federal, State, and local parties which are carrying out related activities, either planned or under way. Discussions with the applicant and FmHA or its successor agency under Public Law 103-354 staff familiar with the project area should assist in this identification effort. If there is a potential for cumulative impacts, the preparer will consult with the involved agencies to determine the nature, timing and results of their environmental analysis. These consultations will be documented in the assessment and considered or adopted when making the environmental impact determination. (See § 1940.324 of this subpart concerning adoption of assessments.) If it is determined that the cumulative impacts are significant, the preparer will further contact the involved Federal agencies and attempt to determine the lead Federal Agency as discussed in §§ 1940.320(b) and 1940.326 of this subpart.
(d) Consultations similar to those discussed in paragraph (c) of this section will also be undertaken with those Federal and State agencies which are directly involved in the FmHA or its successor agency under Public Law 103-354 action, either through the provision of financial assistance or the review and approval of a necessary plan or permit. For example, a construction permit from the U.S. Army Corps of Engineers may be required for a project. In such an instance, the environmental assessment cannot be completed until the preparer has either reviewed the other Agency's completed environmental analysis or consulted with the other Agency and is reasonably sure of the scope, content, and expected environmental impact determination of the forthcoming analysis and has so documented for the FmHA or its successor agency under Public Law 103-354 assessment this understanding. If the other Agency believes that the project will have a significant impact, a joint or lead impact statement will be prepared. If the other Agency does not believe a significant impact will occur, the preparer will consider this finding and its supporting analysis in completing the FmHA or its successor agency under Public Law 103-354 environmental impact determination. Guidance in adopting an environmental assessment prepared by another Federal Agency is provided in § 1940.324 of this subpart.
(e) For actions having a variety of complex or interrelated impacts that are difficult for the preparer to assess, consideration should be given to holding a public meeting in the manner described in § 1940.331(c) of this subpart. Such meetings should not be assumed as being limited to projects for which EISs are being prepared. Such a meeting can serve a useful purpose in better defining and identifying complex impacts, as well as locating expertise with respect to them. The results of a public meeting and the follow-up from it can also serve as a valuable tool in reaching an early understanding on the potential need for an EIS. When identified impacts are difficult to quantify (such as odor and visual and community impacts) or controversial, a public information meeting should be held near the project site and the local area's concern about it. Whenever held, it should be announced and organized in the manner described in § 1940.331(c). However, a transcript of the meeting need not be prepared, but the preparer will make detailed notes for incorporation in the assessment. (See § 1940.331(c) of this subpart.)
(f) Throughout this assessment process, the preparer will keep in mind the criteria for determining a significant environmental impact. If at any time in this process it is determined that a significant impact would result, the preparer will so notify the approving official. Those actions specified in § 1940.320 of this subpart will then be initiated, unless the approving official disagrees with the preparer's recommended determination, in which case further review of the determination may be required as explained in
(g) Similarly, throughout the assessment process, consideration will be given to incorporating mechanisms into the proposed action for reducing, mitigating, or avoiding adverse impacts. Examples of such mechanisms which are commonly referred to as mitigation measures include the deletion, relocation, redesign or other modifications of the project elements; the dedication of environmentally sensitive areas which would otherwise be adversely affected by the action or its indirect impacts; soil erosion and sedimentation plans to control runoff during land-disturbing activities; the establishment of vegetative buffer zones between project sites and adjacent land uses; protective measures recommended by environmental and conservation agencies, including but not limited to interstate, international, Federal, State, area-wide, and local agencies having jurisdiction or special expertise regarding the action's impacts; and zoning. Mitigation measures must be tailored to fit the specific needs of the action, and they must also be practical and enforceable. Mitigation measures which will be taken must be documented in the assessment (Item XIX of exhibit H of this subpart), and include an analysis of their environmental impacts and potential effectiveness and placed in the offer of financial assistance as special conditions or in the implementation requirements when the action does not involve financial assistance. These measures will be consistent with the basic goal of the proposed action and developed in consultation with the appropriate program office.
(h) As part of the assessment process, the preparer will initiate the consultation and compliance requirements for the environmental laws, regulations, and Executive orders specified in the assessment format. The assessment cannot be completed until compliance with these laws and regulations is appropriately documented. The project's failure to meet the requirements specified in Item 10b of Form FmHA or its successor agency under Public Law 103-354 1940-21 for a Class I action and Item XXIb of exhibit H of this subpart for a Class II action will result in postponement of further consideration of the application until such problem is alleviated.
(i) When the preparer has completed the assessment, the related materials and correspondence utilized will be attached. The preparer will then either recommend to the approving official that the action has the potential for significantly affecting the quality of the human environment or will recommend that the action does not have this potential and, therefore, the preparation of an EIS is not necessary. (Item 10a of Form FmHA or its successor agency under Public Law 103-354 1940-21 for Class I action and item XXIa of exhibit H of this subpart for a Class II action.) The recommended environmental findings will also be completed. (Item 10b of Form FmHA or its successor agency under Public Law 103-354 1940-21 for a Class I action and Item XXIb of exhibit H of this subpart for a Class II action.) In those instances specified in § 1940.316, the assessment will then be forwarded to the concurring official and, as required, to the SEC for review. The concurring official will coordinate, as necessary, with the preparer any questions, concerns or clarifications and complete and document the review prior to the assessment being submitted to the approving official or the SEC. The SEC will coordinate with the concurring official in a similar fashion whenever the latter's review is required.
(j) The approving official will review the environmental file and recommendations. The official will then execute the environmental impact determination and findings. If the conclusions reached are that there is no significant impact and there is compliance with the listed requirements, the format contained in exhibit I of this
(k) When there is no need for further review as discussed in paragraph (j) of this section and findings of compliance and a determination of no significant impact are reached, the assessment process is conditionally concluded. To conclude the assessment, the applicant will then be requested to provide public notification of these results as indicated in §1940.331(b)(3) of this subpart. The approving official will not approve the pending application for at least 15 days from the date the notification is last published. If comments are received as a result of the notification, they will be included in the environmental assessment and considered. Any necessary changes resulting from this consideration will be made in the assessment, impact determinations, and findings. If the changes require further implementation steps, such as the preparation of an EIS, they will be undertaken. If there are no changes in the findings and determination steps, such as the preparation of an EIS, they will be undertaken. If there are no changes in the findings and determinations, the approving official may continue to process the application. The environmental documents, i.e., the assessment, related correspondence, Form FmHA or its successor agency under Public Law 103-354 1940-20, and the finding of no significant impact will be included with the approval documents which are assembled for review and clearance within the approving office.
(l) Whenever changes are made to an action or comments or new or changed information relating to the action's potential environmental effects is received after the assessment is completed but prior to the action's approval, such change, comment, or information will be evaluated by the approving official to determine the impact on the completed assessment. Whenever the contents or findings of that assessment are affected, the assessment process for that action will be revised and any other related requirement of this subpart met. Changes to an action in terms of its location(s), design, purpose, or operation will normally require, at a minimum, modification of the original assessment to reflect such change(s) and the associated environmental impacts.
(m) When comments are received after the action has been approved, the approving official will consider the environmental importance of the comments and the necessity and ability to amend both the action, with respect to the issue raised and the action's stage of implementation. The National Office may be consulted to assist in determining whether there are any remaining environmental requirements which need to be met under the specific circumstances. A similar procedure will be followed when new or changed information is received after project approval. Amendments and revisions to actions will be handled as specified in §§1940.310 through 1940.313 of this subpart.
(a) As stated in this subpart, a main purpose of Form FmHA or its successor agency under Public Law 103-354 1940-21, is to provide a mechanism for reviewing actions with normally minimal impacts and for documenting a finding of no significant impact, as well as compliance determinations for other applicable environmental laws, regulations and policies. The second major purpose is to serve as a screening tool for identifying those Class I actions which have more than minimal
(b) The approach to reviewing a Class I action under the assessment format of Form FmHA or its successor agency under Public Law 103-354 1940-21 is exactly the same as for a Class II action. The preparer (as defined in §§1940.302(i) and 1940.316 of this subpart) must become familiar with the elements of the action, the nature of the environment to be affected, the relationship to any other Federal actions or related nonfederal actions, and the applicable environmental laws and regulations.
(c) The data submission requirements placed on the applicant for a Class I action are not as extensive as for a Class II action. The requirements are limited to completing the face of Form FmHA or its successor agency under Public Law 103-354 1940-20, as well as categories (1), (2), (13), (15), (16), and (17) of Item 1b of the FMI, whenver a previously completed environmental analysis covering these categories is not available. Should it later be determined that the magnitude of the Class I action's impact warrants a more detailed assessment, the applicant will be required to submit the remaining items of the data request. Additionally, the circumstances under which FmHA or its successor agency under Public Law 103-354 does not require the submission of Form FmHA or its successor agency under Public Law 103-354 1940-20 by an applicant whose proposed action requires a Class I assessment are specified in §1940.317(f) of this subpart.
(d) The preparer must ensure that the data received from the applicant is complete, consistent, signed and dated before initiating the assessment. If it is not, the applicant will be required to make the necessary changes and clarifications. The reviewer must also ensure that the application properly meets the definition of a Class I action. Phased or segmented projects, as discussed in §1940.317(d) of this subpart, will be identified and the elements and the size of the entire project used to classify the action.
(e) An important element of this assessment is to determine if the action affects an environmental resource which is the subject of a special Federal consultation or coordination requirement. Such resources are listed in the assessment format, Form FmHA or its successor agency under Public Law 103-354 1940-21, and include wetlands, floodplains, and historic properties, for example. If one of the listed resources is to be affected, the preparer must demonstrate the required compliance by accomplishing the review and coordination requirements for that resource. Documentation of the steps taken and coordination achieved will be attached. However, if more than one listed resource is to be affected, this will be viewed as the action having more than minimal impacts and the environmental assessment format for a Class II action will be initiated except if the action under review is an application for a Housing Preservation Grant.
(f) Similarly in completing item 3, General Impacts of Form FmHA or its successor agency under Public Law 103-354 1940-21, the assessment format for a Class II action must be initiated if more than one category of impacts cannot be checked as minimal. If there is a single category which needs analysis, this can be accomplished by attaching an appropriate exhibit addressing the questions and issues for that impact, as specified in the environmental assessment format for a Class II action. See § 1940.311(b)(1) of this subpart for when an attached discussion of water quality impacts is mandatory.
(g) The comments of State, regional, and local agencies obtained through applicable permit reviews or the implementation of Executive Order 12372, Intergovernmental Review of Federal Programs, will be incorported into the assessment, if this review applies to the action. The receipt of negative comments of an environmental nature will warrant the initiation of a more detailed assessment under the format for a Class II action (exhibit H of this subpart). Also, the issue of controversy must be addressed, and if the action is controversial for environmental reasons, the environmental assessment format for a Class II action (exhibit H of this subpart) will be completed. However, if the action is the subject of isolated environmental complaints or any questions or concerns that focus
(h) The potential cumulative impacts of this action, particularly as it relates to other FmHA or its successor agency under Public Law 103-354 actions recently approved in the area or planned, will be analyzed. If the cumulative impact is not minimal and, for example, cumulatively exceeds the criteria and threshholds discussed in paragraphs (e), (f) and (g) of this section, the environmental assessment format for a Class II action will be completed. The actions of other Federal agencies and related nonfederal actions must also be assessed on this basis. When there is a Federal action involved, the environmental review conducted by that Agency will be requested and, if it sufficiently addresses the cumulative impact, can be utilized by the preparer as the FmHA or its successor agency under Public Law 103-354 assessment, assuming the impacts are not significant. (See § 1940.324 of this subpart.) If the other Agency is doing or planning an EIS, the preparer will inform that Agency of our action and request to be a cooperating agency.
(i) The preparer will have the responsibility of initiating the assessment format for a Class II action (exhibit H of this subpart) whenever the need is identified. This should be done as early as possible in the review process. The preparer should not complete the assessment for a Class I action when it is obvious that the assessment format for a Class II action will be needed. The preparer will simply start the more detailed assessment and inform the applicant of the additional data requirements.
(j) Exhibit I will be completed by the approval official in the same instances for a Class I assessment as for a Class II assessment. However, public notification of FmHA or its successor agency under Public Law 103-354's finding of no significant environmental impact will not be required for a Class I assessment. Also, special provisions for completing a Class I assessment for an action that is normally categorically excluded but loses its classification as an exclusion are contained in § 1940.317(g) of this subpart. With the exception of the two preceding sentences, all other procedural requirements of the assessment process, such as the timing of the assessment and the limitations on the applicant's actions, apply to a Class I assessment.
(a)
(b)
(1) All Federal and State agencies that are being requested to provide financial assistance for the project or related projects;
(2) All Federal agencies that must provide a permit for the project should it be approved;
(3) All Federal agencies that have a specific environmental expertise in major environmental issues identified to date;
(4) The Agency responsible for the implementation of the State's environmental impact analysis requirement, if one has been enacted or promulgated by the State;
(5) All Federal, State, and local agencies that will be requested to comment on the draft EIS;
(6) All individuals and organizations that have expressed an interest in the project; and
(7) National, regional, or local environmental organizations whose particular area of interest corresponds to the major impacts identified to date.
(c)
(1) The first step in this process will be the publication of a notice of intent to prepare the EIS. The notice will indicate that an EIS will be prepared and will briefly describe the proposed action and possible alternatives; state the name, address, and phone number of the preparer, indicating that this person can answer questions about the proposed action and the EIS; list any cooperating agencies, and include the date and time of the scoping meeting. If the latter information is not known at the time the notice of intent is prepared, it will be incorporated into a special notice, when available, and published and distributed in the same manner as the notice of intent. It will be the responsibility of the preparer of the EIS to inform the National Office of the need to publish a notice of intent which will coordinate the publication of the notice in the
(2) A scoping meeting will be held. To the extent possible, the scoping meeting should be integrated with any other early planning meetings of the Agency or other involved agencies. The scoping meeting will be chaired by the preparer of the EIS and will be organized to accomplish the following major purposes (as well as other purposes listed in § 1501.7 of the CEQ regulations).
(i) Invite the participation of affected Federal, State, and local agencies, any affected Indian Tribe, the proponent of the action, and any interested parties including those who may disagree with the action for environmental reasons;
(ii) Determine the scope and the significant issues to be analyzed in depth in the EIS;
(iii) Identify and eliminate, from detailed study, the issues which are not significant or which have been covered by prior environmental review, narrowing the discussion of these issues in the statement to a brief presentation of why they will not have a significant effect on the human environment or providing a reference to their coverage elsewhere;
(iv) Allocate assignments for preparation of the EIS among the lead and cooperating agencies, with the lead Agency retaining responsibility for the statement;
(v) Indicate any public environmental assessments and other EISs which are being or will be prepared that are related to, but are not part of, the scope of the impact statement under consideration;
(vi) Identify other environmental review and consultation requirements so
(vii) Indicate the relationship between the timing of the preparation of environmental analyses and the Agency's tentative planning and decisionmaking schedule;
(3) Minutes of the scoping meeting, including the major points discussed and decisions made, will be prepared and retained by the preparer of the EIS as part of the environmental file. The preparer will offer, during the scoping meeting, to send copies of the minutes to any interested party upon written request.
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(a) The final EIS will be a major factor in the Agency's final decision. Agency staff making recommendations on the action and the approving official
(b) As part of this review process, the preparer of the EIS will complete the recommendations listed in Item XXIb and c of exhibit H of this subpart and provide them to the approving official prior to a final decision.
Upon completion of the EIS and its review within FmHA or its successor agency under Public Law 103-354 and before any action is taken on the decision reached on the proposal, the approving official will prepare, in consultation with the preparer of the EIS, a concise record of the decision which will be available for public review. The record will:
(a) State the decision reached;
(b) Certify that the timing requirements for the EIS process have been fully met;
(c) Identify all alternatives considered in reaching the decision specifying the alternative or alternatives that were considered to be environmentally preferable and discuss the relevant factors (environmental, economic, technical, statuatory mission and, if applicable, national policy) that were considered in the decision;
(d) State whether all practicable means to avoid or minimize environmental harm from the alternative selected have been adopted, and if not, why not; and
(e) If any mitigation measures have been adopted, specify the monitoring and enforcement program that will be utilized.
(a) Either the State Office or the National Office, as appropriate, will prepare supplements to either draft or final EIS's if:
(1) A substantial change or changes occur in the proposed action and such changes are relevant to the environmental impacts previously presented; and
(2) Significant new circumstances or information arise which are relevant to environmental concerns and bear on the proposed action or its impacts.
(b) If the preparer of the draft or final EIS determines that the changes or new circumstances referenced in paragraph (a) of this section do not require the preparation of a supplemental EIS, the preparer will complete an environmental assessment for a Class II action which will document the reasons for this determination.
(c) The preparer will be responsible for advising the approving official of the need for a supplement. The latter will make the Agency's formal determination in a manner consistent with § 1940.316 of this subpart.
(d) All of the requirements of this subpart that apply to the completion of an initial EIS apply to the completion of a supplement with the exception of the scoping process, which is optional. Additionally, if the approving official believes that there is a need for expedited or special procedures in the completion of a supplement, the approval of CEQ must first be obtained by the Administrator for any alternative procedures. The final supplement will be included in the project file or docket and used in the Agency's decisionmaking process in the same manner as a final EIS. (See § 1940.321 of this subpart and in particular subparagraphs (f), (g), and (j) of that section as well as § 1502.9(c)(4) of the CEQ regulations for associated circulation, filing, and timing requirements.)
(a) FmHA or its successor agency under Public Law 103-354 may adopt an EIS or portion thereof prepared by another Federal Agency after completion if:
(1) An independent review of the document is conducted by the preparer of the FmHA or its successor agency under Public Law 103-354 environmental review and it is concluded that
(2) If the actions covered in the EIS are substantially the same as those proposed by FmHA or its successor agency under Public Law 103-354 and the environmental conditions in the project area have not substantially changed since its publication, FmHA or its successor agency under Public Law 103-354 will recirculate the EIS as a “final” and so notify the public as specified in § 1940.331(b) of this subpart. The final EIS will contain an appropriate explanation of the FmHA or its successor agency under Public Law 103-354 involvement and will be sent to all parties who would typically receive a draft EIS published by FmHA or its successor agency under Public Law 103-354. If there are differences between the actions or the environmental conditions as discussed in the original EIS, that EIS will be updated to cover these differences and recirculated as a draft EIS with the public so notified. From that point, it will be reviewed and processed in the same manner as any other FmHA or its successor agency under Public Law 103-354 EIS. For circulation, filing, and timing requirements, see paragraphs (f), (g), and (j) of § 1940.320 of this subpart as well as §§ 1506.3(c), 1506.9, and 1506.10 of the CEQ regulations.
(b) If the adopted EIS is not final within the agency that prepared it, or if the action it assesses is the subject of a referral under part 1504 of the CEQ regulations, or if the statement's adequacy is the subject of a judicial action which is not final, FmHA or its successor agency under Public Law 103-354 must so specify and provide an explanation in the recirculated EIS.
(c) After recirculation (whether as a draft or final), the EIS will be reviewed and processed in the same manner as any other FmHA or its successor agency under Public Law 103-354 EIS.
(d) FmHA or its successor agency under Public Law 103-354 may also adopt all or part of environmental assessments or environmental reviews prepared by other Federal agencies. In this case, only paragraph (a)(1) of this section applies. If the requirements of that paragraph can be met except for the fact that the Federal agency whose assessment is to be adopted has no preliminary public notice requirements similar to FmHA or its successor agency under Public Law 103-354's (see § 1940.331(b)(4) of this subpart), the assessment can be adopted without FmHA or its successor agency under Public Law 103-354 publishing a preliminary public notice. Additionally, when all of another Federal agency's assessment is adopted, without supplementation, for a Class II action and a finding of no significant environmental impact (exhibit I of this subpart) is reached by the proper FmHA or its successor agency under Public Law 103-354 official, no public notification of FmHA or its successor agency under Public Law 103-354's finding of no significant environmental impact is required if:
(1) The other Federal agency or its designee published a similar finding in a newspaper of general circulation in the vicinity of the proposed action;
(2) The other Federal agency's or its designee's public notice clearly described the action subject to the FmHA or its successor agency under Public Law 103-354 environmental review; and
(3) The other Federal agency's or its designee's public notice was published less than eighteen months from the date FmHA or its successor agency under Public Law 103-354 adopted the assessment.
(a) FmHA or its successor agency under Public Law 103-354 will serve as a cooperating Agency when requested to do so by the lead Agency for an action in which FmHA or its successor agency under Public Law 103-354 is directly involved or for an action which is directly related to a proposed FmHA or its successor agency under Public Law 103-354 action. An example of the latter would be a request from EPA to participate in an EIS covering its sewage treatment plans for a community, as well as the community's water system plans pending before FmHA or its successor agency under Public Law 103-354. A memorandum of understanding or other written correspondence will be developed with the lead agency in order
(b) When requested to be a cooperating Agency on a basis other than that discussed above, the State Director will consider the expertise which FmHA or its successor agency under Public Law 103-354 could add to the particular EIS process in question and existing workload commitments. If a decision is made on either of these two bases not to participate as a cooperating Agency, a copy of the letter signed by the State Director or Administrator and so informing the lead Agency will be sent to CEQ.
(c) As a cooperating Agency, FmHA or its successor agency under Public Law 103-354 will participate in the development and implementation of the scoping process. If requested by the lead Agency, provide the lead Agency with staff support and descriptive materials with respect to the analyses of the FmHA or its successor agency under Public Law 103-354 portion of the action(s) to be covered, review and comment on all preliminary draft materials prior to their circulation for public review and comment, and attend and participate in public meetings called by the lead Agency concerning the EIS.
(d) The State Director will request the lead Agency to fully identify the Agency's involvement in all public documents and notifications.
(e) FmHA or its successor agency under Public Law 103-354 will use the EIS as its own as long as FmHA or its successor agency under Public Law 103-354's comments and concerns are adequately addressed by the lead Agency and the final EIS is considered to meet the requirements of this subpart. It will be the responsibility of the preparer of the FmHA or its successor agency under Public Law 103-354 environmental review document to formally advise the approving official on these two points. The failure of the lead Agency's EIS to meet either of these stipulations will require FmHA or its successor agency under Public Law 103-354 to follow the steps outlined in § 1940.324 of this subpart prior to the approving official's decision on the FmHA or its successor agency under Public Law 103-354 action.
(a) When other Federal agencies are involved in an FmHA or its successor agency under Public Law 103-354 action or related actions that require the preparation of an EIS, the preparer will consult with these agencies to determine a lead Agency for preparing the EIS. The criteria for making this determination will be those contained in § 1505.5 of the CEQ regulations. If there is a failure to reach a determination within a reasonably short time after consultation is initiated, the National Office will be contacted. The assistance of CEQ will then be requested by the Administrator in order to conclude the determination of a lead Agency.
(b) When acting as lead Agency, the FmHA or its successor agency under Public Law 103-354 preparer will request other Federal and State agencies to serve as cooperating agencies on the basis of the guidance provided in § 1940.320(b) of this subpart. A memorandum of understanding or other written correspondence should be developed with a cooperating agency in order to define that agency's role in the preparation of the EIS.
To the extent possible, FmHA or its successor agency under Public Law 103-354 may consider the concept of tiering in the preparation of environmental assessments and EISs. Tiering refers to the coverage of general matters in broader environmental impact statements, such as one done for a national program or regulation, with subsequent narrower statements or environmental analyses incorporating by reference the broader matters and concentrating on the issues specific to the action under consideration. Tiering can be used when the sequence of analysis
(a) Numerous States have enacted environmental policy acts or regulations similar to NEPA, hereafter referred to as State NEPA's. It is important that FmHA or its successor agency under Public Law 103-354 staff have an understanding of which States have such requirements and how they apply to applicant's proposals. It will be the responsibility of each State Director to determine the applicable State requirements and to establish a working relationship with the State personnel responsible for their implementation.
(b) In processing projects located within States having State NEPA's, the preparer of the FmHA or its successor agency under Public Law 103-354 assessment will determine as early as possible in the assessment process whether the project falls under the requirements of the State NEPA. If it does, one of the following cases will exist and the appropriate actions specified will be taken.
(1) The applicant has complied with the State's NEPA, and it was determined under the State's requirements that the proposed project would not result in sufficient potential impacts to warrant the preparation of an impact statement or other detailed environmental report required by the State NEPA. This finding or conclusion by the State will be considered in the FmHA or its successor agency under Public Law 103-354's review, and any supporting information used by the State will be requested. However, the State's finding can never be the total basis for FmHA or its successor agency under Public Law 103-354's environmental impact determination. An independent and thorough review in accordance with the requirements of this subpart must be conducted by the preparer.
(2) The applicant has complied with the State NEPA, and it was determined under its implementing guidelines that a significant impact will result. This fact will be given great weight in the Agency's environmental determination. However, the State's definition of significant environmental impact may encompass a much lower threshold of impacts compared to FmHA or its successor agency under Public Law 103-354's. In such a case, if the preparer does not believe that a significant impact will result under Agency guidelines for determining significant impacts, the environmental assessment will be prepared and include a detailed discussion with supporting information as to why the environmental reviewer's recommendation differs from that of the State's. However, the assessment cannot be completed until the State's impact statement requirements have been fulfilled by the applicant and the resulting impact statement has been reviewed by the preparer. An environmental impact determination will then be executed based upon the assessment and the statement.
(c) It should be emphasized that at no time does the completion of an impact statement under the requirements of a State NEPA obviate the requirement for FmHA or its successor agency under Public Law 103-354 to prepare an impact statement. Consequently, as soon as it is clear to the preparer that the Agency will have to prepare a statement, every attempt should be made to accomplish the statement simultaneously with the State's. Coordination with State personnel is necessary so that data and expertise can be shared. In this manner, duplication of effort and the review periods for the separate statements can be minimized. This process clearly requires a close working relationship with the appropriate State personnel.
(a) State Directors are authorized to comment directly on EIS's prepared by other Federal agencies. In so doing, comments should be as specific as possible. Any recommendations for the development of additional information or analyses should indicate why there is a need for the material.
(b) Comments should concentrate on those matters of primary importance to FmHA or its successor agency under
(c) Whenever a State Director has serious concerns over the acceptability of the anticipated environmental impacts, the State Director will notify the Administrator.
(a) FmHA or its successor agency under Public Law 103-354 staff who normally have responsibility for the postapproval inspection and monitoring of approved projects will ensure that those measures which were identified in the preapproval stage and required to be undertaken in order to reduce adverse environmental impacts are effectively implemented.
(b) This staff, as identified in paragraph (a) of this section, will review the action's approval documents and consult with the preparer of the action's environmental review document prior to making site visits or requesting project status reports in order to determine if there are environmental requirements to be monitored.
(c) The preparer will directly monitor actions containing difficult or complex environmental special conditions.
(d) Before certifying that conditions contained within offers of financial assistance have been fully met, the responsible monitoring staff will obtain the position of the preparer for those conditions developed as a result of the environmental review.
(e) Whenever noncompliance with an environmental special condition is detected by FmHA or its successor agency under Public Law 103-354 staff, the preparer and the SEC will be immediately informed. The approving official will then take appropriate steps, in consultation with the responsible program office, the SEC and preparer, to bring the action into compliance.
(a)
(b)
(2) Coincident with the distribution of either a draft or final EIS, a notice of the statement's availability will be published within the project area in the same manner as a notice of intent to prepare an EIS. FmHA or its successor agency under Public Law 103-354 will request EPA to publish in the
(3) For Class II actions that are determined not to have a significant environmental impact, the Agency will require the applicant to publish a notification of this determination. This notice will be published in the same manner as a notice of intent to prepare an EIS but will appear for at least 3 consecutive days if published in a daily newspaper or otherwise in two consecutive publications. Individual copies will be sent to the same parties that are required to be sent a notice of intent, as specified in paragraph (b)(1) of this section, with the exception of local radio stations and other news media. Also, there is no requirement to post this notice on the project site. The applicant will provide FmHA or its successor agency under Public Law 103-354 with a copy of this notice, the dates the notice was published, and a list of all parties receiving an individual notice. This notification procedure does not apply to actions reviewed solely on the basis of a Class I assessment.
(4) The public notice procedures for actions that will affect floodplains, wetlands, important farmlands, prime rangelands or prime forest lands are contained in exhibit C of this subpart. These procedures apply to actions that require either an EIS, Class II assessment or Class I assessment. However, whenever an action normally classified as a categorical exclusion requires a Class I assessment because of the potential impact to one of these important land resources, no public notice procedures apply in the course of completing the Class I assessment. When applicable to an action, as specified in exhibit C of this subpart, these public notice procedures can apply at two distinct stages. The first stage, a preliminary notice, applies to any of the five important land resources. The second stage, a final notice, is followed by a fifteen-day public review period and applies only to actions that will impact floodplains or wetlands. For Class II actions, this final notice procedure must be combined with any applicable finding of no significant environmental impact, which is described in paragraph (b)(3) of this section. Individual copies of the preliminary and final notices will be sent to the same parties that are required to be sent a notice of finding of no significant impact, as specified in paragraph (b)(3) of this section, with the following exception. Whenever property owners affected by proposed mitigation measures, such as proposed hook-up restrictions on portions of water or sewer lines that will traverse floodplains, are advised of these proposed measures in a preliminary notice, these property owners need not be sent copies of the final notice as long as the mitigation measures in the final notice are unchanged from the preliminary notice and no property owners raised objections or concerns over the mitigation measures.
(5) The public notice requirements associated with holding a public information meeting are specified in paragraph (c) of this section.
(c)
(2) Whenever a public information meeting is held as part of the completion of an environmental assessment, it will be scheduled, announced, and held in generally the same manner as a public information meeting for an EIS. However, a minimum of 7 days advance notice of the meeting is sufficient, and a transcript of the meeting will not be required. Rather a summary of the meeting to include the major issues raised will be prepared by the FmHA or its successor agency under Public Law 103-354 official who chaired the meeting.
(d)
(a)
(b)
The award of FmHA or its successor agency under Public Law 103-354 funds for the purpose of providing technical assistance or planning assistance will not be subject to any environmental review. However, applicants will be expected to consider in the development of their plans and to generally document within their plans:
(a) The existing environmental quality and the important environmental factors within the planning area, and
(b) The potential environmental impacts on the planning area of the plan as well as the alternative planning strategies that were reviewed.
FmHA or its successor agency under Public Law 103-354 may be assisted by a State Agency in the preparation of an EIS subject to the conditions indicated below. At no time, however, is FmHA or its successor agency under Public Law 103-354 relieved of its responsibilities for the scope, objectivity, and content of the entire statement of any other responsibility under NEPA.
(a) The FmHA or its successor agency under Public Law 103-354 applicant for financial assistance is a State Agency having statewide jurisdiction and responsibility for the proposed action;
(b) FmHA or its successor agency under Public Law 103-354 furnishes guidance to the State Agency as to the scope and content of the impact statement and participates in the preparation;
(c) FmHA or its successor agency under Public Law 103-354 independently evaluates the statement and rectifies any major deficiencies prior to its circulation by the Agency as an EIS;
(d) FmHA or its successor agency under Public Law 103-354 provides, early in the planning stages of the project, notification to and solicits the views of any land management entity (State or Federal Agency responsible for the management or control of public lands) concerning any portion of the project and its alternatives which may have significant impacts upon such land management entities; and
(e) If there is any disagreement on the impacts addressed by the review process outlined in paragraph (d) of this section, FmHA or its successor agency under Public Law 103-354 prepares a written assessment of these impacts and the views of the land management entities for incorporation into the draft impact statement.
(a) As stated in § 1940.312(d)(4) of this subpart, all FmHA or its successor agency under Public Law 103-354 proposals for legislation will receive an environmental assessment. The definition of such a proposal is contained in § 1508.17 of the CEQ regulations.
(b) The environmental assessment and, when necessary, the EIS will be prepared by the responsible Agency staff that is developing the legislation.
(c) If an EIS is required, it will be prepared according to the requirements of § 1506.8 of the CEQ Regulations.
(a) Assistance from outside experts and professionals can be secured for the purpose of completing EIS, assessments, or portions of them. Such assistance will be secured according to the Federal and Agriculture Procurement Regulations contained in chapters 1 and 4 of title 48 of the Code of Federal Regulations.
(b) The contractor will be selected by FmHA or its successor agency under Public Law 103-354 in consultation with any cooperating agencies. In order to avoid any conflict of interest, contractors competing for the work will be required to execute a disclosure statement specifying that they have no financial or other interest in the outcome of the project.
(c) The Administrator will provide the State Director with a proposed scope of work for use in securing such professional services.
(d) Applicants will not be required to pay the costs of these professional services.
The collection of information requirements in this regulation has been approved by the Office of Management and Budget and has been assigned OMB control number 0575-0094.
Number: 9500-3.
Subject: Land Use Policy.
Date: March 22, 1983.
OPI: Land Use Staff, Soil Conservation Service.
The Nation's farmlands, forest lands, rangelands, flood plains, and wetlands are unique natural resources providing food, fiber, wood, and water necessary for the continued welfare of the people of the United States and protection from floods. Each year, large amounts of these lands are converted to other uses. Continued conversion of the Nation's farmlands, forest lands, and rangelands may impair the ability of the United States to produce sufficient food, fiber, and wood to meet domestic needs and the demands of export markets. Continued conversion of the Nation's wetlands may reduce the availability of adequate supplies of suitable-quality water, indigenous wildlife species, and the productive capacity of the Nation's fisheries. Continued encroachments on flood plains decrease the natural flood-control capacity of these land areas, create needs for expensive manmade flood-control measures and disaster-relief activities, and endanger both lives and property.
Land use allocation decisions are matters of concern to USDA. Decisions concerning land use arise from needs to accommodate needed growth and development; prevent unwarranted and costly sprawl; avoid unwarranted conversion of farm, range, and forest lands and wetlands from existing uses and unwarranted encroachment on flood plains; maintain and enhance agricultural and forest production capabilities; maintain wildlife, fish, and seafood habitat; provide or improve community services and facilities; assure appropriate environmental quality; and assure adequate supplies of suitable-quality water. These needs are highly interdependent and often compete with each other for the limited supply of available land and water.
It is Departmental policy to promote land use objectives responsive to current and long-term economic, social, and environmental needs. This policy recognizes the rights and responsibilities of State and local governments for regulating the uses of land under their jurisdiction. It also reflects the Department's responsibility to (a) assure that the United States retains a farm, range, and forest land base sufficient to produce adequate supplies, at reasonable production costs of high-quality food, fiber, wood, and other agricultural products that may be needed; (b) assist individual landholders and State and local governments in defining and meeting needs for growth and development in such ways that the most productive farm, range, and forest lands are protected from unwarranted conversion to other uses; and (c) assure appropriate levels of environmental quality.
In accordance with the authority contained in 7 U.S.C. 1010 and 7 U.S.C. 2204 and consistent with 7 CFR 2.19(f) and provisions of the Farmland Protection Policy Act, Subtitle I, Title XV, Pub. L. 97-98, the Department sets forth this statement of policy on land use.
This regulation supersedes Secretary's Memorandum 9500-2 dated March 10, 1982.
Federal agencies, in implementing programs, make decisions that affect current and potential uses of land. The Department will:
a. Promote and support planning procedures that allow landholders, interest groups, and State and local governments to have input at all appropriate stages of the decisionmaking process for public projects, programs, or activities; that recognize the rights and responsibilities of landholders in making private land use decisions; and that recognize the responsibility of governments in influencing how land may be used to meet public needs.
b. Assure that programs of the agencies within the Department discourage the unwarranted conversion to other uses of prime
c. Manage both its land use-related programs and USDA-administered land in such manner as to (1) demonstrate leadership in meeting short- and long-term needs for growth and development, while assuring adequate supplies of needed food, fiber, and forest products; (2) assure appropriate levels of environmental quality and adequate supplies of water; and (3) discourage unwarranted expansion of peripheral boundaries of existing settlements. Whenever practicable, management of USDA-administered lands shall be coordinated with the management of adjacent private and other public lands.
d. Conduct multidisciplinary land use research and education programs responsive to identified State, local, and national needs and, when requested, assist State and local governments, citizens groups, and individual landholders in determining a alternative land use values, thereby enabling local officials to make judicious choices to meet growth and development needs and to protect the community's farm- and forest-related economic base.
e. Assist landowners and State and Federal agencies in the reclamation of abandoned surface-mined lands. This reclamation will help eliminate safety, health, and environmental problems.
f. Assist in planning for the extraction of coal and other nonrenewable resources in such manner as to facilitate restoration. This restoration would reestablish or enhance food, fiber, or forest productivity or contribute to other beneficial uses of the land as mining is completed in defined areas as sites.
g. Advocate among Federal agencies:
(1) The retention of important farmlands, rangelands, forest lands, and wetlands, whenever proposed conversions to other uses (a) are caused or encouraged by actions or programs of a Federal agency or (b) require licensing or approval by a Federal agency, unless other needs clearly override the benefits derived from retention of such lands; and
(2) Actions that reduce the risk of flood loss and soil erosion; that minimize impacts of floods on human safety, health, and welfare; that preserve natural flood-control and other beneficial functions and values of wetlands and flood plains; and that reduce future need for expensive manmade flood-control systems, disaster-relief assistance, or Federal rehabilitation assistance in the event of flooding.
USDA—U.S. Department of Agriculture.
NRE—Natural Resources and Environment Committee.
Complete definitions for the terms
a. The Office of the Secretary is responsible for (1) encouraging, assisting, and coordinating efforts of other Federal departments and agencies to implement policies and procedures supportive of the objectives of this regulation; (2) resolving issues and acting on recommendations raised to the Secretary's Policy and Coordination Council by the Departmental committees; and (3) raising unresolved issues and recommending actions to the appropriate Cabinet Council.
b. The NRE Committee, created under the Secretary's memorandum dated July 22, 1981, will provide departmentwide leadership for the implementation of this policy statement. In implementing this policy, the NRE Committee will:
(1) Recommend Departmental guidelines to the Secretary and schedule reviews of each agency's procedures for implementation;
(2) Monitor implementation of this policy;
(3) Encourage, support, and provide guidance to State- and local-level USDA committees in implementing this policy;
(4) Coordinate the work of USDA agencies in carrying out the provisions of this regulation; and
(5) Advise the Secretary annually as to progress and problems encountered.
c. Each USDA agency will review and make the necessary administrative changes in existing and proposed rules, regulations, guides, practices, or policies and propose needed legislative changes to bring agency programs into compliance with the provisions of this regulation.
d. Each USDA agency having programs that will be affected by this regulation shall develop implementing procedures, consistent with the guidelines provided by the NRE Committee, and shall provide to all offices of the agency copies of this policy statement, Departmental guidelines, and agency procedures to implement this policy.
e. USDA agencies will encourage State and local governments and individual landholders to retain important farmlands, rangelands, forest lands, and wetlands and to avoid encroachments on flood plains when practicable alternatives exist to meet developmental needs. Appropriate agencies will assist State and local governments, citizens groups, and individual landholders in identifying options and determining alternative land use values as the basis for making judicious choices in meeting growth and development needs.
f. USDA agencies will encourage other Federal, State, and local government agencies to exchange information on plans or projects that may impact on important farmlands, rangelands, forest lands, wetlalds, or flood plains and to involve appropriate USDA agencies early in the planning process. USDA agencies will participate in a timely manner at appropriate stages in the planning process on Federal or federally assisted projects or activities when requested. Where opportunity for such participation is not forthcoming, the Department may intercede, consistent with policy contained in this regulation, at appropriate stages in the decisionmaking process through review and comments on plans, as provided for in authorized administrative review procedures for such projects, activities, or actions.
g. When land held either in public or private ownership will be directly affected by USDA actions, the implementing agency will notify the affected landholders at the earliest time practicable of the proposed action and provide such landholders an opportunity to review the elements of the action and to comment on the action's feasibility and alternatives to it.
h. Agencies of USDA will assure that their actions, investments, and programs on non-Federal lands will conform, to the extent practicable, with the uses permitted under land use regulations adopted by State or local governments.
i. When land use regulations or decisions are inconsistent with USDA policies and procedures for the protection of important farmlands, rangelands, forest lands, wetlands, or flood plains, USDA agencies shall not assist in actions that would convert these lands to other uses or encroach upon flood plains, unless (1) there is a demonstrated, significant need for the project, program, or facility, and (2) there are no practicable alternative actions or sites that would avoid the conversion of these lands or, if conversion is unavoidable, reduce the number of acres to be converted or encroached upon directly and indirectly.
The following definitions apply to this Departmental Regulation.
(1)
(2)
(a) The soils have:
(b) The soils have a temperature regime that is frigid, mesic, thermic, or hyperthermic (pergelic and cryic regimes are excluded). These are soils that, at a depth of 20 inches, have a mean annual temperature higher than 32 degrees Fahrenheit. In addition, the mean summer temperature at this depth in soils with an 0 horizon is higher than 47 degrees Fahrenheit; in soils that
(c) The soils have a pH between 4.5 and 8.4 in all horizons within a depth of 40 inches or in the root zone if the root zone is less than 40 inches deep; and
(d) The soils either have no water table or have a water table that is maintained at a sufficient depth during the cropping season to allow cultivated crops common to the area to be grown; and
(e) The soils can be managed so that in all horizons within a depth of 40 inches or in the root zone if the root zone is less than 40 inches deep, during part of each year the conductivity of the saturation extract is less than 4 mmhoc/cm and the exchangeable sodium percentage is less than 15; and
(f) The soils are not flooded frequently during the growing season (less often than once in 2 years); and
(g) The product of K (erodibility factor) times the percent slope is less than 2.0, and the product of I (soils erodibility) times C (climatic factor) does not exceed 60; and
(h) The soils have a permeability rate of at least 0.06 inch per hour in the upper 20 inches, and the mean annual soil temperature at a depth of 20 inches is less than 59 degrees Fahrenheit or higher; and
(i) Less that 10 percent of the surface layer (upper 6 inches) in these soils consists of rock fragments coarser than 3 inches.
(1)
(2)
This is land, in addition to prime and unique farmlands, that is of statewide importance for the production of food, feed, fiber, forage, and oilseed crops. Criteria for defining and delineating this land are to be determined by the appropriate State agency or agencies. Generally, additional farmlands of statewide importance include those that are nearly prime farmland and that economically produce high yields of crops when treated and managed according to acceptable farming methods. Some may produce as high a yield as prime farmlands if conditions are favorable. In some States, additional farmlands of statewide importance may include tracts of land that have been designated for agriculture by State law.
In some local areas, there is concern for certain additional farmlands for the production of food, feed, fiber, forage, and oilseed crops, even though these lands are not identified as having national or statewide importance. Where appropriate, these lands are to be identified by the local agency or agencies concerned.
Because of the multiple use of forested lands, several categories, e.g., timber, wildlife, and recreation, may be developed. For purposes of this regulation only, the following timberland definitions will apply.
Prime timberland is land that has soil capable of growing wood at the rate of 85 cubic feet or more/acre/year (at culmination of mean annual increment) in natural stands and is not in urban or built-up land uses or water. Generally speaking, this is land currently in forest, but does not exclude qualifying lands that could realistically be returned to forest. Delineation of these lands will be in accordance with national criteria.
Unique timberlands are lands that do not qualify as prime timberland on the basis of producing less than 85 cubic feet/acre/year, but are growing sustained yields of specific high-value species or species capable of producing specialized wood products under a silvicultural system that maintains soil productivity and protects water quality. Delineation of these lands will be in accordance with national criteria.
This is land, in addition to prime and unique timberlands, that is of statewide importance for the growing of wood. Criteria for defining and delineating these lands are
In some local areas, there is concern for certain additional forest lands for the growing of wood, even though these lands are not identified as having national or statewide importance. Where appropriate, these lands are to be identified by a local agency or agencies concerned.
Wetlands are those areas that are inundated by surface or ground water with a frequency sufficient to support and, under normal circumstances, do or would support a prevalence of vegetative or aquatic life that requires saturated or seasonally saturated soil conditions for growth and reproduction. Wetlands generally include swamps, marshes, bogs, and similar areas, such as sloughs, potholes, wet meadows, river overflows, mudflats, and natural ponds.
The term
Prime rangeland is rangeland which, because of its soil, climate, topography, vegetation, and location, has the highest quality or value for grazing animals. The (potential) natural vegetation is palatable, nutritious, and available to the kinds of herbivores common to the area.
1. The State Director shall complete the natural resource management guide within 12 months from the effective date of this subpart and issue the guide as a State supplement after prior approval by the Administrator. A summary of the basic content, purposes, and uses of the guide is contained in § 1940.305 of this subpart. The guide shall be prepared in draft form and be provided for review and comment to USDA agencies, appropriate Federal and State agencies, State and regional review agencies assigned the consulation requirements of Executive Order 12372, as well as interested localities, groups, and citizens. Also at least one public information meeting shall be held on the draft which shall be followed by a 30-day period for the submission of public comments. Public notification of this meeting shall be made in the same manner as the notification process for a scoping meeting. (See § 1940.320(c) of this subpart). Additionally, the public shall be informed that copies of the draft guide will be made available from the State Office upon request. After completion of this public review, the draft will be revised as necessary in light of the comments received and provided as a final draft State Supplement to the Administrator for review and approval. Any concerns and comments of the Administrator will be addressed by the State Director and the guide completed. Upon the Administrator's approval and the fulfillment of the requirements of paragraph 4. of this exhibit, the natural resource management guide shall then become part of any program investment strategies developed by the State Director for the purpose of addressing the rural needs of the State. Although a 12-month period has been established for the completion of a natural resource management guide, this deadline is not to be construed as curtailing or postponing the implementation of existing environmental laws, regulations, Executive orders or the Departmental Regulation 9500-3, Land Use Policy, with respect to individual project reviews, nor giving anyone any rights or claims with respect to the completion or content of the guide.
2. The natural resource management guide needs to be developed in full recognition of its role as an internal Agency planning tool and with sensitivity to the Agency's mission.
3. After the Administrator approves the natural resource management guide, it will become effective 4 months from that date. This interim period shall be used to inform local, State, and Federal agencies, localities, organizations, and interested citizens of the content of the guide. In this manner, those parties intending to seek FmHA or its successor agency under Public Law 103-354 assistance or to coordinate FmHA or its successor agency under Public Law 103-354 assistance programs with their own programs will be able to gain for their planning needs an understanding of our guide.
4. Completed natural resource management guides shall be reviewed every 2 years and updated by the State Director to reflect newly identified geographical areas of concern or policy revisions at the lational, State, regional or local level. They will also be revised, as necessary, through appropriate guidance from the Administrator. Revisions shall be transmitted to the Administrator for postapproval and shall be considered approved if either no comments are raised by the Administrator within 30 days of receipt
5. The foundation for the natural resource management guide is the identification of the types of land uses or environmental factors deserving attention and their geographical location within the State. An inventory or listing shall be developed, therefore, of the important land uses within the State. This inventory will be accomplished by assembling existing data and information compiled by those Federal, State, and local agencies that have jurisdiction or expertise regarding the land uses or environmental factors. At a minimum, the inventory shall consist of available documents, listings, maps, or graphic materials describing the location of the following:
a. National Register of Historic Places to include monthly supplements as designated by the Department of the Interior (DOI), and the State Historic Preservation Plans. This list is issued as a State supplement to subpart F or part 1901 of this chapter;
b. Rivers designated as part of the Wild and Scenic Rivers System and rivers under study for inclusion in the system, as published by DOI;
c. Important farmlands;
d. Prime rangelands.
e. Prime forestlands;
f. Wetland inventory;
g. Floodplain inventory as issued by the Federal Emergency Management Administration;
h. Endangered Species and Critical Habitats as listed or proposed for listing by the Department of Commerce (DOC) and DOI;
i. Sole source aquifer recharge areas as designated by the Environmental Protection Agency (EPA);
j. Air Quality Control Regions as designated by EPA;
k. National Registry of Natural Landmarks at published by DOI;
l. Coastal Barrier Resources System;
m. State inventories or planning documents identifying important land uses, particularly those not covered by the above items, such as wildlife refuges, important habitats, and areas of high water quality, or scenic or recreational value;
n. Agricultural districts or other similar zoning classifications for agricultural land protection; and
o. Coastal Zone Management Areas.
6. The Administrator shall be responsible for assisting State Directors in obtaining listings and inventories of resources protected by Federal statutes and regulations. The State Director has the responsibility for assembling documents on important environmental resources or areas identified in State and substate laws, regulations, plans, and policies.
7. Development of the inventory by the State Director will require consultation and assistance from a variety of agencies and experts. This consultation should begin with Department agencies and be accomplished through appropriate, State-level USDA committees. The objective should be to determine the land classification data that has been compiled and that which is in the process of being compiled either by USDA agencies or their counterparts at the state level. The Memorandum of Understanding executed in May 1979 between the Soil Conservation Service (SCS) and FmHA or its successor agency under Public Law 103-354 should be utilized as the basis for seeking SCS's assistance in this data collection effort. (See FmHA Instruction 2000-D, exhibit A, which is available in any FmHA or its successor agency under Public Law 103-354 Office.) Direct contacts should then be made with State agencies, in particular with the appropriate office of State planning, to determine the availability of State inventories and State land use policies and priorities. Similar discussions should be held with substate regional planning agencies and clearinghouses with assistance being provided in this effort by District Directors. County Supervisors shall contact local officials and shall be responsible for being familiar with and for assembling similar inventories, land use policies, or protective requirements developed by the local government agencies within the supervisor's territorial jurisdiction.
8. Another important element of the natural resource management guide shall be the examination of any major environmental impacts on the State or a substate area resulting from the cumulative effects of FmHA or its successor agency under Public Law 103-354-assisted project over the last several years. In this examination, particular emphasis should be given to the cumulative impacts of water resource projects such as irrigation systems. This should be done in consultation with experts within the appropriate State agencies and the U.S. Geological Survey. The housing programs should also be given a particular emphasis with respect to their cumulative impacts. More detailed
1.
2.
a. Determine whether important land resources are involved. The Act comes into play whenever there is a potential to affect important farmland. The Departmental Regulation covers important farmland as well as the following land resources: prime forest land, prime rangeland, wetlands and floodplains. Hereafter, these land resources are referred to collectively as important land resources. Definitions for these land resources are contained in the appendix to the Departmental Regulation. The SCS rule also defines important farmland for purposes of the Act. Since the SCS's definition of prime farmland differs from the Departmental Regulation's definition, both definitions must be used and if either or both apply, the provisions of this exhibit must be implemented. It is important to note the definition of important farmland in both the SCS rule and the Departmental Regulation because it includes not only prime and unique farmland but additional farmland that has been designated by a unit of State or local government to be of statewide or local importance and such designation has been concurred in by the Secretary acting through SCS. In completing the environmental assessment or Form FmHA or its successor agency under Public Law 103-354 1940-22, “Environmental Checklist For Categorical Exclusions,” the preparer must determine if the project is either located in or will affect one or more of the land resources covered by the SCS rule or the Departmental Regulation. Methods for
(1)
(2)
If a FEMA floodplain map has not been prepared for a project area, detailed assistance is normally available from the following agencies: The U.S. Fish and Wildlife Service (FWS), SCS, Corps of Engineers, U.S. Geological Survey (USGS), or appropriate regional or State agencies established for flood prevention purposes.
(3)
b.
(a) Is compatible with State, unit or local government, and private programs and policies to protect farmland; and
(b) Either will have no effect on important land resources; or
(c) If there will be a direct or indirect conversion of such a resource, (i) whether practicable alternatives exist to avoid the conversion; and
(d) If there are no alternatives, whether there are practicable measures to reduce the amount of the conversion.
(2)
(3)
(a)
(i) The selection of an alternative site;
(ii) The selection of an alternative means to meet the applicant's objectives; or
(iii) The denial of the application, i.e., the no-action alternative.
When the resource that may be converted is important farmland, the preparer will follow the Land Evaluation and Site Assessment (LESA) point system contained within the SCS rule in order to evaluate the feasibility of alternatives. When the proposed site receives a total score of less than 160 points, no additional sites need to be evaluated. Rather than use the SCS LESA point system, the State Director has the authority to use State or local LESA systems that have been approved by the governing body of such jurisdiction and the SCS state conservationist. After this authority is exercised, it must be used for all applicable FmHA or its successor agency under Public Law 103-354 actions within the jurisdiction of that approved LESA system.
(b)
(i) A brief description of the application or proposal and its location;
(ii) The type(s) and amount of important land resources to be affected;
(iii) A statement that the application or proposal is available for review at an FmHA or its successor agency under Public Law 103-354 field office (specify the one having jurisdiction over the project area); and
(iv) A statement that any person interested in commenting on the application or proposal's feasibility and alternatives to it may do so by providing such comments to FmHA or its successor agency under Public Law 103-354 within 30 days following the date of publication. (Specify the FmHA or its successor agency under Public Law 103-354 office processing the application or proposal for receipt of comments.)
Further consideration of the application or proposal must be delayed until expiration of the public comment period. Consequently, publication of the notice as early as possible in the review process is both in the public's and the applicant's interest. Any comments received must be considered and addressed in the subsequent Agency analysis of alternatives and mitigation measures. It should be understood that scheduling a public information meeting is not required but may be helpful based on the number of comments received and types of issues raised.
(c)
If the results of the approving official(s) review differs from the preparer's recommendations, the former will ensure that the findings are appropriately documented in
(ii) No Practicable Alternative Exists—On the other hand, if the preparer concludes that there is no practicable alternative to the conversion, the preparer must then continue with step 2b(3)(d) of this exhibit, immediately below.
(d)
(e)
(i) The application would result in the direct or indirect conversion of important farmland and (is/is not) compatible with State, unit of local government, or private programs and policies to protect farmland. It is recommended that FmHA or its successor agency under Public Law 103-354 determine, based upon the attached analysis, that there is no practicable alternative to this and that the application contains all practicable measures for reducing the amount of conversion (or limiting the extent of any identified incompatibility.)
(ii) The application would result in direct or indirect conversion of important farmland and (is/is not) incompatible with State, unit of local government, or private programs and policies to protect farmland. It is recommended that FmHA or its successor agency under Public Law 103-354 determine, based upon the attached analysis, that there is a practicable alternative to this action, and the processing of this application be discontinued.
(f)
3.
(a) Those facilities which produce, use, or store highly volatile, flammable, explosive, toxic or water-reactive materials;
(b) Schools, hospitals, and nursing homes which are likely to contain occupants who may not be sufficiently mobile to avoid the loss of life or injury during flood and storm events;
(c) Emergency operation centers or data storage centers which contain records or services that any become lost or inoperative during flood and storm events; and
(d) Multi-family housing facilities designed primarily (over 50 percent) for handicapped individuals.
(2) Threshold of Impact—The Executive orders differ from the Act and the Departmental Regulation in that the Executive orders' requirements apply not only to the conversion of floodplains or wetlands but to any impacts upon them. Impacts are defined as changes in the natural values and functions
b.
(2) FmHA or its Successor Agency under Public Law 103-354-Owned Real Property—The requirement in paragraph 3 b (1) immediately above also applies to any substantial improvements made to FmHA or its successor agency under Public Law 103-354-owned real property with the exception of the public notice requirements of this exhibit. Irrespective of any improvements, whenever FmHA or its successor agency under Public Law 103-354 real property located in a floodplain or wetland is proposed for lease or sale, the official responsible for the conveyance must determine if the property can be safely used. If not, the property should not be sold or leased. Otherwise, the conveyance must specify those uses that are restricted under identified Federal, State, and local floodplains or wetlands regulations as well as other appropriate restrictions, as determined by the FmHA or its successor agency under Public Law 103-354 official responsible for the conveyance, to the uses of the property by the leasee or purchaser and any successors, except where prohibited by law. Appropriate restrictions will be developed in consultation with the U.S. Fish and Wildlife Service (FWS) as specified in the Memorandum of Understanding with FWS contained in subpart LL of part 2000 of this chapter. Applicable restrictions will be incorporated into quitclaim deeds with the consent and approval of the Regional Attorney, Office of the General Counsel. Upon application by the owner of any property so affected and upon determination by the appropriate FmHA or its successor agency under Public Law 103-354 official that the condition for which a deed restriction was imposed no longer exists, the restriction clause may be released. A listing of any restrictions shall be included in any notices announcing the proposed sale or lease of the property. At the time of first inquiry, prospective purchasers must be informed of the property's location in a floodplain or wetland and the use restrictions that will apply. A written notification to this effect must be provided to the prospective purchaser who must acknowledge the receipt of the notice. See Item 3 d of this exhibit and subpart C of part 1955 of this chapter for guidance on the proper formats to be used with respect to notices and deed restrictions. The steps and analysis conducted to comply with the requirements of this paragraph must be documented in the environmental review document for the proposed lease or sale.
c.
(2) Nonstructural Mitigation Measures—Mitigation measures under the Executive orders are intended to serve the following three purposes: reduce the risks to human safety, reduce the possible damage to structures, and reduce the disruption to the natural values and functions of floodplains and wetlands. More traditional structural measures, such as filling in the floodplain, cannot accomplish these three purposes and, in fact, conflict with the third purpose. Nonstructural flood protection methods, consequently, must be given priority consideration. These methods are intended to preserve, restore, or imitate natural hydrologic conditions and, thereby, eliminate or reduce the need for structural alteration of water bodies or their associated floodplains and wetlands. Such methods may be either physical or managerial in character. Nonstructural flood protection methods are measures which:
(a) Control the uses and occupancy of floodplains and wetlands, e.g., floodplain zoning and subdivision regulations;
(b) Preserve floodplain and wetland values and functions through public ownership; e.g., fee title, easements and development rights;
(c) Delay or reduce the amount of runoff from paved surfaces and roofed structures discharged into a floodway, e.g., construction of detention basins and use of flow restricting barriers on roofs;
(d) Maintain natural rates of infiltration in developed or developing areas, e.g., construction of seepage or recharge basins and minimization of paved areas;
(e) Protect streambanks and shorelines with vegetative and other natural cover, e.g., use of aquatic and water-loving woody plants;
(f) Restore and preserve floodplain and wetland values and functions and protect life and property through regulation, e.g., flood-proofing building codes which require all structures and installations to be elevated on stilts above the level of the base flood; and
(g) Control soil erosion and sedimentation, e.g., construction of sediment basins, stabilization of exposed soils with sod and minimization of exposed soil.
(3) Avoid Filling in Floodplains—As indicated above, the Executive orders place a major emphasis on not filling in floodplains in order to protect their natural values and functions. Executive Order 11988 states “agencies shall, wherever practicable, elevate structures above the base flood level rather than filling in the land.”
(d)
(a) A description of the proposd action, its location, and the surrounding area;
(b) A description of the floodplain or wetland impacts and the mechanisms to be used to mitigate them;
(c) A statement of why the proposed action must be located in a floodplain or a wetland;
(d) A description of all significant facts considered in making this determination;
(e) A statement indicating whether the actions conform to applicable State or local floodplain protection standards; and
(f) A statement listing other involved agencies and individuals.
(2) Private Party Notification—For all actions to be located in floodplains or wetlands in which a private party is participating as an applicant, purchaser, or financier, it shall be the responsibility of the approving official to inform in writing all such parties of the hazards associated with such locations.
4.
1. FmHA or its successor agency under Public Law 103-354 shall implement the consultation procedures required under Section 7 of the Endangered Species Act as specified in 50 CFR 402. It is important to note that these consultation procedures apply to the disposal of real property by FmHA or its successor agency under Public Law 103-354 and to all FmHA or its successor agency under Public Law 103-354 applications for financial assistance and subdivision approval, including those applications which are exempt from environmental assessments. (See § 1940.310.) Unless repeated in this paragraph, the definitions for the terms utilized are found in 50 CFR 402.02.
2. State Directors shall ensure that State, District, and County Offices maintain current publications of listed and proposed species as well as critical habitats found in their respective jurisdictions.
3. When an application to FmHA or its successor agency under Public Law 103-354 involves financial assistance or permit approval from another Federal agency(s), the FmHA or its successor agency under Public
4. Each disposal action, application for financial assistance or subdivision approval shall be reviewed by the FmHA or its successor agency under Public Law 103-354 official responsible for completing environmental assessments in order to determine if the proposal either may affect a listed species or critical habitat or is likely to jeopardize the continued existence of a proposed species or result in the destruction or adverse modification of a proposed critical habitat.
a. For applications subject to environmental assessments, this review shall be accomplished as part of the assessment.
b. For those applications that are excluded from an environmental assessment, this review shall be documented as part of Form FmHA or its successor agency under Public Law 103-354 1940-22, “Environmental Checklist For Categorical Exclusions,” and shall be accomplished as early as possible after receipt of the application and prior to approval of the application.
c. For applications subject to an environmental impact statement, FmHA or its successor agency under Public Law 103-354 shall request from the Area Manager, FWS, and the Regional Director, NMFS, a list of the proposed and listed species that may be in the area of the proposal. Within 30 days, the FWS and NMFS will respond to FmHA or its successor agency under Public Law 103-354 with this list. FmHA or its successor agency under Public Law 103-354 shall then conduct, as part of the process of preparing the draft environmental impact statement, a biological assessment of these species to determine which species are in the area of the proposal and how they may be affected. This biological assessment should be completed within 180 days or a time mutually agreed upon between FmHA or its successor agency under Public Law 103-354 and FWS or NMFS. Upon completion of the biological assessment, if FmHA or its successor agency under Public Law 103-354 determines either that the proposal may affect a listed species or critical habitat or is likely to jeopardize the continued existence of proposed species or result in the destruction or adverse modification of proposed critical habitat, the formal consultation procedures shall be initiated as specified in paragraph 7b below. To the extent practical, these procedures shall be concluded and their results reflected in the draft EIS. For all draft EISs in which FmHA or its successor agency under Public Law 103-354 determines there will be no effect upon a listed or proposed species or critical habitat and FWS or NMFS indicated the presence of such species upon the initial inquiry, a copy of the draft shall be provided to that agency for review and comment.
5. As indicated in paragraph 4 above, the focus of this review process is to determine if the proposal will affect a listed species or critical habitat or is likely to jeopardize the continued existence of a proposed species or result in the destruction or adverse modification of a proposed critical habitat. Because this impact terminology is specific to the Act, it is important to understand its meaning.
a. To jeopardize the continued existence of a species means to engage in a project which reasonably would be expected to reduce the reproduction, numbers, or distribution of a listed species to such an extent as to appreciably reduce the likelihood of the survival and recovery of that species in the wild. The level of reduction necessary to constitute jeopardy would be expected to vary among listed species.
b. The destruction or adverse modification of a critical habitat means a direct or indirect alteration of critical habitat which appreciably diminishes the value of that habitat for survival and recovery of a listed species. Such alterations include but are not limited to those diminishing the following requirements for:
(i) Space for individual and population growth and for normal behavior;
(ii) Food, water, air, light, minerals, or other nutritional or physiological requirements;
(iii) Cover or shelter;
(iv) Sites for breeding, reproduction, or rearing of offspring; and
(v) Habitats that are protected from disturbances or are representative of the geographical distribution of listed species.
6. It is also important to note that the consultation procedures differ when the subject of the consultation is a listed species or critical habitat as opposed to a proposed species or critical habitat. The latter are defined as those that the Secretary of Interior or Commerce are considering for listing and have so proposed through notification in the
7. In initiating the review process for a project, the list of species and critical habitats, including proposed, shall be examined to determine the potential for impacts. Projects planned within established communities are less likely to affect listed or proposed species or their critical habitat. Projects to be located in remote areas, heavily forested areas and/or previously undisturbed areas are more likely to affect these species. For projects located in such areas, the reviewer shall, at a minimum, discuss the project's potential impact on listed or proposed species with officials of the appropriate State wildlife protection agency or the Area Manager, FWS, or the Regional Director, NMFS, as appropriate. The latter organization generally has responsibility for marine species. The specific list of species under NMFS's jurisdiction can be found at 50 CFR 222.23(a) and 227.4. Such discussions shall be considered as informal consultations and are not a substitute for the required consultation process outlined below.
a. Whenever the reviewer, after reviewing the list and contacting appropriate experts, formally determines that the proposal will have no effect on a listed or proposed species or its critical habitat, these review procedures are completed, unless new information comes to light as discussed in paragraph 9 of this exhibit, or consultation is requested by the appropriate Area Manager, FWS, or Regional Director, NMFS.
b. If the reviewer determines there may be an effect on a listed species or a critical habitat or is unable to make a clear determination, the reviewer shall so inform the SEC (assuming the reviewer is not the SEC). The latter shall either (i) convey a written request for consultation, along with available information to the appropriate Area Manager, FWS or Regional Director, NMFS, for the Federal region where the proposal will be carried out, or (ii) request Program Support Staff (PSS) to perform such consultation. FmHA or its successor agency under Public Law 103-354 shall initiate this formal consultation process and not the applicant. See paragraph 4.c. of this exhibit for initiating consultation where an environmental impact statement is being done for the application. Until the consultation process is completed, as outlined in 50 CFR 402.04, FmHA or its successor agency under Public Law 103-354 shall not approve the application. Should the need for consultation be identified after application approval, FmHA or its successor agency under Public Law 103-354 shall refrain from making any irreversible or irretrievable commitment of resources which would foreclose the consideration of modifications or alternatives to the identified activity or program.
8. Several possible responses may result from initiation of the formal consultation process with each requiring further specific actions.
a. Whenever the Area Manager, FWS, or Regional Director, NMFS, informs FmHA or its successor agency under Public Law 103-354 that insufficient information exists to conclude the consultation process, the SEC with assistance as feasible from the FWS or NMFS and State sources of expertise shall then obtain additional information and conduct, as needed, biological surveys or studies to determine how the proposal may affect listed species or their critical habitat. The cost and performance of such studies shall be handled in the same manner as in the preparation of an Environmental Impact Statement. (See § 1940.336 of this subpart.)
b. Whenever the Area Manager, FWS, or Regional Director, NMFS, responds that the proposal will either promote the conservation of a listed species or is not likely to jeopardize the continued existence of a listed or proposed species or result in the destruction or adverse modification of its critical habitat, the FmHA or its successor agency under Public Law 103-354 reviewer shall formally make a similar determination, attaching the response as documentation. This concludes the formal consultation process unless new information comes to light as discussed in paragraph 9 of this exhibit.
c. Whenever the results of the consultation process include recommendations by the Area Manager, FWS, or Regional Director, NMFS, for modifications to the project which would enhance the conservation and protection of a listed species or its critical habitat, the State Director shall review these recommendations and require that they be incorporated into the project as either design changes or special conditions to the offer of assistance. If the State Director does not believe the recommendations can be
d. Whenever the appropriate Area Manager, FWS, or Regional Director, NMFS, determines that the proposal is likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of its critical habitat, the FmHA or its successor agency under Public Law 103-354 applicant shall be so informed and the project denied on this basis. However, if the State Director believes that funding or approval of the application is (i) of national, regional, or great local significance, and (ii) that there are no reasonable and prudent alternatives to avoiding the listed species impact, the State Director can request the Administrator, through PSS, to review the proposal and the results of the consultation process. Based upon this review, the Administrator shall either inform the State Director that a request for an exemption from section 7 of the Endangered Species Act is not warranted and the application shall be denied or, if the Administrator believes it is warranted, shall request an exemption from the Endangered Species Committee established by section 7(e) of the Act. No action shall be taken by the State Director on the application until the Administrator informs the State Director of the results of the exemption request.
9. Once completed, the consultation process shall be reinitiated by FmHA or its successor agency under Public Law 103-354 or upon request of the appropriate Area Manager, FWS, or Regional Director, NMFS, if:
a. New information or modification of the proposal reveals impacts that may affect listed or proposed species or their habitats; or
b. A new species is listed that may be affected by the proposal.
10. In completing the above compliance procedures, particularly when consulting with the referenced agencies, formally or informally, the preparer of the environmental review document will request information on whether any Category I or Category II species may be present within the project area. These are candidate species; they are presently under consideration for listing under section 4 of the Endangered Species Act. Category I species are those for which FWS currently has substantial date on hand to support the biological appropriateness of proposing to list the species as endangered or threatened. Currently data are being gathered concerning essential habitat needs and, for some species, data concerning the precise boundaries of critical habitat designations. Development and publication of proposed rules on such species is anticipated. Category II comprises species for which information now in the possession of the FWS indicates that proposing to list the species as endangered or threatened is possibly appropriate but for which conclusive data on biological vulnerability and threat(s) are not currently available to presently support proposed rules. Whenever a Category I or II species may be affected, the preparer of the environmental review document will determine if the proposed project is likely to jeopardize the continued existence of the species. Whenever this determination is made, the same compliance procedures specified in paragraph 6 of this exhibit for a proposed species will be followed. The purpose of the requirements of this paragraph is to comply with the National Environmental Policy Act as well as Departmental Regulation 9500-4, Fish and Wildlife Policy, which specifies that USDA agencies will avoid actions which may cause a species to become threatened or endangered.
1. Each application for financial assistance or subdivision approval as well as the proposed disposal of real property by FmHA or its successor agency under Public Law 103-354 shall be reviewed to determine if it will affect a river or portion of it which is either included in the National Wild and Scenic Rivers System, designated for potential addition to the system, or identified in the Nationwide Inventory prepared by the National Park Service (NPS) in the Department of the Interior. The Nationwide Inventory identifies those river segments that, after preliminary review, appear to qualify for inclusion in the system. (For purposes of this subpart, river segments in the Nationwide Inventory shall be treated the same as segments within the system with the exception of paragraph 8.) For applications subject to environmental assessments, the review shall be accomplished as part of the assessment. For applications that are excluded from an environmental assessment, this review shall be documented as part of Form FmHA or its successor agency under Public Law 103-354 1940-22, “Environmental Checklist For Categorical Exclusions,” within the reviewing office and shall be accomplished as early as possible after receipt of the application and prior to approval of the application. The FmHA or its successor agency under Public Law 103-354 official responsible for completing the environmental assessment shall accomplish this review. (See § 1940.316 of this subpart.)
2. In order to effectively implement this review, State Directors shall ensure that State, District and County Offices maintain
3. For applications for water resources projects, as defined in § 1940.302(i) of this subpart, the purpose of this review shall be to determine whether the proposal would have a direct and adverse effect on the values which served as the basis for the river's inclusion in the system or designation for potential addition. For other applications, the purpose of the review shall be to determine if the proposal would invade the river area or unreasonably diminish the scenic, recreational, and fish and wildlife values present in the area. To make these determinations, the reviewer shall consult with the appropriate regional office of NPS if the proposal (i) would be located within one-quarter mile of the banks of the river, (ii) involves withdrawing water from the river or discharging water to the river via a point source, or (iii) would be visible from the river. The appropriate regional office of the Forest Service (FS) shall be contacted under similar circumstances when the effected river is on FS lands. Consultation shall be initiated by a written request for comments on the potential impacts accompanied by a description of the project and its location. The reviewer shall consult in other instances when the likelihood of an impact on a river in the system is identified as part of the environmental review. When the reviewer determines there is no potential impact on such a river, the documentation of this determination concludes the review process, unless reinitiation is required under paragraph 10 of this exhibit. In all other cases, the review is completed as specified below in paragraphs 4 through 9 of this exhibit.
4. If the review is at the County or District Office level, the reviewer can request the State Director (see § 1940.307 of this subpart) to perform the above consultation. The State Director can in turn make a similar request of the National Office. If not requested to perform the consultation for applications approvable at the County and District Office levels, the SEC shall be informed whenever NPS or FS advises that there is a potential for an adverse impact on a river within the system or that protective measures need to be included or designed into the proposal. In all cases, consultation shall be initiated by FmHA or its successor agency under Public Law 103-354 and not the applicant. Until consultation is complete, FmHA or its successor agency under Public Law 103-354 shall not approve the application. Should the need for consultation be identified after application approval, FmHA or its successor agency under Public Law 103-354 shall, if still within its power at the time of identification, refrain from making any irreversible or irretrievable commitments of resources which would foreclose the consideration of modifications or alternatives to the project.
5. If NPS or FS advises there is no potential for an adverse effect as described in paragraph 3 of this exhibit, this review process is concluded, unless the need to reinitiate arises. (See paragraph 10 of this exhibit.)
6. Whenever the results of the consultation process include recommendations by NPS or FS to modify the proposal in order to avoid an adverse effect, as described in paragraph 3 above, the State Director shall review these recommendations and require that they be incorporated into the project as either design changes or special conditions to the offer of assistance. If the State Director does not believe that the Regional Director's recommendations can be so adopted, the Administrator shall be requested to review the recommendations and to assist in the further resolution of the matter.
7. If NPS or FS advises that the proposal will have an unavoidable adverse effect, as described in paragraph 3 of this exhibit, on a river segment which is either included in the National Wild and Scenic Rivers System or designated for potential addition to the system, the FmHA or its successor agency under Public Law 103-354 applicant will be informed by the reviewing office and the application denied on this basis. However, if the State Director disagrees with this determination, the State Director can request the Administrator to review the proposal and attempt to further resolve the matter. The specific reasons for disagreement along with supporting documentation must be included in such a request. Based upon a review of this request, the Administrator shall either inform the State Director that no further consultation is warranted and the application shall be denied or shall request the headquarters staff of NPS or FS to further review the matter. No action shall be taken by the State Director on the application until the Administrator informs the State Director of the results of this further review and consultation.
8. If NPS or FS advises that the proposal will have an adverse effect, as described in paragraph 3 of this exhibit, on a river segment identified in the Nationwide Inventory, the reviewer shall further consult with NPS or FS in order to formulate adequate measures or modification to avoid or mitigate the potential adverse effect. The purposes of such measures or modifications is to ensure that the proposal does not effectively foreclose the designation of a wild, scenic, or recreational river segment. Once concurrence is reached and documented with NPS or FS regarding modifications, the State Director shall require that they be incorporated into the proposal as either design changes or special conditions to the offer of assistance. If the State Director is not able
9. If an application involves financial assistance or permit approval from another Federal Agency, the FmHA or its successor agency under Public Law 103-354 reviewer shall work with the other agency(s) to determine a lead Agency for the consultation process. When FmHA or its successor agency under Public Law 103-354 is not the lead Agency, the reviewer shall ensure that the lead Agency informs NPS or FS of FmHA or its successor agency under Public Law 103-354's involvement.
10. Once completed, the consultation process shall be reinitiated by FmHA or its successor agency under Public Law 103-354 if new information or modification of the proposal reveals impacts to a river within the System or Nationwide Inventory.
1. The Act applies to barrier islands that Congress has designated for inclusion in the Coastal Barrier Resources System. Since coastal barriers are only found in East and Gulf Coast States, no other State Offices fall under the requirements of the Act and, therefore, need be concerned with these implementation procedures.
2. On coastal barriers that are included in the system, the Act prohibits any new expenditures or new financial assistance by the Federal Government. There are some limited exceptions that are contained in Section 6 of the Act and listed in exhibit L of this subpart. Consequently, all of the following actions must be reviewed by the environmental reviewer to determine if they would be located within the System: any application for financial assistance, any proposed direct expenditure of FmHA or its successor agency under Public Law 103-354 funds for construction or maintenance purposes, any request for subdivision approval, and any proposed disposal of real property that includes any form of financial assistance or subsidy to the purchaser. The boundaries of the system can be determined by reviewing a series of maps passed with the legislation and distributed by the Department of the Interior. Each State Director is responsible for ensuring that those field offices having components of the system within their jurisdictions are aware of the system's boundaries therein.
3. Exhibit L lists the six categories of exceptions, that is, those actions that may be taken within the system. No exception may be implemented, however, without first consulting with the Secretary of the Interior. It should also be noted that the sixth category is more limited than the first five. Besides meeting the consultation requirement for this sixth category, the sponsoring Agency must also determine whether the proposed exception is consistent with the purposes of the Act.
4. For those actions that are reviewed and determined not to be within the System, the environmental reviewer must document this result by checking the appropriate compliance blocks on either Form FmHA or its successor agency under Public Law 103-354 1940-22, “Environmental Checklist for Categorical Exclusions,” or Form FmHA or its successor agency under Public Law 103-354 1940-21, “Environmental Assessment for Class I actions,” or by so stating this result in the environmental assessment for Class II Actions (exhibit H), depending upon whichever format is applicable to the action under review.
5. For those actions that would be located within the system, one of the following two steps must be taken:
a. If the environmental reviewer concludes that the action does not meet the criteria for an exception, as listed in exhibit L, the reviewer shall so inform the approving official and a final determination made in the manner indicated in § 1940.316 of this subpart. If this determination is consistent with the environmental reviewer's conclusion, the action must be denied by the approving official and the affected applicant or party informed of the reason for denial. If it is determined that the action may qualify for an exception, the steps identified in Item b immediately below must be implemented prior to a decision on this question.
b. If the environmental reviewer concludes that the proposed action may meet the exception criteria, the approving official must be so informed. Whenever the approving official agrees or makes a similar determination as a result of the review conducted in Item a immediately above, consultation shall be initiated with the Secretary of the Interior by either the State Director or the Administrator for a National Office activity. FmHA or its successor agency under Public Law 103-354 shall request the Secretary's views as to whether the exception criteria are met and shall provide the Secretary with the following information:
(1) A detailed description of the action and its location;
(2) A description of the affected environment within the System and the impacts of the proposed action;
(3) The applicable exception criteria and FmHA or its successor agency under Public Law 103-354's reasons for believing they apply to this action; and
(4) If a Section 6(a)(6) exception is claimed, FmHA or its successor agency under Public Law 103-354's reasons for believing the action to be consistent with the purposes of the Act.
Should the Secretary concur in the exception criteria being met, that portion of the environmental assessment relating to compliance with the Act shall be completed and the corresponding documentation attached. Should the Secretary not concur, a final decision on the approval or denial of the action must be made by the Administrator.
In completing this assessment, it is important to understand the comprehensive nature of the impacts which must be analyzed. Consideration must be given to all potential impacts associated with the construction of the project, its operation and maintenance, the operation of all identified primary beneficiaries, and the attainment of the project's major objectives, whether they be an increased housing stock, community improvement, economic development, or greater agricultural productivity. This last category, the attainment of the project's major objectives, often induces or supports changes in population densities, land uses, community services, transportation systems and resource consumption. The scope of the assessment is broadened even further when there are related activities involved. The impacts of these activities must also be assessed.
The preparer will consult as indicated in § 1940.318(b) of this subpart with appropriate experts from Federal, State, and local agencies, universities, and other organizations or groups whose views could be helpful in the assessment of potential impacts. In so doing, each discussion which is utilized in reaching a conclusion with respect to the degree of an impact will be summarized in the assessment as accurately as possible and include the name, title, phone number, and organization of the individual contacted, plus the date of contact. Related correspondence should be attached to the assessment.
The FmHA or its successor agency under Public Law 103-354 environmental assessment shall be prepared in the following format. It shall address the listed items and questions and contain as attachments the indicated descriptive materials, as well as the environmental information submitted by the applicant, Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information.”
The assessment has been designed to cover the wide variety of projects and environments with which the Agency deals. Consequently, not every issue or potential impact raised in the assessment may be relevant to each project. The purpose of the format is to give the preparer an understanding of a standard range of impacts, environmental factors, and issues which may be encountered. In preparing an assessment, each topic heading identified by a Roman numeral and each environmental factor listed under topic heading IV, such as air quality, for example, must be addressed.
The amount of analysis and material that must be provided will depend upon the type and size of the project, the environment in which it is located, and the range and complexity of the potential impacts. The amount of analysis and detail provided, therefore, must be commensurate with the magnitude of the expected impact. The analysis of each environmental factor (i.e., water quality) must be taken to the point that a conclusion can be reached and supported concerning the degree of the expected impact with respect to that factor.
For example, a small community center may not require detailed information on air emissions or solid waste management, but an industrial facility would. Similarly, an irrigation project for a farming operation would concentrate on such factors as water quality and fish and wildlife, rather than land use changes. The extension of a water or sewer system or the approval of a subdivision, on the other hand, would have to give close attention to all factors, with potential land use changes being a particularly important one.
Identify the name, project number, location, and specific elements of the project along with their sizes, and, when applicable, their design capacities. Indicate the purpose of the project, FmHA or its successor agency under Public Law 103-354's position regarding the need for it, and the extent or area of land to be considered as the project site.
Identify any existing businesses or major developments that will benefit from the project and those which will expand or locate in the area because of the project. Specify by name, product, service, and operations involved.
Identify any related activities which are defined as interdependent parts of a FmHA or its successor agency under Public Law 103-354 action. Such undertakings are considered interdependent parts whenever they either make possible or support the FmHA or its successor agency under Public Law 103-354 action or are themselves induced or supported by the FmHA or its successor agency under Public Law 103-354 action or another related activity. These activities may have been completed in the very recent past and are now operational, or they may reasonably be expected to be accomplished in the near future. Related activities may or may not be
In completing the remainder of the assessment, it must be remembered that the impacts to be addressed are those which stem from the project, the primary beneficiaries, and the related activities.
Describe the project site and its present use. Describe the surrounding land uses; indicate the directions and distances involved. The extent of the surrounding land to be considered depends on the extent of the impacts of the project, its related activities, and the primary beneficiaries. Unique or sensitive areas must be pointed out. These include residential, schools, hospitals, recreational, historical sites, beaches, lakes, rivers, parks, floodplains, wetlands, dunes, estuaries, barrier islands, natural landmarks, unstable soils, steep slopes, aquifer recharge areas, important farmlands and forestlands, prime rangelands, endangered species habitats or other delicate or rare ecosystems.
Attach adequate location maps of the project area, as well as (1) a U.S. Geological Survey “15 minute” (“7
1. Air Quality. Discuss, in terms of the amounts and types of emissions to be produced, all aspects of the project including beneficiaries' operations and known indirect effects (such as increased motor vehicle traffic) which will affect air quality. Indicate the existing air quality in the area. Indicate if topographical or meteorological conditions hinder or affect the dispersal of air emissions. Evaluate the impact on air quality given the types and amounts of projected emissions, the existing air quality, and topographical and meterological conditions. Discuss the project's consistency with the State's air quality implementation plan for the area, the classification of the air quality control region within which the project is located, and the status of compliance with air quality standards within that region. Cite any contacts with appropriate experts and agencies which must issue necessary permits.
2. Water Quality. Discuss, in terms of amounts and types of effluents, all aspects of the project including primary beneficiaries' operations and known indirect effects which will affect water quality. Indicate the existing water quality of surface and/or underground water to be affected. Evalute the impacts of the project on this existing water quality. Indicate if an aquifer recharge area is to be adversely affected. If the project lies within or will affect a sole source aquifer recharge area as designated by EPA, contact the appropriate EPA regional office to determine if its review is necessary. If it is, attach the results of its review.
Indicate the source and available supply of raw water and the extent to which the additional demand will affect the raw water supply. Describe the wastewater treatment system(s) to be used and indicate their capacity and their adequacy in terms of the degree of treatment provided. Discuss the characteristics and uses of the receiving waters for any sources of discharge. If the treatment systems are or will be inadequate or overloaded, describe the steps being taken for necessary improvements and their completion dates. Compare such dates to the completion date of the FmHA or its successor agency under Public Law 103-354 project. Analyze the impacts on the receiving water during any estimated period of inadequate treatment.
Discuss the project's consistency with the water quality planning for the area, such as EPA's Section 208 area-wide waste treatment management plan. Discuss the project's consistency with applicable State water quality standards to include a discussion of whether or not the project would either impair any such standard or fail to meet antidegradation requirements for point or nonpoint sources. Describe how surface runoff is to be handled and the effect of erosion on streams.
Evaluate the extent to which the project may create shortages for or otherwise adversely affect the withdrawal capabilities of other present users of the raw water supply, particularly in terms of possible human health, safety, or welfare problems.
For projects utilizing a groundwater supply, evaluate the potential for the project to exceed the safe pumping rate for the aquifer to the extent that it would (1) adversely affect the pumping capability of present users, (2) increase the likelihood of brackish or saltwater intrusion, thereby decreasing water quality, or (3) substantially increase surface subsidence risks.
For projects utilizing a surface water supply, evaluate the potential for the project to (1) reduce flows below the minimum required for the protection of fish and wildlife or (2) reduce water quality standards below those established for the stream classification at the point of withdrawal or the adjacent downstream section.
Cite contacts with appropriate experts and agencies that must issue necessary permits.
3. Solid Waste Management. Indicate all aspects of the project including primary beneficiaries' operations, and known indirect effects which will necessitate the disposal of solid wastes. Indicate the kinds and expected quantities of solid wastes involved and the disposal techniques to be used. Evaluate the adequacy of these techniques especially in relationship to air and water quality. Indicate if recycling or resource recovery programs are or will be used. Cite any contacts with appropriate experts and agencies that must issue necessary permits.
4. Land Use. Given the description of land uses as previously indicated, evaluate (a) the effect of changing the land use of the project site and (b) how this change in land use will affect the surrounding land uses and those within the project's area of environmental impact. Particularly address the potential impacts to those unique or sensitive areas discussed under Section III, Description of Project Area, which are not covered by the specific analyses required in Sections V-XI. Describe the existing land use plan and zoning restrictions for the project area. Evaluate the consistency of the project and its impacts on these plans. For all actions subject to the requirements of exhibit M of this subpart indicate (a) whether or not highly erodible land, wetland or converted wetland is present, (b) if any exemption(s) applies to the requirements of exhibit M, (c) the status of the applicant's eligibility for an FmHA or its successor agency under Public Law 103-354 loan under exhibit M and (d) any steps the applicant must take prior to loan approval to retain or retain its eligibility. Attach a completed copy of Form SCS-CPA-26, “Highly Erodible Land and Wetland Conservation Determination,” for the action.
5. Transportation. Describe available facilities such as highways and rail. Discuss whether the project will result in an increase in motor vehicle traffic and the existing roads' ability to safely accommodate this increase. Indicate if additional traffic control devices are to be installed. Describe new traffic patterns which will arise because of the project. Discuss how these new traffic patterns will affect the land uses described above, especially residential, hospitals, schools, and recreational. Describe the consistency of the project's transportation impacts with the transportation plans for the area and any air quality control plans. Cite any contact with appropriate experts.
6. Natural Environment.—Indicate all aspects of the project including construction, beneficiaries' operations, and known indirect effects which will affect the natural environment including wildlife, their habitats, and unique natural features. Cite contacts with appropriate experts. If an area listed on the National Registry of Natural Landmarks may be affected, consult with the Department of Interior and document these consultations and any agreements reached regarding avoidance or mitigation of potential adverse impacts.
7. Human Population. Indicate the number of people to be relocated and arrangements being made for this relocation. Discuss how impacts resulting from the project such as changes in land use, transportation changes, air emissions, noise, odor, etc. will affect nearby residents and users of the project area and surrounding areas. Discuss whether the proposal will accommodate any population increases and, if so, describe the potential impacts of these increases on the area's public and community services such as schools, health care, social services, and fire protection. Cite contacts with appropriate experts.
8. Construction. Indicate the potential effects of construction of the project on air quality, water quality, noise levels, solid waste disposal, soil erosion and siltation. Describe the measures that will be employed to limit adverse effects. Give particular consideration to erosion, stream siltation, and clearing operations.
9. Energy Impacts. Indicate the project's and its primary beneficiaries' effects on the area's existing energy supplies. This discussion should address not only the direct energy utilization, but any major indirect utilization resulting from the siting of the project. Describe the availability of these supplies to the project site. Discuss whether the project will utilize a large share of the remaining capacity of an energy supply or will create a shortage of such supply. Discuss any steps to be taken to conserve energy.
10. Discuss any of the following areas which may be relevant: noise, vibrations, safety, seismic conditions, fire-prone locations, radiation, and aesthetic considerations. Cite any disucssion with appropriate experts.
* Complete only if coastal or Great Lakes State.
Indicate if the project is within or will impact a coastal area defined as such by the State's approved Coastal Zone Management Program. If so, consult with the State agency responsible for the Program to determine the project's consistency with it. The results of this coordination shall be included in the assessment and considered in completing the environmental impact determination and environmental findings (Item XXI below).
In this Section, the environmental reviewer shall detail the steps taken to comply
If there will be an effect, discuss all of the steps and protective measures taken to complete the advisory Council's regulations. Describe the affected property and the nature of the effect. Attach to the assessment the results of the coordination process with the Advisory Council on Historic Preservation.
Indicate whether the project will affect a river or portion of it which is either included in the National Wild and Scenic Rivers System or designated for potential addition to the system. This analysis shall be conducted through discussions with the appropriate regional office of the National Park Service or the Forest Service when its lands are involved, as well as the appropriate State agencies having implementation authorities. See exhibit E for specific implementation instructions for this Act. A summary of discussions held or any required formal coordination shall be included in the assessment and considered in completing the environmental impact determination and environmental findings (Item XXI below).
Indicate whether the project will either (1) affect a listed endangered or threatened species or critical habitat or (2) adversely affect a proposed critical habitat for an endangered or threatened species or jeopardize the continued existence of a proposed endangered or threatened species. This analysis will be conducted in consultation with the Fish and Wildlife Service and the National Marine Fisheries Service, when appropriate. Any formal or informal consultations conducted with these agencies as well as any State wildlife protection agency will also address impacts to Category I and Category II species. See exhibit D of this subpart for specific implementation instructions.
The results of any required coordination shall be included in the assessment along with any completed biological opinion and mitigation measures to be required for the project. These factors shall be considered in completing the environmental impact determination.
Indicate whether the project will either directly or indirectly convert an important land resource(s) identified in the Act or Departmental Regulation, other than floodplains or wetlands which should be addressed below in Item X of this exhibit. If a conversion may result, determine if there is a practicable alternative to avoiding it. If there is no such alternative, determine whether all practicable mitigation measures are included in the project. Document as an attachment these determinations and the steps taken to inform the public, locate alternatives, and mitigate potential adverse impacts. See exhibit C of this subpart for specific implementation guidance.
Indicate whether the project is either located within a 100-year floodplain (500-year floodplain for a critical action) or a wetland or will impact a floodplain or wetland. If so, determine if there is a practicable alternative project or location. If there is no such alternative, determine whether all practicable mitigation measures are included in the project and document as an attachment these determinations and the steps taken to inform the public, locate alternatives, and mitigate potential adverse impacts. See the U.S. Water Resources Council's
Indicate whether the project is located within the Coastal Barrier Resources System. If so, indicate whether or not the project meets an exception criteria under the Act and the results of any consultation with the Secretary of the Interior regarding its qualification as an exception. See exhibit F of this subpart for specific implementation instructions as well as exhibit L for a listing of the exception criteria. (Those States not having any components of the system within their jurisdiction need not reference this item in their assessments.)
Indicate if the proposed project is subject to a State environmental policy act or similar regulation. Summarize the results of compliance with these requirements and attach available documentation. (See § 1940.328 of this subpart for further guidance.)
Attach the comments of State, regional, or local agencies (if this review process is required for the project) and respond to all comments that deal with the subject matters discussed in this assessment format or are otherwise of an environmental nature.
Indicate if another Federal Agency is participating in the project either through the provision of additional funds, a companion project, or a permit review authority. Summarize the results of the involved Agency's environmental impact analysis and attach available documentation. (See § 1940.318(d) of this subpart for further guidance.)
Discuss any negative comments or public views raised about the project and the consideration given to these comments. Indicate whether a public hearing or public information meeting has been held either by the applicant or FmHA or its successor agency under Public Law 103-354 to include a summary of the results and any objections raised. Indicate any other examples of the community's awareness of the project, such as newspaper articles or public notifications.
Summarize the cumulative impacts of this project and the related activities. Give particular attention to land use changes and air and water quality impacts. Summarize the results of the environmental impact analysis done for any of these related activities and/or your discussion with the sponsoring agencies. Attach available documentation of the analysis.
Summarize the potential adverse impacts of the proposal as pointed out in the above analysis.
Discuss the feasibility of alternatives to the project and their environmental impacts. These alternatives should include (a) alternative locations, (b) alternative designs, (c) alternative projects having similar benefits, and (d) no project. If alternatives have been fully discussed above in any of Items VI through X, simply reference that discussion.
Describe any measures which will be taken or required by FmHA or its successor agency under Public Law 103-354 to avoid or mitigate the identified adverse impacts. Analyze the environmental impacts and potential effectiveness of the mitigation measures. Such measures shall be included as special requirements or provisions to the offer of financial assistance or other appropriate approval document, if this action does not involve financial assistance.
Discuss the project's consistencies and inconsistencies with the Agency's environmental policies and the State Office's Natural Resource Management Guide. See §§ 1940.304 and 1940.305 for a discussion of these policies and exhibit B for a discussion of the guide.
The following recommendations shall be completed:
a. Based on an examination and review of the foregoing information and such supplemental information attached hereto, I recommend that the approving official determine that this project will have (#) a significant effect on the quality of the human environment and an Environmental Impact Statement must be prepared; will not have (#) a significant effect on the quality of the human environment.
b. I recommend that the approving official make the following compliance determinations for the below-listed environmental requirements.
c. I have reviewed and considered the types and degrees of adverse environmental impacts identified by this assessment. I have also analyzed the proposal for its consistency with FmHA or its successor agency under Public Law 103-354 environmental policies, particularly those related to important farmland protection, and have considered the potential benefits of the proposal. Based upon a consideration and balancing of these factors, I recommend from an environmental standpoint that the project
*See § 1940.316 of this subpart for listing of officials responsible for preparing assessment.
I have reviewed this environmental assessment and supporting documentation. Following are my positions regarding its adequacy and the recommendations reached by the preparer. For any matter in which I do not concur, my reasons are attached as exhibit __.
The attached environmental assessment has been completed for the subject proposal by the FmHA or its successor agency under Public Law 103-354 environmental reviewer. After reviewing the assessment and the supporting materials attached to it, I find that the subject proposal will not significantly affect the quality of the human environment. Therefore, the preparation of an environmental impact statement is not necessary.
I also find that the assessment properly documents the proposal's status of compliance with the environmental laws and requirements listed therein.
Insert signature and title of approving official as specified in § 1940.316 of this subpart. ____(Date).
The U.S. Fish and Wildlife Service (FWS) is presently preparing the National Wetlands Inventory. Each regional office of the FWS
*Quoted from section 6 of the Act, Pub. L. 97-348.
(a) Notwithstanding section 5, the appropriate Federal officer, after consultation with the Secretary, may make Federal expenditures or financial assistance available within the Coastal Barrier Resources System for—
(1) Any use or facility necessary for the exploration, extraction, or transportation of energy resources which can be carried out only on, in, or adjacent to coastal water areas because the use or facility requires access to the coastal water body;
(2) The maintenance of existing channel improvements and related structures, such as jetties, and including the disposal of dredge materials related to such improvements;
(3) The maintenance, replacement, reconstruction, or repair, but not the expansion, of publicly owned or publicly operated roads, structures, or facilities that are essential links in a larger network or system;
(4) Military activities essential to national security;
(5) The construction, operation, maintenance, and rehabilitation of Coast Guard facilities and access thereto; and
(6) Any of the following actions or projects, but only if the making available of expenditures or assistance therefor is consistent with the purposes of this Act:
(A) Projects for the study, management, protection and enhancement of fish and wildlife resources and habitats, including, but not limited to, acquisition of fish and wildlife habitats and related lands, stabilization projects for fish and wildlife habitats, and recreational projects.
(B) The establishment, operation, and maintenance of air and water navigation aids and devices, and for access thereto.
(C) Projects under the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 4601-4 through 11) and the Coastal Zone Management Act of 1972 (16 U.S.C. 1452 et seq.).
(D) Scientific research, including but not limited to aeronautical, atmospheric, space, geologic, marine, fish and wildlife and other research, development and applications.
(E) Assistance for emergency actions essential to the saving of lives and the protection of property and the public health and safety, if such actions are performed pursuant to sections 305 and 306 of the Disaster Relief Act of 1974 (42 U.S.C. 5145 and 5146) and section 1362 of the National Flood Insurance Act of 1968 (42 U.S.C. 4103) and are limited to
(F) The maintenance, replacement, reconstruction, or repair, but not the expansion, of publicly owned or publicly operated roads, structures, or facilities.
(G) Nonstructural projects for shoreline stabilization that are designed to mimic, enhance, or restore natural stabilization systems.
(b) For purposes of subsection (a)(2), a channel improvement or a related structure shall be treated as an existing improvement or an existing related structure only if all, or a portion, of the moneys for such improvement or structure was appropriated before the date of the enactment of this Act.
1.
2.
3.
a.
b.
c.
d.
(1) The purchase of the affected land;
(2) Necessary planning, feasibility, or design studies;
(3) Obtaining any necessary permits;
(4) The purchase, contract, lease or renting of any equipment or materials necessary to carry out the land modification or conversion to include all associated operational costs such as fuel and equipment maintenance costs;
(5) Any labor costs;
(6) The planting, cultivating, harvesting, or marketing of any agricultural commodity produced on nonexempt highly erodible land to include any associated operational or material costs such as fuel, seed, fertilizer, and pesticide costs;
(7) Within the crop year in which the wetland conversion was completed plus the next ten crop years thereafter, the planting, cultivating, harvesting, or marketing of any agricultural commodity produced on the affected land to include any associated operational or materials costs such as fuel, seed, fertilizer and pesticide costs; or
(8) For the same time period as in subparagraph 3d(7) above, any costs associated with using for on-farm purposes an agricultural commodity grown on the affected land.
(9) Additionally, if loan proceeds will be or have been substituted to pay other costs at anytime during the life of the loan so that non-loan funds can be used to pay any of the above costs, it is deemed that loan proceeds will be or have been used for a purpose that contributes to the prohibited activities described in this paragraph.
4.
5.
a.
(1) A statement from the SCS indicating whether or not the applicant's farm property or properties contain either highly erodible land, wetland, or converted wetland and, if so, whether or not the applicant qualifies for a particular exemption to the provisions of this exhibit and as further detailed in paragraph 11 below. The property or properties will be listed and described in accordance
(2) If either highly erodible land, wetland, or converted wetland is present, the applicant's properly executed original or carbon copy of Form AD-1026, “Highly Erodible Land and Wetland Conservation Certification.”
b.
6.
a.
b.
(1) Step one. Review both the date that the wetland was converted and the proposed use of loan proceeds in order to determine if loan proceeds will be used for a prohibited activity as defined in subparagraph d of paragraph 3 of this exhibit. If not, the County Supervisor will so document this as specified in paragraph 8 of this exhibit; complete step two immediately below; and, if an insured loan will be approved, notify the applicant in writing, coincident with the transmittal of Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request For Obligation of Funds,” and by using Form Letter 1940-G-1, “Notification of The Requirements of exhibit M of FmHA Instruction 1940-G,” that the loan approval instruments will contain compliance requirements affecting the applicant's converted wetland. If loan proceeds will be used for a prohibited activity, the applicant (and lender, in the case of a guaranteed loan) will be advised of the applicant's ineligibility for the FmHA or its successor agency under Public Law 103-354 loan being requested. The applicant (and lender, in the case of a guaranteed loan) will be advised of any modifications to the application that could cure the ineligibility. Not growing an agricultural commodity on the converted wetland would cure the ineligibility, but the substitution of non-FmHA or its successor agency under Public Law 103-354 funds to grow an agricultural commodity on the converted wetland would not.
(2) Step two. The County Supervisor will review the applicant's sources of loan repayment to determine if they include funds from a USDA financial assistance program(s) subject to wetland conservation restrictions. If so, the County Supervisor will implement the actions in subparagraph e of this paragraph.
c.
(1)
(2)
(a) Document the above determination in the applicant's file as specified in paragraph 8 of this exhibit.
(b) If an insured loan will be approved and the requirements of subparagraph c (2)(c) of this paragraph do not apply, notify the applicant in writing, coincident with the transmittal of Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request For Obligation of Funds,” and by using Form Letter 1940-G-1, “Notification of The Requirements of Exhibit M of FmHA Instruction 1940-G,” that the loan approval instruments will contain compliance requirements affecting the applicant's highly erodible land and/or wetland.
(c) Review the term of the proposed loan and take the following actions, as applicable.
(i)
(ii)
(d) Implement the actions in subparagraph e of this paragraph if the applicant plans to repay a portion of the loan with funds from a USDA financial assistance program subject to wetland or highly erodible land conservation restrictions.
d.
e.
7.
a.
(1)
Addendum to promissory note dated ________ in the amount of $______ at an annual interest rate of __ percent. This agreement supplements and attaches to the above note.
Borrower recognizes that the loan described in this note will be in default should any loan proceeds be used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 CFR part 1940, subpart G, exhibit M. If (1) the term of the loan exceeds January 1, 1990, but not January 1, 1995, and (2) Borrower intends to produce an agricultural commodity on highly erodible land that is exempt from the restrictions of exhibit M until either January 1, 1990 or two years after the U.S. Soil Conservation Service (SCS) has completed a soil survey for the Borrower's land, whichever is later, the Borrower further agrees that, prior to the loss of the exemption from the highly erodible land conservation restrictions found in 7 CFR part 12, Borrower must demonstrate that Borrower is actively applying on that land which has been determined to be highly erodible a conservation plan approved by the SCS or the appropriate conservation district in accordance with SCS's requirements. Furthermore, if the term of the loan exceeds January 1, 1995, Borrower further agrees that Borrower must demonstrate prior to January 1, 1995, that any production after that date of an agricultural commodity on highly erodible land will be done in compliance with a conservation system approved by SCS or the appropriate conservation district in accordance with SCS's requirements.
(2)
“Borrower further agrees that the loan(s) secured by this instrument will be in default should any loan proceeds be used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 CFR part 1940, subpart G, exhibit M.”
“Default shall also exist if any loan proceeds are used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 CFR part 1940, subpart G, exhibit M.”
b.
(1)
(a) Informs the lender that FmHA or its successor agency under Public Law 103-354's commitment is conditioned upon loan proceeds not being used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as explained in this exhibit;
(b) Informs the lender of the lender's monitoring responsibilities under paragraph 10 of this exhibit; and;
(c) Requires the lender, for all borrowers having highly erodible land, wetland, or converted on their farm properties, to include provisions in its loan instruments similar to those contained in subparagraphs a (1) and (2) of this paragraph.
(2)
8.
9.
10.
11.
a.
b.
(1) Any land upon which an agricultural commodity was planted before December 23, 1985, is exempt for that particular planting. The County Supervisor will consult with the appropriate local ASCS office in applying this exemption and the ASCS determination is controlling for purposes of this exhibit.
(2) Any land planted with an agricultural commodity during a crop year beginning before December 23, 1985, is exempt for that particular planting. FmHA or its successor agency under Public Law 103-354 will consult with the ASCS State Executive Director and the latter's position will be controlling in determining the date that the crop year began.
(3) Any land that during any one of the crop years of 1981 through 1985 was either (a) cultivated to produce an agricultural commodity, or (b) set aside, diverted or otherwise not cropped under a program administered by USDA to reduce production of an agricultural commodity, is exempt until the later of January 1, 1990, or the date that is two years after the date that the SCS has completed a soil survey of the land. To apply this exemption, the County Supervisor will consult with ASCS to determine from the latter's records whether or not the land was cultivated or set aside during the required period. The ASCS determination will be controlling. However, the date of completion for any SCS soil survey will be determined by SCS and used by the County Supervisor.
(4) Beginning on January 1, 1990, or two years after SCS has completed a soil survey for the land, whichever is later, and extending to January 1, 1995, any land that qualified for the exemption in subparagraph b (3) of this paragraph is further exempt if a person is actively applying to it a conservation plan that is based on the local SCS technical guide and properly approved by the appropriate SCS conservation district or the SCS. To apply this exemption as well as the exemptions specified in subparagraphs b (5), (6), (7), and (8) of this paragraph, the County Supervisor will consult with the appropriate local SCS office and the SCS position will be controlling.
(5) Highly erodible land within a conservation district and under a conservation system that has been approved by a conservation district after the district has determined that the conservation system is in conformity with technical standards set forth in the SCS technical guide for such district is exempt.
(6) Highly erodible land not within a conservation district but under a conservation system determined by SCS to be adequate for the production of a specific agricultural commodity or commodities on any highly erodible land is exempt for the production of that commodity or commodities.
(7) Highly erodible land that is planted in reliance on a SCS determination that such land was not highly erodible is exempt. The exemption is lost, however, for any agricultural commodity planted after SCS determines that such land is highly erodible land.
(8) Highly erodible land planted or to be planted in an agricultural commodity that was planted in alfalfa during each of the 1981 and 1985 crop years in a crop rotation determined by SCS to be adequate for the protection of highly erodible land is exempt until June 1, 1988, from the requirement that the highly erodible land be planted in compliance with an approved conservation system.
c.
(1) A converted wetland is exempt if the conversion of such wetland was completed or commenced before December 23, 1985. The County Supervisor will consult with ASCS whose determination as to when conversion of a wetland commenced will be final for FmHA or its successor agency under Public Law 103-354 purposes. Additionally, the County Supervisor will request evidence of ASCS's consultation with the U.S. Fish and Wildlife Service on each commenced determination reached for an FmHA or its successor agency under Public Law 103-354 applicant or borrower. SCS will determine if a wetland is a converted wetland using the criteria contained in § 12.32 of subpart C of part 12 of subtitle A of title 7 (attachment 1 of this exhibit which is available in any FmHA or its successor agency under Public Law 103-354 office). Under these criteria, however, a converted wetland determined to be exempt may not always remain exempt. The criteria include the provision that if crop production is abandoned on a converted wetland and the land again meets the wetland criteria, that land has reverted to a wetland and is no longer exempt. For purposes of FmHA or its successor agency under Public Law 103-354 inventory farm properties, crop production will be considered to have been abandoned on a converted wetland either at the earlier of the time the former owner so abandoned crop production or at the time FmHA or its successor agency under Public Law 103-354 caused crop production to be abandoned after the property came into FmHA or its successor agency under Public Law 103-354's inventory. While in its inventory FmHA or its successor agency under Public Law 103-354 will not lease the converted wetland for the purpose of producing an agricultural commodity. Whether or not the wetland criteria are met on the abandoned land will be determined by SCS immediately before FmHA or its successor agency under Public Law 103-354's lease or sale of the property.
(2) The following are not considered to be a wetland under the provisions of this exhibit: (a) An artificial lake, pond, or wetland created by excavating or diking non-wetland to collect and retain water for purposes such as water for livestock, fish production, irrigation (including subsurface irrigation), a settling basin, colling, rice production, or flood control; (b) a wet area created by a water delivery system, irrigation, irrigation system, or application of water for irrigation and (c) lands in Alaska identified by SCS as having a predominance of permafrost soils. The County Supervisor will consult with SCS regarding the application of this exemption as well as the remaining exemptions in this paragraph and the SCS position will be controlling.
(3) A wetland is exempt if the production of an agricultural commodity is possible (a) as a result of a natural condition, such as drought, and (b) without action by the producer that destroys a natural wetland characteristic. This exemption is lost whenever condition (a) or (b) no longer exists.
(4) Production of an agricultural commodity on a converted wetland is exempt is SCS determines that the effect of such action, individually and in connection with all other similar actions authorized in the area by USDA agencies, on the hydrological and biological aspect of wetland is minimal.
12.
13.
a.
b.
(1) Upon request, copies of site information or exemption decision made by SCS for FmHA or its successor agency under Public Law 103-354 application reviews;
(2) Upon request, copies of exemption decisions made by FmHA or its successor agency under Public Law 103-354; and
(3) Notice of any violations of the provisions of this exhibit identified by FmHA or its successor agency under Public Law 103-354 as a result of the monitoring activities identified in paragraph 10 of this exhibit.
14.
(a)
(1) The cost and terms of credit, and
(2) Their right to cancel certain credit transactions resulting in a lien or mortgage on their home.
(b)
(1) Special rules for the right to cancel transactions not for purchase, acquisition or initial construction of a home broaden the scope of this section to include individuals who have an ownership interest in, and reside in as a principal dwelling, property which will be security for a mortgage, even though they may not execute the promissory note or assumption agreement. Such persons have the right to receive credit disclosures and the notice of the right to cancel and may cancel the transaction.
(2) This section does
(i) Applicants who are corporations, associations, cooperatives, public bodies, partnerships, or other organizations;
(ii) Individual applicants for multiple family housing transactions (rural rental or labor housing), unless for a two-family dwelling in which the applicants will reside, and other business and commercial type loans; or
(iii) Applicants involved in credit transactions primarily for agricultural purposes.
(c)
(i) Annual percentage rate;
(ii) Finance charge;
(iii) Amount financed;
(iv) Total of payments;
(v) Total sale price (required for credit sales only);
(vi) Payment schedule;
(vii) A separate itemization of the amount financed, if the applicant requests it. Normally this required disclosure will have been met in transactions subject to the Real Estate Settlement Procedures Act (RESPA) by providing the applicant with Form FmHA or its successor agency under Public Law 103-354 440-58, “Estimate of Settlement Costs”;
(viii) The lender's identity;
(ix) Prepayment or late payment penalties;
(x) Security interest;
(xi) Insurance requirements;
(xii) Assumption policy; and
(xiii) Referral to other loan documents.
(2)
(ii) In transactions
(iii) In the event of a change in rates and terms between the time of initial disclosure and closing, whereby the annual percentage rate varies by more than one-eighth of one percent, redisclosure must be made. This may be done by entering the changes on all copies of the initial Form FmHA or its successor agency under Public Law 103-354 1940-41, or by preparing a new Form FmHA or its successor agency under Public Law 103-354 1940-41. When required, redisclosure may be made at the time the transaction is approved or at the time of the change, but the form must be delivered to the applicant before the signing of the promissory note or assumption agreement.
(3)
(ii) Reamortization, as described in § 1944.37(g) of subpart A of part 1944 and § 1951.315 of subpart G of part 1951 of this chapter, when the borrower is in default or delinquent, does not require new credit disclosure. In all other cases reamortization requires new credit disclosure.
(iii) Refinancing of debts in accordance with § 1944.22 of subpart A of part 1944 of this chapter, though not subject to RESPA or early disclosure, does require credit disclosure at the time the transaction is approved.
(iv) Multiple transactions.
(A) When a subsequent loan is financed along with another transaction and both transactions require credit disclosure, a separate Form FmHA or its successor agency under Public Law 103-354 1940-41 will be prepared for each transaction.
(B) Transactions with multiple advances will be treated as one transaction for the purpose of credit disclosure, in accordance with the Forms Manual Insert (FMI) for Form FmHA or its successor agency under Public Law 103-354 1940-41.
(d)
(1)
(i) The acquisition of a security interest in the individual's principal residence.
(ii) The individual's right to cancel the transaction.
(iii) How to exercise the right to cancel the transaction, with a form for that purpose.
(iv) The effects of cancellation.
(v) The date the cancellation period expires.
(2)
(ii) Any entitled individual may cancel the transaction until midnight of the third business day following whichever of the following events occurs last:
(A) The date the transaction is closed.
(B) The date Truth in Lending credit disclosures were made.
(C) The date notice of the right to cancel was received.
(3)
(i) Forms FmHA 1940-43 have been given to the appropriate individuals,
(ii) The three-day cancellation period has expired, and
(iii) The loan approval official is reasonably assured that the transaction has not been cancelled. This assurance may be obtained by:
(A) Waiting a reasonable period of time after the expiration of the cancellation period to allow for the delivery of a mailed notice, or
(B) Obtaining a written statement from each individual entitled to cancel that the right has not been exercised.
(iv) This delay in disbursing funds may be waived in cases of a bonafide personal financial emergency, which must be met within the cancellation period, when the individual submits a signed and dated statement describing the nature of the emergency and waiving the right to cancel. Such a statement must be signed by all individuals entitled to cancel.
(4)
(ii) Within twenty (20) calendar days after receipt of a notice of cancellation the loan approval official will:
(A) Notify all interested parties of the cancellation;
(B) Return, and/or request the return of any money or property given to anyone in connection with the transaction; and
(C) Take the necessary action to terminate the mortgage.
(iii) Once evidence has been presented to the borrower that the mortgage has been terminated, the borrower must return any funds advanced by FmHA or its successor agency under Public Law 103-354 to the FmHA or its successor agency under Public Law 103-354 County Office or surrender any property at his/her residence within twenty (20) calendar days.
(e)
(1) If an advertisement states specific credit terms, it shall state only those terms that actually are or will be arranged or offered.
(2) If an advertisement states a rate of finance charge, it shall state the rate as an
(3) Terms requiring additional disclosures.
(i) If any of the following terms is set forth in an advertisement:
(A) The amount or percentage of any down payment,
(B) The number of payments or period of repayment,
(C) The amount of any payment, or
(D) The amount of any finance charge,
(ii) The advertisement must also state:
(A) The amount or percentage of down payment,
(B) The terms of repayment, and
(C) The
(a)
(b)
(i) The proceeds of the loan or the credit extended are used in whole or in part to finance the purchase and transfer of title of the property to be mortgaged by the borrower, and
(ii) The loan or credit sale is secured by a first lien covering real estate on which is located a structure designed principally for the occupancy of from 1-4 families, or on which a structure designed principally for the occupancy of from 1-4 families is to be constructed using proceeds of the loan.
(2) Exempt transactions include:
(i) Loans for repairs, improvements, or refinancing if the proceeds are not used to finance the purchase of the property.
(ii) Loans to finance the construction of a 1-4 family structure if the tract of land is already owned by the applicant/borrower.
(iii) Assumptions or transfers.
(c)
(i) Form FmHA or its successor agency under Public Law 103-354 440-58, “Estimate of Settlement Costs,” is to be used to provide a “good faith” statement of estimated closing costs. Form FmHA or its successor agency under Public Law 103-354 440-58 will be completed by the County Supervisor and mailed or delivered to the applicant with the Settlement Costs booklet. Costs will vary between geographic areas; therefore, information supplied on this form must be based upon (A) the County Supervisor's best estimate of charges the borrower will pay for each service in connection with the transaction, or (B) a range of charges at which such service is available to the borrower from all providers in the area.
(ii) Form FmHA or its successor agency under Public Law 103-354 440-58 does not replace Truth in Lending forms. Appropriate forms listed in § 1940.401 will be used for Truth in Lending purposes.
(2) Form FmHA or its successor agency under Public Law 103-354 1940-59, “Settlement Statement,” will be completed as indicated in the form and FMI by the designated attorney or title company for all transactions described in paragraph (b) of this section. The purpose of this form is to provide a uniform settlement statement prescribed by RESPA.
(i) During the business day immediately preceding the date of settlement, the closing agent, if requested by the applicant, must permit the applicant to inspect the settlement statement, completed for those items which are then known to the closing agent.
(ii) A copy will be given to both the borrower and seller at the time of closing or settlement or will be mailed as soon as practicable if the borrower or seller are not present at closing.
(a) The purpose of this subpart is to set forth the methodology and formulas by which the Administrator of the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 allocates program funds to the States. (The term
(b) The formulas in this subpart are used to allocate program loan and grant funds to State Offices so that the overall mission of the Agency can be carried out. Considerations used when developing the formulas include enabling legislation, congressional direction, and administration policies. Allocation formulas ensure that program resources are available on an equal basis to all eligible individuals and organizations.
(c) The actual amounts of funds, as computed by the methodology and formulas contained herein, allocated to a State for a funding period are distributed to each State Office by an exhibit to this subpart. The exhibit is available for review in any FmHA or its successor agency under Public Law 103-354 State Office. The exhibit also contains clarifications of allocation policies and provides further guidance to the State Directors on any suballocation within the State. FmHA or its successor agency under Public Law 103-354 will publish a Notice of Availability of Rural Housing funds in the
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(1)
(2)
(3)
(i)
(j)
(k)
(a)
(b)
(1) A = Farm operators with sales of $2,500 to $39,999 and less than 200 days work off farm. Source: U.S. Census of Agriculture. 15%
(2) B = Farm operators with sales of $40,000 or more and less than 200 days work off farm. Source: U.S. Census of Agriculture. 35%
(3) C = Tenant farm operators. Source: U.S. Census of Agriculture. 20%
(4) D = Three year average net farm income. Source: USDA Economic Research Service. 15% This criterion is the inverse of the division of the State mean net farm income by the National mean net farm income. This inverse is used because the need for assistance is inversely proportional to the level of net income. Limits of .5 and 1.5 are placed in this result to limit the influence on the allocation.
(5) E=Value of farm nonreal estate assets. Source: USDA Economic Research Service. 15%
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1) A = Farm operators with sales of $2,500 to $39,999 and less than 200 days work off farm. Source: U.S. Census of Agriculture. 15%
(2) B = Farm operators with sales of $40,000 or more and less than 200 days work off farm. Source: U.S. Census of Agriculture. 35%
(3) C = Tenant farm operators. Source: U.S. Census of Agriculture. 20%
(4) D = Three year average net farm income. Source: USDA Economic Research Service. 15%. This criterion is the inverse of the division of the State
(5) E = Value of farm nonreal estate assets. Source: USDA Economic Research Service. 15%
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1) A = Farm operators with sales of $2,500 to $39,999 and less than 200 days work off farm. Source: U.S. Census of Agriculture. 15%
(2) B = Farm operators with sales of $40,000 or more and less than 200 days work off farm. Source: U.S. Census of Agriculture. 35%
(3) C = Tenant farm operations. Source: U.S. Census of Agriculture. 25%
(4) D = Three-year average net farm income. Source: USDA Economic Research Service. 15%. This criterion is the inverse of the division of the State mean net farm income by the National mean net farm income. This inverse is used because the need for assistance is inversely proportional to the level of net income. Limits of .5 and 1.5 are placed in this result to limit the influence of the allocation.
(5) E = Value of farm real estate assets. Source: USDA Economic Research Service. 10%.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1) A = Farm operators with sales of $2,500 to $39,999 and less than 200 days work off farm. Source: U.S. Census of Agriculture. 15%
(2) B = Farm operators with sales of $40,000 or more and less than 200 days work off farm. Source: U.S. Census of Agriculture. 35%
(3) C = Tenant farm operations. Source: U.S. Census of Agriculture. 25%
(4) D = Three year average net farm income. Source: USDA Economic Research Service. 15%. This criterion is the inverse of the division of the State mean net farm income by the National mean net farm income. This inverse is used because the need for assistance is inversely proportional to the level of net income. Limits of .5 and 1.5 are placed in this result to limit the influence on the allocation.
(5) E = Value of farm real estate assets. Source: USDA Economic Research Service. 10%
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
When funding levels are under $100,000,000, all funds will be held in a National Office reserve and made available administratively in accordance with the Notice of Funding Availability (NOFA) and program regulations. When program levels are sufficient for a nationwide program, funds are allocated based upon the following criteria and weights.
(a)
(b)
Each factor will receive a weight respectively of 40%, 40% and 20%. The criteria used in the basic formula are:
(1) State's percentage of National rural population,
(2) State's percentage of the National number of rural households between 50 and 115 percent of the area median income, and
(3) State's percentage of National average cost per unit. Data source for the first two of these criterion are based on the latest census data available. The third criterion is based on the cost per unit data using the applicable maximum per unit dollar amount limitations under section 207(c) of the National Housing Act, which can be obtained from the Department of Housing and Urban Development. The percentage representing each criterion is multiplied by the weight assigned and totaled to arrive at a State factor.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1) State's percentage of the National number of rural occupied substandard units,
(2) State's percentage of the National rural population in places of less than 2,500 population,
(3) State's percentage of the national number of rural households between 80 and 100 percent of the area median income, and
(4) State's percentage of the national number of rural renter households paying more than 35 percent of income for rent.
(c)
(d)
(e)
(f)
(g)
(h)
(1) Mid-year: If used in a particular fiscal year, available funds unobligated as of the pooling date are pooled and redistributed based on the formula used to allocate funds initially.
(2) Year-end: Pooled funds are placed in a National Office reserve and are available as determined administratively.
(i)
(j)
(k)
(a)
(b)
(1) State's percentage of the National number of rural occupied substandard units,
(2) State's percentage of the National rural population in places of less than 2,500 population,
(3) State's percentage of the national number of rural households below 80 percent of the area median income, and
(4) State's percentage of the national number of rural renter households paying more than 35 percent of income for rent.
(c)
(d)
(e)
(f)
(g)
(h)
(1) Mid-year: If used in a particular fiscal year, available funds unobligated as of the pooling date are pooled and redistributed based on the formula used to allocate funds initially.
(2) Year-end: Pooled funds are placed in a National Office reserve and are available as determined administratively.
(i)
(j)
(k)
(a)
(b)
(1) State's percentage of the National number of rural occupied substandard units,
(2) State's percentage of the National rural population,
(3) State's percentage of the National rural population in places of less than 2,500 population,
(4) State's percentage of the National number of rural households between 50 and 80 percent of the area median income, and
(5) State's percentage of the National number of rural households below 50 percent of the area median income.
(c)
(d)
(e)
(f)
(g)
(h)
(1)
(2)
(i)
(j)
(k)
(a)
(b)
(1) State's percentage of the National number of rural occupied substandard units, and
(2) State's percentage of the National number of rural households below 50 percent of area median income.
(c)
(d)
(e)
(f)
(g)
(h)
(1) Mid-year: If used in a particular fiscal year, available funds unobligated as of the pooling date are pooled and redistributed based on the formula used to allocate funds initially.
(2) Year-end: Pooled funds are placed in a National Office reserve and are available as determined administratively.
(i)
(j)
(k)
(a)
(b)
(1) State's percentage of the National number of rural occupied substandard units,
(2) State's percentage of the National rural population 62 years and older, and
(3) State's percentage of the National number of rural households below 50 percent of area median income.
(c)
(d)
(e)
(f)
(g)
(h)
(1)
(2)
(i)
(j)
(k)
The following program funds are kept in a National Office reserve and are available as determined administratively:
(a) Section 523 Self-Help Technical Assistance Grants.
(b) Section 523 Land Development Fund.
(c) Section 524 Rural Housing Site Loans.
(d) Section 509 Compensation for Construction Defects.
(e) Section 502 Nonsubsidized Funds.
(a)
(b)
The criteria used in the basic formula area:
(1) State's percentage of National rural population,
(2) State's percentage of National number of rural occupied substandard units, and
(3) State's percentage of National rural families with incomes below the poverty level.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1)
(2)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
Funds are not allocated to States. The following program funds are kept in a National Office reserve and are available as determined administratively:
(a) Section 514 Farm Labor Housing Loans.
(b) Section 516 Farm Labor Housing Grants.
(a)
(b)
(1) The criteria used in the basic formula are:
(i) State's percentage of national rural population—50 percent.
(ii) State's percentage of national rural population with incomes below the poverty level—25 percent.
(iii) State's percentage of national nonmetropolitan unemployment—25 percent.
(2) Data source for each of these criterion is based on the latest census data available. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a State factor (SF). The SF cannot exceed .05.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1) The criteria used in the basic formula are:
(i) State's percentage of national rural population—50 percent.
(ii) State's percentage of national rural population with incomes below the poverty level—25 percent.
(iii) State's percentage of national nonmetropolitan unemployment—25 percent.
(2) Data source for each of these criterion is based on the latest census data available. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a State factor (SF). The SF cannot exceed .05.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1) The criteria used in the basic formula are:
(i) State's percentage of national rural population—50 percent.
(ii) State's inverse percentage of nonmetropolitan per capita income—25 percent.
(iii) State's percentage of national nonmetropolitan unemployment—25 percent.
(2) Data source for each of these criterion is based on the latest census data available. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a State factor (SF). The SF cannot exceed .05.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1) The criteria used in the basic formula are:
(i) State's percentage of national rural population—50 percent.
(ii) State's percentage of national rural population with incomes below the poverty level—25 percent.
(iii) State's percentage of national nonmetropolitan unemployment—25 percent.
(2) Data source for each of these criterion is based on the latest census data available. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a State factor (SF). The SF cannot exceed .05.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(1) The criteria used in the basic formula are:
(i) State's percentage of National rural population—50 percent.
(ii) State's percentage of National rural population with income below the poverty level—50 percent.
(2) Data source for each of these criterion is based on the latest census data available. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a State factor (SF).
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
I.
II.
III.
A. Will own an interest in a project to be financed under this section and will materially participate in the development and the operations of the project; and
B. Is a private organization that has nonprofit, tax exempt status under section 501(c)(3) or section 501(c)(4) of the Internal Revenue Code of 1986; and
C. Has among its purposes the planning, development, or management of low-income housing or community development projects; and
D. Is not affiliated with or controlled by a for-profit organization; and
E. May be a consumer cooperative, Indian tribe or tribal housing authority.
IV.
V.
A.
B.
C.
VI.
A.
B.
VII.
A. Preapplications/applications for assistance from eligible nonprofit entities under this subpart must continue to meet all loan making requirements of subpart E of part 1944 of this chapter.
B. A separate processing list will be maintained for NPSA loan requests.
C. The State Director may issue Form AD-622, “Notice of Preapplication Review Action”, requesting a formal application to the highest ranking preapplication(s) from eligible nonprofit entities defined in paragraph III of this exhibit as follows:
1.
2.
D. All AD-622s issued for proposals to be funded from NPSA will be subject to the availability of NPSA funds. Form AD-622 should contain the following or similar language: “This Form AD-622 is issued subject to the availability of Nonprofit Set-Aside (NPSA) funds.”
E. If a preapplication requesting NPSA funds has sufficient priority points to compete with non-NPSA loan requests based upon the District or State allocation (as applicable), the preapplication will be maintained on both the NPSA and non-NPSA rating/ranking lists.
F. Provisions for providing preference to loan requests from nonprofits is contained in § 1944.231 of subpart E of part 1944 of this chapter. Limited partnerships, with a nonprofit general partner, do not qualify for nonprofit preference.
VIII.
A. To improve the quality of affordable housing by targeting funds under Rural Housing Targeting Set Aside (RHTSA) to designated areas that have extremely high concentrations of poverty and substandard housing and have severe, unmet rural housing needs.
B. To provide for the eligibility of certain colonias for rural housing funds.
The Cranston-Gonzalez National Affordable Housing Act of 1990 (herein referred to as the “Act”) requires that Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 set aside section 502, 504, 514, 515, and 524 funds for assistance in targeted, underserved areas. An appropriate amount of section 521 new construction rental assistance (RA) is set aside for use with seciton 514 and 515 loan programs. Under the Act, certain colonias are now eligible for FmHA or its successor agency under Public Law 103-354 housing assistance.
A. Colonia is defined as any identifiable community that:
1. Is in the State of Arizona, California, New Mexico or Texas;
2. Is in the area of the United States within 150 miles of the border between the United States and Mexico, except that the term does not include any standard metropolitan statistical area that has a population exceeding 1 million;
3. Is designated by the State or county in which it is located as a colonia;
4. Is determined to be a colonia on the basis of objective criteria, including lack of potable water supply, lack of adequate sewage systems, and lack of decent, safe, and sanitary housing; and
5. Was in existence and generally recognized as a colonia before November 28, 1990.
B. Requests for housing assistance in colonias have priority as follows:
1. When the State did not obligate its allocation in one or more of its housing programs during the previous 2 fiscal years (FYs), priority will be given to requests for assistance, in the affected program(s), from regularly allocated funds, until an amount equal to 5 percent of the current FY program(s) allocation is obligated in colonias. This priority takes precedence over other processing priority methods.
2. When the State did obligate its allocation in one or more of its housing programs during the previous 2 FYs, priority will be given to requests for assistance, in the affected program(s), from RHTSA funds, until an amount equal to 5 percent of the current FY program(s) allocation is obligated in colonias. This priority takes precedence over other processing priority methods.
C. Colonias may access pooled RHTSA funds as provided in paragraph IV G of this exhibit.
A.
B.
2.
C.
D.
E.
F.
G.
H. [Reserved]
I. [Reserved]
J.
1. Issue Form AD-622, “Notice of Preapplication Review Action,” up to 150 percent of the amount shown in attachment 1 of this exhibit (available in any FmHA or its successor agency under Public Law 103-354 State Office).
2. All AD-622s issued for applicants in targeted counties will be annotated, in Item 7, under “Other Remarks,” with the following: “Issuance of this AD-622 is contingent upon receiving funds from the Rural Housing Targeting Set Aside (RHTSA). Should RHTSA funds be unavailable, or the county in which this project will be located is no longer considered a targeted county, this AD-622 will no longer be valid. In these cases, the request for assistance will need to compete with other preapplications in non-targeted counties, based upon its priority point score.”
This subpart sets forth Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 policies and procedures for the delivery of certain rural development programs under a rural economic development review panel established in
(a) If a State desires to participate in this pilot program, the Governor of the State may submit an application to the Under Secretary for Small Community and Rural Development, U.S. Department of Agriculture, room 219-A, Administration Building, Washington, DC 20250 in accordance with § 1940.954 of this subpart.
(b) The Under Secretary shall designate not more than five States in which to make rural economic development review panels applicable during any established time period for the purpose of reviewing and ranking applications submitted for funding under certain rural development programs. The following time periods have been established for participation in this pilot program:
The State will be bound by the provisions of this pilot program only during the established time period(s) for which the State is designated. If a designated State does not remain an eligible State during the established time period(s) for which the State was designated, the State will not be eligible to participate in this program and cannot revert to the old ranking and applicant selection process.
(c) Assistance under each designated rural development program shall be provided to eligible designated States for qualified projects in accordance with this subpart.
(d) Federal statutes provide for extending FmHA or its successor agency under Public Law 103-354 financially supported programs without regard to race, color, religion, sex, national origin, marital status, age, familial status, or physical/mental handicap (provided the participant possesses the capacity to enter into legal contracts.)
For the purpose of this subpart:
(1) Water and Waste Disposal Insured or Guaranteed Loans;
(2) Development Grants for Community Domestic Water and Waste Disposal Systems;
(3) Technical Assistance and Training Grants;
(4) Emergency Community Water Assistance Grants;
(5) Community Facilities Insured and Guaranteed Loans;
(6) Business and Industry Guaranteed Loans;
(7) Industrial Development Grants;
(8) Intermediary Relending Program;
(9) Drought and Disaster Relief Guaranteed Loans;
(10) Disaster Assistance for Rural Business Enterprises;
(11) Nonprofit National Rural Development and Finance Corporations.
(2) To which the Administrator is required to provide assistance.
(a)
(1) A narrative signed by the Governor including reasons for State participation in this program and reasons why a project review and ranking process by a State panel will improve the economic and social conditions of rural areas in the State. The narrative will also include the time period(s) for which the State wishes to participate.
(2) A proposal outlining the method for meeting all the following eligibility requirements and the timeframes established for meeting each requirement:
(i) Establishing a rural economic development review panel in accordance with § 1940.956 of this subpart. When established, the name, title, and address of each proposed member should be included and the chairperson and vice chairperson should be identified.
(ii) Governor's proposed designation of a State agency to support the State coordinator and the panel. The name, address, and telephone number of the proposed agency's contact person should be included.
(iii) Governor's proposed selection of a State coordinator in accordance with § 1940.957 of this subpart, including the title, address, and telephone number.
(iv) Development of area development plans for all areas of the State that are eligible to receive assistance from designated rural development programs.
(v) The review and evaluation of area development plans by the panel in accordance with § 1940.956 of this subpart.
(vi) Development of written policy and criteria used by the panel to review and evaluate area plans in accordance with § 1940.956 of this subpart.
(vii) Development of written policy and criteria the panel will use to evaluate and rank applications in accordance with § 1940.956 of this subpart.
(3) Preparation of a proposed budget that includes 3 years projections of income and expenses associated with panel operations. If funds from other sources are anticipated, sources and amounts should be identified.
(4) Development of a financial management system that will provide for effective control and accountability of all funds and assets associated with the panel.
(5) A schedule to coordinate the submission, review, and ranking process of preapplications/applications in accordance with § 1940.956(a) of this subpart.
(6) Other information provided by the State in support of its application.
(b)
(c)
(2) A copy of the notification to the Governor will be submitted to the Administrator along with a copy of the State's application and other material submitted in support of the application.
(d)
(2) The Under Secretary will review the material submitted by the Governor in sufficient detail to determine if a State has complied with all eligibility requirements of this subpart. The panel will not begin reviewing and ranking applications until the Governor has been notified in writing by the Under Secretary that the State has been determined eligible and is designated to participate in this program. A copy of the notification will be sent to the Administrator. The Under Secretary's decision is not appealable.
(e)
(i) The State has established a rural economic development review panel that meets the requirements of § 1940.956 of this subpart;
(ii) The Governor has appointed an officer or employee of the State government to serve as State coordinator to carry out the responsibilities set forth in § 1940.957 of this subpart; and
(iii) The Governor has designated an agency of the State government to provide the panel and State coordinator with support for the daily operation of the panel.
(2) If a State is determined eligible initially and desires to participate in additional time periods established for this program, the Governor will submit documents and information not later than September 1 of each subsequent FY in sufficient detail for the Under Secretary to determine, prior to the beginning of the additional time period, that the State is still in compliance with all eligibility requirements of this subpart.
(a) States selected to participate in the first established time period will receive funds from designated rural development programs according to applicable program regulations until the end of FY 1992, if necessary for States to have sufficient time to meet the eligibility requirements of this subpart, and to be designated to participate in this program. No funds will be administered under this subpart to an ineligible State.
(b) If a State becomes an eligible State any time prior to the end of FY 1992, any funds remaining unobligated from a State's FY 1992 allocation, may be administered under this subpart.
(c) Beginning in FY 1993 and for each established time period thereafter, all designated rural development program funds received by a designated State will be administered in accordance with §§ 1940.961 through 1940.965 of this subpart, provided the State is determined eligible prior to the beginning of each FY in accordance with § 1940.954 of
(a)
(1) Timeframes should assure that applications selected for funding from the current FY's allocation of funds can be processed by FmHA or its successor agency under Public Law 103-354 and funds obligated prior to the July 15 pooling established in § 1940.961(c) of this subpart;
(2) Initial submission of preapplications/applications from FmHA or its successor agency under Public Law 103-354 to the panel and any subsequent submissions during the first year;
(3) How often during each FY thereafter should FmHA or its successor agency under Public Law 103-354 submit preapplications/applications to the panel for review and ranking;
(4) Number of working days needed by the panel to review and rank preapplications/applications;
(5) Number of times during the FY the panel will submit a list of ranked preapplications/applications to FmHA or its successor agency under Public Law 103-354 for funding consideration;
(6) Consider the matching of available loan and grant funds to assure that all allocated funds will be used;
(7) How to consider ranked preapplications/applications at the end of the FY that have not been funded; and
(8) How to consider requests for additional funds needed by an applicant to complete a project that already has funds approved; i.e., construction bid cost overrun.
(b)
(1)
(ii)
(A) The policy and criteria used to rank applications for business related projects will include the following, which are not necessarily in rank order:
(
(
(
(
(
(
(
(
(
(
(B) The policy and criteria used to rank preapplications/applications for infrastructure and all other community facility-type projects will include the following which are not necessarily in rank order:
(
(
(
(
(
(
(
(
(
(2)
(i) The panel will accept any area plan that meets established criteria unless the plan is incompatible with any other area plan for that area that has been accepted by the panel; or
(ii) The panel will return any area plan that is technically or economically inadequate, not feasible, is unlikely to be successful, or is not compatible with other panel-accepted area plans for that area. When an area plan is returned, the panel will include an explanation of the reasons for the return and suggest alternative proposals.
(iii) The State coordinator will notify the State Director, in writing, of the panel's decision on each area plan reviewed.
(3)
(i)
(A) Accept any preapplication/application determined to be compatible with such area plan; or
(B) Return to the State Director any preapplication/application determined not to be compatible with such area plan. The panel will notify the applicant when preapplication/applications are returned to the State Director.
(ii)
(A) Priority ranking for projects addressing health emergencies. In addition to the criteria established in paragraph (b)(1)(ii) of this section, preapplications/applications for projects designed to address a health emergency declared so by the appropriate Federal or State agency, will be given priority by the panel.
(B) Priority based on need. If two or more preapplications/applications ranked in accordance with this subpart are determined to have comparable strengths in their feasibility and potential for growth, the panel will give priority to the applications for projects with the greatest need.
(C) If additional ranking criteria for use by a panel are required in any designated rural development program regulation, the panel will give consideration to the criteria when ranking preapplications/applications submitted under that program.
(iii)
(4)
(c)
(i) One of whom is the Governor of the State or the person designated by the Governor to serve on the panel, on behalf of the Governor, for that year;
(ii) One of whom is the director of the State agency responsible for economic and community development or the person designated by the director to serve on the panel, on behalf of the director, for that year:
(iii) One of whom is appointed by a statewide association of banking organizations;
(iv) One of whom is appointed by a statewide association of investor-owned utilities;
(v) One of whom is appointed by a statewide association of rural telephone cooperatives;
(vi) One of whom is appointed by a statewide association of noncooperative telephone companies;
(vii) One of whom is appointed by a statewide association of rural electric cooperatives;
(viii) One of whom is appointed by a statewide association of health care organizations;
(ix) One of whom is appointed by a statewide association of existing local government-based planning and development organizations;
(x) One of whom is appointed by the Governor of the State from either a statewide rural development organization or a statewide association of publicly-owned electric utilities, neither of which is described in any of paragraphs (c)(1)(iii) through (ix);
(xi) One of whom is appointed by a statewide association of counties;
(xii) One of whom is appointed by a statewide association of towns and townships, or by a statewide association of municipal leagues, as determined by the Governor;
(xiii) One of whom is appointed by a statewide association of rural water districts;
(xiv) The State director of the Federal small business development center or, if there is no small business development center in place with respect to the State, the director of the State office of the Small Business Administration;
(xv) The State representative of the Economic Development Administration of the Department of Commerce; and
(xvi) One of whom is appointed by the State Director from among the officers and employees of FmHA or its successor agency under Public Law 103-354.
(2)
(i) One from names submitted by the dean or the equivalent official of each school or college of business, from colleges and universities in the State;
(ii) One from names submitted by the dean or the equivalent official of each school or college of engineering, from colleges and universities in the State;
(iii) One from names submitted by the dean or the equivalent official, of each school or college of agriculture, from colleges and universities in the State; and
(iv) The director of the State agency responsible for extension services in the State.
(3)
(4)
(5)
(ii) If a State has more than one of any of the statewide associations or organizations of the entities described in paragraph (c)(1) of this section, the Governor will select one of the like organizations to name a member to serve during no more than one established time period. Thereafter, the Governor will rotate selection from among the remaining like organizations to name a member.
(d)
(e)
(f)
(g)
(2)
(h)
(2)
(3)
(4)
(i)
(j)
The Governor will appoint an officer or employee of State government as State coordinator in order for a State to become and remain an eligible State under this subpart. The State coordinator will have the following duties and responsibilities:
(a) Manage, operate, and carry out the instructions of the panel;
(b) Serve as liaison between the panel and the Federal and State agencies involved in rural development;
(c) Coordinate the efforts of interested rural residents with the panel and ensure that all rural residents in the State are informed about the manner in which assistance under designated rural development programs is provided to the State pursuant to this subpart, and if requested, provide information to State residents; and
(d) Coordinate panel activities with FmHA or its successor agency under Public Law 103-354.
The Governor will appoint a State agency to provide the panel and the State coordinator with support for the daily operation of the panel. In addition to providing support, the designated agency is responsible for identifying:
(a) Alternative sources of financial assistance for project preapplications/applications reviewed and ranked by the panel, and
(b) Related activities within the State.
Each area plan submitted to the panel for review in accordance with § 1940.956 of this subpart shall identify the geographic boundaries of the area and shall include the following information:
(a) An overall development plan for the area with goals, including business development and infrastructure development goals, and time lines based on a realistic assessment of the area, including, but not limited to, the following:
(1) The number and types of businesses in the area that are growing or declining;
(2) A list of the types of businesses that the area could potentially support;
(3) The outstanding need for water and waste disposal and other public services or facilities in the area;
(4) The realistic possibilities for industrial recruitment in the area;
(5) The potential for development of tourism in the area;
(6) The potential to generate employment in the area through creation of small businesses and the expansion of existing businesses; and
(7) The potential to produce value-added agricultural products in the area.
(b) An inventory and assessment of the human resources of the area, including, but not limited to, the following:
(1) A current list of organizations in the area and their special interests;
(2) The current level of participation of area residents in rural development activities and the level of participation required for successful implementation of the plan;
(3) The availability of general and specialized job training in the area and the extent to which the training needs of the area are not being met;
(4) A list of area residents with special skills which could be useful in developing and implementing the plan; and
(5) An analysis of the human needs of the area, the resources in the area available to meet those needs, and the manner in which the plan, if implemented, would increase the resources available to meet those needs.
(c) The current degree of intergovernmental cooperation in the area and the degree of such cooperation needed for the successful implementation of the plan.
(d) The ability and willingness of governments and citizens in the area to become involved in developing and implementing the plan.
(e) A description of how the governments in the area apply budget and fiscal control processes to the plan. This process is directed toward costs associated with carrying out the planned development. When plans are developed, the financial condition of all areas covered under the plan should be fully recognized and planned development should realistically reflect the area's immediate and long-range financial capabilities.
(f) The extent to which public services and facilities need to be improved to achieve the economic development and quality of life goals of the plan. At a minimum, the following items will be considered:
(1) Law enforcement;
(2) Fire protection;
(3) Water, sewer, and solid waste management;
(4) Education;
(5) Health care;
(6) Transportation;
(7) Housing;
(8) Communications; and
(9) The availability of and capability to generate electric power.
(g) Existing area or regional plans are acceptable provided the plan includes statements that indicate the degree to which the plan has met or is meeting all the requirements in paragraphs (a) through (f) of this section.
(a) The State Director will appoint one FmHA or its successor agency under Public Law 103-354 employee to serve as a voting member of the panel established in § 1940.956(c)(1) of this subpart.
(b) The Administrator may appoint, temporarily and for specific purposes, personnel from any department or agency of the Federal Government as nonvoting panel members, with the consent of the head of such department or agency, to provide official information to the panel. The member(s) appointed shall have expertise to perform a duty described in § 1940.956(b) of this subpart that is not available among panel members.
(c) Federal panel members will be paid per diem or otherwise reimbursed by the Federal Government for expenses incurred each day the employee is engaged in the actual performance of a duty of the panel. Reimbursement will be in accordance with Federal travel regulations.
(a)
(2) Each FY, and normally within 30 days after the date FmHA or its successor agency under Public Law 103-354 receives an appropriation of designated rural development program funds, the Governor of each designated State will be notified of the amounts allocated to the State under each designated program for such FY. The Governor will also be notified of the total amounts appropriated for the FY for each designated rural development program.
(3) The State Director will fund projects from a designated State's allocation of funds, according to appropriate program regulations giving great weight to the order in which the preapplications/applications for projects are ranked and listed by the panel in accordance with § 1940.956(b)(3) of this subpart.
(b)
(c)
(2) Funds pooled from designated States can be requested by designated States, pursuant to subsection (d) of this section. The designated States' pool; however, will not be available to nondesignated States until September 1 of each year.
(d)
(2) Designated States may request funds from the nondesignated reserve account when:
(i) All allocated and reserve funds to designated states have been used, or
(ii) Sufficient funds do not remain in any designated State allocation and in the designated States' reserve account to fund a project.
(a)
(b)
(2) Amounts transferred on a National basis. The amount of direct loan funds transferred in a FY, among the designated States, from a program under this subpart (after accounting for any offsetting transfers into such program) shall not exceed $9 million, or an amount otherwise authorized by law.
(c)
(a)
(b)
(c)
Except for the project review and ranking process established in this subpart, all requests for funds from designated rural development programs will be processed, closed, and serviced according to applicable FmHA or its successor agency under Public Law 103-354 regulations, available in any FmHA or its successor agency under Public Law 103-354 office.
(a)
(b)
(c)
Your application has been submitted to the State coordinator for review and ranking by the State rural economic development review panel. If you have questions regarding this review process, you should contact the State coordinator. The address and telephone number are: (insert).
You will be notified at a later date of the decision reached by the panel and whether or not you can proceed with the proposed project.
You are advised against incurring obligations which cannot be fulfilled without FmHA or its successor agency under Public Law 103-354 funds.
(d)
(e)
(f)
(1)
(2)
(i) Committee on Agriculture of the House of Representatives, Washington, DC.
(ii) Committee on Agriculture, Nutrition, and Forestry of the Senate, Washington, DC.
(a)
(b)
(c)
(d)
(e)
(f)
(1) Travel and lodging expenses;
(2) Salaries for State coordinator and support staff;
(3) Reasonable fees and charges for professional services necessary for establishing or organizing the panel. Services must be provided by individuals licensed in accordance with appropriate State accreditation associations;
(4) Office supplies, and
(5) Other costs that may be necessary for panel operations.
(g)
(1) Pay costs incurred prior to the effective date of the grant authorized under this subpart;
(2) Recruit preapplications/applications for any designated rural development loan or grant program or any loan or grant program;
(3) Duplicate activities associated with normal execution of any panel member's occupation;
(4) Fund political activities;
(5) Pay costs associated with preparing area development plans;
(6) Pay for capital assets; purchase real estate, equipment or vehicles; rent, improve, or renovate office space; or repair and maintain State or privately owned property;
(7) Pay salaries to panel members; or
(8) Pay per diem or otherwise reimburse panel members unless distance traveled exceed 50 miles.
(h)
(2)
(3)
(4)
(i)
(2) After the Governor has been notified that the State has been designated to participate in this program and the State has met all eligibility requirements of this subpart, the State may file an original and one copy of SF 424.1 with the State Director. The following information will be included with the application:
(i) State's financial or in-kind resources, if applicable, that will maximize the use of Panel Grant funds;
(ii) Proposed budget. The financial budget that is part of SF 424.1 may be used, if sufficient, for all panel income and expense categories;
(iii) Estimated breakdown of costs, including costs to be funded by the grantee or from other sources;
(iv) Financial management system in place or proposed. The system will account for grant funds in accordance with State laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the State must be sufficient to permit preparation of reports required by Federal regulations and permit the tracing of funds to a level of expenditures adequate to establish that grant funds are used solely for authorized purposes;
(v) Method to evaluate panel activities and determine if objectives are met;
(vi) Proposed Scope-of-Work detailing activities associated with the panel and time frames for completion of each task, and
(vii) Other information that may be needed by FmHA or its successor agency under Public Law 103-354 to make a grant award determination.
(3) The applicable provisions of § 1942.5 of subpart A of part 1942 of this chapter relating to preparation of loan dockets will be followed in preparing grant dockets. The docket will include at least the following:
(i) Form FmHA or its successor agency under Public Law 103-354 400-4, “Assurance Agreement;”
(ii) Scope-of-work prepared by the applicant and approved by FmHA or its successor agency under Public Law 103-354;
(iii) Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request for Obligation of Funds,” with exhibit A, and
(iv) Certification regarding a drug-free workplace in accordance with FmHA Instruction 1940-M (available in any FmHA or its successor agency under Public Law 103-354 office).
(j)
(2) Exhibit A (available from any FmHA or its successor agency under Public Law 103-354 State Office), shall be attached to and become a permanent part of Form FmHA or its successor agency under Public Law 103-354 1940-A and the following paragraphs will appear in the comment section of that form:
The Grantee understands the requirements for receipt of funds under the Panel Grant program. The Grantee assures and certifies that it is in compliance with all applicable laws, regulations, Executive Orders, and other generally applicable requirements, including those set out in FmHA or its successor agency under Public Law 103-354 7 CFR, part 1940, subpart T, and 7 CFR, parts 3016 and 3017, including revisions through ___ (date of grant approval). The Grantee further agrees to use grant funds for the purposes outlined in the Scope-of-Work approved by FmHA or its successor agency under Public Law 103-354. Exhibit A is incorporated as a part hereof.
(3) Grants will be approved and obligated in accordance with the applicable parts of § 1942.5(d) of subpart A of part 1942 of this chapter.
(4) An executed copy of the Scope-of-Work will be sent to the State coordinator on the obligation date, along with a copy of Form FmHA or its successor agency under Public Law 103-354 1940-1 and the required exhibit. FmHA or its successor agency under Public Law 103-354 will retain the original of Form FmHA or its successor agency under Public Law 103-354 1940-1 and the exhibit.
(5) Grants will be closed in accordance with the applicable parts of subpart A of part 1942 of this chapter, including § 1942.7. The grant is considered closed on the obligation date.
(6) A copy of Form FmHA or its successor agency under Public Law 103-354 1940-1, with the required exhibit, and the Scope-of-Work will be submitted to the National Office when funds are obligated.
(7) If the grant is not approved, the State coordinator will be notified in writing of the reason(s) for rejection. The notification will state that a review of the decision by FmHA or its successor agency under Public Law 103-354 may be requested by the State under subpart B of part 1900 of this chapter.
(k)
(1) SF 270, “Request for Advance or Reimbursement,” will be completed by the State coordinator and submitted to the State Director not more frequently than monthly.
(2) Upon receipt of a properly completed SF 270, the State Director will request funds through the Automated Discrepancy Processing System. Ordinarily, payment will be made within 30 days after receipt of a properly prepared request for reimbursement.
(3) States are encouraged to use minority banks (a bank which is owned by at least 50 percent minority group members) for the deposit and disbursement of funds. A list of minority owned banks can be obtained from the Office of Minority Business Enterprises, Department of Commerce, Washington, DC 20230.
(l)
(m)
(n)
(o)
(p)
(1) A comparison of actual accomplishments to the objectives established for that period;
(2) Reasons why established objectives were not met;
(3) Problems, delays, or adverse conditions which will affect the ability to meet the objectives of the grant during established time periods. This disclosure must include a statement of the action taken or planned to resolve the situation; and
(4) Objectives and timetable established for the next reporting period.
(q)
(r)
(s)
(t)
Forms, exhibits, and subparts of this chapter (all available in any FmHA or its successor agency under Public Law 103-354 office) referenced in this subpart, are for use in establishing a State economic development review panel and for administering the Panel Grant program associated with the panel.
The authority authorized to the State Director in this subpart may be redelegated.
The collection of information requirements contained in this regulation has been approved by the Office of Management and Budget and assigned OMB control number 0575-0145. Public reporting burden for this collection of
5 U.S.C. 301 and 7 U.S.C. 1989.
This subpart contains regulations for making initial and subsequent direct Operating (OL) and Youth (OL-Y) loans. OL loans may be made to eligible farmers and ranchers and farm cooperatives, private domestic corporation, partnerships, and joint operations that will manage and operate not larger than family farms. Youth loans may be made to rural youth to conduct modest projects in connection with their participation in 4-H, Future Farmers of America, and similar organizations. It is the policy of Farm Service Agency (FSA) or its successor agency under Public Law 103-354 to make loans to any qualified applicant without regard to race, color, religion, sex, national origin, marital status, age or physical/mental handicap provided the applicant can execute a legal contract. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to Agency or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an Agency or its successor agency under Public Law 103-354 employee. See exhibit A of subpart A of part 1943 of this chapter for making OL loans to entrymen on unpatented public lands. Agency or its successor agency under Public Law 103-354 forms are available in any Agency or its successor agency under Public Law 103-354 office.
The basic objective of the OL loans program is to provide credit and management assistance to farmers and ranchers to become operators of family-sized farms or continue such operations when credit is not available elsewhere. FmHA or its successor agency under Public Law 103-354 assistance enables family-farm operators to use their land, labor and other resources and to improve their living and financial conditions so that they can obtain credit elsewhere. The objective of the OL loan program for rural youth is to provide credit for rural youths to establish and operate income-producing projects of modest size in connection with their participation in 4-H clubs, Future Farmers of America, and similar organizations.
As provided in subpart B of part 1924 of this chapter, management assistance will be provided to all borrowers to the extent necessary to achieve the objectives of the loan.
As used in this subpart, the following definitions apply:
(a) Meets the loan eligibility requirements for OL loan assistance in accordance with § 1941.12 of this subpart.
(b) Has not operated a farm or ranch, or who has operated a farm or ranch for not more than 10 years. This requirement applies to all members of an entity.
(c) Will materially and substantially participate in the operation of the farm or ranch.
(1) In the case of a loan made to an individual, individually or with the immediate family, material and substantial participation requires that the individual provide substantial day-to-day labor and management of the farm or ranch, consistent with the practices in the county or State where the farm is located.
(2) In the case of a loan made to an entity, all members must materially and substantially participate in the operation of the farm or ranch. Material and substantial participation requires that the members provide some amount of the management, or labor and management necessary for day-to-day activities, such that if the members did not provide these inputs, operation of the farm or ranch would be seriously impaired.
(d) Agrees to participate in any loan assessment, borrower training, and financial management programs required by FmHA or its successor agency under Public Law 103-354 regulations.
(e) Except for OL loan purposes, does not real farm or ranch property or who, directly or through interests in family farm entities, owns real farm or ranch property, the aggregate acreage of which does not exceed 25 percent of the average farm or ranch acreage of the farms or ranches in the county where the property is located. If the farm is located in more than one county, the average farm acreage of the county where the applicant's residence is located will be used in the calculation. If the applicant's residence is not located on the farm or if the applicant is an entity, the average farm acreage of the county where the major portion of the farm is located will be used. The average county farm or ranch acreage will be determined from the most recent Census of Agriculture developed by the U.S. Department of Commerce, Bureau of the Census. State Directors will publish State supplements containing the average farm or ranch acreage by county.
(f) Demonstrates that the available resources of the applicant and spouse (if any) are not sufficient to enable the applicant to enter or continue farming or ranching on a viable scale.
(g) In the case of an entity:
(1) All the members are related by blood or marriage.
(2) All the stockholders in a corporation are eligible beginning farmers or ranchers.
(a) Produces agricultural commodities for sale in sufficient quantities so that it is recognized in the community as a farm rather than a rural residence.
(b) Provides enough agricultural income by itself, including rented land, or together with any other dependable income, to enable the borrower to:
(1) Pay necessary family and operating expenses;
(2) Maintain essential chattel and real property; and
(3) Pay debts.
(c) Is managed by:
(1) The borrower when a loan is made to an individual.
(2) The members, stockholders, partners, or joint operators responsible for operating the farm when a loan is made to a cooperative, corporation, partnership, or joint operation.
(d) Has a substantial amount of the labor requirements for the farm enterprise provided by:
(1) The borrower and family members for a loan made to an individual.
(2) The members, stockholders, partners, or joint operators responsible for operating the farm, along with the families of these individuals, for a loan made to a cooperative, corporation, partnership, or joint operation.
(e) May use a reasonable amount of full-time hired labor and seasonal labor during peakload periods.
(a) Pay all operating expenses and all taxes which are due during the projected farm budget period;
(b) Meet necessary payments on all debts; and
(c) Provide living expenses for the family members of an individual borrower or a wage for the farm operator in the case of a cooperative, corporation, partnership, or joint operation borrower which is in accordance with the essential family needs. Family members include the individual borrower of farm operator in the case of an entity, and the immediate members of the family who reside in the same household.
The applicant shall certify in writing on the appropriate forms, and the County Supervisor shall verify and document, that adequate credit is not available, with or without a guarantee or subordination, to finance the applicant's actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near where the applicant resides for loans for similar purposes and periods of time.
(a) If the County Supervisor receives letters or other written evidence from a lender(s) indicating that the applicant is unable to obtain satisfactory credit, this will be included in the loan docket.
(b) If the applicant cannot qualify for the needed credit from the lender(s) contacted, but one or more of them has indicated they would provide credit with an FmHA or its successor agency under Public Law 103-354 guarantee, or the County Supervisor determines that the applicant can obtain a guaranteed loan, the applicant will be advised to file an application with that lender(s) so that a guaranteed OL request can be processed by the lender(s) for consideration by FmHA or its successor agency under Public Law 103-354.
(c) Property and interest in property owned and income received by an individual applicant; a cooperative and its members, as individuals; a corporation and its stockholders, as individuals; a partnership and its partners, as individuals; and a joint operation and its joint operator as individuals will be
(d) Applicants and borrowers will be encouraged to supplement operating loans with credit from other credit sources to the extent economically feasible and in accordance with sound financial management practices.
Applications will be received and processed as provided in subpart A of part 1910 of this chapter, with consideration given to the requirements in exhibit M of subpart G of part 1940 of this chapter.
In accordance with the Food Security Act of 1985 (Pub. L. 99-198), after December 23, 1985, if an individual or any member, stockholder, partner, or joint operator of an entity is convicted under Federal or State law of planting, cultivating, growing, producing, harvesting, or storing a controlled substance (see 21 CFR part 1308, which is exhibit C of this subpart and is available in any FmHA or its successor agency under Public Law 103-354 office, for the definition of “controlled substance”) prior to loan approval in any crop year, the individual or entity shall be ineligible for a loan for the crop year in which the individual or member, stockholder, partner, or joint operator of the entity was convicted and the four succeeding crop years. Applicants will attest on Form FmHA or its successor agency under Public Law 103-354 410-1, “Application for FmHA Services,” that as individuals or that its members, if an entity, have not been convicted of such crime after December 23, 1985. A decision to reject an application for this reason is not appealable. In addition, the following requirements must be met:
(a) An individual must:
(1) Be a citizen of the United States (see § 1941.4 of this subpart for the definition of “United States”) or an alien lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act. Aliens must provide Forms I-151 or I-551, “Alien Registration Receipt Card.” Indefinite parolees are not eligible. If the authenticity of the information shown on the alien's identification document is questioned, the County Supervisor may request the Immigration and Naturalization Service (INS) to verify the information appearing on the alien's identification card by completing INS Form G-641, “Application for Verification of Information from Immigration and Naturalization Records,” obtainable from the nearest INS District. (See exhibit B of subpart A of part 1944 of this chapter.) Mail the completed form to INS. The payment of a service fee by FmHA or its successor agency under Public Law 103-354 to INS is waived by inserting in the upper right hand corner of INS Form G-641, the following: “INTERAGENCY LAW ENFORCEMENT REQUEST”.
(2) Possess the legal capacity to incur the obligations of the loan.
(3) Except for youth loans, have sufficient applicable educational and/or on the job training or farming experience in managing and operating a farm or ranch (1 year's complete production and marketing cycle within the last 5 years) which indicates the managerial ability necessary to assure reasonable prospects of success in the proposed plan of operation.
(4) Have the character (emphasizing credit history, past record of debt repayment and reliability) and industry to carry out the proposed operation. Past record of debt repayment will not be cause for a determination that the applicant/borrower is not eligible if an honest attempt has been made to meet the payment(s).
(5) Honestly endeavor to carry out the applicant's/borrower's undertakings and obligations. This would include, but is not limited to, providing current, complete and truthful information when applying for assistance and making every reasonable effort to meet the conditions and terms of the proposed loan.
(6) Be unable to obtain sufficient credit elsewhere to finance actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans
(7) Except for youth loans, be the owner-operator or tenant-operator of not larger than a family farm after the loan is closed. In the case of a limited resource applicant see § 1941.4 of this subpart.
(8) Have not executed a promissory note for a direct OL loan in more than 6 different calendar years prior to the calendar year that the requested direct OL loan will close. This eligibility restriction applies to anyone who signs the promissory note. Youth loans are not counted as direct OL loans for the purpose of this paragraph.
(9)
(10) Have not caused the Agency a loss by receiving debt forgiveness on all or a portion of any direct or guaranteed loan made under the authority of the Consolidated Farm and Rural Development Act (CONACT) by debt-write down, write-off, compromise under the provisions of section 331 of the CONACT, adjustment, reduction, charge-off or discharge in bankruptcy or through any payment of a guaranteed loss claim under the same circumstances. Notwithstanding the restrictive provisions of this paragraph, applicants who received a write-down under section 353 of the CONACT may receive direct and guaranteed OL loans to pay annual farm and ranch operating expenses, which includes family subsistence if the applicant meets all other eligibility requirements.
(11) Not be delinquent on any Federal debt. This restriction will not apply if the Federal delinquency is cured on or before the loan closing date.
(b)
(1) Be unable to obtain sufficient credit elsewhere to finance actual needs at reasonable rates and terms, taking into account prevailing private and cooperative rates and terms in or near the community for loans for similar purposes and periods of time. This applies to the entity and
(2) Be controlled by farmers or ranchers engaged primarily and directly in farming or ranching in the United States, after the loan is made.
(3) Be the owner-operator or tenant-operator of not larger than a family farm after the loan is closed.
(4) Consist of members, stockholders, partners or joint operators who are individuals and not cooperative(s), corporation(s), partnership(s), or joint operation(s).
(5) If the members, stockholders, partners, or joint operators holding a
(i) They must be citizens of the United States (see § 1941.4 of this subpart for the definition of “United States”) or aliens lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act. Aliens must provide Forms I-151 or I-551, “Alien Registration Receipt Card.” Indefinite parolees are not eligible. If the authenticity of the information shown on the alien's identification document is questioned, the County Supervisor may request the Immigration and Naturalization Service (INS) to verify the information appearing on the alien's identification card by completing INS Form G-641, “Application for Verification of Information from Immigration and Naturalization Records,” obtainable from the nearest INS District. (See exhibit B of subpart A of part 1944 of this chapter.) Mail the completed form to INS. The payment of a service fee by FmHA or its successor agency under Public Law 103-354 to INS is waived by inserting in the upper right hand corner of the INS Form G-641, the following: “INTERAGENCY LAW ENFORCEMENT REQUEST”.
(ii) They must have sufficient applicable educational and/or on the job training or farming experience in managing and operating a farm or ranch (1
(iii) They and the entity itself must have the character (emphasizing credit history, past record of debt repayment and reliability) and industry to carry out the proposed operation. Past record of debt repayment will not be cause for a determination that the applicant/borrower is not eligible if an honest attempt has been made to meet the payment(s).
(iv) They and the entity itself will honestly endeavor to carry out the applicant's/borrower's undertakings and obligations. This would include, but is not limited to, providing current, complete and truthful information when applying for assistance and making every reasonable effort to meet the conditions and terms of the proposed loan.
(v) At least one member, stockholder, partner, or joint operator must operate the family farm.
(vi) The entity must operate the farm and be authorized to do so in the State(s) in which the farm is located.
(6) If the members, stockholders, partners, or joint operators holding a majority interest are
(i) The requirements of paragraphs (b)(5) (i) through (iv) and (vi) of this section must be met.
(ii) They and the entity itself must operate the family farm.
(7) If applying as a limited resource applicant, as defined in § 1941.4 of this subpart:
(i) The requirements of paragraphs (b)(5) (i) through (iv) and (vi) of this section must be met by the entity and
(ii) The entity and
(8) If each member's, partner's, stockholder's, or joint operator's ownership interest does
(i) all of the members of the entity are related by blood or marriage,
(ii) all of the members are or will be operators of the entity, and
(iii) the majority interest holders of the entity meet the requirements of paragraphs (b)(5) (i) through (iv) and (vi) of this section.
(9) Have no member of the business entity who has executed a promissory note for direct OL loans closed in more than 6 different calendar years prior to the calendar year that the requested direct OL loan will close. This eligibility restriction applies to anyone who signs the promissory note. Youth loans are not counted as direct OL loans for the purpose of this paragraph.
(10)
(11) Have not caused the Agency a loss by receiving debt forgiveness on all or a portion of any direct or guaranteed loan made under the authority of the Consolidated Farm and Rural Development Act (CONACT) by debt-write down, write-off, compromise under the provisions of section 331 of the CONACT, adjustment, reduction, charge-off or discharge in bankruptcy or through any payment of a guaranteed loss claim under the same circumstances. Notwithstanding the restrictive provisions of this paragraph, applicants who received a write-down under section 353 of the CONACT may receive direct and guaranteed OL loans to pay annual farm and ranch operating expenses, which includes family subsistence if the applicant meets all other eligibility requirements.
(12) Not be delinquent on any Federal debt. This restriction will not apply if the Federal delinquency is cured on or before the loan closing date. This eligibility restriction applies to the entity and all of its members.
(c)
If otherwise eligible, a rural youth who applies for an OL loan must be recommended by a project advisor such as a 4-H club advisor, vocational teacher, home economics teacher, county extension agent, or other organizational sponsor or advisor. In addition, a youth who has not reached the age of majority under State law must obtain a written recommendation from a parent or guardian. All recommendations will be filed with the application in the borrower's case file.
An applicant who obtained a write-down under direct or guaranteed loan authorities is restricted to the purposes listed under paragraphs (c), (g) and (h) of this section. All other eligible applicants may only request OL funds for any of the following purposes:
(a) Payment of costs associated with reorganizing a farm or ranch to improve its profitability.
(b) Purchase of livestock, including poultry, and farm or ranch equipment, including quotas and bases, and cooperative stock for credit, production, processing or marketing purposes.
(c) Payment of annual operating expenses, examples of which include, but are not exclusively limited to feed, seed, fertilizer, pesticides, farm or ranch supplies, cooperative stock, and cash rent.
(d) Payment of costs associated with land and water development for conservation or use purposes.
(e) Payment of loan closing costs.
(f) Payment of costs associated with complying with Federal or State-approved standards under the Occupational Safety and Health Act of 1970 (29 U.S.C. 655 and 667). This purpose is limited to applicants who demonstrate that compliance with the standards will cause them substantial economic injury.
(g) Payment of training costs required or recommended by the Agency.
(h) Payment of farm, ranch, or home needs, including family subsistence. A portion of the loan is available to the borrower for use outside of a supervised bank account. This portion is the lesser of:
(1) 10 percent of the OL loan;
(2) $5,000; or
(3) The amount needed to meet the subsistence needs of the family for a 3-month period.
(i) Refinancing debts if the applicant has had direct or guaranteed OL loans refinanced (refinanced does not mean restructured) 4 times or less and one of the following conditions is met:
(1) The need for refinancing was caused by a qualifying disaster declared by the President or designated by the Secretary; or
(2) The debts to be refinanced are owed to a non-USDA creditor.
An OL loan will not be approved:
(a) If the total outstanding insured OL principal balance, including the new loan, owed by the applicant will exceed $200,000 at loan closing.
(b) If the total outstanding youth loan principal balance will exceed $5,000 at loan closing.
(c) For the purchase of real estate, making principal payments on real estate, or refinancing of any debts incurred for the purchase of real estate.
(d) For any purpose that will contribute to excessive erosion of highly erodible land or to convert wetlands to produce an agricultural commodity as further explained in exhibit M of subpart G of part 1940 of this chapter. Refer to subpart LL of part 2000 of this chapter, “Memorandum of Understanding Between FmHA or its successor agency under Public Law 103-354 and the U.S. Fish and Wildlife Service,” for assistance in implementation.
(a)
(1) An applicant will receive the lower rate provided:
(i) The applicant meets the conditions of the definition for a limited resource applicant set forth in § 1941.4 of this subpart.
(ii) The Farm and Home Plan and/or Nonagricultural Enterprise Analysis, when appropriate, indicates that installments at the higher rate, along with other debts, cannot be paid during the period of the plan.
(2) A borrower with Limited Resource interest rates will be reviewed each year at the time the analysis is conducted (see § 1924.55 of subpart B of part 1924 of this chapter) and at any time a servicing action such as consolidation, rescheduling or deferral is taken to determine what interest rate should be charged. The rate may be increased in increments of whole numbers until it reaches the current regular interest rate for the loan at the time of the rate increase. (See § 1951.25 of subpart A of part 1951 of this chapter.)
(b)
(2) Loan funds used to pay annual operating expenses or bills incurred for such purposes for the crop year being financed will normally be scheduled for payment within 12 months, but no later than 18 months, from the date the loan is closed when marketing plans extend beyond 12 months. When an OL loan for annual production purposes is scheduled for repayment in one installment, the installment must fall due no later than 18 months from the date of loan closing. Individual marketing circumstance may warrant repayment schedules which are longer than 18 months. Such factors as establishing a new enterprise, developing a farm, purchasing feed while feed crops are being established, marketing plans, or during recovery from a disaster or economic reverses, can be considered as reasons for a longer repayment period on loans for annual operating purposes. When longer than normal repayment terms are used for annual operating purposes, crops and/or livestock produced for sale will not be considered sufficient security. The County Supervisor may use Form FmHA or its successor agency under Public Law 103-354 440-9, “Supplementary Payment Agreement,” for borrowers who receive substantial income from which payment is to be
(3) Advances for purposes other than annual operating expenses will be scheduled for payment over the minimum period necessary considering the applicant's ability to pay and the useful life of the security, but not in excess of 7 years.
(4) When conditions warrant, installment scheduled in accordance with paragraph (b)(2) of this section may include equal, unequal, or balloon installments. In each case warranting balloon installments, there must be adequate collateral for the loan at the time the balloon payment is due. Circumstances which warrant balloon installments are factors such as establishing a new enterprise, developing a farm, purchasing feed while crops are being established or during recovery from a disaster, or economic reverses. In
Primary security must be available for the loan. Any additional security available up to and including 150 percent of the loan amount also will be taken. Security in excess of 150 percent of the loan amount will only be taken when it is not practical to separate the property, i.e., same type of livestock (dairy cows, brood sows). In cases when a loan is being made in conjunction with a servicing action, the security requirements as stated in subpart S of part 1951 of this chapter will prevail. In unusual cases, the loan approval official may require a cosigner in accordance with § 1910.3 (d) of subpart A of part 1910 of this chapter or a pledge of security from a third party. A pledge of security is preferable to a cosigner.
(a)
(2) If the security for the loan under paragraph (a)(1) of this section is not at least equal to 150 percent of the loan amount, the best lien obtainable will be taken on other chattel security owned by the applicant, if available, up to the point that security for the loan at least equals 150 percent of the loan amount.
(i) When there are several alternatives available (cattle, machinery), any one of which will meet the security requirements of this section, the approval official generally has the discretion to select the best alternative for obtaining security.
(ii) When alternatives exist and the applicant has a preference as to the property to be taken for security, however, the approval official will honor the preference so long as the requirements of paragraphs (a)(1) and (2) of this section are met.
(3) To comply with the 150 percent requirement, security values will be established as follows:
(i) For the purposes of loan making only, the security value of the crop and/or livestock production is presumed to be 100 percent of the amount loaned for annual operating and family living expenses listed on Form FmHA or its successor agency under Public Law 103-354 431-2, “Farm and Home Plan,” or other acceptable plan of operation.
(ii) The specific livestock and/or equipment to be taken as security, along with the value of the security, will be documented in the case file. This information will be obtained from values established in accordance with § 1941.25 of this subpart.
(b)
(1) Security may also include assignments of leases or leasehold interests having mortgageable value, revenues, royalties from mineral rights, patents and copyrights, and pledges of security by third parties.
(2) Advice on obtaining security will be received from OGC when necessary.
(c)
(1) A lien will not be taken on property when it will prevent the applicant, or members of an entity applicant, from obtaining operating credit from other sources.
(2) A lien will not be taken on property that could have significant environmental problems/costs (e.g., known or suspected underground storage tanks or hazardous wastes, contingent liabilities, wetlands, endangered species, historic properties). Guidance is provided in part II, item H of exhibit A of FmHA Instruction 1922-E (available in any FmHA or its successor agency under Public Law 103-354 office) as to the action to be taken when the appraiser indicates that the property is subject to any hazards, detriments or limiting conditions.
(3) A lien will not be taken on property that cannot be made subject to a valid lien.
(4) A lien will not be taken on the applicant's personal residence and appurtenances, when the residence is located on a separate parcel and the farm tract(s) being used for collateral, in addition to any crops or chattels, meet the security requirement of at least equal to 150 percent of the loan.
(5) A lien will not be taken on subsistence livestock; cash or special cash collateral accounts to be used for the farming operation or for necessary living expenses; all types of retirement accounts; personal vehicles necessary for family living or farm operating purposes; household goods; and small tools and small equipment, such as hand tools, power lawn mowers, and other similar items not needed for security purposes.
(6) When title to a livestock or crop enterprise is held by a contractor under a written contract or the enterprise is to be managed by the applicant under a share lease or share agreement, an assignment of all or part of the applicant's share of the income will be taken. A form approved by OGC will be used to obtain the assignment.
(7) A lien will not be taken on timber or the marginal land for a loan for planting softwood timber trees on marginal land in conjunction with a softwood timber (ST) loan.
(d)
(e)
(f)
(1) Chattel and/or real estate security that is separate and identifiable from the security pledged to the Agency for any other farm credit programs direct or guaranteed loan(s).
(2) Different lien positions on real estate are considered separate and identifiable collateral.
(3) The outstanding amount of loans made may not exceed the value of the collateral used.
(a)
(1) Environmental assessments and statements. Subpart G of part 1940 of this chapter should be referred to for these requirements. The State Environmental Coordinator should be consulted for assistance in preparing any required statements.
(2) Equal opportunity and nondiscrimination requirements. In accordance with title V of Pub. Law 93-495, the Equal Credit Opportunity Act, FmHA or its successor agency under Public Law 103-354 will not discriminate against any applicant on the basis of race, color, religion, sex, national origin, marital status, age or physical/mental handicap provided the applicant can execute a legal contract, with respect to any aspect of a credit transaction.
(3) National Historic Preservation Act of 1966. If a loan will affect any district, site, building, structure, or object that has been included in the National Register of Historic Places as maintained by the Department of Interior in accordance with the National Historic Preservation Act of 1966, or if the undertaking may affect properties having scientific, prehistorical, historical, or archaeological significance, the provisions of subpart F of part 1901 of this chapter will apply.
(b)
(2) An applicant will be advised that compliance with all applicable special laws and regulations is required.
(3) An applicant receiving a loan for a nonfarm enterprise will be advised of the possibilities of incurring liability and encouraged to obtain public liability and property damage insurance.
(4) An applicant must have acceptable tenure arrangements. Unless the loan approval official determines otherwise, each applicant will obtain a satisfactory written lease. A copy of the lease will be filed in the County Office case file.
(a) Except as provided in paragraph (a)(5) of this section, real estate appraisals will be completed by an FmHA or its successor agency under Public Law 103-354 employee, or a contractor authorized to make farm appraisals. Chattel and real estate appraisals will be made on forms in accordance with § 761.7 of this title and, in the case of an appraisal of mineral rights’ the appropriate Agency form (available in each Agency State Office) or other format that contains the same information, to determine market value and borrower equity in the following instances:
(1) When an initial loan is made, a chattel appraisal is required on all chattel property owned by the applicant, and on chattel property to be acquired when the item can be specifically identified.
(2) When a subsequent loan is made, a chattel appraisal is required when:
(i) Refinancing chattel debt.
(ii) The existing chattel appraisal is more than 2 years old.
(3) A real estate appraisal is not required when real estate is taken as additional security, as defined in § 1941.4 of this subpart. However, the County Supervisor will document in the running record the estimated market value of the additional security and the basis for the estimate.
(4) A real estate appraisal is required when real estate is taken as primary security, as defined in § 1941.4 of this subpart.
(5) Other real estate appraisals completed by other State-certified general appraisers may be used providing such appraisals meet the ethics, competency, departure provisions, etc., and
(6) A new real estate appraisal is not required if the latest appraisal report available is not over 1 year old, unless the approval official requests a new appraisal, or unless significant changes in the market value of real estate have occurred in the area within the 1-year period.
(b)
(a) An eligible emergency loan (EM) applicant's total credit needs will be satisfied under the EM loan authorities, to the extent possible, before OL loan assistance is considered.
(b) A direct OL loan may be made to a guaranteed loan borrower provided:
(1) The outstanding direct and guaranteed OL principal balance owed by the loan applicant does not exceed $400,000 at loan closing.
(2) The outstanding combined direct and guaranteed OL principal balance owed by the loan applicant, or owed by anyone who will sign the note as co-signer evidencing personal liability, will not exceed the authorized guaranteed OL loan limit providing the portion representing the direct OL indebtedness does not exceed the direct loan limit. The deciding factors are the type of entity and the personal liability of the entity members. Individuals, who are members or stockholders of a cooperative or corporation that is indebted for a $200,000 direct and $200,000 guaranteed OL loan, can each borrow a $200,000 direct and $200,000 guaranteed OL loan, or any combination of direct or guaranteed OL loan funds that does not cause them to exceed the individual direct or guaranteed OL loan limits, provided they conduct separate farming operations as individuals and they have not signed as individuals giving personal liability for the entity OL debt. Likewise, such entities whose members or stockholders are individually indebted for the maximum direct or guaranteed OL loan limit, may borrow the maximum direct or guaranteed OL loan limits, providing none of the members or stockholders are required to pledge personal liability for the entity debt. Partners or joint operators of a partnership or joint operation, which is indebted for a $200,000 direct and a $200,000 guaranteed OL loan, cannot borrow additional OL funds as individuals in a separate operation because they are each personally liable for the total entity debt. Likewise, such entities, consisting of individuals who are indebted for the maximum direct or guaranteed OL loan limits, are not eligible for OL loan assistance.
(3) Chattel and/or real estate security must be separate and identifiable from the security pledge to FmHA or its successor agency under Public Law 103-354 for a guaranteed loan. Different lien positions on real estate are considered separate and identifiable security.
(c) An direct OL loan may be made to refinance a guaranteed OL loan when the following conditions are met:
(1) The circumstances resulting in the need to refinance were beyond the borrower's control.
(2) Refinancing is in the best interest of the Government and the borrower.
(3) The guaranteed OL loan must be completely paid off at the time the direct OL loan is closed.
(d) New applicants and borrowers indebted to FmHA or its successor agency under Public Law 103-354 and/or an FmHA or its successor agency under Public Law 103-354 guaranteed lender(s) for an EE loan may be considered for an OL loan(s) provided their total outstanding principal indebtedness to FmHA or its successor agency under Public Law 103-354 and/or the FmHA or its successor agency under Public Law 103-354 guaranteed lender(s) for the EE loan and any FO, SW, RL, and/or OL loans will not exceed $650,000.
Applicants must comply with the CAT insurance requirement no later than loan closing by either:
(1) Obtaining at least the CAT level of coverage, if available, for each crop of economic significance as defined by the Federal Crop Insurance Corporation, or,
(2) By waiving eligibility of emergency crop loss assistance in connection with the uninsured crop. FSA emergency (EM) loss loan assistance is not considered emergency crop loss assistance for the purpose of the crop insurance waiver on the uninsured crop.
(a)
(b)
(i) The Agency has certified the applicant eligible,
(ii) Funds are requested for authorized purposes,
(iii) The proposed loan is based on a feasible plan, or meets the requirements set forth in § 1941.14(a)(5) of this chapter for annual production loans to delinquent borrowers. Planning forms other than Form FmHA or its successor agency under Public Law 103-354 431-2 may be used when they provide all the necessary information.
(iv) The security is adequate,
(v) Necessary supervision is planned, and
(vi) All other pertinent requirements have been met or will be met.
(2) When approving the loan, the approval official will:
(i) Indicate on all copies of Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request for Obligation of Funds,” any conditions required by Agency or its successor agency under Public Law 103-354 regulations that must be met for loan closing;
(ii) Specify all security requirements;
(iii) Indicate special conditions or agreements needed with prior lienholders when appropriate;
(iv) Indicate that approval is subject to satisfactory title evidence when required, if such evidence has not been obtained; and
(v) Send a signed copy of Form FmHA or its successor agency under Public Law 103-354 1940-1 to the borrower on the date of loan approval.
(c)
(1) The reasons for disapproval will be indicated on Form FmHA or its successor agency under Public Law 103-354 1940-1 by the loan approval official. The reasons may be in a letter or the running record if this form has not been completed. Suggestions of how to remedy the disapprovals should be included.
(2) The County Supervisor will notify the applicant in writing of the action
(3) Items furnished by the applicant during docket processing will be returned.
(4) The County Supervisor will notify any other interested parties of the disapproval.
(a)
(b)
(c)
(1) Complete and distribute Form FmHA or its successor agency under Public Law 103-354 1940-10.
(2) When necessary, prepare and excute a subsitute promissory note reflecting the revised total of the loan and the revised repayment schedule. When it is not necessary to obtain a substitute promissory note, the County Supervisor will show on Form FmHA or its successor agency under Public Law 103-354 440-57 the revised amount of the loan and the revised repayment schedule.
(d)
Operating loans will be closed in accordance with subpart B of part 1941 of this chapter.
Loans will be serviced in accordance with subpart A of part 1962 of this chapter and/or subpart S of part 1951 of this chapter.
State supplements will be issued as necessary to implement this subpart.
This exhibit outlines the basic steps involved in processing a loan application and identifies the FmHA or its successor agency under Public Law 103-354 forms which should be considered for use at each step.
Consult the appropriate Forms Manual Insert (FMI) for instructions for completion, distribution, and procedural references for each form.
Review applicant's proposed plan of operation in view of authorized loan purposes and limitations on loans.
Begin running case record.
Provide applicant with FmHA or its successor agency under Public Law 103-354 forms to be completed and returned which are needed to determine eligibility. Be sure applicant understands the purposes of the forms and knows who must complete them.
Advise applicant of other information that must be given to FmHA or its successor agency under Public Law 103-354.
When appropriate, have applicant contact other creditors as possible credit sources for financing, or participating in the financing, of the proposed operation.
The following FmHA or its successor agency under Public Law 103-354 forms will be made available to the applicant or will be used by the County Supervisor. Forms designated with an “x” are always required and those designated with an “*” are to be used when appropriate.
Notify applicant of planned visit and its purpose.
Evaluate the resources available to the applicant and determine whether or not they adequately fulfill the requirements of the proposed plan of operation.
Obtain information needed to complete required appraisals (chattel and real estate).
Hold landlord-tenant meeting, if necessary, to reach an agreement on the terms of the lease, resolve any problems, etc.; record in running case record.
Determine security requirements and record in running case record.
The following FmHA or its successor agency under Public Law 103-354 forms will be used as appropriate:
Obtain all needed application forms, and other information from the applicant; assist the applicant in completing these forms and in obtaining needed information, as necessary.
Request copy of deed or other evidence of title, when needed.
Schedule meeting with county committee, review application and determine eligibility.
Inform applicant of the results of committee action.
The following FmHA or its successor agency under Public Law 103-354 forms will be used as appropriate in accomplishing the above actions:
Obtain all information from the applicant, prior lienholder(s), landlord(s), etc., needed for the loan docket to be prepared.
Check to make sure all security requirements have been met or will be met by loan closing.
Prepare a loan narrative, for running record.
The following FmHA or its successor agency under Public Law 103-354 forms will be completed and utilized as necessary in preparing the loan docket for approval:
File financing statement or chattel mortgage, and obtain a lien search.
Request preliminary title opinion when appropriate.
Record loan closing conditions in the running record.
Execute and distribute all forms necessary for loan approval.
Request needed legal services.
Arrange for loan closing by county office, escrow agent, designated attorney, or other authorized loan closing agent; furnish loan closing agent with appropriate instructions, forms, and other needed information for loan closing.
The following FmHA or its successor agency under Public Law 103-354 forms will be used by the County Office in addition to those forms listed under docket preparation which must be executed by the borrower or other party:
For
—Exhibit C referenced in this subpart is available in any FmHA or its successor agency under Public Law 103-354 office.)
This subpart prescribes Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 policies, procedures, and authorizations for closing direct loans secured by chattels. These loans are considered closed on the date the promissory note is executed.
(a)
(b)
(2)
(3)
Security instruments referred to in this subpart are financing statements, security agreements, chattel mortgages, and similar lien instruments. To obtain a security interest in chattels and crops in States which have adopted the Uniform Commercial Code (UCC), both a financing statement and a security agreement are required, although only the financing statement must be filed or recorded in public records. See paragraph (g) of this section for filing or recording instructions. In Louisiana a Chattel Mortgage and Crop Pledge or Crop Pledge, as appropriate, is required to obtain a security interest in chattels and crops.
(a)
(1) Appropriate cooperative or corporation officials, on behalf of a cooperative or corporation. Any other signatures needed to assure the required security will be obtained as provided in State supplements. A cosigner will be required only when it has been determined that the applicant cannot possible meet the security requirements for the loan request.
(2) Appropriate partners or joint operators on behalf of a partnership or joint operation; and the instruments will also be executed by all partners, or all joint operators, who will sign as individuals.
(b)
(c)
(2) Form FmHA or its successor agency under Public Law 103-354 440-4 LA, “Chattel Mortgage and Crop Pledge (Louisiana),” or Form FmHA or its successor agency under Public Law 103-354 440-4A LA, “Crop Pledge (Louisiana),” will be used in the State of Louisiana.
(3) Other forms will be used as provided in State supplements in Puerto Rico, Guam, American Samoa and the Northern Mariana Islands.
(d)
(i)
(ii)
(2)
(ii)
(A) An additional security agreement may also be executed to reflect significant changes in security.
(B) An additional security agreement is not necessary if the existing security agreement covers all types of chattels that will serve as security for the subsequent loan, describes the land on which the crops or fixtures are or will be located, and was executed within 1 year before the crops which are offered as security became growing crops.
(e)
(2) Generally, animals, birds, fish, etc., should be described by groups in the security agreement. The serial or other identification numbers of major items of equipment should be listed in the security agreement. If a security interest is to be taken in property such as inventory, supplies, recreation or other nonfarm equipment, or fixtures which cannot be readily described under the column headings of items 2 or 3 of Form FmHA or its successor agency under Public Law 103-354 440-4, an appropriate description of such property will be inserted in item 2 or 3 below the other property, without regard to the column headings.
(3) The advice of the Office of the General Counsel (OGC) will be obtained as to how to describe in financing statements and security agreements items such as grazing permits, milk bases, and membership or stock in cooperative associations. The property to be described in security instruments should be reconciled with any existing security instruments and with Form FmHA or its successor agency under Public Law 103-354 462-1, “Record of the Disposition of Security Property.”
(4) After the initial security agreement is executed, and after the borrower obtains all the property which FmHA or its successor agency under Public Law 103-354 wants specifically described, by item, in the security agreement, a new security agreement will be executed.
(f)
(g)
(2) Security agreements will not be filed or recorded unless required by State supplements. Form FmHA or its successor agency under Public Law 103-354 440-4 LA or Form FmHA or its successor agency under Public Law 103-354 440-4A LA will be filed or recorded in Louisiana as provided by State supplements.
A purchase money security interest will take priority over an earlier perfected security interest if a security agreement is taken and a financing statement is filed before the purchaser receives possession of the property or within 10 days thereafter, subject to the following limitations:
(a)
(b)
(c)
(1) A security agreement is taken and a financing statement is filed not later than the time the purchaser receives possession of the property, and
(2) Before the purchaser takes possession of the property, written notice is given to the party holding the earlier perfected interest that the purchase money creditor has acquired or expects to acquire a purchase money security interest in the inventory, which must by described by item or type. When determined necessary by OGC, a State supplement will be issued to further explain the requirements for perfecting a purchase money security interest in inventory.
(d)
(e)
(a)
(2) Under the UCC, lien searches are necessary in making subsequent loans if an additional financing statement is required; i.e., when crops or fixtures to be taken as security are or will be located on land not described in the existing financing statement, or when property not covered by the financing statement is to be taken as security for the loan.
(3) Lien searches also may be obtained in connection with processing applications when the County Supervisor determines such searches are necessary on an individual case basis.
(4) Although a lien search is not always required for youths who are minors (as defined in State supplements), the County Supervisor may determine that a search is necessary to assure the Government obtains the required security interest.
(b)
(2) The State Director will issue a State supplement setting forth the requirements for lien searches, including the records to be searched and the periods to be covered.
(3) The applicant should be informed of County Clerks, local attorneys or other persons who will conduct lien searches at a reasonable cost. The applicant will select the lien searcher. The cost of a lien search can be paid from the proceeds of loan checks.
If necessary because of provisions in State statutes, leases, land purchase contracts, or real estate mortgages commonly in use, State Directors will issue State supplements which tell how to obtain a subordination agreement, certification of obligation to landlord, disclaimer, and consent and subordination agreement to perfect security interest.
(a)
(b)
(1) It appears that the applicant is not financially obligated to the landlord except for rent for the lease year and will not incur other obligations to the landlord during that year, and
(2) A State supplement authorizing the use of Form FmHA or its successor agency under Public Law 103-354 441-17 in such cases has been issued.
(c)
(1) If a debt on an item which has already become a fixture is being refinanced, consent and subordination agreements will be signed before releasing loan funds to the creditor. In all other cases in which a security interest is being taken on an item that already has become a fixture, consent and subordination agreements will be signed no later than the time of loan closing.
(2) Consent and subordination agreements will be taken only in those cases in which the fixture is placed on the real estate before the financing statement and security agreement covering the fixture have been executed, or before the financing statement is filed, or before the request for obligation of funds is signed by the loan approving official.
The borrower will pay all fees for filing or recording financing statements, mortgages, or other legal instruments and will pay all notary and lien search fees incident to loan transactions. Payment will be made from personal funds or from the proceeds of the loan. Whenever FmHA or its successor agency under Public Law 103-354 employees accept cash to pay for filing or recording fees or for the cost of making a lien search, Form FmHA or its successor agency under Public Law 103-354 440-12, “Acknowledgment of Payment for Recording, Lien Search, and Releasing Fees,” will be executed. FmHA or its successor agency under Public Law 103-354 employees will make it clear to the borrower that any fee so accepted is not received by the Government as a payment on the borrower's debt, but is accepted only for paying the recording, filing, or lien search fees on behalf of the borrower.
Original executed security agreements will not be altered or destroyed, and will remain in the case file when new security agreements are taken. Changes in security property will be noted
The future advance and after-acquired property clauses of security agreements will be considered valid in all respects in UCC States unless otherwise provided in a State supplement.
(a)
(b)
(c)
(a) For loans over $10,000, title clearance is required when real estate is taken as primary security.
(b) For loans of $10,000 or less, and loans for which real estate is taken as primary security, a certification of ownership and verification of equity in real estate is required. Certification of ownership may be in the form of a notarized affidavit which is signed by the applicant, names the record owner of the real estate in question and lists the balances due on all known debts against the real estate. Whenever the County Supervisor is uncertain of the record owner or debts against the estate security, a title search will be required.
(c) Title clearance is not required when real estate is taken as additional security, as defined in § 1941.4 of this subpart.
(d) When real estate is taken as primary security, as defined in § 1941.4 of this subpart, title clearance and loan closing requirements will be carried out in accordance with subpart B of part 1927 of this chapter.
(e) If any prior liens against the real estate offered as security contain provisions (such as future advance clauses not limited to a specific amount) that could jeopardize either the security position of the Government or the applicant's ability to meet the obligations of the prior liens and FmHA or its successor agency under Public Law 103-354 loan, the prior lienholders involved must agree in writing, before the loan is closed, to modify, waive, or subordinate such objectionable provisions.
(f) If a lien is to be taken on real estate which is already subject to a lien, and if State law allows a prior lienholder to foreclose on a loan (under power of sale or otherwise) without notifying a junior lienholder of the foreclosure proceedings, the prior lienholders must agree, in writing, to give FmHA or its successor agency under Public Law 103-354 advance notice of all foreclosure proceedings and of any assignment of the mortgage.
(g) Each real estate lien will be taken on Form FmHA or its successor agency under Public Law 103-354 1927-1 (State), “Real Estate Mortgage or Deed of Trust for ______,” unless a state supplement requires the use of another form.
(h) If the real estate offered as security is held under a purchase contract, the following conditions must exist:
(1) The applicant must be able to provide a mortgageable interest in the real estate.
(2) The applicant and the purchase contract holder must agree, in writing, that any insurance proceeds received to compensate for real estate losses will be used only to replace or repair the damaged real estate. If necessary, the applicant will negotiate with the purchase contract holder to arrive at a new contract without any provisions objectionable to either FmHA or its successor agency under Public Law 103-354 or the lender.
(3) If a satisfactory contract of sale cannot be negotiated or if the purchase contract holder refuses to agree to apply the insurance proceeds toward the repair or replacement of the real estate and wants to retain some of the proceeds as an extra payment on the
(4) The purchase contract must not be subject to summary cancellation on default and must not contain any other provisions which might jeopardize either the Government's security position or the borrower's ability to repay the loan.
(5) The contract holder must agree, in writing, to give the Government notice of any breach by the purchaser, and must also agree to give the Government the option to rectify the conditions which amount to a breach within 30 days. The 30 days begin to run on the day the Government receives the written notice of the breach.
(a)
(1) Obtaining at least the CAT level of coverage or,
(2) Waiving eligibility for emergency crop loss assistance in connection with the uninsured crop. EM loss loan assistance is not considered emergency crop loss assistance for purposes of this waiver.
(b)
(1) When OL loan funds are to be used as the primary source of financing for the ensuing year's crop production expenses, and such crop(s) will serve as security for the loan, and crop insurance is purchased by the borrower, FmHA or its successor agency under Public Law 103-354 requires and “Assignment of Indemnity” on the borrower's crop insurance policy(ies).
(2) When FmHA or its successor agency under Public Law 103-354 is not the primary lender for annual crop production expenses, but has or will have a security interest in the crop(s), and the applicant has purchased or will purchase crop insurance, an “Assignment of Indemnity” is taken by FmHA or its successor agency under Public Law 103-354, if the primary lender chooses not to do so.
(3) When the payment of crop insurance premiums is not required until after harvest, the premiums may be paid by releasing insured crop(s) sale proceeds, but not withstanding the limits in §§ 1962.17 and 1962.29(b) of subpart A of part 1962 of this chapter. If the borrower's crop losses are sufficient to warrant an indemnity payment, the premium due will be deducted by the insurance carrier from such payment.
(c)
(d)
(e)
The County Supervisor will receive and deliver loan checks. On receipt of a loan check, and after arrangements have been completed for loan closing, the applicant will be promptly notified on Form FmHA or its successor agency under Public Law 103-354 440-8, “Notice of Check Delivery.” Loan funds will be disbursed in accordance with subpart A of part 1902 of this chapter.
If a supervised bank account is required, loan funds will be deposited following loan closing. Supervised bank accounts will be established in accordance with subpart A of part 1902 of this chapter.
(a)
(1) The change is consistent with authorities, policies and limitations for making loans, and
(2) The change will not adversely affect either the workings of an on-going operation or the Government's interest.
(b)
The regulations of this subpart set forth the terms and conditions under which loans are made under the Boll Weevil Eradication Loan Program. These regulations are applicable to applicants, borrowers, and other parties involved in making, servicing, and liquidating these loans. The program objective is to assist producers and state government agencies in the eradication of boll weevils from cotton producing areas.
As used in this subpart, the following definitions apply:
(a) An eligible organization must:
(1) Meet all requirements prescribed by APHIS to qualify for cost-share grant funds as determined by APHIS, (FSA will accept APHIS’ determination as to an organization's qualification);
(2) Have appropriate charter and legal authority as a non-profit corporation to operate a boll weevil eradication program in any State and biological or geographic region of any State in which it operates;
(3) Possess the legal authority to enter into contracts, including debt instruments;
(4) Operate in an area in which producers have approved a referendum authorizing producer assessments and in which an active eradication or post- eradication program is underway or scheduled to begin no later than the fiscal year following the fiscal year in which the application is submitted;
(5) Be unable to obtain, and certify in writing, that credit from private, commercial, or cooperative sources at reasonable rates and terms for loans for similar purposes and periods of time is not available; and
(6) Have the legal authority to pledge producer assessments as collateral for loans from FSA.
(b) Individual producers are not eligible for loans.
(a) Loan funds may be used for any purpose directly related to boll weevil eradication activities, including, but not limited to:
(1) Purchase or lease of supplies and equipment;
(2) Operating expenses, including but not limited to, travel and office operations;
(3) Salaries and benefits;
(b) Loan funds may not be used to pay expenses incurred for lobbying, public relations, or related activities, or to pay interest on loans from the Agency.
No loan will be made until all Federal and state statutory and regulatory environmental requirements have been complied with.
No recipient of a boll weevil eradication loan will directly, or through contractual or other arrangement, subject any person or cause any person to be subjected to discrimination on the basis of race, religion, color, national origin, gender, or other prohibited basis. Borrowers must comply with all applicable Federal laws and regulations regarding equal opportunity in hiring, procurement, and related matters.
(a) In addition to the specific requirements in this subpart, loan applications will be coordinated with all appropriate Federal, State, and local agencies.
(b) Borrowers are required to comply with all applicable:
(1) Federal, State, or local laws;
(2) Regulatory commission rules; and
(3) Regulations which are presently in existence, or which may be later adopted including, but not limited to, those governing the following:
(i) Borrowing money, pledging security, and raising revenues for repayment of debt;
(ii) Accounting and financial reporting; and
(iii) Protection of the environment.
(a)
(b)
(c)
(i) Assignments of assessments, taxes, levies, or other sources of revenue as authorized by State law;
(ii) Investments and deposits of the applicant; and
(iii) Capital assets or other property of the applicant or its members.
(2) In those cases in which FSA and another lender will hold assignments of the same revenue as collateral, the other lender must agree to a prorated distribution of the assigned revenue based upon the proportionate share of the applicant's debt the lender holds for the eradication zone from which the revenue is derived at the time of loan closing.
(d)
A complete application will consist of the following:
(a) An application for Federal assistance (available in any FSA office);
(b) Applicant's financial projections including a cashflow statement showing the plan for loan repayment;
(c) Copies of the applicant's authorizing State legislation and organizational documents;
(d) List of all directors and officers of the applicant;
(e) Copy of the most recent audited financial statements along with updates through the most recent quarter;
(f) Copy of the referendum used to establish the assessments and a certification from the Board of Directors that the referendum passed;
(g) Evidence that the officers and employees authorized to disburse funds are covered by an acceptable fidelity bond;
(h) Evidence of acceptable liability insurance policies;
(i) Statement from the applicant addressing any current or pending litigation against the applicant as well as any existing judgements;
(j) A copy of a resolution passed by the Board of Directors authorizing the officers to incur debt on behalf of the borrower;
(k) Any other information deemed to be necessary by FSA to render a decision.
Loan requests will be processed based on the date FSA receives the application. Loan approval is subject to the availability of funds. However, when multiple applications are received on the same date and available funds will not cover all applications received, applications from active eradication areas, which FSA determines to be most critical for the accomplishment of program objectives, will be funded first.
(a)
(b)
(c)
(1) The borrower must submit audited financial statements to FSA at least annually;
(2) The borrower will immediately notify FSA of any adverse actions such as:
(i) Anticipated default on FSA debt;
(ii) Potential recall vote of an assessment referendum; or
(iii) Being named as a defendant in litigation;
(3) Submission of other specific financial reports for the borrower;
(4) The right of deferral under 7 U.S.C. 1981a; and
(5) Applicable liquidation procedures upon default.
(d)
(a)
(b)
(a)
(b)
(c)
(d)
5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.
(a) This subpart outlines the policies and procedures for making and processing insured loans for community facilities except for fire and rescue and water and waste disposal facilities. This subpart applies to community facility loans for fire and rescue facilities only as specifically provided for in subpart C of this part. Water and waste loans are provided for in part 1780 of this title. The Agency shall cooperate fully with State and local agencies in making loans to assure maximum support to the State strategy for rural development. State Directors and their staffs shall maintain coordination and liaison with State agency and substate planning districts. Funds allocated for use under this subpart are also for the
(b) Indian tribes on Federal and State reservations and other Federally recognized Indian tribes are eligible to apply for and are encouraged to participate in this program. Such tribes might not be subject to State and local laws or jurisdiction. However, any requirements of this subpart that affect applicant eligibility, the adequacy of FmHA or its successor agency under Public Law 103-354's security or the adequacy of service to users of the facility and all other requirements of this subpart must be met.
(c) Loans sold without insurance by FmHA or its successor agency under Public Law 103-354 to the private sector will be serviced in the private sector and will not be serviced under this subpart. The provisions of this subpart are not applicable to such loans. Future changes to this subpart will not be made applicable to such loans.
(d) The District Office will normally be the entry point for preapplications and serve as a local point. Applications will be filed with the District Office and loans will be processed to the maxium extent possible by the District Office staff. The applicant's governing body should designate one person to coordinate the activities of its engineer, architect, attorney, and any other professional employees and to act as contact person during loan processing. FmHA or its successor agency under Public Law 103-354 personnel should make every effort to involve the applicant's contact person when meeting with the applicant's professional consultants and/or agents. The State Office staff will monitor community programs loanmaklng and servicing, and will provide assistance to District Office personnel to the extent necessary to assure that the activities are being accomplished in an orderly manner consistent with FmHA or its successor agency under Public Law 103-354 regulations.
(a)
(i) Eligibility determination and recommendations.
(ii) One copy of SF 424.2.
(iii) State intergovernmental review comments and recommendations (clearinghouse comments).
(iv) Priority recommendations.
(v) Supporting documentation necessary to make an eligibility determination such as financial statements, audits, or copies of organizational documents or existing debt instruments. The District Director will advise applicants on what documents are necessary. Applicants should not be required to expend significant amounts of money or time developing supporting documentation at the preapplication stage.
(2) The State Director will review each SF 424.2 along with other information that is deemed necessary to determine whether financing from commercial sources at reasonable rates and terms is available. If credit elsewhere is indicated, the State Director will instruct the District Director to so inform the applicant and recommend the applicant apply to commercial sources for financing. Projects may be funded jointly with other lenders provided the requirements of § 1942.17 (g) of this subpart are met. Joint financing occurs when two or more lenders make separate loans to supply the funds required by one applicant for a project.
(i) In order to provide a basis for referral of preapplications of only those applicants who may be able to finance projects through commercial sources, State Directors should maintain liaison with representatives of banks, investment bankers, financial advisors, and other lender representatives in the State. State Directors with their assistance, should maintain criteria for determining preapplications which should be referred to commercial lenders. A list of lender representatives interested in receiving such referrals should be maintained.
(ii) The State Director shall maintain a working relationship with the State Office or official that has been designated as the single point of contact for the intergovernmental review process and give full consideration to their comments when selecting preapplications to be processed.
(iii) The State Director will review the District Director's eligibility determination and recommendations in sufficient time for the District Director's use in preparing and issuing Form AD-622.
(iv) Form AD-622 will be prepared by the District Director within forty-five (45) calendar days from receipt of the preapplication by FmHA or its successor agency under Public Law 103-354, stating the results of the review action. The original will be signed and delivered to the applicant with a copy to the State Director.
(3) For preapplications eligible for FmHA or its successor agency under Public Law 103-354 funding which have the necessary priority to compete with similar preapplications, FmHA or its successor agency under Public Law 103-354 will issue Form AD-622 inviting an application containing the following statement:
You are advised against taking any actions or incurring any obligations which would either limit the range of alternatives to be considered, or which would have an adverse effect on the environment. Satisfactory completion of the environmental review process must occur prior to the issuance of the letter of conditions.
(4) The following statement must be added to Form AD-622 when notifying preapplicants who are eligible, but do not have the priority necessary for further consideration at this time:
You are advised against incurring obligations which would limit the range of alternatives to be considered, or which cannot be fulfilled without FmHA or its successor agency under Public Law 103-354 funds until the funds are actually made available. Therefore, you should refrain from such actions as initiating engineering and legal work, taking actions which would have an adverse effect on the environment, taking options on land rights, developing detailed plans and specifications, or inviting construction bids until notified by Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 to proceed.
(b)
(c)
(1) State Directors should have applications in process representing approximately 150 percent of the current State allocation.
(2) The application docket will include SF 424.2, and related forms, materials, and information. The application will be assembled in accordance with guide 15 of this subpart or State guides developed under § 1942.16 of this subpart.
(3) When an applicant is notified to proceed with an application, the District Director should arrange for a conference with the applicant to provide copies of appropriate appendices and forms; furnish guidance necessary for orderly application processing; and to initiate a processing checklist for establishing a time schedule for completing items using Form FmHA or its successor agency under Public Law 103-354 1942-39, “Processing Check List (Other Than Public Bodies),” or Form FmHA or its successor agency under Public Law 103-354 1942-40, “Processing Check List (Public Bodies),” or other checklist adopted for use in the State. The District Director will confirm decisions made at this conference by letter to the applicant and by a copy of the processing checklist. The original and a copy of the processing checklist will be retained in the District Office and a copy will be forwarded to the State Office. The original and copy of the checklist retained in the District Office will be kept current as application processing actions are taken. The copy will be sent to the State Office to use in updating its copy of this form. The State Office will then return the District Office's copy. As the application is being processed, and the need develops for additional conferences, the District Director will arrange with the applicant for such conference to extend and update the processing checklist.
(d)
The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income is derived from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Federal agency that administers compliance with this law is the Federal Trade Commission, Equal Credit Opportunity, Washington, DC 20580.
(e)
When the loan approval official requires an appraisal, Form FmHA or its successor agency under Public Law 103-354 422-10, “Appraisal Report—Water and Waste Disposal Systems,” may be used with appropriate supplements. Form FmHA or its successor agency under Public Law 103-354 442-10 may be modified as appropriate or other appropriate format may be used for facilities other than water and waste disposal. Appraisal reports prepared for use in connection with the purchase of existing essential community facilities or when required by § 1942.17 (g)(2)(iii)(B)(
The State Director will, with assistance as necessary by the Office of the General Counsel (OGC), concur in agreements between borrowers and third parties such as contracts for professional and technical services and contracts for the purchase of water or treatment of waste. State Directors are expected to work closely with representatives of engineering and architectural societies, bar associations, commercial lenders, accountant associations, and others in developing standard forms of agreements, where needed, and other such matters in order to expedite application processing, minimize referrals to OGC, and resolve problems which may arise.
(a)
(1) The District Director will complete the project summary including written analysis and recommendations using either Form FmHA or its successor agency under Public Law 103-354 1942-45, “Project Summary—Water and Waste Disposal and Other Utility-Type Projects,” for utility type projects or Form FmHA or its successor agency under Public Law 103-354 1942-43, “Project Summary—Community Facilities (Other than utility-type projects),” for all other types of projects. The District Director will prepare a draft letter of conditions listing all the requirements which the applicant must agree to meet within a specific time.
(i) Requirements listed in letters of conditions will include the following
(ii) Each letter of conditions will contain the following paragraphs:
This letter establishes conditions which must be understood and agreed to by you before further consideration may be given to the application. Any changes in the project cost, source of funds, scope of services, or any other significant changes in the project or applicant must be reported to and approved by FmHA or its successor agency under Public Law 103-354 by written amendment to this letter. Any changes not approved by FmHA or its successor agency under Public Law 103-354 shall be cause for discontinuing processing of the application.
This letter is not to be considered as loan approval or as representation to the availability of funds. The docket may be completed on the basis of a loan not to exceed $___.
If FmHA or its successor agency under Public Law 103-354 makes the loan, you may make a written request that the interest rate be the lower of the rate in effect at the time of loan approval or the time of loan closing. If you do not request the lower of the two interest rates, the interest rate charged will be the rate in effect at the time of loan approval. The loan will be considered approved on the date a signed copy of Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request for Obligation of Funds,” is mailed to you. If you want the lower of the two rates, your written request should be submitted to FmHA or its successor agency under Public Law 103-354 as soon as practical. In order to avoid possible delays in loan closing such a request should ordinarily be submitted at least 30 calendar days before loan closing.
Please complete and return the attached Form FmHA or its successor agency under Public Law 103-354 1942-46, “Letter of Intent to Meet Conditions,” if you desire that further consideration be given your application.
(iii) Rural Development Managers may add the following:
If the conditions set forth in this letter are not met within ___ days from the date hereof, FmHA or its successor agency under Public Law 103-354 reserves the right to discontinue the processing of the application.
(2) The FmHA or its successor agency under Public Law 103-354 staff engineer or architect, as appropriate, will include a written analysis and recommendations on Form FmHA or its successor agency under Public Law 103-354 1942-43 or Form FmHA or its successor agency under Public Law 103-354 1942-45.
(3) The Chief, Community Programs or Community and Business Programs will review the assembled application and include on Form FmHA or its successor agency under Public Law 103-354 1942-43 or Form FmHA or its successor agency under Public Law 103-354 1942-45 written analysis and recommendations, including the availability of other credit and other eligibility determinations. The draft letter of conditions will be reviewed and any necessary modifications made.
(b)
(1) The Rural Development Manager should assemble applications for the National Office review in the following order from top to bottom and forward them to the State Director for review and recommedation prior to submission to the National Office:
(i) Transmittal memorandum including:
(A) Recommendation.
(B) Date of expected obligation.
(C) Any unusual circumstances.
(ii) Copies of the following:
(A) Proposed letter of conditions.
(B) Applicable State Intergovernmental review comments (FmHA Instruction 1940-J, available in any FmHA or its successor agency under Public Law 103-354 office).
(C) Forms FmHA 1942-45 or FmHA 1942-43 (including the required copy of Forms FmHA 1942-7, “Operating Budget,” and FmHA 1942-14, “Association Project Fund Analysis”).
(D) Preliminary architectural or engineering report.
(E) Form FmHA or its successor agency under Public Law 103-354 442-3, “Balance Sheet,” or a financial statement or audit that includes a balance sheet.
(F) For other essential community facility loan applicants whose proposals do not meet the assured income or tax based security requirements of § 1942.17 (g)(2)(iii) and (g)(3)(iii) of this subpart, financial information for the last five years of operation will be submitted if available. The type of financial information to be submitted should be determined based on what is available and the following order of preference:
(
(
(
(G) For other essential community facility loans secured under paragraph (b)(1)(ii)(F) of this section, submit a detailed explanation of the proposed security; evidence that the application cannot be processed and the loan secured under paragraph (b)(1)(ii)(F) of this section; evidence supporting the efforts by the applicant in persuading appropriate public bodies to provide the proposed facility and services and the results, and comments of the Regional Attorney concurring in the applicants' legal authority to give the proposed security.
(H) Financial Feasibility Report when required by § 1942.17 (h)(1).
(I) Proposed lease agreements, management agreements, or other agreements when facility management will be provided by other than the applicant.
(J) Other forms and documents on which there are specific questions.
(K) Environmental impact analysis and documentation.
(2) For applications to be reviewed in the State or field, at least those items in paragraph (b)(1)(ii) of this section, should be available.
(c)
(1) The letter of conditions should not ordinarily be issued unless the State Director expects to have adequate funds in the State allocation to fund the project within the next 12 months based on historic allocations or other reliable projections.
(2) If the applicant declines to execute Form FmHA or its successor agency under Public Law 103-354 1942-46, the Rural Development Manager will immediately notify the State Director and provide complete information as to the reasons for such declination.
(3) If the applicant executes Form FmHA or its successor agency under Public Law 103-354 1942-46, the Rural
(d)
(1) Form FmHA or its successor agency under Public Law 103-354 1940-1, authorizing funds to be reserved, may be executed by the loan approval official providing the applicant has the legal authority to contract for a loan and to enter into required agreements and has signed Form FmHA or its successor agency under Public Law 103-354 1940-1.
(2) If approval was concurred in by the National Office, a copy of the concurring memorandum will be attached to the original of Form FmHA or its successor agency under Public Law 103-354 1940-1.
(3) The State Director or designee will request an obligation of loan and/or grant funds via the FmHA or its successor agency under Public Law 103-354 Field Office terminal system after signing Form FmHA or its successor agency under Public Law 103-354 1940-1. The requesting official will furnish security identification as necessary. The requesting official will record the date, time of request, and their initials on the original Form FmHA or its successor agency under Public Law 103-354 1940-1.
(4) The obligation date and date the applicant is notified of loan and/or grant approval is six working days from the date funds are reserved unless an exception is granted by the National Office.
(5) Immediately after verifying that funds have been reserved, utilizing the FmHA or its successor agency under Public Law 103-354 Field Office terminal system status inquiry function, the State Director or designee will notify by telephone, the Legislative Affairs and Public Information Staff in the National Office as required by FmHA Instruction 2015-C, “Announcement of Approval of Loans, Grants, or Guaranteed Loans for Rural Project,” (available in any FmHA or its successor agency under Public Law 103-354 State Office).
(6) Loan approval and applicant notification will be accomplished by the State Director or designee by mailing to the applicant on the obligation date a copy of Form FmHA or its successor agency under Public Law 103-354 1940-1 which has been previously signed by the applicant and loan approval official. The date the applicant is notified is also the date the interest rate at loan approval is established. The State Director or designee will record the date of applicant notification and the interest rate in effect at that time on the original of Form FmHA or its successor agency under Public Law 103-354 1940-1 and include it as a permanent part of the District Director project file with a copy placed in the State Office file.
(7) If a transfer of obligation of funds is necessary, complete Form FmHA or its successor agency under Public Law 103-354 450-10, “Advice of Borrower's Change of Address, Name, Case Number, or Loan Number,” and process via the FmHA or its successor agency under Public Law 103-354 Field Office terminal system. An obligation of funds established for an applicant may be transferred to a different (substituted) applicant provided:
(i) The substituted applicant is eligible to receive the assistance approved for the original applicant; and
(ii) The substituted applicant bears a close and genuine relationship to the original applicant (such as two organizations that are controlled by the same individuals); and
(iii) The need for and scope of the project and the purpose(s) for which FmHA or its successor agency under
(a)
(b)
(2) In all cases the availability and amounts of other funds to be used in the project will be verified by FmHA or its successor agency under Public Law 103-354.
(c)
(d)
(1) The applicant has complied with approval conditions and closing instructions, except for those actions which are to be completed on the date of loan closing or subsequent thereto; and
(2) The applicant is ready to start construction or funds are needed to pay interim financing obligations.
(e)
(1) The Finance Office will be notified of the anticipated date for retirement of the interim instruments and issuance of permanent instruments of debt.
(2) The Finance Office will prepare a statement of account including accrued interest through the proposed date of retirement and also show the daily interest accrual. The statement of account and the interim financing instruments will be forwarded to the District Director.
(3) The District Director will collect interest through the actual date of the retirement and obtain the permanent instrument(s) of debt in exchange for the interim financing instruments. The permanent instruments and the cash collection will be forwarded to the Finance Office immediately, except that for promissory notes and single instrument bonds fully registered as to principal and interest, the original will be retained in the District Office and a copy will be forwarded to the Finance Office. In developing the permanent instruments, the sequence of preference set out in § 1942.19(e) of this subpart will be followed.
Loans will be closed in accordance with the closing instructions issued by the OGC and § 1942.17(o) of this subpart and as soon as possible after receiving the check.
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(b)
(c)
(d)
(e)
(f)
(1) The complete docket; and
(2) A statement covering information other than the completion of legal documents showing what was done in carrying out loan closing instructions.
(g)
(h)
(i)
(a)
(b)
(1) State Director's and FmHA or its successor agency under Public Law 103-354 engineer/architect's comments and recommendations, and when noncompetitive negotiation is proposed, submit an evaluation of previous work of the proposed construction firm.
(2) Regional attorney's opinion and comments regarding the legal adequacy of the proposed procurement method and proposed contract documents.
(3) Copy of owner's written request and description of the procurement method proposed.
(4) Copy of the proposed contract.
(c)
(d)
Loans which have been approved and obligations which have been established may be canceled before closing as follows:
(a) Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation.” The District Director or State Director may prepare and execute Form FmHA or its successor agency under Public Law 103-354 1940-10 in accordance with the Forms Manual Insert (FMI). If the check has been received or is subsequently received in the District Office, the District Director will return it as prescribed in FmHA Instruction 2018-D
(b)
Loans will be serviced under subpart E of part 1951 of this chapter.
Subsequent loans will be processed under this subpart.
The State Director is responsible for implementing the authorities in this subpart and for issuing State supplements redelegating authorities. Loan and grant approval authority is in subpart A of part 1901 of this chapter. Except for loan and grant approval authority, District Directors may redelegate their duties to qualified staff members.
State Directors will obtain National Office clearance for all State supplements and guides under FmHA Instruction 2006-B (available in any FmHA or its successor agency under Public Law 103-354 office).
(a)
(b)
(a)
(b)
(1)
(A) Loans for water or waste disposal facilities will not be made to a city or town with a population in excess of 10,000 inhabitants, according to the latest decennial Census of the United States.
(B) Loans for essential community facilities will not be made to a city or town with a population in excess of 20,000 inhabitants according to the latest decennial Census of the United States.
(ii) An organization operated on a not-for-profit basis, such as an association, cooperative, and private corporation. Applicants organized under the general profit corporation laws may be eligible if they actually will be operated on a not-for-profit basis under their charter, bylaws, mortgage, or supplemental agreement provisions as may be required as a condition of loan approval. Essential community facility applicants other than utility-type must have significant ties with the local rural community. Such ties are necessary to ensure to the greatest extent possible that a facility under private control will carry out a public purpose and continue to primarily serve rural areas. Ties may be evidenced by items such as:
(A) Association with or controlled by a local public body or bodies, or broadly based ownership and controlled by members of the community.
(B) Substantial public funding through taxes, revenue bonds, or other local Government sources, and/or substantial voluntary community funding, such as would be obtained through a community-wide funding campaign.
(iii) Indian tribes on Federal and State reservations and other Federally recognized Indian tribes.
(2)
(ii) Essential community facilities must primarily serve rural areas.
(iii) For water or waste disposal facilities, the terms
(iv) For essential community facilities, the terms
(3)
(4)
(5)
(6) Expanded eligibility for timber-dependent communities in Pacific Northwest. In the Pacific Northwest, defined as an area containing national
(i) Part or all of the community lies within 100 miles of the boundary of a national forest covered by the Federal document entitled, “Forest Plan for a Sustainable Economy and a Sustainable Environment,” dated July 1, 1993; and
(ii) The community is located in a county in which at least 15 percent of the total primary and secondary labor and proprietor income is derived from forestry, wood products, or forest-related industries such as recreation and tourism.
(c)
(2)
(i)
(ii)
(iii)
(A)
(
(
(B)
(
(
(
(
(C)
(
(
(D)
(
(
(
(
(
(
(
(
(
(
(E) In certain cases the State Director may assign up to 15 points to a preapplication, in addition to those that may be scored under paragraphs (c)(2)(iii) (A) through (D), of this section. These points are primarily intended to address an unforeseen exigency or emergency, such as the loss of a community facility due to accident or natural disaster or the loss of joint
(iv)
(v)
(vi)
(vii)
(viii)
(d)
(i) To construct, enlarge, extend, or otherwise improve water or waste disposal and other essential community
(A)
(B)
(
(
(
(
(
(
(
(C)
(
(
(
(ii) To construct or relocate public buildings, roads, bridges, fences, or utilities, and to make other public improvements necessary to the successful operation or protection of facilities authorized in paragraph (d)(1)(i) of this section.
(iii) To relocate private buildings, roads, bridges, fences, or utilities, and other private improvements necessary to the successful operation or protection of facilities authorized in paragraph (d)(1)(i) of this section.
(iv) To pay the following expenses, but only when such expenses are a necessary part of a loan to finance facilities authorized in paragraphs (d)(1)(i), (d)(1)(ii) and (d)(1)(iii) of this section.
(A) Reasonable fees and costs such as legal, engineering, architectural, fiscal advisory, recording, environmental impact analyses, archeological surveys and possible salvage or other mitigation measures, planning, establishing or acquiring rights.
(B) Interest on loans until the facility is self-supporting, but not for more than three years unless a longer period is approved by the National Office; interest on loans secured by general obligation bonds until tax revenues are available for payment, but not for more than two years unless a longer period is approved by the National Office; and interest on interim financing, including interest charges on interim financing from sources other than FmHA or its successor agency under Public Law 103-354.
(C) Costs of acquiring interest in land; rights, such as water rights, leases, permits, rights-of-way; and other evidence of land or water control necessary for development of the facility.
(D) Purchasing or renting equipment necessary to install, maintain, extend, protect, operate, or utilize facilities.
(E) Initial operating expenses for a period ordinarily not exceeding one year when the borrower is unable to pay such expenses.
(F) Refinancing debts incurred by, or on behalf of, a community when all of the following conditions exist:
(
(
(
(G) Prepay costs for which FmHA or its successor agency under Public Law 103-354 grant funds were obligated provided there is:
(
(
(
(
(v) To pay obligations for construction incurred before loan approval. Construction work should not be started and obligations for such work or materials should not be incurred before the loan is approved. However, if there are compelling reasons for proceeding with construction before loan approval, applicants may request FmHA or its successor agency under Public Law 103-354 approval to pay such obligations. Such requests may be approved if FmHA or its successor agency under Public Law 103-354 determines that:
(A) Compelling reasons exist for incurring obligations before loan approval; and
(B) The obligations will be incurred for authorized loan purposes; and
(C) Contract documents have been approved by FmHA or its successor agency under Public Law 103-354; and
(D) All environmental requirements applicable to FmHA or its successor agency under Public Law 103-354 and the applicant have been met; and
(E) The applicant has the legal authority to incur the obligations at the time proposed, and payment of the debts will remove any basis for any mechanic, material, or other liens that may attach to the security property. FmHA or its successor agency under Public Law 103-354 may authorize payment of such obligations at the time of loan closing. FmHA or its successor agency under Public Law 103-354's authorization to pay such obligations, however, is on the condition that it is not committed to make the loan; it assumes no responsibility for any obligations incurred by the applicant; and the applicant must subsequently meet all loan approval requirements. The applicant's request and FmHA or its successor agency under Public Law 103-354 authorization for paying such obligations shall be in writing. If construction is started without FmHA or its successor agency under Public Law 103-354 approval, post approval in accordance with this section may be considered.
(2) Funds may not be used to finance:
(i) On-site utility systems or business and industrial buildings in connection with industrial parks.
(ii) Facilities to be used primarily for recreation purposes.
(iii) Community antenna television services or facilities.
(iv) Electric generation or transmission facilities or telephone systems, except as provided in paragraph (d)(1)(i)(B)(
(v) Facilities which are not modest in size, design, and cost.
(vi) Loan or grant finder's fees.
(vii) Projects located within the Coastal Barriers Resource System that do not qualify for an exception as defined in section 6 of the Coastal Barriers Resource Act, Pub. L. 97-348.
(viii) New combined sanitary and storm water sewer facilities.
(ix) That portion of a water and/or waste disposal facility normally provided by a business or industrial user.
(e)
(1) Utility-type service facilities will be installed so as to serve any user within the service area who desires service and can be feasibly and legally served. Applicants and borrowers must obtain written concurrence of the FmHA or its successor agency under Public Law 103-354 prior to refusing service to such user. Upon failure to provide service which is reasonable and legal, such user shall have direct right
(i) If a mandatory hookup ordinance will be adopted, the required bond ordinance or resolution advertisement will be considered adequate notification.
(ii) When any portion of the income will be derived from user fees and a mandatory hookup ordinance will not be adopted, each potent user will be afforded an opportunity to request service by signing a Users Agreement.
(2) In no case will boundaries for the proposed service area be chosen in such a way that any user or area will be excluded because of race, color, religion, sex, marital status, age, handicap, or national origin.
(3) This does not preclude:
(i) Financing or constructing projects in phases when it is not practical to finance or construct the entire project at one time; and
(ii) Financing or constructing facilities where it is not economically feasible to serve the entire area, provided economic feasibility is determined on the basis of the entire system and not by considering the cost of separate extensions to or parts thereof; the applicant publicly announces a plan for extending service to areas not initially receiving service from the system; and potential users located in the areas not to be initially served receive written notice from the applicant that service will not be provided until such time as it is economically feasible to do so, and
(iii) Extending services to industrial areas when service is made available to users located along the extensions.
(4) The State Director will determine that, when feasibly and legally possible, inequities within the proposed project's service area for the same type service proposed (i.e., water or waste disposal) will be remedied by the owner on or before completion of the project that includes FmHA or its successor agency under Public Law 103-354 funding. Inequities are defined as flagrant variations in availability, adequacy or quality of service. User rate schedules for portions of existing systems that were developed under different financing, rates, terms or conditions, as determined by the State Director, do not necessarily constitute inequities.
(5) Before a loan is made to an applicant other than a public body, for other than utility type projects, the articles of incorporation or loan agreement will include a condition similar to the following:
In the event of dissolution of this corporation, or in the event it shall cease to carry out the objectives and purposes herein set forth, all business, property, and assets of the corporation shall go and be distributed to one or more nonprofit corporations or public bodies as may be selected by the board of directors of this corporation and approved by at least 75 percent of the users or members to be used for, and devoted to, the purpose of a community facility project or other purpose to serve the public welfare of the community. In no event shall any of the assets or property, in the event of dissolution thereof, go or be distributed to members, directors, stockholders, or others having financial or managerial interest in the corporation either for the reimbursement of any sum subscribed, donated or contributed by such members or for any other purposes, provided that nothing herein shall prohibit the corporation from paying its just debts.
(f)
(2)
(i) The primary purpose of the loan is to upgrade existing facilities or construct new facilities required to meet applicable health or sanitary standards. Documentation will be obtained from the appropriate regulatory agency with jurisdiction to establish the standard, to verify that a bonafide standard exists, what that standard is, and that the proposed improvements are needed and required to meet the standard; and
(ii) The median household income of the service area is below the poverty line for a family of four, as defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), or below 80 percent of the Statewide nonmetropolitan median household income.
(3)
(4)
(5)
(6)
(7)
(i) Principal payments may be deferred in whole or in part for a period not to exceed 36 months following the date the first interest installment is due. If for any reason it appears necessary to permit a longer period of deferment, the State Director may authorize such deferment with the prior approval of the National Office. Deferments of principal will not be used to:
(A) Postpone the levying of taxes or assessments.
(B) Delay collection of the full rates which the borrower has agreed to charge users for its services as soon as major benefits or the improvements are available to those users.
(C) Create reserves for normal operation and maintenance.
(D) Make any capital improvements except those approved by FmHA or its successor agency under Public Law 103-354 determined to be essential to the repayment of the loan or to the obtaining of adequate security thereof.
(E) Accelerate the payment of other debts.
(ii)
(g)
(1)
(i)
(ii)
(iii)
(iv)
(v)
(2)
(i) Utility-type facilities such as water and sewer systems, natural gas distribution systems, electric systems, etc., will be secured by:
(A) The full faith and credit of the borrower when the debt is evidenced by general obligation bonds; and/or
(B) Pledges of taxes or assessments; and/or
(C) Pledges of facility revenue and, when it is the customary financial practice in the State, liens will be taken on the interest of the applicant in all land, easements, rights-of-way, water rights, water purchase contracts, water sales contracts, sewage treatment contracts, and similar property rights, including leasehold interest, used or to be used in connection with the facility whether owned at the time the loan is approved or acquired with loan funds; and/or
(D) In those cases involving water and waste disposal projects where there is a substantial number of other than full-time users and facility costs result in a higher than reasonable rate for such full-time users, the loan will be secured by the full faith and credit of the borrower or by an assignment or pledge of taxes or assessments from public bodies or other organizations having the authority to issue bonds or pledge such taxes or assessments.
(ii)
(iii)
(A) Such loans will be secured by one or a combination of the following and in the following order of preference:
(
(
(
(
(
(
(
(
(
(
(
(
(
(B) Real estate and chattel property taken as security in accordance with paragraphs (g)(2)(iii)(A) (
(
(
(
(C) When security is not available in accordance with paragraphs (g)(2)(iii)(A) (
(3)
(i) Utility-type facilities eligible for FmHA or its successor agency under Public Law 103-354 assistance under paragraph (d) of this section such as water and sewer systems, natural gas distribution systems, electric systems, etc., will be secured as follows:
(A) Assignments of borrower income will be taken and perfected by filing, if legally permissable; and
(B) A lien will be taken on the interest of the applicant in all land, easements, rights-of-way, water rights, water purchase contracts, water sales contracts, sewage treatment contracts and similar property rights, including leasehold interest, used, or to be used in connection with the facility whether owned at the time the loan is approved or acquired with loan funds. In unusual circumstances where it is not feasible to obtain a lien on such land (such as land rights obtained from Federal or local government agencies, and from railroads) and the loan approval official determines that the interest of FmHA or its successor agency under Public Law 103-354 otherwise is secured adequately, the lien requirement may be omitted as to such land rights.
(C) When the loan is approved or the acquisition of real property is subject to an outstanding lien indebtedness, the next highest priority lien obtainable will be taken if the loan approval official determines that the loan is adequately secured.
(D) Other security. Promissory notes from individuals, stock or membership subscription agreements, individuals member's liability agreements, or other evidences of debt, as well as mortgages or other security instruments encumbering the private property of members of the association may be pledged or assigned to FmHA or its successor agency under Public Law 103-354 as additional security in any case in which the interest of FmHA or its successor agency under Public Law 103-354 will not be otherwise adequately protected.
(E) In those cases where there is a substantial number of other than full-time users and facility costs result in a higher than reasonable rate for such full-time users, the loan will be secured by an assignment or pledge of general obligation bonds, taxes, or assessments from public bodies or other organizations having the authority to issue bonds or pledge such taxes, or assessments.
(ii)
(iii)
(A) Such loans will be secured by one or a combination of the following and in the following order of preference:
(
(
(
(
(
(
(
(
(
(
(B) Real estate and chattel property taken as security:
(
(
(
(h)
(1)
(i) Included as part of the preliminary engineer/architectural report using guides 6 through 10 as applicable; or
(ii) Prepared by a qualified firm or individual not having a direct interest in the management or construction of the facility using guide 5 when:
(A) The project will significantly affect the applicant's financial operations and is not a utility-type facility but is dependent on revenues from the facility to repay the loan; or
(B) It is specifically requested by FmHA or its successor agency under Public Law 103-354.
(2)
(i) In estimating the number of users and establishing rates or fees on which the loan will be based for new systems and for extensions or improvements to existing systems, consideration should be given to the following:
(A) An estimated number of maximum initial users should not be used when setting user fees and rates since it may be several years before all residents in the community will need the services provided by the system. In establishing rates a realistic number of initial users should be employed.
(B) User agreements from individual vacant property owners will not be considered when determining project feasibility unless:
(
(
(
(C) Income from other vacant property owners will be considered only as extra income.
(ii) Realistic user estimates will be established as follows:
(A) Meaningful potential user cash contributions. Potential user cash contributions are required except:
(
(
(
(B) The amount of cash contributions required in paragraph (h)(2)(ii)(A) of this section will be set by the applicant and concurred in by FmHA or its successor agency under Public Law 103-354. Contribtions should be an amount high enough to indicate sincere interest on the part of the potential user, but not so high as to preclude service to low income families. Contributions ordinarily should be an amount approximating one year's minimum user fee, and shall be paid in full before loan closing or commencement of construction, whichever occurs first. Once economic feasibility is ascertained based on a demonstration of meaningful potential user cash contributions, the contribution, membership fee or other fees that may be imposed are not a requirement of FmHA or its successor agency under Public Law 103-354 under this section. However, borrowers do have an additional responsibility relating to generating sufficient revenues as set forth in paragraph (n)(2)(iii) of this section.
(C) Enforceable user agreement. Except for users presently receiving service, an enforceable user agreement with a penalty clause is required unless State statutes or local ordinances require mandatory use of the system and the applicant or legal entity having such authority agrees in writing to enforce such statutes or ordinances.
(iii) In those cases where all or part of the borrower's debt payment revenues will come from user fees, applicants must provide a positive program to encourage connection by all users as soon as service is available. The program will be available for review and approval by FmHA or its successor agency under Public Law 103-354 before loan closing or commencement of construction, whichever occurs first. Such a program shall include:
(A) An aggressive information program to be carried out during the construction period. The borrower should send written notification to all signed users at least three weeks in advance of the date service will be available, stating the date users will be expected to have their connections completed, and the date user charges will begin.
(B) Positive steps to assure that installation services will be available. These may be provided by the contractor installing the system, local plumbing companies, or local contractors.
(C) Aggressive action to see that all signed users can finance their connections. This might require collection of sufficient user contributions to finance connections. Extreme cases might necessitate additional loan funds for this purpose; however, loan funds should be used only when absolutely necessary and when approved by FmHA or its successor agency under Public Law 103-354 prior to loan closing.
(3)
(i) The applicant already having sufficient assured revenues to repay the loan; or
(ii) Developers providing a bond or escrowed security deposit as a guarantee sufficient to meet expenses attributable to the area in question until a sufficient number of the building sites are occupied and connected to the facility to provide enough revenues to meet operating, maintenance, debt service, and reserve requirements. Such guarantees from developers will meet the requirements in paragraph (h)(2)(i)(B) of this section; or
(iii) Developers paying cash for the increased capital cost and any increased operating expenses until the developing area will support the increased costs; or
(iv) The full faith and credit of a public body where the debt is evidenced by general obligation bonds; or
(v) The loan is to a public body evidenced by a pledge of tax assessments; or
(vi) The user charges can become a tax lien upon the property being served and income from such lien can be collected in sufficient time to be used for its intended purposes.
(i)
(1)
(2)
(j)
(i) The organization is well established and is operating with a sound financial base; or
(ii) For utility-type projects the members of the organization have all signed an enforceable user agreement with a penalty clause and have made the required meaningful user cash contribution, except for members presently receiving service or when State statutes or local ordinances require mandatory use of the facility.
(2)
(3)
(i)
(B) Insurance and fidelity bond requirements by FmHA or its successor agency under Public Law 103-354 shall normally not exceed those proposed by the applicant/borrower if the FmHA or its successor agency under Public Law 103-354 loan approval or servicing official determines that proposed coverage is adequate to protect the government's financial interest. Applicants/borrowers are encouraged to have their attorney, consulting engineer/architect, and/or insurance provider(s) review proposed types and amounts of coverage, including any deductible provisions. If the FmHA or its successor agency under Public Law 103-354 official and the applicant/borrower cannot agree on the acceptability of coverage proposed, a decision will be made by the State Director.
(C) The use of deductibles, i.e., an initial amount of each claim to be paid by the applicant/borrower, may be allowed by FmHA or its successor agency under Public Law 103-354 providing the applicant/borrower has financial resources which would likely be adequate to cover potential claims requiring payment of the deductible.
(D) Borrowers must provide evidence to FmHA or its successor agency under Public Law 103-354 that adequate insurance and fidelity bond coverage is being maintained. This may consist of a listing of policies and coverage amounts in yearend reports submitted with management reports required under § 1942.17(q)(2) or other documentation. The borrower is responsible for updating and/or renewing policies or coverage which expire between submissions to FmHA or its successor agency under Public Law 103-354. Any monitoring of insurance and fidelity bond coverage by FmHA or its successor agency under Public Law 103-354 is solely for the benefit of FmHA or its successor agency under Public Law 103-354, and does not relieve the applicant/borrower of its obligation under the loan resolution to maintain such coverage.
(ii)
(A) The amount of coverage required by FmHA or its successor agency under Public Law 103-354 will normally approximate the total annual debt service requirements for the FmHA or its
(B) Form FmHA or its successor agency under Public Law 103-354 440-24, “Position Fidelity Schedule Bond” may be used. Similar forms may be used if determined acceptable to FmHA or its successor agency under Public Law 103-354. Other types of coverage may be considered acceptable if it is determined by FmHA or its successor agency under Public Law 103-354 that they fulfill essentially the same purpose as a fidelity bond.
(iii)
(A) Property insurance. Fire and extended coverage will normally be maintained on all structures except as noted in paragraphs (j)(3)(iii)(A) (
(
(
(B) Liability and property damage insurance, including vehicular coverage.
(C) Malpractice insurance. The need and requirements for malpractice insurance will be carefully and thoroughly considered in connection with each health care facility financed.
(D) Flood insurance. Facilities located in special flood- and mudslide-prone areas must comply with the eligibility and insurance requirements of subpart B of part 1806 of this chapter (FmHA Instruction 426.2).
(E) Worker's compensation. The borrower will carry worker's compensation insurance for employees in accordance with State laws.
(4)
(i)
(A)
(B)
(
(
(ii)
(A) A statement by the applicant's attorney regarding the nature of the water rights owned or to be acquired by the applicant (such as conveyance of title, appropriation and decree, application and permit, public notice and appropriation and use).
(B) A copy of a contract with another company or municipality to supply water; or stock certificates in another company which represents the right to receive water.
(iii)
(B) Applicants may obtain land through land purchase contracts when all of the following conditions are met:
(
(
(
(
(C) The land purchase contract must provide for the transfer of ownership by the seller without any restrictions, liens or other title defects. The contract must not contain provisions for future advances (except for taxes, insurance, or other costs needed to protect the security), summary cancellations, summary forfeiture, or other clauses that may jeopardize the Government's interest or the purchaser's ability to pay the FmHA or its successor agency under Public Law 103-354 loan. The contract must provide that if the purchaser fails to make payment that FmHA or its successor agency under Public Law 103-354 will be given at least 90 days written notice with an option to cure the default before the contract can be cancelled, terminated or foreclosed. Then FmHA or its successor agency under Public Law 103-354 must have the option of making the
(D) Prior to loan closing or the beginning of construction, whichever occurs first, the following actions must be taken in the order listed below:
(
(
(
(5)
(6)
(i) Form FmHA or its successor agency under Public Law 103-354 440-22, “Promissory Note (Association or Organization),” will ordinarily be used for loans to nonpublic bodies.
(ii) Section 1942.19 contains instructions for preparation of notes and bonds evidencing indebtedness of public bodies.
(7)
(8)
(i) A statement from the responsible State agency certifying that the proposed health care facility is not inconsistent with the State Medical Facilities Plan.
(ii) A statement from the responsible State agency or regional office of the Department of Health and Services certifying that the proposed facility meets the standards in § 1942.18(d)(4).
(9)
(10)
(i) Applicants providing service through individual facilities must meet the eligibility requirements in § 1942.17(b).
(ii) FmHA or its successor agency under Public Law 103-354 must approve the form of agreement between the owner and individual users for the installation, operation and payment for individual facilities.
(iii) If taxes or assessments are not pledged as security, owners providing service through individual facilities must obtain security as necessary to assure collection of any sum the individual user is obligated to pay the owner.
(iv) Notes representing indebtedness owed the owner by a user for an individual facility will be scheduled for payment over a period not to exceed the useful life of the individual facility or the loan, whichever is shorter. The interest rate will not exceed the interest rate charged the owner on the FmHA or its successor agency under Public Law 103-354 indebtedness.
(v) Owners providing service through individual or cluster facilities must obtain:
(A) Easements for the installation and ingress to and egress from the facility; and
(B) An adequate method for denying service in the event of nonpayment of user fees.
(11)
(k)
(1)
(i) Organization of the applicant and its authority to construct, operate, and maintain the proposed facilities;
(ii) Borrowing money, giving security therefore, and raising revenues for the repayment thereof;
(iii) Land use zoning; and
(iv) Health and sanitation standards and design and installation standards unless an exception is granted by FmHA or its successor agency under Public Law 103-354.
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(l)
(2)
(3)
(4)
(m)
(2)
(3)
(4)
(5)
(6)
(7)
(n)
(2)
(i) To indemnify the Government for any payments made or losses suffered by the Government on behalf of the association. Such indemnification shall be payable from the same source of funds pledged to pay the bonds or any other legally permissible source.
(ii) To comply with applicable local, State and Federal laws, regulations, and ordinances.
(iii) To provide for the receipt of adequate revenues to meet the requirements of debt service, operation and maintenance, establishment of adequate reserves, and to continually operate and maintain the facility in good condition. Except for utility-type facilities, free service use may be permitted. If free services are extended no distinctions will be made in the extension of those services because of race, color, religion, sex, national origin, marital status, or physical or mental handicap.
(iv) To acquire and maintain such insurance coverage including fidelity bonds, as may be required by the Government.
(v) To establish and maintain such books and records relating to the operation of the facility and its financial affairs and to provide for required audit thereof in such a manner as may be required by the Government and to provide the Government without its request, a copy of each such audit and to make and forward to the Government such additional information and reports as it may, from time to time, require.
(vi) To provide the Government at all reasonable times, access to all books and records relating to the facility and access to the property of the system so that the Government may ascertain that the association is complying with the provisions hereof and of the instruments incident to the making or insuring of the loan.
(vii) To provide adequate service to all persons within the service area who can feasibly and legally be served and to obtain FmHA or its successor agency under Public Law 103-354's concurrence prior to refusing new or adequate services to such persons. Upon failure of the applicant to provide services which are feasible and legal, such person shall have a direct right of action against the applicant organization.
(viii) To have prepared on its behalf and to adopt an ordinance or resolution for the issuance of its bonds or notes or other debt instruments or other such items and in such forms as are required by State statutes and as are agreeable and acceptable to the Government.
(ix) To refinance the unpaid balance, in whole or in part, of its debt upon the request of the Government if at any time it should appear to the Government that the association is able to refinance its bonds by obtaining a loan for such purposes from responsible cooperative or private sources at reasonable rates and terms.
(x) To provide for, execute, and comply with Form FmHA or its successor agency under Public Law 103-354 400-4,
(xi) To place the proceeds of the loan on deposit in a manner approved by the Government. Funds may be deposited in institutions insured by the State or Federal Government as invested in readily marketable securities backed by the full faith and credit of the United States. Any income from these accounts will be considered as revenues of the system.
(xii) Not to sell, transfer, lease, or otherwise encumber the facility or any portion thereof or interest therein, and not to permit others to do so, without the prior written consent of the Government.
(xiii) Not to borrow any money from any source, enter into any contract or agreement, or incur any other liabilities in connection with making enlargements, improvements or extensions to, or for any other purpose in connection with the facility (exclusive of normal maintenance) without the prior written consent of the Government if such undertaking would involve the source of funds pledged to repay the debt to FmHA or its successor agency under Public Law 103-354.
(xiv) That upon default in the payments of any principal and accrued interest on the bonds or in the performance of any covenant or agreement contained herein or in the instruments incident to making or insuring the loan, the Government, at its option, may:
(A) Declare the entire principal amount then outstanding and accrued interest, due and payable;
(B) For the account of the association (payable from the source of funds pledged to pay the bonds or notes or any other legally permissiable source), incur and pay reasonable expenses for repair, maintenance and operation of the facility and such other reasonable expenses as may be necessary to cure the cause of default; and/or
(C) Take possession of the facility, repair, maintain and operate, or otherwise dispose of the facility. Default under the provisions of the resolution or any instrument incident to the making or insuring of the loan may be construed by the Government to constitute default under any other instrument held by the Government and executed or assumed by the association and default under any such instrument may be construed by the Government to constitute default hereunder.
(3)
(i) Statements to the extent possible are obtained;
(ii) The interest of FmHA or its successor agency under Public Law 103-354 can be adequately protected and its security position is not impaired; and
(iii) Adequate provisions are made for handling the unpaid accounts by withholding or escrowing sufficient funds to pay such claims.
(4)
(5)
(6)
(o)
(2)
(3)
(4)
(p)
(2)
(i) Section 1942.19 contains instructions for making multiple advances to public bodies.
(ii) Advances will be requested by the borrower in writing. The request should be in sufficient amounts to pay cost of construction, rights-of-way and land, legal, engineering, interest, and other expenses as needed. The applicant may use Form FmHA or its successor agency under Public Law 103-354 440-11, “Estimate of Funds Needed for 30 Day Period Commencing ___,” to show the amount of funds needed during the 30-day period.
(iii) FmHA or its successor agency under Public Law 103-354 loan funds obligated for a specific purpose, such as the paying of interest, but not needed at the time of loan closing will remain in the Finance Office until needed unless State statutes require all funds to be delivered to the borrower at the time of closing. Loan funds may be advanced to prepay costs under paragraph (d)(1)(iv)(G) of this section. If all funds must be delivered to the borrower at the time of closing to comply with State statutes, funds not needed at loan closing will be handled as follows:
(A) Deposited in an appropriate borrower account, such as the debt service account, or
(B) Deposited in a supervised bank account under paragraph (p)(3)(i) of this section.
(3)
(ii)
(iii)
(4)
(5)
(6)
(i)
(A) On projects that only involve an FmHA or its successor agency under Public Law 103-354 loan and no FmHA or its successor agency under Public Law 103-354 grant, funds that are not needed will be applied as an extra payment on the FmHA or its successor agency under Public Law 103-354 indebtedness unless other disposition is required by the bond ordinance, resolution, or State statute.
(B) On projects that involve an FmHA or its successor agency under Public Law 103-354 grant, all remaining FmHA or its successor agency under Public Law 103-354 funds will be considered to be grant funds up to the full amount of the grant. Grant funds not expended under paragraph (p)(6)(i) of this section will be deobligated.
(ii)
(q)
(ii)
(iii)
(iv)
(2)
(i)
(B) Prior to the beginning of each fiscal year, two copies, with data entered in column three only of Schedule 1, page one, “Annual Budget” and all of Schedule 2, will be submitted to the District Director. Twenty (20) days after the end of each of the first three quarters of each year, two copies with all information furnished on Schedule 1
(ii)
(B) Borrowers delinquent on payment to FmHA or its successor agency under Public Law 103-354 or experiencing financial problems, will develop a positive action plan to resolve financial problems. The plan will be reviewed with FmHA or its successor agency under Public Law 103-354 and updated at least quarterly. Guide 22 may be used for developing a positive action plan.
(3)
(4)
(i)
(A)
(
(
(
(
(
(
(
(
(B)
(
(
(
(
(ii)
(A)
(
(B)
(5)
(r)
(i)
(ii)
(B) Subsequent reviews will be made for all delinquent and other borrowers having financial problems and reported to the State Director by a copy of Form FmHA or its successor agency under Public Law 103-354 442-4. These borrowers will adopt a positive action plan (see guide 22). The plan will be reviewed quarterly by the District Director until the delinquency is eliminated or other servicing actions are recommended.
(C) The District Director may, after the end of the borrower's third fiscal year of operation, exempt it from submitting management reports provided it:
(
(
(
(
(D) Borrowers qualifying for this exemption will still be required to submit a copy of their audits or annual financial statements.
(E) Ordinarily and exception will not be made to the requirement for the borrower to submit a copy of its annual budget.
(F) The District Director or State Director may reinstate the requirements for submission of periodic management reports for those borrowers who became delinquent or otherwise are not carrying out their agreements with FmHA or its successor agency under Public Law 103-354 or require more frequent submission of management reports. This requirement will be reinstated for borrowers receiving a subsequent loan which will significantly alter the scope of the project.
(G) The District Director may accept management reports which are not prepared on page 1 of Form FmHA or its successor agency under Public Law 103-354 442-2 Schedule 1 but contain like information. However, page 2 of this form must be used by all borrowers required to furnish management reports.
(iii)
(A) The review of the District Director's submission for all borrowers whose indebtedness exceeds $1,000,000. The State Director will forward comments to the District Director in order that a response, if necessary, can be sent to the borrower within 40 calendar days after the borrower's submission of its management reports.
(B) The review of all delinquent and problem case borrower management reports. Ordinarily, review findings and instructions regarding further management assistance will be determined, and provided to the District Office within 20 calendar days of submission for delinquent and problem borrowers.
(C) Forwarding to the National Office copies of review findings, instructions for further assistance, and positive action plans on delinquent borrowers and borrowers experiencing financial problems, at same time the findings and instructions are provided to the District Office.
(2)
(ii)
(iii)
(3)
(i)
(ii)
(iii)
(iv)
(4)
(5) Other loan servicing actions will be in accordance with subparts E and O of part 1951 of this chapter.
For
(a)
(b)
(c)
(d)
(1)
(i)
(ii)
(iii)
(iv)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(A) 1991 International Conference of Building Officials (ICBO) Uniform Building Code;
(B) 1993 Building Officials and Code Administrators International, Inc. (BOCA) National Building Code; or
(C) 1992 Amendments to the Southern Building Code Congress International (SBCCI) Standard Building Code.
(ii) The date, signature, and seal of a registered architect or engineer and the identification and date of the model building code on the plans and specifications will be evidence of compliance with the seismic requirements of the appropriate building code.
(e)
(1)
(2)
(3)
(f)
(1) Include a commitment by the supplier to furnish, at a specified point, an adequate quantity of water or other service and provide that, in case of shortages, all of the supplier's users will proportionately share shortages. If it is impossible to obtain a firm commitment for either an adequate quantity or sharing shortages proportionately, a contract may be executed and approved provided adequate evidence is furnished to enable FmHA or its successor agency under Public Law 103-354 to make a determination that the supplier has adequate supply and/or treatment facilities to furnish its other users and the applicant for the foreseeable future; and
(i) The supplier is subject to regulations of the Federal Energy Regulatory Commission or other Federal or State agency whose jurisdiction can be expected to prevent unwarranted curtailment of supply; or
(ii) A suitable alternative supply could be arranged within the repayment ability of the borrower if it should become necessary; or
(iii) Prior approval is obtained from the National Office. The following information should be submitted to the National Office:
(A) Transmittal memorandum including:
(
(
(
(B) Copies of the following:
(
(
(
(
(
(C) Owner and FmHA or its successor agency under Public Law 103-354 engineer's comments and recommendations.
(D) Documentation and statement from the supplier that it has an adequate supply and treatment facilities available to meet the needs of its users and the owner for the foreseeable future.
(2) Set out the ownership and maintenance responsibilities of the respective parties including the master meter if a meter is installed at the point of delivery.
(3) Specify the initial rates and provide some kind of escalator clause which will permit rates for the association to be raised or lowered proportionately as certain specified rates for the supplier's regular customers are raised or lowered. Provisions may be made for altering rates in accordance with the decisions of the appropriate State agency which may have regulatory authority.
(4) Run for a period of time which is at least equal to the repayment period of the loan. State Directors may approve contracts for shorter periods of time if the supplier cannot legally contract for such period, or if the owner and supplier find it impossible or impractical to negotiate a contract for the maximum period permissible under State law, provided:
(i) The supplier is subject to regulations of the Federal Energy Regulatory Commission or other Federal or State agency whose jurisdiction can be expected to prevent unwarranted curtailment of supply; or
(ii) The contract contains adequate provisions for renewal; or
(iii) A determination is made that in the event the contract is terminated, there are or will be other adequate sources available to the owner that can feasibly be developed or purchased.
(5) Set out in detail the amount of connection or demand charges, if any, to be made by the supplier as a condition to making the service available to the owner. However, the payment of such charges from loan funds shall not be approved unless FmHA or its successor agency under Public Law 103-354 determines that it is more feasible and economical for the owner to pay such a connection charge than it is for the owner to provide the necessary supply by other means.
(6) Provide for a pledge of the contract to FmHA or its successor agency under Public Law 103-354 as part of the security for the loan.
(7) Not contain provisions for:
(i) Construction of facilities which will be owned by the supplier. This does not preclude the use of money paid as a connection charge for construction to be done by the supplier.
(ii) Options for the future sale or transfer. This does not preclude an agreement recognizing that the supplier and owner may at some future date agree to a sale of all or a portion of the facility.
(g)
(h)
(i)
(j)
(1)
(i) The owner's officers, employees or agents shall neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors, or parties of subagreements.
(ii) To the extent permitted by State or local law or regulations, the owner's standards of conduct shall provide for penalties, sanctions, or other disciplinary actions for violations of such standards by the owner's officers, employees, agents, or by contractors or their agents.
(2)
(3)
(4)
(i) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. The description shall not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equal” description may be used to define the performance or other salient requirements of a procurement. The specific features of the named brands which must be met by offerors shall be clearly stated.
(ii) Clearly specify all requirements which offerors must fulfill and all other factors to be used in evaluating bids or proposals.
(5)
(A) Include qualified small and minority businesses on solicitation lists.
(B) Assure that small and minority businesses are solicited whenever they are potential sources.
(C) When economically feasible, divide total requirements into smaller tasks or quantities so as to permit maximum small and minority business participation.
(D) Where the requirement permits, establish delivery schedules which will encourage participation by small and minority businesses.
(E) Use the services and assistance of the Small Business Administration and
(F) If any subcontracts are to be let, require the prime contractor to take the affirmative steps in paragraphs (j)(5)(i) (A) through (E) of this section.
(ii) Owners shall take similar appropriate affirmative action in support of women's businesses.
(iii) Owners are encouraged to procure goods and services from labor surplus areas.
(iv) Owners shall submit a written statement or other evidence to FmHA or its successor agency under Public Law 103-354 of the steps taken to comply with paragraphs (j)(5)(i) (A) through (F), (j)(5)(ii), and (j)(5)(iii) of this section.
(6)
(7)
(i) An engineer or architect as an individual or firm who has prepared plans and specifications or who will be responsible for monitoring the construction;
(ii) Any firm or corporation in which the owner's architect or engineer is an officer, employee, or holds or controls a substantial interest;
(iii) The governing body's officers, employees, or agents;
(iv) Any member of the immediate family or partners in paragraphs (j)(7)(i), (j)(7)(ii), or (j)(7)(iii) of this section; or
(v) An organization which employs, or is about to employ, any person in paragraph (j)(7)(i), (j)(7)(ii), (j)(7)(iii) or (j)(7)(iv) of this section.
(8)
(k)
(1)
(2)
(i) At a sufficient time prior to the date set for opening of bids, bids shall be solicited from an adequate number of qualified sources. In addition, the invitation shall be publicly advertised.
(ii) The invitation for bids, including specifications and perinent attachments, shall clearly define the items or services needed in order for the bidders to properly respond to the invitation under paragraph (j)(4) of this section.
(iii) All bids shall be opened publicly at the time and place stated in the invitation for bids.
(iv) A firm-fixed-price contract award shall be made by written notice to that responsible bidder whose bid, conforming to the invitation for bids, is lowest. When specified in the bidding documents, factors such as discounts and transportation costs shall be considered in determining which bid is lowest.
(v) Any or all bids may be rejected by the owner when it is in their best interest.
(3)
(i) Proposals shall be solicited from an adequate number of qualified sources to permit reasonable competition consistent with the nature and requirements of the procurement. The Request for Proposal shall be publicized and reasonable requests by other sources to compete shall be honored to the maximum extent practicable.
(ii) The Request for Proposal shall identify all significant evaluation factors, including price or cost where required, and their relative importance.
(iii) The owner shall provide mechanisms for technical evaluation of the proposals received, determination of responsible offerors for the purpose of written or oral discussions, and selection for contract award.
(iv) Award may be made to the responsible offeror whose proposal will be most advantageous to the owner, price and other factors considered. Unsuccessful offerors should be promptly notified.
(v) Owners may utilize competitive negotiation procedures for procurement of architectural/engineering and other professional services, whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiations of fair and reasonable compensation.
(4)
(i) The item is available only from a single source; or
(ii) There exists a public exigency or emergency and the urgency for the requirement will not permit a delay incident to competitive solicitation; or
(iii) After solicitation of a number of sources, competition is determined inadequate; or
(iv) No acceptable bids have been received after formal advertising; or
(v) The procurement of architectural/engineering and other professional services.
(vi) The aggregate amount does not exceed $50,000.
(5)
(l)
(1) The owner's written request to use an unconventional contracting method with a description of the proposed method.
(2) A proposed scope of work describing in clear, concise terms the technical requirements for the contract. It should include items such as:
(i) A nontechnical statement summarizing the work to be performed by the contractor and the results expected.
(ii) The sequence in which the work is to be performed and a proposed construction schedule.
(3) A proposed firm-fixed-price contract for the entire project which provides that the contractor shall be responsible for:
(i) Any extra cost which may result from errors or omissions in the services provided under the contract.
(ii) Compliance with all Federal, State, and local requirements effective on the contract execution date.
(4) Where noncompetitive negotiation is proposed, an evaluation of the contractor's performance on previous similar projects in which the contractor acted in a similar capacity.
(5) A detailed listing and cost estimate of equipment and supplies not included in the construction contract but which are necessary to properly operate the facility.
(6) Evidence that a qualified construction inspector who is independent of the contractor has or will be hired.
(7) Preliminary plans and outline specifications. However, final plans and specifications must be completed and reviewed by FmHA or its successor agency under Public Law 103-354 prior to the start of construction.
(8) The owner's attorney's opinion and comments regarding the legal adequacy of the proposed contract documents and evidence that the owner has the legal authority to enter into and fulfill the contract.
(m)
(1)
(i) The lapse of a reasonable period of time between the date of contract award and the date of filing the preapplication which clearly indicates an irreconcilable failure of previous financial arrangements; or
(ii) A written statement explaining initial plans for financing the project and reasons for failure to obtain the planned credit.
(2)
(3)
(4)
(n)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(o)
(1)
(2)
(i) A comparison of actual accomplishments with the construction schedule established for the period. The partial payment estimate may be used for this purpose.
(ii) A narrative statement giving full explanation of the following:
(A) Reasons why established goals were not met.
(B) Analysis and explanation of cost overruns or high unit costs and how payment is to be made for the same.
(iii) If events occur between reports which have a significant impact upon the project, the owner will notify FmHA or its successor agency under Public Law 103-354 as soon as any of the following conditions are met:
(A) Problems, delays, or adverse conditions which will materially affect the ability to attain program objectives or prevent the meeting of project work units by established time periods. This disclosure shall be accompanied by a statement of the action taken, or contemplated, and any Federal assistance needed to resolve the situation.
(B) Favorable developments or events which enable meeting time schedules and goals sooner than anticipated or producing more work units than originally projected or which will result in cost underruns or lower unit costs than originally planned and which may result in less FmHA or its successor
(3)
(4)
(i) A complete set of all daily construction records will be maintained and the original set furnished to the owner upon completion of construction.
(ii) All entries shall be legible and shall be made in ink.
(iii) Daily entries shall include but not be limited to the date, weather conditions, number and classification of personnel working on the site, equipment being used to perform the work, persons visiting the site, accounts of substantive discussions, instructions given to the contractors, directions received, all significant or unusual happenings involving the work, any delays, and daily work accomplished.
(iv) The daily entries shall be made available to FmHA or its successor agency under Public Law 103-354 personnel and will be reviewed during project inspections.
(5)
(6)
(7)
(A) Funds are available to cover any additional costs; and
(B) The change is for an authorized loan purpose; and
(C) It will not adversely affect the soundness of the facility operation or FmHA or its successor agency under Public Law 103-354's security; and
(D) The change is within the scope of the contract.
(ii) Changes will be recorded on Form FmHA or its successor agency under Public Law 103-354 1924-7, “Contract Change Order,” or, other similar forms may be used with the prior approval of the State Director or designee. Regardless of the form, change orders must be approved by the FmHA or its successor agency under Public Law 103-354 State Director or a designated representative.
(iii) Changes should be accomplished only after FmHA or its successor agency under Public Law 103-354 approval on all changes which affect the work and shall be authorized only by means of contract change order. The change order will include items such as:
(A) Any changes in labor and material and their respective cost.
(B) Changes in facility design.
(C) Any decrease or increase in quantities based on final measurements that are different from those shown in the bidding schedule.
(D) Any increase or decrease in the time to complete the project.
(iv) All changes shall be recorded on chronologically numbered contract change orders as they occur. Change orders will not be included in payment estimates until approved by all parties.
(a)
(b)
(1)
(2)
(i) The amount of the issue does not exceed $50,000 and the applicant recognizes and accepts the fact that processing the application may require additional legal and administrative time.
(ii) There is a significant cost saving to the applicant particularly with reference to total legal fees after determining what bond counsel would charge as compared with what the local attorney will charge without bond counsel.
(iii) The local attorney is able and experienced in handling this type of legal work.
(iv) The applicant understands that, if it is required by FmHA or its successor agency under Public Law 103-354 to refinance its loan pursuant to the statutory refinancing requirements, it will probably have to obtain at its expense a bond counsel's opinion at that time.
(v) All bonds will be prepared in accordance with this regulation and will conform as nearly as possible to the preferred methods of preparation stated in paragraph (e) of this section but still be consistent with State law.
(vi) Many matters necessary to comply with FmHA or its successor agency under Public Law 103-354 requirements such as land rights, easements, and organizational documents will be handled by the applicant's local attorney. Specific closing instructions will be issued by the Office of the General Counsel of the U.S. Department of Agriculture for the guidance of FmHA or its successor agency under Public Law 103-354.
(3)
(c)
(1) Copies of all organizational documents.
(2) Copies of general incumbency certificate.
(3) Certified copies of minutes or excerpts therefrom of all meetings of the applicant's governing body at which action was taken in connection with the authorization and issuance of the bonds.
(4) Certified copies of documents evidencing that the applicant has complied fully with all statutory requirements incident to calling and holding of a favorable bond election, if such an election is necessary in connection with bond issuance.
(5) Certified copies of the resolution or ordinances or other documents, such as the bond authorizing resolutions or ordinance and any resolution establishing rates and regulating the use of the improvement, if such documents are not included in the minutes furnished.
(6) Copies of official Notice of Sale and affidavit of publication of Notice of Sale where a public sale is required by State statute.
(7) Specimen bond, with any attached coupons.
(8) Attorney's no-litigation certificate.
(9) Certified copies of resolutions or other documents pertaining to the bond award.
(10) Any additional or supporting documents required by bond counsel.
(11) For loans involving multiple advances of FmHA or its successor agency under Public Law 103-354 loan funds a preliminary approving opinion of bond counsel (or local counsel if no bond counsel is involved) if a final unqualified opinion cannot be obtained until all funds are advanced. The preliminary opinion for the entire issue shall be delivered on or before the first advance of loan funds and state that the applicant has the legal authority to issue the bonds, construct, operate and maintain the facility, and repay the loan subject only to changes during the advance of funds such as litigation resulting from the failure to advance loan funds, and receipt of closing certrificates.
(12) Preliminary approving opinion, if any, and final unqualified approving opinion of recognized bond counsel (or local counsel if no bond counsel is involved) including opinion regarding interest on bonds being exempt from Federal and any State income taxes. On approval of the Administrator, a final opinion may be qualified to the extent that litigation is pending relating to Indian claims that may affect title to land or validity of the obligation. It is permissible for such opinions to contain language referring to the last sentence of section 306(a)(1) or to section 309A(h) of the Consolidated Farm and Rural Development Act [7 U.S.C. 1926(a)(1) or 1929a(h)], and providing that if the bonds evidencing the indebtedness in question are required by the Federal Government and sold on an insured basis from the Agriculture Credit Insurance Fund, or the Rural Development Insurance Fund, the interest on such bonds will be included in gross income for the purpose of the Federal income tax statutes.
(d)
(e)
(1)
(2)
(i) Annual payments—Subtract the due date of the
(ii) Semiannual payments—Multiply by two the number of years between the due date of the
(iii) Monthly payments—Multiply by twelve the number of years between the due date of the
(3)
(i) The repayment terms concerning interest only installments described in paragraph (e)(2) of this section, “Second perference” applies.
(ii) The instrument shall contain in substance the following provisions:
(A) A statement of principal maturities and due dates.
(B) Payments made on indebtedness evidenced by this instrument shall be applied to the interest due through the next installment due date and the balance to principal in accordance with the terms of the bond. Payments on delinquent accounts will be applied in the following sequence:
(
(
(
(
(
(4)
(f)
(g)
(1) The date from which each advance will bear interest.
(2) The interest rate.
(3) A payment schedule providing for interest on outstanding principal at least annually.
(4) A maturity date which shall be no earlier than the anticipated issuance date of the permanent instrument(s).
(h)
(1)
(i) To compute the value of each coupon when the bond denomination is consistent:
(A) Multiply the amount of the loan or advance by the interest rate and divide the product by 365 days.
(B) Multiply the daily accrual factor determined in (A) by the number of days from the date of advance or last installment date to the next installment date.
(C) Divide the interest computed in (B) by the number of bonds securing the advance; this is the individual coupon amount.
(ii) to compute the value of each coupon when the bond denomination varies:
(A) Multiply the denomination of the bond by the interest rate and divide the product by 365 days.
(B) Multiply the daily accrual factor determined in (A) by the number of days from the date of advance or last installment date to the next installment due date; this is the individual coupon amount.
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(i) Provisions for the holder to manually post each payment to the instrument.
(ii) Provisions for returning the permanent or temporary debt instrument to the borrower in order that it, rather than FmHA or its successor agency under Public Law 103-354, may post the date and amount of each advance or repayment on the instrument.
(iii) Defeasance provisions in loan or bond resolutions. When a bond issue is defeased, a new issue is sold which supersedes the contractual provisions of the prior issue, including the refinancing requirement and any lien on revenues. Since defeasance in effect precludes FmHA or its successor agency under Public Law 103-354 from requiring graduation before the final maturity date, it represents a violation of the statutory refinancing requirement, therefore it is disallowed.
(iv) Provisions that amend convenants contained in Forms FmHA 1942-47, “Loan Resolution (Public Bodies),” or FmHA 1942-9, “Loan Resolution Security Agreement.”
(11)
(i) When more than one loan type is used in financing a project, each type of loan will be evidenced by a separate debt instrument or series of debt instruments.
(ii) Loan funds obligated in different fiscal years and those obligated with different interest rates or terms in the same fiscal year will be evidenced by separate debt instruments.
(iii) Loan funds obligated for the same loan type in the same fiscal year at the same interest rate and term may be combined in the same debt instrument; provided the borrower has been notified on Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request for Obligation of Funds”, of the action.
(i)
(a) The following documents are attached and made part of this subpart and may be used by FmHA or its successor agency under Public Law 103-354 officials in administering this program.
(1) Guide 1 and 1a—Guide Letter for Use in Informing Private Lender of
(2) Guide 2—Water Users Agreement.
(3) Guide 3—Service Declination Statement.
(4) Guide 4—Bylaws.
(5) Guide 5—Financial Feasibility Report.
(6) Guide 6—Preliminary Architectural Feasibility Report.
(7) Guide 7—Preliminary Engineering Report Water Facility.
(8) Guide 8—Preliminary Engineering Report Sewerage Systems.
(9) Guide 9—Preliminary Engineering Report Solid Waste Disposal Systems.
(10) Guide 10—Preliminary Engineering Report Storm Waste-Water Disposal.
(11) Guide 11—Daily Inspection Report.
(12) Guide 12—Memorandum of Understanding Between the Economic Development Administration—Department of Commerce and the Farmers Home Administration or its successor agency under Public Law 103-354—Department of Agriculture Pertaining to EDA Public Works Projects Assisted by an FmHA or its successor agency under Public Law 103-354 Loan.
(13) Guide 13—Memorandum of Understanding Between the Economic Development Administration—Department of Commerce and the Farmers Home Administration or its successor agency under Public Law 103-354—Department of Agriculture Regarding Supplementary Grant Assistance for the Construction of Public Works and Development Facilities.
(14) Guide 14—Legal Services Agreement.
(15) Guide 15—Community Facility Borrower's Application.
(16) Guide 16—Community Facility Loan Docket.
(17) Guide 17—Construction Contract Documents—Short Form.
(18) Guide 18—FmHA or its successor agency under Public Law 103-354 Supplemental General Conditions.
(19) Guide 19—Construction Contract Documents.
(20) Guide 20—Agreement for Engineering Services (FmHA or its successor agency under Public Law 103-354/EPA Jointly Funded Projects).
(21) Guide 21—Review of Audit Reports.
(22) Guide 22—Delinquent Accounts Positive Action Plan.
(23) Guide 23—Agreement for Joint Use of Electric System Poles.
(24) Guide 24—Minimum Suggested Contents of Management Agreements.
(25) Guide 25—Joint Policy Statement Between EPA and FmHA or its successor agency under Public Law 103-354.
(26) Guide 26—Community Programs Project Selection Criteria.
(27) Exhibit A—Circular No. A-128.
(28) Exhibit B—Department of Agriculture Regional Inspector General (OIG).
(b) These guides and exhibits are for use by FmHA or its successor agency under Public Law 103-354 officials, applicants and applicant's officials and/or agents on certain matters related to the planning, development, and operation of essential community facilities which involve the use of loans and/or grants from FmHA or its successor agency under Public Law 103-354. This includes activities related to applying for and obtaining such financial assistance. These guides and exhibits are not published in the
The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0575-0015. Public reporting burden for this collection of information is estimated to vary from five minutes to 15 hours per response, with an average of 2.7 hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this
This subpart provides the policies and procedures for making and processing insured community facility loans for facilities that will primarily provide fire or rescue services. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to FmHA or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an FmHA or its successor agency under Public Law 103-354 employee. Community facility loans for other types of facilities are covered in subpart A of this part 1942.
(a) Federal statutes provide for extending Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 financial programs without regard to race, color, religion, sex, national origin, marital status, age, or physical/mental handicap. The participants must possess the capacity to enter into legal contracts under State and local statutes.
(b) Indian tribes on Federal and State reservations and other Federally recognized Indian tribes are eligible to apply for and are encouraged to participate in this program. Such tribes might not be subject to State and local laws or jurisdiction. However, any requirements of this subpart that affect applicant eligibility, the adequacy of FmHA or its successor agency under Public Law 103-354's security or the adequacy of service to users of the facility and all other requirements of this subpart must be met.
For the purpose of this subpart:
(a)
(b)
(c)
(a)
(b)
(c)
(1) Project summary is completed.
(2) Letter of conditions is issued.
(3) Applicant declines to execute Form FmHA or its successor agency under Public Law 103-354 1942-46, “Letter of Intent to Meet Conditions.”
(4) Applicant is notified of loan approval.
(5) A loan is properly closed.
(6) A construction contract is awarded.
(7) A final inspection is completed.
(d)
The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income is derived from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Federal agency that administers compliance with this law is the Federal Trade Commission, Equal Credit Opportunity, Washington, DC 20580.
FmHA or its successor agency under Public Law 103-354 must conduct and document an environmental review for each proposed project in accordance with subpart G of part 1940 of this chapter. The review should be completed as soon as possible after receipt of an application. The loan approving official must determine an adequate environmental review has been completed before requesting an obligation of funds.
(a) Loans under this subpart are subject to intergovernmental review in accordance with subpart J of part 1940 of this chapter.
(b) State intergovernmental review agencies that have selected community facility loans as a program they want to review may not be interested in reviewing proposed loans for fire and rescue facilities. In such cases, the State Director should obtain a letter from the State single point of contact exempting fire and rescue loans from intergovernmental consultation review. A copy of the letter should be placed in the case file for each fire and rescue facility application in lieu of completing the intergovernmental review process.
(c) When an application is filed and adverse comments are not expected, the District Director should proceed with application processing pending intergovernmental review. The loan should not be obligated until any required review process has been completed.
(d) Funds allocated for use under this subpart are also for the use of eligible Indian tribes within the State, regardless of whether State development strategies include Indian reservations. Eligible Indian tribes must have equal opportunity to participate in the program as compared with other residents of the State.
(a) Eligible applications must be selected for processing in accordance with § 1942.17(c) of subpart A of this part 1942.
(b) The District Director must score each eligible application in accordance with § 1942.17(c)(2)(iii) of subpart A of this part 1942. The District Director must then notify the State Director of the score, proposed loan amount, and other pertinent data. The State Director should determine as soon as possible if the project has sufficient priority for further processing and notify the District Director. Normally, this consultation should be handled by telephone and documented in the running record.
(c) Applicants who appear eligible but do not have the priority necessary for further consideration at this time should be notified that funds are not available, requested to advise whether they wish to have their application maintained for future consideration and given the following notice:
You are advised against incurring obligations which would limit the range of alternatives to be considered, or which cannot be fulfilled without FmHA or its successor agency under Public Law 103-354 funds until the funds are actually made available. Therefore, you should refrain from such actions as initiating engineering and legal work, taking actions which would have an adverse effect on the environment, taking options on land rights, developing detailed plans and specifications, or inviting construction bids until notified by Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 to proceed.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(a)
(b)
(c)
(a) Funds may be used:
(1) To construct, enlarge, extend, or otherwise improve essential community facilities primarily providing fire or rescue services primarily to rural residents and rural business. Rural businesses would include facilities such as educational and other publicly owned facilities. “Otherwise improve” includes but is not limited to the following:
(i) The purchase of major equipment, such as fire trucks and ambulances, which will, in themselves, provide an essential service to rural residents.
(ii) The purchase of existing facilities when it is necessary either to improve or to prevent a loss of service.
(2) To pay the following expenses, but only when such expenses are a necessary part of a loan to finance facilities authorized in paragraph (a)(1) of this section:
(i) Reasonable fees and costs such as legal, engineering, architectural, fiscal advisory, recording, environmental impact analyses, archaeological surveys and possible salvage or other mitigation measures, planning, establishing or acquiring rights.
(ii) Interest on loans until the facility is self-supporting but not for more than 3 years unless a longer period is approved by the National Office; interest on loans secured by general obligation bonds until tax revenues are available for payment, but not for more than 2 years unless a longer period is approved by the National Office; and interest on interim financing, including interest charges on interim financing from sources other than FmHA or its successor agency under Public Law 103-354.
(iii) Costs of acquiring interest in land, rights such as water rights, leases, permits, rights-of-way, and other evidence of land or water control necessary for development of the facility.
(iv) Purchasing or renting equipment necessary to install, maintain, extend, protect, operate, or utilize facilities.
(v) Initial operating expenses for a period ordinarily not exceeding 1 year when the borrower is unable to pay such expenses.
(vi) Refinancing debts incurred by, or on behalf of, a community when all of the following conditions exist:
(A) The debts being refinanced are a secondary part of the total loan;
(B) The debts are incurred for the facility or service being financed or any part thereof; and
(C) Arrangements cannot be made with the creditors to extend or modify the terms of the debts so that a sound basis will exist for making a loan.
(3) To pay obligations for construction or procurement incurred before loan approval. Construction work or procurement actions should not be started and obligations for such work or materials should not be incurred before the loan is approved. However, if there are compelling reasons for proceeding with construction or procurement before loan approval, applicants may request FmHA or its successor agency under Public Law 103-354 approval to pay such obligations. Such requests may be approved if FmHA or its successor agency under Public Law 103-354 determines that:
(i) Compelling reasons exist for incurring obligations before loan approval; and
(ii) The obligations will be incurred for authorized loan purposes; and
(iii) Contract documents have been approved by FmHA or its successor agency under Public Law 103-354; and
(iv) All environmental requirements applicable to FmHA or its successor agency under Public Law 103-354 and the applicant have been met; and
(v) The applicant has the legal authority to incur the obligations at the time proposed, and payment of the debts will remove any basis for any mechanic, material or other liens that may attach to the security property. FmHA or its successor agency under Public Law 103-354 may authorize payment of such obligations at the time of loan closing. FmHA or its successor agency under Public Law 103-354's authorization to pay such obligations, however, is on the condition that it is not committed to make the loan; it assumes no responsibility for any obligations incurred by the applicant; and the applicant must subsequently meet all loan approval requirements. The applicant's request and FmHA or its successor agency under Public Law 103-354 authorization for paying such obligations shall be in writing. If construction or procurement is started without FmHA or its successor agency under Public Law 103-354 approval, post approval in accordance with this section may be considered.
(b) Funds may not be used to finance:
(1) Facilities which are not modest in size, design, and cost.
(2) Loan finder's fees.
(3) Projects located within the Coastal Barriers Resource system that do not qualify for an exception as defined in section 6 of the Coastal Barriers Resource Act, Pub. L. 97-348.
Rates and terms for loans under this subpart are as set out in § 1942.17(f) of subpart A of this part 1942.
Specific requirements for security for each loan will be included in the letter of conditions. Loans must be secured by the best security position practicable, in a manner which will adequately protect the interest of FmHA or its successor agency under Public Law 103-354 during the repayment period of the loan, and in accordance with the following;
(a) Security must include one of the following:
(1) A pledge of revenue and a lien on all real estate and major equipment purchased or developed with the FmHA or its successor agency under Public Law 103-354 loan; or
(2) General obligation bonds or bonds pledging other taxes.
(b) Additional security may be required as determined necessary by the loan approval official. In determining the need for additional security the loan approval official should carefully consider:
(1) The estimated market value of real estate and equipment security.
(2) The adequacy and dependability of the applicant's revenues, based on the applicant's financial records, the project financial feasibility report, and the project budgets.
(3) The degree of community commitment to the project, as evidenced by items such as active broad based membership, aggressive leadership, broad based fund drives, or contributions by local public bodies.
(c) Additional security may include, but is not limited to, the following:
(1) Liens on additional real estate or equipment.
(2) A pledge of revenues from additional sources.
(3) An assignment of assured income in accordance with § 1942.17(g)(3)(iii)(A)(
(d) Review and approval or concurrence in the State Office is required if the security will not include a pledge of taxes and the applicant cannot provide evidence of the financially successful operation of a similar facility for the 5 years immediately prior to loan application.
(e) Review and concurrence in the National Office is required if the security will not include a pledge of taxes, the applicant cannot provide evidence of the financially successful operation of a similar facility for the 5 years immediately prior to loan application, and the amount of the loan will exceed $250,000.
(f) Loans under this subpart are subject to the provisions of § 1942.17(g)(1) of subpart A of this part 1942, regarding security for projects utilizing joint financing.
Applicants are responsible for determining that prices paid for property rights, construction, equipment, and other project development are reasonable and fair. FmHA or its successor agency under Public Law 103-354 may require an appraisal by an independent appraiser or FmHA or its successor agency under Public Law 103-354 employee.
All projects financed under this section must be based on taxes, assessments, revenues, fees, or other satisfactory sources of revenues in an amount sufficient to provide for facility operation and maintenance, a reasonable reserve, and debt payment. An overall review of the applicant's financial status, including a review of all assets and liabilities, will be a part of the docket review process by the FmHA or its successor agency under Public Law 103-354 staff and approval official. All applicants will be expected to provide a financial feasibility report. These financial feasibility reports will normally be:
(a) Included as part of the preliminary engineer/architectural report using guide 6 to subpart A of this part 1942 (available in any FmHA or its successor agency under Public Law 103-354 Office), or
(b) Prepared by the applicant using Form FmHA or its successor agency under Public Law 103-354 1942-54, “Applicant's Feasibility Report.”
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(a) Loans under this subpart are subject to the provisions of § 1942.17 (k) of subpart A of this part 1942.
(b) An initial compliance review should be completed under subpart E of part 1901 of this chapter.
(a) Loans under this subpart are subject to the provisions of § 1942.17 (l) of subpart A of this part 1942.
(b) The District Director will, with assistance as necessary by the State Director and OGC, concur in agreements between borrowers and third parties such as contracts for professional and technical services. The State Director may require State Office review of such documents in accordance with § 1942.108 (g) of this subpart. State Directors are expected to work closely with representatives of engineering and architectural societies, bar associations, commercial lenders, accountant associations, and others in developing standard forms of agreements, where needed, and other matters to expedite application processing, minimize referrals to OGC, and resolve problems which may arise. Standard forms should be reviewed by and approved by OGC.
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(1) Form FmHA or its successor agency under Public Law 103-354 440-57, “Acknowledgement of Obligated Funds/Check Request,” has been received from the Finance Office.
(2) The applicant has complied with approval conditions and any closing instructions, except for those actions which are to be completed on the date of loan closing or subsequent thereto.
(3) The applicant is ready to start construction or funds are needed to pay interim financing obligations.
(b)
(2) Loans will be closed in accordance with the closing instructions issued by OGC and § 1942.19 of subpart A of this part 1942.
(c)
(d)
(e)
(f)
(g)
(h)
(1) The Finance Office will be notified of the anticipated date for the retirement of the interim instruments and the issuance of permanent instruments of debt.
(2) The Finance Office will prepare a statement of account including accrued interest through the proposed date of retirement and also show the daily interest accrual. The statement of account and the interim financing instruments will be forwarded to the District Director.
(3) The District Director will collect interest through the actual date of the retirement and obtain the permanent instrument(s) of debt in exchange for the interim financing instruments. The permanent instruments and the cash collection will be forwarded to the Finance Office immediately, except that for notes and single instrument bonds fully registered as to principal and interest the original will be retained in the District Office and a copy will be forwarded to the Finance Office. In developing the permanent instruments, the sequence of preference set out § 1942.19(e) of subpart A of this part 1942 will be followed.
(i)
(j)
(k)
(l)
(m)
(a)
(b)
(1)
(2)
(3)
(c)
(d)
(1)
(2)
(3)
(e)
(f)
(g)
(h)
(1) Small purchase procedures as provided in § 1942.18(k)(1) of subpart A of this part 1942.
(2) Competitive sealed bids as provided in § 1942.18(k)(2) of subpart A of this part 1942. Competitive sealed bids is the preferred procurement method of construction projects, except for buildings costing $100,000 or less when the owner desires to use a “preengineered” or “packaged” building.
(3) Competitive negotiation as provided in § 1942.18(k)(3) of subpart A of this part 1942. Competitive negotiation is the preferred procurement method of buildings not exceeding $100,000 in cost when the owner desires to use a “pre--engineered” or “packaged” building and for major equipment.
(4) Noncompetitive negotiation as provided in § 1942.18(k)(4) of subpart A of this part 1942.
(i)
(j)
(k)
(l)
(1)
(2)
(i) A comparison of actual accomplishments with the construction schedule established for the period. The partial payment estimate may be used for this purpose.
(ii) A narrative statement giving full explanation of the following:
(A) Reasons why established goals were not met.
(B) Analysis and explanation of cost overruns or high unit costs and how payment is to be made for the same.
(iii) If events occur between reports which have a significant impact upon
(A) Problems, delays, or adverse conditions which will materially affect the ability to attain program objectives or prevent the meeting of project work units by established time periods. This disclosure shall be accompanied by a statement of the action taken, or contemplated, and any Federal assistance needed to resolve the situation.
(B) Favorable developments or events which enable meeting time schedules and goals sooner than anticipated or producing more work units than originally projected or which will result in cost underruns or lower unit costs than originally planned and which may result in less FmHA or its successor agency under Public Law 103-354 assistance.
(3)
(i) An initial inspection should be made just prior to or during the placement of concrete footings or monolithic footings and floor slabs. At this point, foundation excavations are complete, forms or trenches and steel are ready for concrete placement and the subsurface installation is roughed in. If the building design does not include concrete footings the initial inspection should be made just after or during the placement of poles or other foundation materials.
(ii) An inspection should be made when the building is enclosed, structural members are still exposed, roughing in for heating, plumbing and electrical work is in place and visible, and wall insulation and vapor barriers are installed.
(iii) A final inspection should be made when all development of the structure has been completed and the structrure is ready for its intended use.
(4)
(5)
(6)
(A) Funds are available to cover any additional costs; and
(B) The change is for an authorized loan purpose; and
(C) It will not adversely affect the soundness of the facility operation or FmHA or its successor agency under Public Law 103-354's security; and
(D) The change is within the scope of the contract; and
(E) Any applicable requirements of subpart G of part 1940 of this chapter have been met.
(ii) Changes will be recorded on Form FmHA or its successor agency under Public Law 103-354 1924-7, “Contract Change Order,” or other similar forms may be used with the prior approval of the District Director. Regardless of the form, change orders must be approved by the FmHA or its successor agency under Public Law 103-354 District Director.
(iii) Changes should be accomplished only after FmHA or its successor agency under Public Law 103-354 approval on all changes which affect the work and shall be authorized only by means of contract change order. The change order will include items such as:
(A) Any changes in labor and material and their respective cost.
(B) Changes in facility design.
(C) Any decrease or increase in quantities based on final measurements that are different from those shown in the bidding schedule.
(D) Any increase or decrease in the time to complete the project.
(iv) All changes shall be recorded on chronologically numbered contract change orders as they occur. Change orders will not be included in payment estimates until approved by all parties.
(a)
(b)
(c)
(d)
(e)
(1)
(2)
(f)
(a) Loans under this subpart are subject to the provisions of § 1942.17(q) of subpart A of this part 1942 except as provided in this section.
(b) Borrowers with annual incomes not exceeding $100,000 may, with concurrence of the District Director, use Form FmHA or its successor agency under Public Law 103-354 1942-53, “Cash Flow Report,” instead of page one of schedule one and schedule two of Form FmHA or its successor agency under Public Law 103-354 442-2, “Statement of Budget, Income, and Equity.” When used for budgeting, the cash statement should be projected for the upcoming fiscal year. When used for quarterly or annual reports, the cash flow report should include current year projections and actual data for the prior year, the quarter just ended, and the current year to date.
Loans under this subpart are subject to the provisions of § 1942.17(r) of subpart A of this part 1942 and subpart E of part 1951 of this chapter.
Subsequent loans will be processed under this subpart.
Loan approval authority is in subpart A of part 1901 of this chapter. State Directors may delegate approval authority to District Directors to approve fire and rescue loans regardless of whether authority to approve other community facility loans is delegated. Except for loan approval authority, District Directors may redelegate their duties to qualified staff members.
State Directors will obtain National Office clearance for all State supplements and guides under FmHA Instruction 2006-B (available in any FmHA or its successor agency under Public Law 103-354 Office).
(a)
(b)
The collection of information requirements in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575-0120.
7 U.S.C. 1989; delegation of authority by the Secretary of Agriculture, 7 CFR 2.23; delegation of authority by the Assistant Secretary for Rural Development, 7 CFR 2.70; 5 U.S.C. 301.
This subpart outlines Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 policies and authorizations and sets
(a) The grant program will be used to support the development of small and emerging private business enterprises in rural areas.
(b) FmHA or its successor agency under Public Law 103-354 officials will maintain liaison with officials of other federal, state, regional and local development agencies to coordinate related programs to achieve rural development objectives.
(c) FmHA or its successor agency under Public Law 103-354 officials shall cooperate with appropriate State agencies in making grants that support State strategies for rural area development.
(d) Funds allocated for use in accordance with this subpart are also to be considered for use of Indian tribes within the State regardless of whether State development strategies include Indian reservations within the State's boundaries. Indians residing on such reservations must have equal opportunity along with other rural residents to participate in the benefits of these programs. This includes equal application of outreach activities of FmHA or its successor agency under Public Law 103-354 County and District Offices.
The State Director is responsible for implementing the authorities contained in this subpart and to issue State supplements redelegating these authorities to appropriate FmHA or its successor agency under Public Law 103-354 employees. Grant approval authorities are contained in subpart A of part 1901 of this chapter.
(a)
(2) Regional Commission Grant applicants must meet eligibility requirements of the Regional Commission and also of FmHA or its successor agency
(3) Television demonstration grants may be made to statewide, private, nonprofit public television systems whose coverage is predominantly rural. An eligible applicant must be organized as a private nonprofit public television system, licensed by the Federal Communications Commission, and operated statewide and within a coverage area that is predominantly rural.
(b)
(1)
(2)
(3)
(i)
(ii)
(B) Proposed project(s) will primarily be located in areas where Median Household Income (MHI) as prescribed by section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) for a family of 4 for the State is: (
(iii)
(iv)
(B) Applicant has evidence of substantial commitment of funds from nonfederal sources for proposed project. An authorized representative of the source organization of the nonfederal funds must provide evidence that the funds are available and will be used for the proposed project. More than 50 percent of the project costs from nonfederal sources—15 points; more than 25 percent, but less than 50 percent of project costs from nonfederal sources—10 points; between 5 percent and 25 percent of project costs from nonfederal sources—5 points.
(C) For a grant to establish a revolving fund, the applicant provides evidence to FmHA or its successor agency under Public Law 103-354 through loan applications or letters from businesses that the loans are needed by small emerging businesses in the proposed project area—25 points.
(D) The anticipated development, expansion, or furtherance of business enterprises as a result of the proposed project will create and/or save jobs associated with the affected businesses. The number of jobs must be evidenced by a written commitment from the business to be assisted. One job per each $10,000 or less in grant funds expended—10 points. One job per each $25,000 to $10,000 in grant funds expended—5 points.
(E) The proposed grant project is consistent with, and does not duplicate, economic development activities for the project area under an existing community or economic development plan covering the project area. If no local plan is in existence for the project area, an areawide plan may be used. The plan used must be adopted by the appropriate governmental officials/entities as the area's community or economic development plan. Appropriate plan references and copies of appropriate sections of the plan, as well as evidence of plan adoption by appropriate governmental officials, should be provided to FmHA or its successor agency under Public Law 103-354. Project is reflected in a plan—5 points.
(F) Grant projects utilizing funds available under this subpart of less than $100,000—25 points, $100,000 to $200,000—15 points, more than $200,000 but not more than $500,000—10 points.
(v)
(a) Grant funds may be used to finance and/or develop small and emerging private business enterprises in rural areas including, but not limited to, the following:
(1) Acquisition and development of land, easements and rights-of-way.
(2) Construction, conversion, enlargement, repairs or modernization of buildings, plants, machinery, equipment, access streets and roads, parking areas, utilities, and pollution control and abatement facilities.
(3) Loans for startup operating cost and working capital.
(4) Technical assistance for private business enterprises.
(5) Reasonable fees and charges for professional services necessary for the planning and development of the project including packaging. Services must be provided by individuals licensed in accordance with appropriate State accreditation associations.
(6) Refinancing of debts exclusive of interest incurred by or on behalf of an association before an application for a grant when all of the following exist:
(i) The debts were incurred for the facility or part thereof or service to be installed or improved with the grant, and
(ii) Arrangements cannot be made with the creditors to extend or modify the terms of the existing debt.
(7) Providing financial assistance to third parties through a loan.
(8) Training, when necessary, in connection with technical assistance.
(9) Production of television programs to provide information on issues of importance to farmers and rural residents.
(10) Create, expand, and operate rural distance learning networks or rural
(b) Grants, except grants for television demonstration programs, may be made only when there is a reasonable prospect that they will result in development of small and emerging private business enterprises.
(c) FmHA or its successor agency under Public Law 103-354 grant funds may be used jointly with funds furnished by the grantee or from other sources including FmHA or its successor agency under Public Law 103-354 loan funds. Pursuant to Pub. L. 95-334, other departments, agencies, and executive establishments of the Federal Government may participate and provide financial and technical assistance jointly with FmHA or its successor agency under Public Law 103-354. The amount of participation by the other department, agency, or executive establishment shall only be limited by its authorities other than authorities which impose restrictions on joint financing.
(a) Funds will not be used:
(1) To produce agriculture products through growing, cultivation and harvesting either directly or through horizontally integrated livestock operations except for commercial nurseries, timber operations or limited agricultural production related to technical assistance projects.
(2) To finance comprehensive areawide type planning. This does not preclude the use of grant funds for planning for a given project.
(3) For loans by grantees when the rates, terms and charges for those loans are not reasonable or would be for purposes not eligible under § 1942.306 of this subpart.
(4) For programs operated by cable television systems.
(5) To fund a part of a project which is dependent on other funding unless there is a firm commitment of the other funding to ensure completion of the project.
(6) To pay for technical assistance as defined in this subpart which duplicates assistance provided to implement an action plan funded by the Forest Service (FS) under the National Forest-Dependent Rural Communities Economic Diversification Act for 5 continuous years from the date of grant approval by the FS. To avoid duplicate assistance, the grantee shall coordinate with FS and Rural Business-Cooperative Service (RBS) to ascertain if a grant has been made in a substantially similar geographical or defined local area in a State for technical assistance under the above program. The grantee will provide documentation to FS and RBS regarding the contact with each agency. Under its program, the FS assists rural communities dependent upon national forest resources by establishing rural forestry and economic diversification action teams which prepare action plans. Action plans are intended to provide opportunities to promote economic diversification and enhance local economies dependent upon national forest resources.
(b) At least 51 percent of the outstanding interest in the project has membership or is owned by those who are either citizens of the United States or reside in the United States after being legally admitted for permanent residence.
(a) Grants are sometimes made by Federal Regional Commissions for projects eligible for FmHA or its successor agency under Public Law 103-354 assistance. FmHA or its successor agency under Public Law 103-354 has agreed to administer such funds in accordance with FmHA or its successor agency under Public Law 103-354 regulations and the requirements of the commission.
(b) The transfer of funds from a Regional Commission to FmHA or its successor agency under Public Law 103-354 will be based on specific applications
(c) ARC is authorized under the Appalachian Regional Development Act of 1965 (40 U.S.C. 1-405), as amended, to serve the Appalachian region. ARC grants are handled in accordance with the ARC Agreement which applies to all ARC grants administered by the Agency. Therefore, a separate Project Management Agreement between the Agency and ARC is not needed for each ARC grant.
(d) Other Federal Regional Commissions are those authorized under title V of the Public Works and Economic Development Act of 1965. Grants by these commissions are handled in accordance with a separate Project Management Agreement between the respective Regional Commission and FmHA or its successor agency under Public Law 103-354 for each Commission grant administered by FmHA or its successor agency under Public Law 103-354 (Guide 1 of this subpart). The agreement should be prepared by the FmHA or its successor agency under Public Law 103-354 State Director and the appropriate Commission official when the State Director receives a notice from the Commission of the amount of the grant to be made.
(a) Civil rights compliance requirements. All grants made under this subpart are subject to the requirements of title VI of the Civil Rights Act of 1964, which prohibits discrimination on the bases of race, color, and national origin as outlined in subpart E of part 1901 of this chapter. In addition, the grants made under this subpart are subject to the requirements of section 504 of the Rehabilitation Act of 1973, which prohibits discrimination on the basis of handicap, the requirements of the Age Discrimination Act of 1975, which prohibits discrimination on the basis of age and title III of the Americans with Disabilities Act, Public Law 101-336, which prohibits discrimination on the basis of disability by private entities in places of public accommodations. When FmHA or its successor agency under Public Law 103-354 is administering a Federal Regional Commission grant and no FmHA or its successor agency under Public Law 103-354 RBE/television demonstration grant funds are involved, the Federal Regional Commission may make its own determination of compliance with the above Acts, unless FmHA or its successor agency under Public Law 103-354 is designated compliance review responsibilities. FmHA or its successor agency under Public Law 103-354 shall in all cases be made aware of any findings of discrimination or noncompliance with the requirements of the above Acts.
(b)
(2)
(3)
(4)
(5)
(i) The proposed direct construction project(s) will be reviewed under the requirements of paragraph (b)(3) of this section prior to authorization of the application.
(ii) The plan to provide financial assistance to thrid parties will be reviewed and processed under the requirements of paragraph (b)(4) of this section. Additionally, the Class II assessment required for the plan shall address and analyze the cumulative impacts of all proposed projects, direct or third party, identified within the preapplication.
(c)
(i) The transfer of any employment or business activity from one area to another (this limitation shall not prohibit assistance for the expansion of an existing business entity through the establishment of a new branch, affiliate, or subsidiary of such entity if the expansion will not result in an increase
(ii) An increase in the production of goods, materials, or commodities or the availability of services or facilities in the area, when there is not sufficient demand for such goods, materials, commodities, services, or facilities, to employ the efficient capacity of existing competitive commercial or industrial enterprises, unless such financial or other assistance will not have an adverse effect upon existing competitive enterprises in the area. The applicant's written indication will consist of a resolution from the applicant and Form FmHA or its successor agency under Public Law 103-354 449-22, “Certificate of Non-Relocation and Market and Capacity Information Report,” from each existing and future occupant of the site. The applicant may use guide 2 of this subpart as an example in preparing the resolution. Future occupants of the site must be certified by Department of Labor (DOL) as outlined in paragraph (c)(3) of this section for a period of 3 years after the initial certification by DOL.
(2) The State Director will check each document for completeness and accuracy and, submit nine copies of each to the National Office for forwarding to DOL. The submittal to the National Office should be accompanied by a cover memorandum giving the amount and purpose of the grant. Information should
(3) Grants shall not be made if the Secretary of Labor certifies within 30 days after the matter has been submitted by the Secretary of Agriculture that the provisions of § 1942.310(c)(1) of this subpart have not been complied with. Information for obtaining this certification will be submitted in writing by the applicant to FmHA or its successor agency under Public Law 103-354. The information will be submitted to DOL by the FmHA or its successor agency under Public Law 103-354 National Office. Grant approval may be given and funds may be obligated subject to the DOL certification being received provided FmHA or its successor agency under Public Law 103-354 has made its own separate determinations of (c)(1)(i) and (ii) of this section when the project is in excess of $1 million and affects over 50 employees.
(4) When a grant is being administered for a Federal Regional Commission and no FmHA or its successor agency under Public Law 103-354 grant funds are being used, the requirements for DOL determinations may be waived upon written request from the Commission. If the Commission so desires, the request will be included in the letter from the Commission to FmHA or its successor agency under Public Law 103-354 that gives notice of transfer of funds and conditions under which the funds are to be made available to the grantee. In such cases the letter of conditions from FmHA or its successor agency under Public Law 103-354 to the grantee will not include the requirement for DOL determinations.
(d)
(e)
(f)
(g)
(h)
(i)
(a)
(2) Each application for assistance will be carefully reviewed in accordance with the priorities established in § 1942.305(b)(3) of this subpart. A priority rating will be assigned to each application. Applications selected for funding will be based on the priority rating assigned each application and the total funds available. All applications submitted for funding should contain sufficient information to permit FmHA or its successor agency under Public Law 103-354 to complete a thorough priority rating.
(b)
(a) For applications involving establishment of a revolving fund to provide financial assistance to third parties the applicant shall develop a plan which outlines the purpose and administration of the fund. The plan will include:
(1) Planned projects to be financed.
(2) Sources of all non RBE funds.
(3) Amount of technical assistance (if any).
(4) Purpose of the loans.
(5) Number of jobs to be created/saved with each project.
(6) Project priority and length of time involved in completion of each project.
(7) Other information required by the State Office.
(b) Each third party project receiving funds will be reviewed for eligibility. When the applicant does not have a list of projects to be completed, the applicant should advise the FmHA or its successor agency under Public Law 103-354 at the time a preapplication is submitted.
For applications involving a purpose other than a construction project to be owned by the applicant, the applicant shall develop a Scope of Work. The Scope of Work will be used to measure the performance of the grantee. As a minimum, the Scope of Work should contain the following:
(a) The specific purposes for which grant funds will be utilized, i.e., Technical Assistance, Revolving Fund, etc.
(b) Timeframes or dates by which action surrounding the use of funds will be accomplished.
(c) Who will be carrying out the purpose for which the grant is made (key personnel should be identified).
(d) How the grant purposes will be accomplished.
(e) Documentation regarding the availability and amount of other funds to be used in conjunction with the funds from the RBE/television demonstration program.
(f) For grants involving a revolving fund the scope of work should include those items listed in paragraphs (a) through (e) of this section as well as the following:
(1) Information which will establish/identify the need for the revolving loan fund.
(2) Financial statements which will demonstrate the financial ability of the applicant to administer the revolving loan fund. As a minimum the financial statements will include:
(i) Balance sheet
(ii) Income statement
(3) Detail on the applicants experience in operating a revolving loan fund.
(g) For technical assistance and television demonstration program projects, the scope of work should include a budget based on the budget contained in the application, modified or revised as appropriate, which includes salaries, fringe benefits, consultant costs, indirect costs, and other appropriate direct costs for the project.
(a) The applicable provisions of § 1942.5 of subpart A of part 1942 of this chapter relating to preparation of loan dockets will be followed in preparing grant dockets.
(b) The State Director or the State Director's designated representative will prepare a Letter of Conditions outlining the conditions under which the grant will be made. It will include those matters necessary to assure that the proposed development is completed in accordance with approved plans and specifications, that grant funds are expended for authorized purposes, and that the terms of the Scope of Work and requirements as prescribed in parts 3015 and 3016 of 7 CFR are complied with. The Letter of Conditions will be addressed to the applicant, signed by the State Director or other designated FmHA or its successor agency under Public Law 103-354 representative, and mailed or handed to appropriate applicant officials. Each Letter of Conditions will contain the following paragraphs.
“This letter established conditions which must be understood and agreed to by you before further consideration may be given to the application.”
“This letter is not to be considered as grant approval nor as a representation as to the availability of funds. The docket may be completed on the basis of a grant not to exceed $___.”
“Please complete and return the attached Form FmHA or its successor agency under Public Law 103-354 1942-46, ‘Letter of Intent to Meet Conditions,’ if you desire further consideration be given your application.”
Other items in the Letter of Conditions should include those relative to: Maximum amount of grant, contributions, final plans and specifications, construction contract documents and bidding, required project audit, evidence of compliance with all applicable Federal, State, and local requirements, closing instructions, DOL certifications, compliance with any required environmental mitigation measures, and other requirements including those of Regional Commissions when a grant is being made by a Regional Commission.
(a)
(b)
(c)
Subsequent grants will be processed in accordance with this subpart.
The Administrator may, in individual cases, make an exception to any requirement or provision of this subpart which is not inconsistent with the authorizing statute, an applicable law or decision of the Comptroller General, if the Administrator determines that application of the requirement or provision would adversely affect the Government's interest and show how the adverse impact will be eliminated or minimized if the exception is made.
Guides 1 and 2 of this subpart, Attachment 1 and Forms referenced (all available in any Rural Development office) are for use in administering RBE/television demonstration grants.
The collection of information requirements in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575-0132. Public reporting burden for this collection of information is estimated to vary from one-half to 40 hours per response, with an average of 1.8 hours per response including time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of the collection of information, including suggestions for reducing this burden, to Department of Agriculture, Clearance Officer, OIRM, room 404-W, Washington, DC 20250; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503.
Whereas the ______ (hereinafter called public body) desires to obtain financial assistance from the Farmers Home Administration or its successor agency under Public Law 103-354, United States Department of Agriculture, pursuant to section 310 B of the Consolidated Farm and Rural Development Act, for the purpose of providing ______ (describe briefly the nature of the project) ______ (herein referred to as the facility) and as a condition to and in consideration of receiving financial assistance from the Farmers Home Administration or its successor agency under Public Law 103-354 this resolution is being adopted.
Therefore, in consideration of the premises the public body agrees as follows:
1. No private business enterprises shall be allowed to use or occupy the facility if such use or occupancy would be calculated to, or is likely to, result in the transfer from one area to another of any employment or business activity provided by operations of the private business enterprises. This limitation shall not be construed to prohibit use and enjoyment of the facility by such private business entity through the establishment of a new branch, affiliate, or subsidiary if the establishment of such branch, affiliate, or subsidiary will not result in the increase in unemployment in the area of original location (or in any other area where such entity conducts business operations), unless there is reason to believe that such branch, affiliate, or subsidiary is being established with the intention of closing down the operations of the existing business entity in the area of its original location (or in any other area where it conducts such operation).
2. No private business enterprises shall be allowed to use or occupy the facilities if such use or occupancy would be calculated to, or is likely to, result in an increase in the production of goods, materials, or commodities, or the availability of services or facilities in the area, where there is not sufficient demand for such goods, materials, commodities, services or facilities to employ the sufficient capacity of existing competitive commercial or industrial enterprises, unless such financial or other assistance will not have an adverse affect upon existing competitive enterprises in the area.
3. Prior to allowing the use or occupancy of the facilities by any private business enterprise, the public body shall clear such use or occupancy with the Manpower Administration, Department of Labor, Washington, DC, by submitting information required by the Department of Labor for certification under the Act. This information shall be submitted to Farmers Home Administration or its successor agency under Public Law 103-354 for transmittal to the Department of Labor. The public body agrees to make no final commitment with any private business enterprise regarding such use or occupancy if the Department of Labor issues a negative certification under the Act. The public body shall obtain prior clearance in this matter for a period of three years after the date of an affirmative certification by the Department of Labor on the application for financial assistance now pending before the Farmers Home Administration or its successor agency under Public Law 103-354.
This resolution shall be in force and effect immediately.
The voting was yeas __, nays __, absent __.
I the undersigned as (Secretary) (Town Clerk) of the _____ do hereby certify that the foregoing resolution was duly adopted at a meeting of _____ duly called and held on the __ day of ___ 19_, and that such resolution has not been rescinded or amended in any way. Dated this __ day of ___, 19_.
5 U.S.C. 301; and 7 U.S.C. 1989.
This subpart contains regulations for making initial and subsequent direct Farm Ownership (FO) loans. FO loans may be made to eligible farmers and ranchers, farm cooperatives, private domestic corporations, partnerships, and joint operations that will manage and operate not larger than family farms. It is the policy of Farm Service Agency (FSA) or its successor agency under Public Law 103-354 to make loans to any qualified applicant without regard to race, color, religion, sex, national origin, marital status, age or physical/mental handicap provided the applicant can execute a legal contract. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to FmHA or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an FmHA or its successor agency under Public Law 103-354 employee. See exhibit A of this subpart for making FP loans to entrymen on unpatented public lands.
The basic objective of the FO loan program is to provide credit and management assistance to eligible farmers and ranchers to become owners-operators of family-sized farms or to continue such operations when credit is not available elsewhere. Agency or its successor agency under Public Law 103-354 assistance enables family-farm operators to use their land, labor and other resources, and to improve their living and financial conditions so that they can obtain credit elsewhere.
Supervision will be provided borrowers to the extent necessary to achieve the objectives of the loan and to protect the interests of the Government in accordance with subpart B of part 1924 of this chapter. Such assistance consists of farm, home and nonfarm planning, recordkeeping; analyzing the farm and any nonfarm business; and giving management advice.
As used in this subpart, the following definitions apply:
(a) Meets the loan eligibility requirements for FO loan assistance in accordance with § 1943.12 of this subpart.
(b) Has not operated a farm or ranch, or who has operated a farm or ranch for not more than 10 years. This requirement applies to all members of an entity.
(c) Will materially and substantially participate in the operation of the farm or ranch.
(1) In the case of a loan made to an individual, individually or with the immediate family, material and substantial participation requires that the individual provide substantial day-to-day labor and management of the farm or ranch, consistent with the practices in the county or State where the farm is located.
(2) In the case of a loan made to an entity, all members must materially and substantially participate in the operation of the farm or ranch. Material and substantial participation requires that the individual provides some amount of the management, or labor and management necessary for day-to-
(d) Agrees to participate in any loan assessment, borrower training, and financial management programs required by FmHA or its successor agency under Public Law 103-354 regulations.
(e) Except for OL loan purposes, does not own real farm or ranch property or who, directly or through interests in family farm entities, owns real farm or ranch property, the aggregate acreage of which does not exceed 25 percent of the average farm or ranch acreage of the farms or ranches in the county where the property is located. If the farm is located in more than one county, the average farm acreage of the county where the applicant's residence is located will be used in the calculation. If the applicant's residence is not located on the farm or if the applicant is an entity, the average farm acreage of the county where the major portion of the farm is located will be used. The average county farm or ranch acreage will be determined from the most recent Census of Agriculture developed by the U.S. Department of Commerce, Bureau of the Census. State Directors will publish State supplements containing the average farm or ranch acreage by county.
(f) Demonstrates that the available resources of the applicant and spouse (if any) are not sufficient to enable the applicant to enter or continue farming or ranching on a viable scale.
(g) In the case of an entity:
(1) All the members are related by blood or marriage.
(2) All the stockholders in a corporation are qualified beginning farmers or ranchers.
(a) Will produce agricultural commodities for sale in sufficient quantities so that it is recognized in the community as a farm rather than a rural residence.
(b) Will provide enough agricultural income by itself, including rented land, or together with any other dependable income, to enable the borrower to:
(1) Pay necessary family and operating expenses;
(2) Maintain essential chattel and real property; and
(3) Pay debts.
(c) Is managed by:
(1) The borrower, when a loan is made to an individual.
(2) The members, stockholders, partners, or joint operators responsible for operating the farm when a loan is made to a cooperative, corporation, partnership, or joint operation.
(d) Has a substantial amount of the labor requirements for the farm enterprise provided by:
(1) The borrower and any family member for a loan made to an individual.
(2) The members, stockholders, partners, or joint operators responsible for operating the farm, along with the families of these individuals, for a loan
(e) May require a reasonable amount of full-time hired labor and seasonal labor during peakload periods.
(a) Pay all operating expenses and all taxes which are due during the projected farm budget period.
(b) Meet necessary payments of all debts.
(c) Provide living expenses for the family members of an individual borrower or a wage for the farm operator in the case of a cooperative, corporation, partnership or joint operation borrower which is in accordance with the essential family needs. Family members include the individual borrower or farm operator in the case of an entity, and the immediate members of the family which resides in the same household.
The applicant shall certify in writing on the appropriate forms, and the County Supervisor shall verify and document, that adequate credit elsewhere is not available, with or without a guarantee or a subordination, to finance the applicant's actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near where the applicant resides for loans for similar purposes and periods of time.
(a) If the County Supervisor receives letters or other written evidence from a lender(s) indicating that the applicant is unable to obtain satisfactory credit, these will be included in the loan docket.
(b) If the applicant cannot qualify for the needed credit from the lenders contacted, but one or more of them has indicated they would provide credit with an FmHA or its successor agency under Public Law 103-354 guarantee or the County Supervisor determines that the applicant can obtain a guaranteed loan, the applicant will be advised to file an application with that lender(s) so that a guaranteed FO loan request can be processed by the lender for consideration by FmHA or its successor agency under Public Law 103-354.
(c) Property and interests in property owned and income received by an individual applicant; a cooperative and its members, as individuals; a corporation and its stockholders, as individuals; a partnership and its partners, as individuals; and a joint operation and its joint operators, as individuals; will be considered and used by an applicant in obtaining credit from other sources.
(d) Applicants and borrowers will be encouraged to supplement farm ownership loans with credit from other credit
The term owner-operator as used in this subpart shall include in the State of Hawaii the lessee-operator of real property in any case in which the County Supervisor determines that such real property cannot be acquired in fee simple by the lessee-operator. The leasehold must provide adequate security for the loan. A leasehold is the right to use property for a specific period of time under conditions provided in a lease agreement. The determination of value will be made by an appraisal of the present market value of the leasehold by an FmHA or its successor agency under Public Law 103-354 employee designated to appraise farm real estate. The terms and conditions of the lease must be such as to allow the lessee-operator to have a reasonable probability of accomplishing the objectives and repayment of the loan. The FmHA or its successor agency under Public Law 103-354 Hawaii State Office will issue an amendment to its State supplement for this subpart providing the necessary requirements (including forms) for obtaining the required security. The amendment to the State supplement and forms, and any revisions to them, but have prior National Office approval before being issued.
(a) In addition to the preference established in subpart A of part 1910 of this chapter, an application for a loan for land purchase from an applicant who (1) has a dependent family, or (2) is an owner of livestock and farm implements necessary to successfully carry on farming operations, or (3) is able to make down payments will be given preference over one from an applicant who does not meet any of these criteria.
(b) The portion of a State's farm ownership (FO) loan fund allocation designated for applicants who are members of socially disadvantaged groups will be used exclusively to assist them in purchasing farmland. However, this requirement does not preclude the use of the State's regular allocation of FO funds for loans for other authorized FO loan purposes to applicants who are members of socially disadvantaged groups. (See exhibit B of this subpart, “Target Participation Rates for Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 Direct Farm Ownership (FO) Loans and Acquired Property Outreach Program for Members of Socially Disadvantaged Groups”.)
Applications for FO loans will be received and processed as provided in subpart A of part 1910 of this chapter, with consideration given to the requirements in exhibit M of subpart G of part 1940 of this chapter. Socially disadvantaged individuals will be provided the technical assistance necessary when applying for FO loans or other assistance to acquire inventory farmland. Such assistance shall include, but not be limited to, completion of application and farm and home planning.
In accordance with the Food Security Act of 1985 (Pub. L. 99-198), after December 23, 1985, if an individual or any member, stockholder, partner, or joint operator of an entity is convicted under Federal or State law of planting, cultivating, growing, producing, harvesting or storing a controlled substance (see 21 CFR part 1308, which is exhibit C to subpart A of part 1941 of this chapter and is available in any FmHA or its successor agency under Public Law 103-354 office, for the definition of
(a)
(1) Be a citizen of the United States (see § 1943.4 of this subpart for the definition of
(2) Possess the legal capacity to incur the obligations of the loan.
(3) Have sufficient applicable educational and/or on the job training or farming experience in managing a farm or ranch which indicates the managerial ability necessary to assure reasonable prospects of success in the proposed plan of operation.
(4) Have the character (emphasizing credit history, past record of debt repayment, and reliability) and industry to carry out the proposed operation. Past record of debt repayment will not be cause for a determination that the applicant/borrower is not eligible if an honest attempt has been made to make the payment(s).
(5) Honestly endeavor to carry out the applicant's/borrower's obligations. This would include, but is not limited to, providing current, complete and truthful information when applying for assistance and making every reasonable effort to meet the conditions and terms of the proposed loan.
(6) Be unable to obtain sufficient credit elsewhere to finance actual needs at reasonable rate and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time.
(7) Be the owner-operator of not larger than a family farm after the loan is closed (in the case of a limited resource applicant see § 1943.4 of this subpart).
(8) Have operated a farm or ranch for at least 3 years and satisfy at least one of the following conditions:
(i) Meet the definition of a beginning farmer or rancher.
(ii) The applicant, or anyone who will execute the promissory note, has not had direct FO loans outstanding for more than a total of 10 years prior to the date that the new FO loan is closed.
(iii) Have never received a direct FO loan.
(9)
(i) If the applicant, or anyone who executed the promissory note, had direct FO loans outstanding for less than 5 years, the applicant is eligible for new direct FO loans through April 4, 2006.
(ii) If the applicant, or anyone who executed the promissory note, had direct FO loans outstanding for 5 years or more, those parties are eligible for new direct FO loans through April 4, 2001.
(10) Have not caused the Agency a loss by receiving debt forgiveness on all or a portion of any direct or guaranteed loan made under the authority of the Consolidated Farm and Rural Development Act (CONACT) by debt-write down, write-off, compromise provisions of section 331 of the CONACT, adjustment, reduction, charge-off or discharge in bankruptcy or through any
(11) Not be delinquent on any Federal debt. This restriction will not apply if the Federal delinquency is cured on or before the loan closing date.
(b)
(1) Be unable to obtain sufficient credit elsewhere to finance actual needs at reasonable rates and terms, taking into account prevailing private and cooperative rates and terms in or near the community for loans for similar purposes and periods of time. This applies to the entity and
(2) Be controlled by farmers or ranchers engaged
(3) Be the owner-operator of not larger than a family farm after the loan is closed (except for limited resource applicants and as provided for in paragraph (b)(7) of this section) and consist of members, stockholders, partners, or joint operators who are
(4) If the members, stockholders, partners, or joint operators holding a
(i) They must be citizens of the United States (see § 1943.4 of this subpart for the definition of
(ii) They must have sufficient applicable educational and/or on the job training or farming experience in managing a farm or ranch which indicates the managerial ability necessary to assure reasonable prospects of success in the proposed plan of operation.
(iii) Have the character (emphasizing credit history, past record of debt repayment and reliability) and industry to carry out the proposed operation. This requirement must be met by the individual members, stockholders, partners or joint operators. Past record of debt repayment will not be cause for a determination that the applicant/borrower is not eligible if an honest attempt has been made to make the payment(s).
(iv) They and the entity itself must honestly endeavor to carry out the applicant's/borrower's undertakings and obligations. This would include, but is not limited to, providing current, complete and truthful information when applying for assistance and making every reasonable effort to meet the conditions and terms of the proposed loan.
(v) At least one member, stockholder, partner, or joint operator must operate the family farm.
(vi) The entity must own
(5) If the members, stockholders, partners, or joint operators holding a
(i) The requirements of paragraphs (b)(4)(i) through (iv) and (vi) of this section must be met.
(ii) They and the entity itself must own
(6) If applying as a limited resource applicant, as defined in § 1943.4 of this subpart:
(i) The requirements of paragraphs (b)(4)(i) through (iv) and (vi) of this section must be met by the entity and
(ii) The entity and
(7) If each member's, partner's, stockholder's or joint operator's ownership interest does
(8) Have one or more members, constituting a majority interest in the business entity, who have operated a farm or ranch for at least 3 years and who satisfy one of the following conditions:
(i) Meet the definition of a beginning farmer or rancher.
(ii) The applicant, or anyone who will execute the promissory note, has not had direct FO loans outstanding for more than a total of 10 years prior to the date that the new FO loan is closed.
(iii) Have never received a direct FO loan.
(9)
(i) If the applicant, or anyone who executed the promissory note, had direct FO loans outstanding for less than 5 years, the applicant is eligible for new direct FO loans through April 4, 2006.
(ii) If the applicant, or anyone who executed the promissory note, had direct FO loans outstanding for 5 years or more, those parties are eligible for new direct FO loans through April 4, 2001.
(10) Have not caused the Agency a loss by receiving debt forgiveness on all or a portion of any direct or guaranteed loan made under the authority of the Consolidated Farm and Rural Development Act (CONACT) by debt-write down, write-off, compromise provisions of section 331 of the CONACT, adjustment, reduction, charge-off or discharge in bankruptcy or through any payment of a guaranteed loss claim under the same circumstances.
(11) Not be delinquent on any Federal debt. This restriction will not apply if the Federal delinquency is cured on or before the loan closing date. This eligibility restriction applies to the entity and all of its members.
(c)
The purpose of this section is to establish procedures and responsibilities for carrying out the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 Farm Ownership (FO) Direct Loan and Acquired Property Outreach Program to
(a)
(1) Surface and correct problems and obstacles that prevent the participation of members of socially disadvantaged groups in the FO loan program.
(2) Target direct FO loan funds to members of socially disadvantaged groups to ensure they are provided access to FO loan funds, as outlined in exhibit B of this subpart.
(3) Provide pamphlets, publications and general information on the direct FO loan program to members of socially disadvantaged groups.
(4) Provide assistance to members of socially disadvantaged groups to assure that the application process is expedient and complete. Assistance will be provided to borrowers of socially disadvantaged groups through special farm initiatives to assure that sound operating procedures are implemented to enhance the borrower's chances for successfully achieving the objectives of the direct FO loan program.
(b)
(1) Maintain close liaison with local, State and national organizations serving social disadvantaged groups to ascertain the reasons for the lack of participation of members of socially disadvantaged groups in FmHA or its successor agency under Public Law 103-354 direct FO loan program.
(2) Work closely with County Supervisors, District Directors, and National Office officials to remove obstacles and solve problems relating to the making of direct FO loans and credit sales to members of socially disadvantaged groups.
(3) Attend meetings of local, State, and Federal Governments and private organizations concerned with the economic and social development of members of socially disadvantaged groups.
(4) Train members of socially disadvantaged groups, interested individuals and groups involved with socially disadvantaged activities, in the packaging of applications and distribution of materials for use in the direct FO loan and credit sale programs.
(5) Provide pamphlets and publications on the direct FO loan and credit sale program.
(6) Initiate special media outreach activities to inform members of socially disadvantaged groups of the availability of acquired farmland and of targeted and non-targeted direct FO loan funds.
(i) Information must be provided to community and farm oriented organizations, agriculture colleges, other USDA agencies and community leaders who are active in the farming area.
(ii) Newspaper articles, radio announcements and public television broadcasts will be used to publicize the FmHA or its successor agency under Public Law 103-354 Farm Ownership (FO) Direct Loan and Acquired Property Outreach Program to members of socially disadvantaged groups.
(c)
(2)
(i) The State and County of each direct FO loan and credit sale made to applicant/borrowers who are members of socially disadvantaged groups.
(ii) Number of applications for direct initial and subsequent FO loans and credit sales received during the period.
(iii) Number of direct initial and subsequent FO loans and credit sales approved during the period.
(iv) Number of applications on hand for direct initial and subsequent FO loans and credit sales at the end of the reporting periods.
(v) Number of announcements placed in local newspapers, on radio and public television.
(vi) Amount of each initial and subsequent direct FO loans and credit sales approved during the reporting periods.
(vii) Total dollar value of direct initial and subsequent FO loans and credit sales approved during the reporting periods.
(a)
(b)
(c)
(d)
(1) The applicant cannot provide at least 10 percent of the purchase price of the farm or ranch.
(2) The purchase price or appraised value, whichever is lower, exceeds $250,000.
(3) Financing provided by FmHA or its successor agency under Public Law 103-354 and other credit exceeds 90 percent of the purchase price or appraised value, whichever is lower.
(4) The other financing for the balance of the purchase price is amortized for less than 30 years and/or a balloon payment is scheduled within the 10 years of the FmHA or its successor agency under Public Law 103-354 loan.
(e)
(2)
(ii) Loans under this section shall be repaid in equal annual installments.
(f)
(2) FmHA or its successor agency under Public Law 103-354's secured interest in the farm or ranch being acquired will be junior only to the party providing the financing for the balance of the purchase price to the applicant.
(3) The borrower must agree to obtain permission from the County Supervisor prior to granting any additional security interest in the farm or ranch as stated in § 1965.16 of subpart A of part 1965 of this chapter.
(g)
(h)
(1) Maintaining close liaison and attending meetings with local, State and national organizations serving the agricultural community.
(2) Providing information to community and farm oriented organizations, agriculture colleges, other USDA Agencies and community leaders who are active in the farming area.
(3) Use of newspaper articles, radio announcements, and/or public television announcements.
Loan funds may only be used to:
(a) Acquire or enlarge a farm or ranch. Examples of items that the Agency may authorize the use of FO funds for include, but are not limited to, the purchase of easements, the applicant's portion of land being subdivided, purchase of cooperative stock, appraisal and survey fees, and participation in special FO loan programs of this subpart. Down payments are authorized as a loan purpose subject to the following:
(1) A deed is obtained and the transaction is properly documented by debt and security instruments.
(2) Any prior liens meet the FO security requirements for the Agency's junior lien position.
(3) For contract purchases, purchase contracts must properly obligate the buyer and seller to fulfill the terms of the contract, provide the buyer with possession, control and beneficial use of the property, and entitle the buyer to marketable title upon fulfillment of the contract terms. The deed must be held in trust by a bonded agent until transferred to the buyer. Upon buyer's default, the seller must give the Agency written notice of the default and a reasonable opportunity to cure the default. Any sums advanced by the Agency must be repaid by the borrower.
(b) Make capital improvements. Examples of items that the Agency may authorize the use of FO funds for include, but are not limited to, the construction, purchase and improvement of farm dwellings, service buildings, and facilities that can be made fixtures to the real estate. In the case of leased property, the borrower must have a lease to ensure use of the improvement over its useful life or to ensure that the borrower receives compensation for any remaining economic life upon termination of the lease.
(c) Promote soil and water conservation and protection. Examples include the correction of well-defined, hazardous environmental conditions, and the construction or installation of tiles, terraces, and waterways.
(d) Pay closing costs.
(a) An FO loan will not be approved if:
(1) The total outstanding direct FO, Soil and Water (SW) or Recreation (RL) loan principal balance including the new loan owed by the applicant will exceed the lesser of $200,000 or the market value of the farm or other security.
(2) The noncontiguous character of a farm containing two or more tracts is such that an efficient farming operation and nonfarm enterprise cannot be conducted due to the distance between tracts or due to inadequate rights-of-way or public roads between tracts.
(3) The limitation found in § 1943.29 (b) of this subpart is exceeded.
(b) Loans my not be made for any purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in exhibit M to subpart G of part 1940 of this chapter. Refer to FmHA Instruction 2000-LL, “Memorandum of Understanding Between FmHA or its successor agency under Public Law 103-354 and U.S. Fish and Wildlife Service,” for assistance in implementation.
(a)
(b)
(1) The applicant meets the conditions of the definition for a limited resource applicant set forth in § 1943.4 of this subpart.
(2) The farm business plan shows that installments at the higher rate, along with other debts, cannot be paid during the period of the plan.
(3) A borrower with limited resource interest rates will be reviewed each year at the time the analysis is conducted (see § 1924.55 of subpart B of part 1924 of this chapter) and at any time a servicing action such as reamortization or deferral is taken to determine what interest rate should be charged. The rate may be increased in increments of whole numbers until it reaches the current regular interest rate for the loan at the time of the rate increase. (See § 1951.25 subpart A of part 1951 of this chapter.)
(c)
Each FO loan will be secured by real estate. Chattels and/or other security will only be taken as security as set forth in paragraphs (b) and (c) of this section. The total amount of security required will be the lesser of either 150 percent of the loan amount, or all real estate owned by the applicant. A loan will be considered adequately secured when the real estate security for the loan is at least equal to the loan amount. Security in excess of 150 percent of the loan amount will only be taken when it is not practical to separate the property, i.e., a tract of land. All security taken, along with the value of the security, will be documented in the case file. This information will be obtained from values established in accordance with § 1943.25 of this subpart. If the applicant disagrees with the real estate values established, FmHA or its successor agency under Public Law 103-354 will accept an appraisal from the applicant, obtained at the applicant's expense, if the appraisal meets all FmHA or its successor agency under Public Law 103-354 requirements. In cases when a loan is being made in conjunction with a servicing action, the security requirements as stated in subpart S of part 1951 of this chapter will prevail. In unusual cases, the loan approval official may require a cosigner in accordance with § 1910.3(d) of subpart A of part 1910 of this chapter or a pledge of security from a third party. A pledge of security is preferable to a cosigner.
(a)
(2) Security will also include items which are considered part of the farm and ordinarily pass with the title to the farm such as, but not limited to, assignments of leases or leasehold interests having mortgageable value, water rights, easements, rights-of-way, revenues, and royalties from mineral rights.
(3) A first lien is required on real estate, when available. In addition, loans will be secured by a junior lien on real estate provided:
(i) Prior lien instruments do not contain provisions for future advances (except for taxes, insurance, other costs needed to protect the security, or reasonable foreclosure costs), cancellation, summary forfeiture, or other clauses that may jeopardize the Government's interest or the applicant's ability to pay the FO loan unless any such undesirable provisions are limited, modified, waived or subordinated insofar as the Government is concerned.
(ii) Agreements are obtained from prior lienholders to give notice of foreclosure to FmHA or its successor agency under Public Law 103-354 whenever State law or other arrangements do not require such a notice. Any agreements needed will be obtained as provided in subpart B of part 1927 of this chapter, except as modified by the “Memorandum of Understanding-FCA-FmHA or its successor agency under Public Law 103-354,” FmHA Instruction 2000-R (available in any FmHA or its successor agency under Public Law 103-354 office).
(4) Advice on obtaining security will be received from OGC when necessary.
(5) The designated attorney, title insurance company, or the OGC will furnish advice on obtaining security when a life estate is involved.
(6) Any loan of $10,000 or less may be secured by the best lien obtainable without title clearance or legal service as required in subpart B of part 1927 of this chapter provided the County Supervisor believes from a search of the County records that the applicant can give a mortgage on the farm. This exception to title clearance will not apply when:
(i) The loan is made simultaneously with that of another lender.
(ii) Land is to be purchased.
(iii) This provision conflicts with program regulations of any other FmHA or its successor agency under Public Law 103-354 loan being made simultaneously with the FO loan.
(7) The Departments of Agriculture and Interior have agreed that FmHA or its successor agency under Public Law 103-354 loans may be made to Native Americans and secured by real estate when title is held in trust or restricted status. When security is so taken on real estate held in trust or restricted status:
(i) The applicant will request the Bureau of Indian Affairs (BIA) to furnish Title Status Reports to the County Supervisor; and
(ii) The BIA approval will be obtained on the mortgage after it has been signed by the applicant and any other party whose signature is required.
(b)
(1) A first lien will be taken on equipment or fixtures purchased with loan funds whenever such property cannot be included in the real estate lien and the best lien obtainable on all real estate does not provide primary security for the loan.
(2) Chattel security will be obtained when the best lien obtainable on all real estate does not provide primary security for the loan.
(3) The same collateral may be used to secure two or more loans made, direct or guaranteed, to the same borrower. Therefore, junior liens on chattels may be taken when there is enough equity in the property. However, when possible, a first lien on selected chattel items should be obtained.
(4) Chattel security liens will be obtained and kept effective, as provided in subpart A of part 1962 of this chapter.
(c)
(2) Other property may be taken as security when the best lien obtainable on all real estate does not provide primary security for the loan. Examples of such security include but are not limited to cash surrender value of life insurance, securities, patents and copyrights, and membership or stock in cooperatives and associations.
(d)
(1) A lien will not be taken on property that could have significant environmental problems/costs (e.g., known or suspected underground storage tanks or hazardous wastes, contingent liabilities, wetlands, endangered species, historic properties). Guidance is provided in part II, item H of exhibit A of FmHA Instruction 1922-E (available in any FmHA or its successor agency under Public Law 103-354 office) as to the action to be taken when the appraiser indicates that the property is subject to any hazards, detriments or limiting conditions.
(2) A lien will not be taken on property that cannot be made subject to a valid lien.
(3) A lien will not be taken on the applicant's personal residence and appurtenances, when the residence is located on a separate parcel and the farm tract being financed, improved, or otherwise used for collateral provides primary security for the loan(s).
(4) A lien will not be taken on subsistence livestock; cash or special cash collateral accounts to be used for the farming operation or for necessary family living expenses; all types of retirement accounts; personal vehicles necessary for family living or farm operating purposes; household goods; and small tools and small equipment, such as hand tools, power lawn mowers, and other similar items not needed for security purposes.
(5) A lien will not be taken on marginal land, including timber, when a softwood timber (ST) loan is secured by such land.
(e)
(f)
(1) Chattel and/or real estate security that is separate and identifiable from the security pledged to FmHA or its successor agency under Public Law 103-354 for any other farmer program direct or guaranteed loans.
(2) Different lien positions on real estate are considered separate and identifiable collateral.
(3) The outstanding amount of loans made may not exceed the value of the collateral used.
(g)
(a)
(1) The Corps of Engineers or the Soil Conservation Service (SCS) will be consulted concerning:
(i) Likelihood of flooding.
(ii) Probability of flood damage.
(iii) Recommendation on special design and specifications needed to minimize flood and mudslide hazards.
(2) FmHA or its successor agency under Public Law 103-354 representatives will evaluate the proposal and record the decision in the loan docket in accordance with subpart G of part 1940 of this chapter.
(b)
(1) Funds used to finance nonfarm enterprises and recreation enterprises. Applicants will sign Form FmHA or its successor agency under Public Law 103-354 400-4, “Nondiscrimination Agreement,” in these cases.
(2) Any development financed by FmHA or its successor agency under Public Law 103-354 that will be performed by a contract or subcontract of more than $10,000.
(c)
(d)
(e)
(1) Any part of the loan is used to purchase all or part of the land to be mortgaged, and
(2) The loan is secured by a first lien on the property where a dwelling is located.
(f)
(g)
(2) State Directors and Farmer Programs Staff members will consult with SCS, U.S. Geological Survey, State Geologist or Engineer, or any board having official functions relating to water use or farm drainage requirements and restrictions for water and drainage development. State supplements will be issued to provide guidelines which:
(i) State all requirements to be met, including the acquisition of water rights.
(ii) Define areas where development of ground water for irrigation is not recommended.
(iii) Define areas where land drainage is restricted.
(a)
(b)
(i) The applicant already owns an adequate, decent, safe, and sanitary dwelling, suitable for the family's needs, and located close enough to the farm so the farm may be operated successfully, it will not be necessary to provide a dwelling on the farm.
(ii) The applicant has a long-term lease on acceptable rented buildings that are adjacent to or near the farm, or the applicant occupies suitable buildings which the applicant will eventually inherit or be permitted to purchase from a relative.
(iii) The farm does not have an adequate dwelling and the applicant owns a suitable mobile home which will be used as the applicant's home, the applicant will not be required to build a dwelling. A mobile home will not be considered to add value to the farm but FO funds may be used to finance anchoring the home.
(2) When loan funds are needed for a dwelling and an applicant is eligible for a Rural Housing (RH) loan, it will be processed simultaneously with the FO loan. However, in such cases if a small amount is needed for dwelling improvements, FO funds may be used. Dwellings financed with RH funds will meet the requirements for such loans as provided in subpart A of part 1944 of this chapter.
(c)
(d)
(2) Applicants must comply with the catastrophic risk protection insurance (CAT) requirement by either:
(i) Obtaining at least the available CAT level of coverage for each crop of economic significance, as defined by the Federal Crop Insurance Corporation, or
(ii) Waiving eligibility for emergency crop loss assistance in connection with the uninsured crop. FSA emergency (EM) loss loan assistance is not considered emergency crop loss assistance for the purpose of the crop insurance waiver on the uninsured crop.
(3) See § 1943.23(a) of this subpart for information about flood or mudslide hazard areas.
(e)
(1) There is reasonable assurance that any rented land which the applicant depends on will be available; and/or
(2) Any off-farm employment the applicant depends on is likely to continue.
(f)
(1) To both the life estate holder and the remainderman, provided:
(i) Both have a legal right to occupy and operate the farm;
(ii) Both are eligible for the loan; and
(iii) Both parties sign the note and mortgage.
(2) To the remainderman only, provided;
(i) The remainderman has a legal right to occupy and operate the farm; and
(ii) The lien instrument is signed by the remainderman, life estate holder, and any other party having any interest in the security.
(3) To the life estate holder only, provided:
(i) There is no legal restriction placed on a life estate holder who occupies and operates a farm; and
(ii) The lien instrument is signed by the life estate holder, remainderman, and any other party having any interest in the security.
(g)
(h)
(1) Productivity of the land and its suitability for operation as a family farm;
(2) Cost of the land and improvements;
(3) Accessibility to roads, markets, schools, right-of-way, easements, and other services.
(4) Disposition or omission of any part of the tract that is not suitable; and
(5) The number of eligible applicants in the area.
(i)
(j)
(a)
(1) The County Supervisor should advise the applicant to have an understanding with the seller on such items as:
(i) Land description and number of acres;
(ii) Buildings and fixtures included in the transaction. The applicant should determine the condition of property attached to the land and the working condition of any fixtures with movable parts;
(iii) Minerals and the effect any mineral reservation has on the land value and operating it as a farm;
(iv) Access to the land or any part of it;
(v) The party responsible for taxes and insurance; and
(vi) The party who will receive the income from the land during the crop year of the transaction.
(2) The applicant shoud decide if the applicant wants the option recorded and is responsible for paying any recording fees.
(b) Farm business plans will be completed as provided in subpart B of part 1924.
(c)
(2) Other real estate appraisals completed by other State-certified general appraisers may be used providing such appraisals meet the ethics, competency, departure provisions, etc., and sections I and II of the Uniform Standards of Professional Appraisal Practices, and contain a mineral rights appraisal as set out in paragraph (c)(4) of this section. Prior to acceptance, the appraisal must have an acceptable desk review (technical) completed by an FmHA or its successor agency under Public Law 103-354 designated review appraiser.
(3) Real estate appraisals will be completed as provided in § 761.7 of this title. The rights to mining products, gravel, oil, gas, coal, or other minerals
(4) The value of stock required to be purchased by Federal Land Bank (FLB) borrowers may be added to the recommended market value of the real estate, provided:
(i) An assignment is obtained on the stock, or
(ii) An agreement is obtained which provides that:
(A) The value of the stock at the time the FLB loan is satisfied will be applied on the FLB loan, or
(B) The stock refund check is made payable to the borrower and FmHA or its successor agency under Public Law 103-354, or
(C) The stock refund check is made payable to the borrower and mailed to the County Supervisor.
(iii) The total of the stock value and the recommended market value of real estate is indicated in the comments section of the appraisal report.
(5) In the case of nonreal estate security the following items apply:
(i) Form FmHA or its successor agency under Public Law 103-354 440-21, “Appraisal of Chattel Property,” will be used.
(ii) The property which will serve as security will be described in sufficient detail so it can be identified.
(iii) Its current market value, or if appropriate, the current cash value will be determined.
The development work will be planned and completed in accordance with subpart A of part 1924 of this chapter. The provisions of subpart E of part 1901 of this chapter will be met in connection with FO loans involving recreational enterprises and the construction of buildings.
An applicant will be requested to obtain credit from another source when information indicates such credit is available. When another lender will not make a loan for the total needs of the applicant but is willing to participate with an FO loan, consideration will be given to a participation loan. FmHA or its successor agency under Public Law 103-354 employees may not guarantee, personally or for FmHA or its successor agency under Public Law 103-354, repayment of advances made from other credit sources. However, lenders may be assured that lien priorities will be recognized.
(a) FmHA Guide Letter 1943-A-1 (available in any FmHA or its successor agency under Public Law 103-354 office), will serve as a guide in executing MOUs with State Beginning Farmer programs by which FO loans will be made simultaneously with loans by any State Beginning Farmer program. Subpart R of part 2000 of this chapter, “Memorandum of Understanding FHA or its successor agency under Public Law 103-354-FCA,” (available in any FmHA or its successor agency under Public Law 103-354 office) will serve as a guide in processing FO loans to be made simultaneously with loans by FLB to a common applicant. State Directors may work out agreements for simultaneous loans with long-term lenders other than FLBs for eligible loan purposes. Such an agreement should prohibit future advances by the first mortgage holder except for taxes, property insurance, reasonable maintenance expenditures, and reasonable foreclosure costs, but should not prohibit subsequent FmHA or its successor agency under Public Law 103-354 loans. It should also cover items such as appraisal methods, title clearances, loan closing, the disbursement of funds and, when appropriate, advance notice of foreclosure. It may also cover other items considered necessary or advisable for a sound FmHA or its successor agency under Public Law 103-354 junior lien loan.
(b) The County Supervisor and the other lender's representative should maintain a close working relationship in processing loans to a mutual applicant or borrower. When an FO loan is made at the same time as a loan from another lender, that lender's lien will have priority over the FmHA or its successor agency under Public Law 103-354 lien unless otherwise agreed upon. The lender's lien priority can cover the following in addition to principal and interest: advances for payment of taxes, property insurance, reasonable maintenance to protect the security, and reasonable foreclosure costs including attorney's fees.
(a) Direct FO loans may be made simultaneously with other FmHA or its successor agency under Public Law 103-354 loans, and to borrowers presently indebted to FmHA or its successor agency under Public Law 103-354, when the loan limits will
(b) A direct FO loan may be made to a borrower with an outstanding guaranteed FO, SW, or RL loan when:
(1) The total direct and guaranteed FO, SW and RL principal balance, including the new loan, owed by the loan applicant does not exceed $300,000 at loan closing.
(2) The outstanding combined direct and guaranteed FO principal balance owed by the loan applicant, or owed by anyone who will sign the note as cosigner evidencing personal liability, will not exceed the authorized guaranteed FO loan limit providing the portion representing the direct FO indebtedness does not exceed the direct FO loan limit. The deciding factors are the type of entity and the personal liability of the entity members. Individuals, who are members or stockholders of a cooperative or corporation that is indebted for a $200,000 direct and $100,000 guaranteed FO loan, can each borrow a $200,000 direct and $100,000 guaranteed FO loan, or any combination of direct or guaranteed FO loan funds that does not cause them to exceed the individual direct or guaranteed FO loan limits, provided they conduct separate farming operations as individuals and they have not signed for personal liability for the entity FO debt. Likewise, such entities, whose members or stockholders are individually indebted for the maximum direct or guaranteed FO loan limits, may borrow the maximum direct or guaranteed FO loans providing none of the members or stockholders are required to pledge personal liability for the entity debt. Partners or joint operators of a partnership or joint operation, which are indebted for a $200,000 direct and a $100,000 guaranteed FO loan, cannot borrow additional FO funds as individuals in a separate operation, because they are each personally liable for the total entity debt. Likewise, such entities consisting of individuals who are indebted for the maximum direct or guaranteed FO loan limits, are not eligible for FO loan assistance.
(3) Different lien positions on real estate are considered separate and identifiable collateral.
(4) All other requirements of the loan are met.
(c) New applicants and borrowers indebted to the Agency or its successor agency under Public Law 103-354 and/or and the Agency or its successor agency under Public Law 103-354 guaranteed lender(s) for an EE loan may be considered for an FO loan(s) provided their total outstanding principal indebtness to the Agency or its successor agency under Public Law 103-354 and/or the Agency or its successor agency under Public Law 103-354 guaranteed lender(s) for the EE and any SW, RL OL and FO loans will not exceed $650,000.
(d) A borrower may use the same collateral to secure two or more loans, direct or guaranteed, under this subpart except that the outstanding amount of such loans may not exceed the total value of the collateral so used.
(a)
(1) The total debt including the loan(s) being made (unpaid principal and past due interest) against the security will not exceed the market value of the security.
(2) No significant changes have been made in the development plan considered by the appraiser when real estate will be taken as security.
(b)
(i) The Agency has certified the applicant eligible.
(ii) Funds are requested for authorized purposes.
(iii) The proposed loan is based on a feasible plan. Planning forms other than Form FmHA or its successor agency under Public Law 103-354 431-2 may be used when they provide the necessary information.
(iv) The security is adequate.
(v) Necessary supervision is planned, and
(vi) All other pertinent requirements have been met or will be met.
(2) [Reserved]
(a) The County Supervisor will request the applicant to obtain title clearance as provided in subpart B of part 1927 of this chapter, when required, if this has not been done.
When the loan is approved, the following action will be taken:
(b) The applicant will sign Form FmHA or its successor agency under Public Law 103-354 440-35, “Acceptance of Option,” and send the original to the seller if land is being acquired. A copy will be kept in the case folder.
(c) The applicant will arrange with the seller to take possession when land is being acquired.
(a)
(1) When all loan funds can be disbursed at, or within 30 days after, loan closing of if the amount of funds that cannot be disbursed does not exceed $5,000, the total amount of the loan will be requested in a single advance.
(2) When loans funds cannot be disbursed as outlined in paragraph (a)(1) of this section, the amount needed to meet the immediate needs of the borrower will be requested through the field office terminal system. The amount of each advance should meet the needs of borrowers as much as possible, so that the amount in the supervised bank account will be kept at a minimum. The Finance Office will continue to supply Form FmHA or its successor agency under Public Law 103-354 440-57 until the entire loan has been disbursed. The County Supervisor should tell the borrower to notify the
(b)
(2) If a loan check is received and the loan cannot be closed within 20 working days from the date of the check, the County Supervisor will take appropriate action in accordance with FmHA Instruction 2018-D, a copy of which may be obtained from any FmHA or its successor agency under Public Law 103-354 office. The applicant must agree to a delayed loan closing and the same will be documented in the case file by the County Supervisor.
(3) When a check is returned and the loan will be closed at a subsequent date, another check will be requested in accordance with FmHA Instruction 2018-D.
(c)
(1) The County Supervisor will notify the State Office of loan cancellation by using Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation.” The County Office will send a copy of Form FmHA or its successor agency under Public Law 103-354 1940-10 to the designated attorney, Regional Attorney, or the title insurance company representative providing loan closing instructions to indicate that the loan has been canceled. If a check received in the County Office is to be canceled, the check will be returned as prescribed in FmHA Instruction 2018-D (available in any FmHA or its successor agency under Public Law 103-354 office).
(2) Interested parties will be notified of the cancellation as provided in subpart B of part 1927 of this chapter.
(d)
(1) Complete and distribute Form FmHA or its successor agency under Public Law 103-354 1940-10 in accordance with the FMI.
(2) When necessary, prepare and execute a substitute promissory note reflecting the revised total of the loan and the revised repayment schedule. When it is not possible to obtain a substitute promissory note, the County Supervisor will show on Form FmHA or its successor agency under Public Law 103-354 440-57 the revised amount of the loan and the revised repayment schedule.
(e)
When a loan closing date has been agreed upon, the County Supervisor will notify the borrower and the seller, if any, of the loan closing date. The following appropriate actions will be taken in connection with, and after, loan closing.
(a)
(b)
(1) Form FmHA or its successor agency under Public Law 103-354 440-15, “Security Agreement (Insured Loans to Individuals).”
(2) Form FmHA or its successor agency under Public Law 103-354 440-25, “Financing Statement” or, when authorized, Form FmHA or its successor agency under Public Law 103-354 440-A25, “Financing Statement.”
(3) State forms may be used if national forms are not legally acceptable. Such forms will require OGC and National Office clearance.
(c)
(d)
(e)
(i) Transfer funds planned to be used for refinancing specific debts to other debts when there is a need to do so, and
(ii) Transfer funds planned to be used for other purposes to pay small deficiencies in estimates for refinancing debts, providing there are sufficient remaining funds to complete any land purchase and planned development.
(2) A revised docket will be developed when:
(i) The total amount of debts to be refinanced has increased in such an amount that planned loan purposes cannot be carried out, and
(ii) The applicant is unable to make up any deficiencies from other resources.
(f)
(1) For assignment of income, Form FmHA or its successor agency under Public Law 103-354 443-16, “Assignment of Income from Real Estate Security,” will be used, except if it is legally inadequate in a State it may be adapted to that State with the approval of the OGC or an authorized State Form may be used instead.
(2) The County Supervisor, upon the advice of the designated attorney, escrow agent, title insurance company, or the OGC, as appropriate, may require acknowledgment and recordation of the assignment. Any cost incident thereto will be paid by the borrower.
(3) At the time Form FmHA or its successor agency under Public Law 103-354 443-16 is executed, appropriate notations will be made on Form FmHA or its successor agency under Public Law 103-354 1905-1, “Management System Card—Individual,” to insure that the proceeds, or the specified portions of the proceeds assigned to FmHA or its successor agency under Public Law 103-354 from the transactions, are remitted at the proper time.
(g)
(1) Separate notes will be prepared for any other FmHA or its successor
(2) All FmHA or its successor agency under Public Law 103-354 notes to be secured by real estate can be described in the same mortgage.
(3) The promissory note will be signed as follows:
(i) Individuals. Only the applicant(s) will sign the note as a borrower. If the co-signer is needed (see § 1910.3(e) of subpart A of part 1910 of this chapter), the co-signer will also sign the note. Any other signatures needed to assure the required security will be obtained as provided in State supplements. Persons who are minors or mental incompetents will not execute a promissory note. Except when a person has pledged only property as security for a loan, the purpose and effect of signing a promissory note or other evidence of indebtedness for a loan made or insured by FmHA or its successor agency under Public Law 103-354 is to incur individual personal liability regardless of any State law to the contrary.
(ii) Cooperatives or corporations. The promissory note(s) will be executed so as to evidence liability of the entity as well as individual liability of all member(s) or stockholder(s) in the entity.
(iii) Partnerships or joint operations. The note will be executed by the partner or joint operator authorized to sign for the entity, and all partners in the partnership or joint operators in the joint operation, as individuals.
(h)
(i)
(j)
(k)
(1) Real estate mortgage.
(i) When the original recorded instrument is returned to County Office:
(A) File the original in the County Office file, and
(B) Give a copy to the borrower.
(ii) When the original is retained by recorder:
(A) File a conformed copy in County Office file, and
(B) Give a conformed copy to the borrower.
(iii) The County Supervisor will provide copies that may be needed in some cases for interested third parties.
(2) Deeds.
(i) Give the original to borrower, and
(ii) Retain one copy to file.
(3) Title insurance policies.
(i) File the mortgage title policy in the County Office file, and
(ii) Give the Owner's title policy, if one is obtained, to the borrower.
(4) Water stock certificates or similar collateral will be retained in the County Office file.
(5) Abstracts of title.
(i) Return to the borrower, except that when they were obtained from a third party with understanding they will be returned, the abstracts will be sent to the third party. A memorandum receipt will be obtained when abstracts are delivered to the third party.
(ii) Form FmHA or its successor agency under Public Law 103-354 140-4, “Transmittal of Documents” will be used and a receipted copy kept in the County Office. The FMI should be followed for preparing this form.
FO loans will be serviced in accordance with subpart A of part 1965 of this chapter and/or subpart S of part 1951 of this chapter. Chattel security for FO loans will be serviced in accordance with subpart A of part 1962 of this
A subsequent FO loan is a loan made to a borrower who is currently in debt for an FO loan.
(a) A subsequent loan may be made for the same purpose and under the same conditions as an initial loan.
(b) The subsequent loan will be processed in the same manner as an initial loan.
(c) A new real estate mortgage will not be necessary provided:
(1) All the land which will serve as security for the loan is described on the present real estate mortgage and
(2) The real estate mortgage has a future advance clause and a State supplement provides authority for using such a clause and
(3) The required lien priority is obtained with the existing mortgage and future advance clause.
Subordinations in favor of other lenders will be processed in accordance with subpart A of part 1965 of this chapter.
State supplements will be issued as necessary to implement this subpart.
I.
A.
B.
C.
D.
1. RESIDENCE AND DEVELOPMENT REQUIREMENTS. A homestead entryman must established residence upon the tract entered within 6 months after date of the entry unless an extension of time is allowed and must maintain a residence there for 3 years. The entryman should notify the authorized officer of the BLM upon establishing residence. When an FmHA or its successor agency under Public Law 103-354 loan is made for any purpose, the requirements of the applicable FmHA or its successor agency under Public Law 103-354 regulations must be met. Likewise any residence or development requirements of BLM or BR will be met.
2. FINAL PROOF. Specific requirements for final proof for homestead entrymen is found in 43 CFR 2515.7 and final proof for desertland entrymen is found in 43 CFR 2521.6.
a. Homestead Entryman: Final proof must be filed within 5 years from the date of allowance of entry. A patent will not be issued until the entryman has submitted final proof. Final proof must show that (1) a habitable dwelling is on the land at the time proof is submitted, (2) residence requirements have been met, (3) the improvements are of such character as to show good faith, and (4) the entryman is a citizen of the United States. When the entryman is ready to submit final proof the entryman should notify the BR and request instructions regarding the procedure to be followed.
b. Desertland Entryman: Final proof must be made within 4 years from the date of entry. General requirements of the BLM that must be met include: (1) Filing a map at the initiation of the entry showing the method of irrigation and the proposed source of water supply, (2) an annual expenditure for 3 years of not less than $1 for each acre in the necessary development of the land, (3) filing a map at the end of the third year showing the character and extent of improvements, and (4) yearly proof of expenditures containing statements of two or more credible witnesses who have knowledge that the expenditures were made.
The County Supervisor should consult the BLM official for any additional requirements of the entryman such as preparing a notice of intention to make final proof, publication of final proof and submission of final proof.
3. RECLAMATION PROOF. Reclamation proof for homestead entryman may be submitted with, or at any time after, the submission of homestead proof. In additon to the final homestead proof mentioned in paragraph I D 2, the filing of reclamation proof is required as a condition for obtaining a patent to any entry within a reclamation project. Reclamation proof must show reclamation and cultivation of at least one-half of the irrigable area in the entry for 2 years immediately preceding the date of submission of proof and the payment of all reclamation charges due at that time. Reclamation proof, in proper form, must be submitted to the official in charge of the project accompanied by the payment of final homestead commissions.
II.
A.
2. APPLICATIONS FROM ENTRYMEN IN A FEDERAL RECLAMATION PROJECT. An application for an FmHA or its successor agency under Public Law 103-354 loan from an entryman with respect to public land within a Federal reclamation project will not be considered until after the entryman has received a Certificate of Eligibility from BR and has selected a farm. If at the time of making application the entryman has received the Notice of Allowance of Entry from BLM, he will attach the original or a copy of such document to Form FmHA or its successor agency under Public Law 103-354 410-1. If the entryman has not received the Notice of Allowance of Entry, a copy of the Certificate of Eligibility must be attached to the FmHA or its successor agency under Public Law 103-354 application. However, the docket will not be approved until the original or a copy of the document showing Notice of Allowance of Entry has been received from the applicant and placed in the loan docket.
3. SUPPLEMENTAL INFORMATION ON APPLICANT. At the time of making application for an FmHA or its successor agency under Public Law 103-354 loan to be secured by real estate, the entryman may be requested to authorize the FmHA or its successor agency under Public Law 103-354 to obtain from BLM or BR any available information concerning the entryman's application for homestead, desertland, or reclamation entry for use by the FmHA or its successor agency under Public Law 103-354 in determining the entryman's eligibility for the loan as provided in the Memorandum of Understanding.
B.
1. DEVELOPMENT PLAN. An extra copy of Form FmHA or its successor agency under Public Law 103-354 1924-1, “Farm Development Plan” will be prepared and sent to BLM in each case. When the entryman's farm is located in a Federal reclamation project, any development items listed on Form FmHA or its successor agency under Public Law 103-354 1924-1 must be consistent with the overall plans for development of the reclamation project. Consequently, when Form FmHA or its successor agency under
C.
2. The State Director, upon advice from the Office of the General Counsel, will inform the County Supervisor regarding the acceptable form of certified statement required in paragraph II C 1.
D.
1. REAL ESTATE MORTGAGE FORMS. Whenever the entry is located within a Federal reclamation project two extra copies of Form FmHA or its successor agency under Public Law 103-354 1927-1, “Real Estate Mortgage,” will be prepared. If the entry is not within a Federal reclamation project, one extra copy of the real estate mortgage will be prepared. After the loan has been closed, a conformed copy of the real estate mortgage will be sent to BLM and, if the entry is located in a Federal reclamation project, a conformed copy of the mortgage also will be sent to the BR. The entryman's serial number which appears on the original document showing Notice of Allowance of Entry will be typed on the original, and the conformed copies of the Mortgage for BLM and BR will indicate the date and place of recordation and the book and page numbers.
2. COUNTY OFFICE RECORD OF ALLOWANCE OF ENTRY. When the loan is closed a copy will be made of the original document showing Notice of Allowance of Entry for the borrower's county office case folder, unless a copy was funished. The County Supervisor will sign the following certification which will be typed on this copy:
“I hereby certify that this is an exact copy of the Notice of Allowance of Entry issued by the BLM to __________ (Entryman's Name) residing at __________ (Entryman's Address)”
When the original document showing allowance of entry is furnished, it will be returned to the borrower.
3. ENTRIES REQUIRED ON MANAGEMENT SYSTEM CARDS. Upon closing the loan, the County Supervisor will enter a notation on the borrower's Management System Card (Form FmHA or its successor agency under Public Law 103-354 405-1) as to the date when the borrower must submit final proof to the BLM in fulfillment of the requirements to obtain a patent. If residence has not been established, a notation also will be made on the Management System Card of the date such residence must be commenced. It will be the responsibility of the County Supervisor to follow through to see that the borrower completes these actions.
III.
IV.
A.
B.
(1) The term
(2) The term
(3) The term
(4) Pub. L. 361, 81st Congress (7 U.S.C. 1006a and 1006b), is referred to as “Pub. L. 361.” It applies to Farm Ownership (FO), Operating (OL), Soil and Water Conservation (SW) loans made to individuals and Recreation (RL) loans to individuals under the Consolidated Farm and Rural Development Act of 1972 (7 U.S.C. 1921) and prior laws. It does not apply to Emergency (EM) loans made under that act or prior laws, nor to Housing (RH) loans made under Title V of the Housing Act of 1949 (42 U.S.C. 1471), or to any other loans made or administered by FHA or its successor agency under Public Law 103-354.
(5) Pub. L. 419 (86 Stat. 675) amended Pub. L. 361 to add desertland entrymen as eligible for the same loans as indicated in (4) above.
(6) The term
(7) The term
(8) The term
(9) The term
A. FHA or its successor agency under Public Law 103-354 regulations will govern making and servicing FHA or its successor agency under Public Law 103-354 loans, including the taking of mortgages as additional security for existing FHA or its successor agency under Public Law 103-354 loans.
B. In connection with applications for FHA or its successor agency under Public Law 103-354 loans or credit sales to eligible applicants, the Project Officer of BR or the authorized officer of BLM, upon written request of the County Supervisor, will furnish the following:
1. Written consent to make the applicant an FHA or its successor agency under Public Law 103-354 loan or to secure an existing FHA or its successor agency under Public Law 103-354 loan.
2. Any information which BR or BLM has concerning the applicant, provided, in the case of BR information, the request has the following authorizations attached to it:
I hereby authorize the Bureau of Reclamation to make available to the Farmers Home Administration or its successor agency under Public Law 103-354 any information the Bureau may have concerning my transactions with it. This information may be used by the Farmers Home Administration or its successor agency under Public Law 103-354 in determining my eligibility and qualifications for a loan, and is to be treated as confidential.
(Type name of applicant below signature)
3. A statement of account, showing the applicant's outstanding balance if there is a debt owed to BR (principal balance, accrued unpaid interest, and daily interest accrual rate, any other charges and any unpaid special distribution system costs, and the amount, delinquent).
4. A report on any development and residence requirements which have not been completed and on eligibility of the unit for
5. Advice as to whether the applicant is in default because of failure to pay water charges, or because of breach of any other agreements with the Bureau of Reclamation.
C. A homestead or desertland entryman on public land not in a reclamation project may apply to the County Supervisor for an FHA or its successor agency under Public Law 103-354 loan when his entry has been allowed. The original or a copy of the Notice of Allowance of Entry from BLM must be attached to the application for a loan from FHA or its successor agency under Public Law 103-354. Upon request of the County Supervisor, the authorized officer of the BLM, to the extent applicable will furnish any information that office has with respect to the applicant entryman.
An applicant for a homestead on a reclamation project likewise may apply to the County Supervisor for an FHA or its successor agency under Public Law 103-354 loan when he has received from the BR a Certificate of Eligibility and has selected a unit. A copy of the Certificate of Eligibility must be attached to the application for a loan from the FHA or its successor agency under Public Law 103-354 unless the unit has been entered, in which case the Notice of Allowance of Entry will be attached to the application for a loan. Each application for such a loan filed by an entryman will be processed in substantially the same manner as other application of a similar character, including the preparation of the loan docket, certifications by the FHA or its successor agency under Public Law 103-354 County Committee, and approval by the duly authorized loan approving official. If any conflict exists between the development plans of FHA or its successor agency under Public Law 103-354 and BR or BLM, the difference must be reconciled prior to loan closing. A copy of the Notice of Allowance of the Entry will be required in the loan docket before a loan is closed.
D. Upon closing of a loan to an entryman, when real estate security is taken, the County Supervisor will send copies of the real estate mortgage to the authorized officer of BLM, and to BR if appropriate. The County Supervisor will indicate on the mortgage the date such instrument was filed for record and the entryman's homestead or desertland entry serial number. Copies of these instruments will serve as notification to BLM or BR that a loan has been made by FHA or its successor agency under Public Law 103-354 and may be used in connection with the servicing of such loans as indicated herein.
A. If the entryman-borrower repays his indebtedness in full to FHA or its successor agency under Public Law 103-354 before a patent is issued to him by BLM, the County Supervisor will promptly notify the BLM authorized officer of the release of the mortgage lien.
B. When final homestead or desertland entry proof or homestead proof and reclamation proof submitted by an entryman-borrower is accepted by the BLM and a patent is issued before BLM is notified of the full repayment of the indebtedness to FHA or its successor agency under Public Law 103-354, the patent issued will make reference to the FHA or its successor agency under Public Law 103-354 mortgage as follows:
“This patent is issued subject to the rights of the United States under a certain mortgage or deed of trust executed by ___ and _______ under date of ________, 19 __, recorded in Book ___, Page _____ of the records of the Recorder of Deeds for _____.”
In such cases, if the patent is issued to a person other than the mortgager or the purchaser at foreclosure of the mortgage, there shall also be inserted after the recital of recordation of the mortgage the following words: “Which the patentee assumes and agrees to pay.”
C. Upon issuance of the patent to the entryman-borrower, the authorized officer of BLM will notify the State Director that the patent has been issued and mailed to the entryman-borrower. Upon such notification, the County Supervisor will advise the entryman-borrower to record the patent promptly in the real estate records in the county in which his unit is located, and will check the records to determine that the recordation has been accomplished. The issuance of the patent will terminate any further relationship between BLM and FHA or its successor agency under Public Law 103-354 insofar as the entryman-borrower is concerned.
D. In the event that an entryman-borrower has not submitted Final Proof within the statutory period from the date of allowance of his entry, BLM will send to the County Supervisor a copy of the Notice of Expiration of the statutory period of entry when it is mailed to the entryman-borrower. The copy of the notice will be used by the County Supervisor in urging the entryman-borrower to submit final proof with appropriate explanation of his failure to do so before the expiration of the statutory period.
When an entryman-borrower is in default in the terms of his mortgage to FHA or its successor agency under Public Law 103-354, in complying with requirements to obtain a patent, or in meeting the requirements to make reclamation proof, the following procedures will apply:
A.
1. The State Director will furnish the authorized officer of BLM with an explanation of the need for cancellation. When the entry is located in a reclamation project, the State Director also will notify the BR Regional Director and furnish him with an explanation of the need for cancellation.
2. The BR Regional Director may request the State Director to reconsider the necessity for cancellation of the entry when (a) BR can furnish information which may not have been considered by FHA or its successor agency under Public Law 103-354, (b) there is an outstanding contract between BR and the entryman borrower for the repayment of charges for land leveling, or (c) the entryman-borrower has not made reclamation proof. If such a request is made, a copy will be furnished to the BLM which shall suspend action on the FHA or its successor agency under Public Law 103-354 request until further notified by the FHA or its successor agency under Public Law 103-354. Ordinarily, BR will not request a reconsideration of the necessity for cancellation unless there appears to be a reasonable basis upon which a solution can be worked out so that the entryman-borrower may retain possession of his unit.
3. If BR does not ask the State Director to reconsider his request to cancel within 30 days, BLM will issue a decision cancelling the entry.
4. If BR asks for a reconsideration of the request to cancel, it will furnish the State Director immediately new information which it believes should be considered by FHA or its successor agency under Public Law 103-354 in reaching a decision. When FHA or its successor agency under Public Law 103-354 has reached a final decision, it will notify the BLM and the BR of the decision reached. Within 30 days after receiving notice of the final decision of the State Director that the entry should be canceled, BLM will notify the entryman-borrower of the cancellation of his entry in accordance with the usual procedure. A copy of the notice of the cancellation will be mailed to the State Director at the same time.
B.
C.
After cancellation or relinquishment of an entry upon land on which FHA or its successor agency under Public Law 103-354 holds a mortgage, such land shall be opened to re-entry only to persons eligible for an original entry, and eligible for an FHA or its successor agency under Public Law 103-354 loan unless the FHA or its successor agency under Public Law 103-354 Loan is paid in full. Any unit disposed of hereunder shall be subject to the outstanding balance owed to FHA or its successor agency under Public Law 103-354 and BR, or to that portion of the outstanding balance as agreed upon by the FHA or its successor agency under Public Law 103-354 and BR or BLM, as appropriate, if the entryman is eligible for an FHA or its successor agency under Public Law 103-354 loan.
A.
B.
C.
a. BR will, thereafter, for that particular unit, proceed to inform the public of the availability of the unit in accordance with its established procedures. However, before BR issues a Certificate of Eligibility to any applicant for re-entry it will submit to the County Supervisor (a) a list of the names of the applicants who can qualify for a Certificate of Eligibility and the order in which such applicants shall be considered, and (b) the information submitted by each of the qualified applicants in support of his application for the entry.
b. The County Supervisor and the County Committee will examine the list and the information to determine which of the applicants are eligible for an FHA or its successor agency under Public Law 103-354 loan. The list of any documentary information furnished will be returned to BR with a written statement setting forth the names in the list which are eligible for FHA or its successor agency under Public Law 103-354 assistance. Upon receiving such information from FHA or its successor agency under Public Law 103-354, BR will proceed to select, in accordance with established procedures, from among the applicants determined to be eligible for a Certificate of Eligibility and an FHA or its successor agency under Public Law 103-354 loan, one applicant but not to exceed two alternate applicants, to whom the unit may be awarded upon qualifying to assume the indebtedness.
c. BR will issue a Certificate of Eligibility to the selected applicant. The Certificate of Eligibility will be sent to the FHA or its successor agency under Public Law 103-354 County Supervisor who will instruct the applicant to file his Certificate of Eligibility and application for entry with BLM which will issue a Notice of Allowance of Entry if the applicant is qualified to make entry. The applicant will be allowed to occupy the unit when he has received the Notice of Allowance of Entry and has completed arrangements to assume the required amount of indebtedness owed to FHA or its successor agency under Public Law 103-354 or to refinance such indebtedness. FHA or its successor agency under Public Law 103-354 will send a copy of the assumption agreement or note and mortgage, if any, executed by the new occupant to BR and BLM.
d. FHA or its successor agency under Public Law 103-354 may permit an eligible person to whom the unit is awarded to assume that part of the indebtedness determined to be within the value of the property.
2.
a. The BLM will, thereafter, for that particular entry, proceed to inform the public of the availability of the land in accordance with its established procedures. BLM will, following the opening of the land to application, submit to the County Supervisor (a) a list of the names of the applicants who can qualify for the allowance and the order in which such applicants shall be considered, and (b) the information submitted by each of the applicants in support of his application.
b. Thereafter the FHA or its successor agency under Public Law 103-354 will select from the list the first applicant for the entry who can qualify for an FHA or its successor agency under Public Law 103-354 loan.
c. FHA or its successor agency under Public Law 103-354 will then notify BLM of the applicant selected. The authorized Officer will, as soon as possible after notification, issue the Notice of Allowance. The Allowance of Entry or an attachment thereto will show that entry is conditioned upon payment or assumption of the FHA or its successor agency under Public Law 103-354 debt. A copy of appropriate notice will be mailed to the State Director.
d. Upon receipt of the Notice of Allowance of Entry by the applicant, FHA or its successor agency under Public Law 103-354 will instruct him to occupy the unit and will complete arrangements for him to assume or
e. FHA or its successor agency under Public Law 103-354 may permit an eligible person to whom the unit is awarded to assume that part of the indebtedness determined to be within the value of the property.
D.
2. If the property cannot be sold immediately, the FHA or its successor agency under Public Law 103-354 will arrange for a lease or caretaker agreement as necessary to protect the Government's interests.
3. When FHA or its successor agency under Public Law 103-354 prepares to sell a unit, it will also advise BLM or BR, as appropriate, of the name of the purchaser and will request issuance of a patent to the purchaser. If the unit is in a reclamation project. BR will furnish, as soon as possible to FHA or its successor agency under Public Law 103-354, information concerning any outstanding reclamation charges on the land due the United States.
4. The sale may be for cash or on credit. In the event the sale is on credit, FHA or its successor agency under Public Law 103-354 will furnish a copy of the mortgage to BLM or BR, as appropriate, which shall make reference, in any patent issued thereafter, to the outstanding mortgage of FHA or its successor agency under Public Law 103-354.
This memorandum of understanding supersedes the earlier memorandum of understanding signed on February 17, 1950, and March 25, 1950, respectively, by the Secretaries of Agriculture and Interior.
Approved:
Date: October 22, 1974.
Approved:
Date: December 16, 1974.
The Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 is statutorily required to establish target participation rates for providing direct Farm Ownership (FO) loan funds to members of socially disadvantaged groups. These rates are established to ensure that members of socially disadvantaged groups are provided access to direct FO loan funds to purchase suitable farmland. The target participation rate established for each state, and each county within the state, is based on the proportion of minority rural population to the total rural population in the state, and for each county within the state.
States will meet their target participation rates in use of direct FO loan funds as provided in this exhibit. The targeted portion of a state's fiscal year direct FO allocation, as outlined in exhibit A of subpart L of part 1940 of this chapter, will be used exclusively to enable members of socially disadvantaged groups to purchase suitable farmland. Additional funds will be available from the National Office Reserve to enable States to obligate loans for socially disadvantaged applicants should their targeted allocation be insufficient. This requirement does not prohibit States from using their allocation of regular direct FO funds for making loans to members of socially disadvantaged groups.
The National Office will provide each State Director with a list of the target participation rates for each county by October 1 of each year. State Directors shall make available to each County and District Office the county(ies) target participation rates. State Directors will make every effort to provide the greater amount of direct FO loan funds to counties having the larger socially disadvantaged population.
This subpart contains regulations for making initial and subsequent direct Soil and Water (SW) loans. It is the policy of Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 to make loans to any qualified applicant without regard to race, color, religion, sex, national origin, marital status, age or physicial/mental handicap provided the applicant can execute a legal contract. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to FmHA or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an FmHA or its successor agency under Public Law 103-354 employee. See exhibit A of subpart A of this part for making SW loans to entrymen on unpatented public lands. See subpart R of part 2000 of this chapter (available in any FmHA or its successor agency under Public Law 103-354 office) for the Memorandum of Understanding between the Farm Credit Administration (FCA) and the FmHA or its successor agency under Public Law 103-354.
The basic objective of the SW loan program is to provide credit and management assistance to eligible farmers and ranchers when credit is not available elsewhere. FmHA or its successor agency under Public Law 103-354 assistance enables farm and ranch operators to use their land resources to improve their financial conditions so that they can obtain credit elsewhere.
Supervision will be provided borrowers to the extent necessary to achieve loan objectives and protect the Government's interest, in accordance with subpart B of part 1924 of this chapter.
(a) Meets the loan eligibility requirements for SW loan assistance in accordance with § 1943.62 of this subpart.
(b) Has not operated a farm or ranch, or who has operated a farm or ranch for not more than 10 years. This requirement applies to all members of an entity.
(c) Will materially and substantially participate in the operation of the farm or ranch.
(1) In the case of a loan made to an individual, individually or with the immediate family, material and substantial participation requires that the individual provide substantial day-to-day labor and management of the farm or ranch, consistent with the practices in the county or State where the farm is located.
(2) In the case of a loan made to an entity, all members must materially and substantially participate in the operation of the farm or ranch. Material and substantial participation requires that the individual provides some amount of the management, or labor and management necessary for day-to-day activities, such that if the individual did not provide these inputs, operation of the farm or ranch would be seriously impaired.
(d) Agrees to participate in any loan assessment, borrower training, and financial management programs required by FmHA or its successor agency under Public Law 103-354 regulations.
(e) Does not own real farm or ranch property or who, directly or through interests in family farm entities owns real farm or ranch property, the aggregate acreage of which does not exceed 15 percent of the average farm or ranch acreage of the farms or ranches in the county where the property is located. If the farm is located in more than one county, the average farm acreage of the county where the applicant's residence is located will be used in the calculation. If the applicant's residence is not located on the farm or if the applicant is an entity, the average farm acreage of the county where the major portion of the farm is located will be used. The average county farm or ranch acreage will be determined from the most recent Census of Agriculture developed by the U.S. Department of Commerce, Bureau of the Census. State Directors will publish State supplements containing the average farm or ranch acreage by county.
(f) Demonstrates that the available resources of the applicant and spouse (if any) are not sufficient to enable the applicant to enter or continue farming or ranching on a viable scale.
(g) In the case of an entity:
(1) All the members are related by blood or marriage.
(2) All the stockholders in a corporation are qualified beginning farmers or ranchers.
(a) Pay all operating expenses and all taxes which are due during the projected farm budget period.
(b) Meet necessary payments on all debts, except as provided in § 1941.14 of subpart A of part 1941 of this chapter, for annual production loans or subordinations made to delinquent borrowers.
(c) Provide living expenses for the family members of an individual borrower or a wage for the farm operator in the case of a cooperative, corporation, partnership or joint operation borrower which is in accordance with essential family needs. Family members include the individual borrower or farm operator in the case of an entity, and the immediate members of the family which resides in the same household.
The applicant shall certify in writing on the appropriate forms, and the County Supervisor shall verify and document, that adequate credit elsewhere is not available, with or without a guarantee or subordination, to finance the applicant's actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near where the applicant resides for loans for similar purposes and periods of time.
(a) If the County Supervisor receives letters or other written evidence from a lender(s) indicating the applicant is unable to obtain satisfactory credit, these will be included in the loan docket.
(b) If the applicant cannot qualify for the needed credit from the lenders contacted, but one or more of them has indicated they would provide credit with an FmHA or its successor agency under Public Law 103-354 guarantee, or the County Supervisor determines that the applicant can obtain a guaranteed loan, the applicant will be advised to file an application with that lender(s) so that a guaranteed SW loan request can be processed by the lender for consideration by FmHA or its successor agency under Public Law 103-354.
(c) Property and interest in property owned and income received by an individual applicant; and cooperative and its members, as individuals; a corporation and its stockholders, as individuals; a partnership and it partners, as individuals; and a joint operation and its joint operators, as individuals; will be considered and used by an applicant in obtaining credit from other sources.
Priority will be given to otherwise qualified applicants requesting assistance for soil and water conservation and protection purposes denoted in § 1943.66(a) of this subpart who use loan funds to build conservation structures or establish conservation practices on highly erodible land to comply with part 12 of this title (see attachment 1 of exhibit M of subpart G of part 1940 of this chapter which is available in any FmHA or its successor agency under Public Law 103-354 office).
Applications will be received and processed as provided in subpart A of part 1910 of this chapter, with consideration given to the requirements in exhibit M of subpart G of part 1940 of this chapter.
In accordance with the Food Security Act of 1985 (Pub. L. 99-198), after December 23, 1985, if an individual or any member, stockholder, partner, or joint operator of an entity is convicted
(a) An individual must:
(1) Be a citizen of the United States (see § 1943.54 of this subpart for the definition of
(2) Possess the legal capacity to incur the obligations of the loan.
(3) Have sufficient applicable educational and/or on the job training or farming experience in managing and operating a farm or ranch (1 year's complete production and marketing cycle within the last 5 years), which indicates the managerial ability necessary to assure reasonable prospects of success in the proposed plan of operation. There is no education or experience restriction on loans made for waste pollution abatement and control facilities under § 1943.66(b) of this subpart.
(4) Have the character (emphasizing credit history, past record of debt repayment and reliability), and industry necessary to carry out the proposed operation. Past record of debt repayment will not be cause for a determination that the applicant/borrower is not eligible if an honest attempt has been made to make the payments.
(5) Honestly endeavor to carry out the applicant's/borrower's undertakings and obligations. This would include, but is not limited to, providing current, complete and truthful information when applying for assistance and making every reasonable effort to meet the conditions and terms of the proposed loan.
(6) Be unable to obtain sufficient credit elsewhere to finance actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar proposes and periods of time.
(7) Be the owner or operator of not larger than a family farm after the loan is closed, when loan funds are used for soil and water conservation and protection purposes as defined in § 1943.66 (a)(1) through (a)(5) of this subpart. There is no farm size restriction on loans made for waste pollution abatement and control facilities under § 1943.66(b) of this subpart.
(8) If a tenant, has a satisfactory written lease for a sufficient period of time and under terms that will enable the operator to obtain reasonable returns on the improvements to be made with the SW loan. In addition, the
(b) A cooperative, corporation, partnership or joint operation must:
(1) Have the character (emphasizing credit history, past record of debt repayment and reliability), and industry necessary to carry out the proposed operation. This requirement also must be met by the individual members, stockholders, partners or joint operators, Past record of debt repayment will not be cause for a determination that the applicant/borrower is not eligible if an honest attempt has been made to make the payments.
(2) Honestly try to carry out the applicant's/borrower's undertakings and obligations. This would include, but is not limited to, providing current, complete and truthful information when applying for assistance, and making every reasonable effort to carry out the conditions and terms of the proposed loan. This requirement also must be met by the individual members, stockholders, partners, or joint operators.
(3) Consist of members, stockholders, partners, or joint operators holding a majority interest who are citizens of the United States (see § 143.54 of this subpart for the definition of
(4) Have sufficient applicable education and/or on the job training or farming experience in managing and operating a farm or ranch (1 year's complete production and marketing cycle within the last 5 years), which indicates the managerial ability necessary to assure reasonable prospects of success in the proposed plan of operation. There is no education or experience restriction on loans made for waste pollution abatement and control facilities under § 1943.66(b) of this subpart.
(5) Be authorized to own and/or operate a farm in the State(s) in which the farm is located.
(6) Be unable to obtain sufficient credit elsewhere, either as an entity or as individual members, stockholders, partners, or joint operators, to finance actual needs at reasonable rates and terms taking into account prevailing private and cooperative rates and terms in or near the community for loans for similar proposes and periods of time.
(7) Be controlled by individuals engaged primarily and directly in farming or ranching in the United States after the loan is made.
(8) Be the owner or operator of not larger than a family farm after the loan is closed, when loan funds are used for soil and water conservation and protection purposes as defined in § 1943.66 (a)(1) through (a)(5) of this subpart. There is no farm size restriction on loans made for waste pollution abatement and control facilities under § 1943.66(b) of this subpart.
(9) If a tenant, has a satisfactory written lease for a sufficient period of time, and under terms that will enable the applicant to obtain reasonable returns on the improvements made with the loan. In addition, the lease or separate agreement should provide for compensating the tenant for any remaining value of the improvements upon termination of the lease.
(10) Consist of members, stockholders, partners, or joint operators, who are
(11) When loan funds will be used for soil and water conservation and protection purposes (§ 1943.66 (a)(1) through (a)(5) of this subpart), and the members, stockholders, partners, or joint operators holding a majority interest are related by blood or marriage, the requirements of § 1943.12(b)(5), (b)(7) (if limited resource applicant), and (b)(8) of subpart A of part 1943 of this chapter will apply.
(12) When loan funds will be used for soil and water conservation and protection purposes, and the members, stockholders, partners, or joint operators holding a majority interest are not related by blood or marriage, the requirements of § 1943.12(b)(6) of subpart A of part 1943 of this chapter will apply.
(c)
Loans that are consistent with all Federal, State, and local environmental quality standards may be made to:
(a) Pay costs for construction, materials, supplies, equipment, and services related to, soil and water conservation and protection purposes, such as:
(1) Installation of conservation structures, including terraces, sod waterways, permanently vegetated stream borders and filter strips, windbreaks (tree or grass), shelterbelts, and living snow fences.
(2) Establishment of forest cover for sustained yield timber management, erosion control, or shelter belt purposes.
(3) Establishment or improvement of permanent pasture.
(4) The conversion to and maintenance of sustainable agriculture production systems, as described by Department technical guides and handbooks.
(5) Payment of costs to build conservation structures or establish conservation practices on highly erodible land to comply with a conservation plan in accordance with part 12 of this title (see attachment 1 of exhibit M of subpart G of part 1940 of this chapter which is available in any FmHA or its successor agency under Public Law 103-354 office).
(6) Other purposes consistent which plans for soil and water conservation, integrated farm management, water quality protection and enhancement, and wildlife habitat improvement.
(7) The following items/purposes related to conservation and protection purposes and water quality are authorized:
(i) Sodding, subsoiling, land leveling, liming, and fencing.
(ii) Fertilizer and seed used in connection with a soil conservation practice or to establish or improve permanent vegetation.
(iii) Gasoline, oil, and equipment rental or hire connected with establishing or completing the development.
(iv) Reasonable expenses incidental to obtaining, planning, closing, and making the loan, such as fees for legal,
(v) Purchase or repair of special-purpose equipment, such as terracing, land leveling, and ditching equipment, provided:
(A) Such equipment is needed and will facilitate the completion or maintenance of the planned improvement, and
(B) The cost of the equipment plus the other costs related to improvement will not be more than if performed by a contractor or by another method.
(vi) Acquire a source of water to be used on land the applicant owns, will acquire, or operates including:
(A) The purchase of water stock or membership in an incorporated water users association.
(B) The acquisition of a water right through appropriation, agreement, permit, or decree.
(C) The acquisition of water supply or right, and the land on which it is presently being used, when the water supply or right cannot be purchased without the land, provided:
(
(
(vii) Purchase land or an interest therein for sites or rights-of-way and easements upon which a water or drainage facility will be located.
(viii) Pay that part of the cost of facilities, improvements, and “practices” which will be paid for in connection with participation in programs administered by agencies such as the Agricultural Stabilization and Conservation Service (ASCS) or the Soil Conservation Service (SCS) only when such costs cannot be covered by purchase orders or assignments to material suppliers or contractors. If loan funds are advanced and the portion of the payment for which the funds were advanced is likely to exceed $1,000, the applicant will assign the payment to the FmHA or its successor agency under Public Law 103-354.
(ix) Provide water supply facilities for dwellings and farm buildings, including such facilities as wells, pumps, farmstead distribution systems, and home plumbing.
(x) Pay costs of land and water development, use, and conservation essential to the applicant's farm, subject to the following:
(A) Such a loan may be made on land with defective title owned by the applicant or on land in which the applicant owns an undivided interest providing:
(
(
(
(B) Such a loan may be made on land leased by the applicant providing:
(
(
(
(b) Pay the costs of meeting Federal, State, or local requirements for agricultural, animal, or poultry waste pollution abatement and control facilities, including construction, modification, or relocation of the farm or farm structures, if necessary, to comply with such pollution abatement requirements.
An SW loan will not be approved if:
(a) The loan being made exceeds the lesser of the value of the farm or other security for the loan, or $50,000.
(b) The total outstanding insured SW, Farm Ownership (FO) or Recreation (RL) loan principal balance including the new loan owned by the applicant will exceed the lesser of $200,000, or the market value of the farm or other security.
(c) The noncontiguous character of a farm containing two or more tracts is such that an efficient farming operation and nonfarm enterprise cannot be conducted due to the distance between tracts or due to inadequate rights-of-way or public records between tracts.
(d) The limitation found in § 1943.79 (c) of this subpart is exceeded.
(e) The loan is made for any purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in exhibit M of subpart G of part 1940 of this chapter. Refer to FmHA Instruction 2000-LL (available in any FmHA or its successor agency under Public Law 103-354 Office) for assistance in implementation.
(a)
(b)
(c)
(1) The applicant meets the conditions of the definition for a limited resource applicant set forth in § 1943.54 of this subpart.
(2) The Farm and Home Plan and Business Analysis—Nonagricultural Enterprise form, when appropriate, indicates that installments at the higher rate, along with other debts, cannot be paid during the period of the plan.
Each SW loan will be secured by real estate, chattels, leaseholds, or a combination of these. Chattels and/or leaseholds, however, will only be taken as security as set forth in paragraphs (c) and (d) of this section. The total amount of security required will be the lesser of either 150 percent of the loan amount, or all real estate owned by the applicant. A loan will be considered adequately secured when the real estate security for the loan is at least equal to the loan amount. Security in excess of 150 percent of the loan amount will only be taken when it is not practical to separate the property, i.e., a tract of land. The specific items of security, along with the value of the security, will be documented in the case file. This information will be obtained from values established in accordance with § 1943.75 of this subpart. If the applicant disagrees with the values established, FmHA or its successor agency under Public Law 103-354 will accept an appraisal from the applicant, obtained at the applicant's expense, if the appraisal meets all FmHA or its successor agency under Public Law 103-354 requirements. In cases, when a loan
(a)
(2) Security will also include items which are considered part of the farm and ordinarily pass with the title to the farm such as, but not limited to, assignments of leases or leasehold interests having mortgageable value, water rights, easements, rights-of-way, revenues, and royalties from mineral rights.
(3) A first lien is required on real estate, when available. In addition, loans will be secured by a junior lien on real estate provided:
(i) Prior lien instruments do not contain provisions for future advances (except for taxes, insurance, other costs needed to protect the security, or reasonable foreclosure costs), cancellation, summary forfeiture, or other clauses that may jeopardize the Government's interest or the applicant's ability to pay the SW loan unless any such undesirable provisions are limited, modified, waived or subordinated insofar as the Government is concerned.
(ii) Agreements are obtained from prior lienholders to give notice of foreclosure to FmHA or its successor agency under Public Law 103-354 whenever State law or other arrangements do not require such a notice. Any agreements needed will be obtained as provided in subpart B of part 1927 of this chapter, except as modified by the “Memorandum of Understanding-FCA-FmHA or its successor agency under Public Law 103-354,” FmHA Instruction 2000-R (available in any FmHA or its successor agency under Public Law 103-354 office).
(4) Advice on obtaining security will be received from OGC when necessary.
(5) The designated attorney, title insurance company, or OGC will furnish advice on obtaining security when a life estate is involved.
(6) Any loan of $10,000 or less may be secured by the best lien obtainable without title clearance or legal services as required in subpart B of part 1927 of this chapter, provided the County Supervisor believes from a search of the County records that the applicant can give a mortgage on the farm. This exception to title clearance will not apply when:
(i) The loan is made simultaneously with that of another lender.
(ii) This provision conflicts with program regulations of any other FmHA or its successor agency under Public Law 103-354 loan being made simultaneously with the SW loan.
(7) The Departments of Agriculture and Interior have agreed that FmHA or its successor agency under Public Law 103-354 loans may be made to Native Americans and secured by real estate when title is held in trust or restricted status. When security is so taken on real estate held in trust or restrictive status:
(i) The applicant will request the Bureau of Indian Affairs (BIA) to furnish Title Status Reports to the County Supervisor; and
(ii) The BIA approval will be obtained on the mortgage after it has been signed by the applicant and any other party whose signature is required.
(b)
(1) A lien will not be taken on property that could have significant environmental problems/costs (e.g., known or suspected underground storage tanks or hazardous wastes, contingent liabilities, wetlands, endangered species, historic properties). Guidance is provided in part II, item H of exhibit A of FmHA Instruction 1922-E (available in any FmHA or its successor agency under Public Law 103-354 office) as to the action to be taken when the appraiser indicates that the property is subject to any hazards, detriments or limiting conditions.
(2) A lien will not be taken on property that cannot be made subject to a valid lien.
(3) A lien will not be taken on the applicant's personal residence and appurtenances, when the residence is located on a separate parcel and the farm tract being financed, refinanced, improved, or otherwise used for collateral provides primary security for the loan(s).
(4) A lien will not be taken on subsistence livestock; cash or special cash collateral accounts to be used for the farming operation or for necessary family living expenses; all types of retirement accounts; personal vehicles necessary for family living and farm operating purposes; household goods; and small tools and small equipment, such as hand tools, power lawn mowers, and other similar items not needed for security purposes.
(5) A lien will not be taken on marginal land, including timber, when a softwood timber (ST) loan is secured by such land.
(c)
(1) A first lien will be taken on equipment or fixtures bought with loan funds whenever such property cannot be included in the real estate lien and the best lien obtainable on all real estate will be taken and does not provide primary security for the loan.
(2) Chattel security will be obtained when real estate will not provide primary security for the loan and the best lien obtainable has been taken on all real estate.
(3) When a loan is made only for the purchase of shares of water stock, such stock will be pledged or assigned as security for the loan.
(4) If there is no real estate security available and a lien is taken on chattels only, the loan cannot be over $100,000 and must be scheduled for repayment within 20 years or the useful life of the security, whichever is less.
(5) Chattel security will be obtained and kept effective as notice to third parties as provided in subpart B of part 1941 and subpart A of part 1962 of this chapter.
(d)
(1) The unexpired term of the lease should extend beyond the repayment period of the loan for a period sufficient to ensure the objectives of the loan will be achieved. If the loan repayment period is equal to or greater than the period covered by the lease, the borrower must provide other security to secure the loan or the lessor must agree in writing to compensate the borrower for any unexhausted value of the improvements when the lease expires or is terminated.
(2) The lessor must have good and marketable title to the real estate, which may be subject to a prior lien, or the lessor must have signed a contract to purchase the real estate. The contract to sell and the lien instruments must not contain covenants, such as short redemption periods or rights to cancel, which may jeopardize the Government's security. Any provisions which may jeopardize the Government's security must be limited, modified, waived or subordinated in favor of the Government.
(3) With respect to achieving the purpose of the loan, obtaining adequate security and being able to service the loan and enforce its rights, the Government, as holder of a mortgage upon a lease or leasehold interest, must be in a position substantially as good as if it held a second mortgage on the real estate. Besides the lessor's consent to the SW mortgage on the leasehold interest, FmHA or its successor agency under Public Law 103-354 should consider whether or not:
(i) There is reasonable security of tenure. The borrower's interest should not be subject to summary forfeiture or cancellation.
(ii) The right to foreclose the SW mortgage and sell without restrictions would adversely affect the salability or market value of the security.
(iii) FmHA or its successor agency under Public Law 103-354 has a right to bid at a foreclosure sale or to accept voluntary conveyance in lieu of foreclosure.
(iv) FmHA or its successor agency under Public Law 103-354 has the right, after acquiring the leasehold through
(v) The borrower has the right, in the event of default or inability to continue with the lease and the SW loan, to transfer the leasehold, subject to the SW mortgage, to an eligible transferee who will assume the SW debt.
(vi) Advance notice will be given to FmHA or its successor agency under Public Law 103-354 of the lessor's intention to cancel, terminate or foreclose upon the lease. Such advance notice should be long enough to permit FmHA or its successor agency under Public Law 103-354 to ascertain the amount of delinquencies, the total amount of the lessor's and any other prior interest, the market value of the leasehold interest and, if litigation is involved, to refer the case with a report of the facts to the United States Attorney for appropriate action.
(vii) There are express provisions covering the question of FmHA or its successor agency under Public Law 103-354's obligation to pay unpaid rental or other charges accrued at the time it acquires possession of the property or title to the leasehold, and those which become due during FmHA or its successor agency under Public Law 103-354's occupancy or ownership, pending further servicing or liquidation.
(viii) There are any necessary provisions to assure fair compensation to the lessee for any part of the premises taken by condemnation.
(ix) Any other provisions are necessary to obtain an interest which can be mortgaged.
(4) A State supplement will be issued in any State in which real estate or chattel liens may be taken on leasehold interests in farmland and recorded so as to protect the mortgagee.
(5) The following language or similar language which, in the opinion of OGC or the designated attorney, is legally adequate, will be inserted on the lien instrument:
“All Borrower's right, title, and interest in and to the leasehold estate for a term of __ years beginning on __, 19_, created and established by a certain Lease dated _____, 19_, executed by ______ as lessor(s), recorded on __, 19_, in Book __, page __ of the __ Records of said County and State, and any renewals and extensions thereof, and all Borrower's right, title, and interest in and to said Lease, covering the following real estate:” (To be inserted just before the legal description.)
Borrower will pay when due all rents and any and all other charges required by said Lease, will comply with all other requirements of said Lease, and will not surrender or relinquish without the Government's written consent, any of the Borrower's right, title or interest in or to said leasehold estate or under said Lease while this instrument remains in effect.
(e)
(f)
(1) Chattel and/or real estate security that is separate and identifiable from the security pledged to FmHA or its successor agency under Public Law 103-354 for any other farmer program insured or guaranteed loans.
(2) Different lien positions on real estate are considered separate and identifiable collateral.
(3) The outstanding amount of loans made may not exceed the value of the collateral used.
(g)
(a)
(1) The Corps of Engineers or the Soil Conservation Service (SCS) will be consulted concerning:
(i) Likelihood of flooding.
(ii) Probability of flood damage.
(iii) Recommendations on special design and specifications needed to minimize flood and mudslide hazards.
(2) FmHA or its successor agency under Public Law 103-354 representatives will evaluate the proposal and record the decision in the loan docket in accordance with subpart G of part 1940 of this chapter.
(b)
(c)
(d)
(e)
(f)
(2) State Directors and Farmer Programs Staff members will consult with SCS, U.S. Geological Survey, State Geologist or Engineer, or any board having official functions relating to water use and restrictions for water development. State supplements will be issued to provide guidelines which:
(i) State all requirements to be met, including the acquisition of water rights.
(ii) Define areas where development of ground water for irrigation is not recommended.
(3) Applicants will comply with all local laws and regulations, and will obtain any special licenses or permits needed for nonfarm, recreation, specialized or fish farming enterprises.
(a)
(b)
(c)
(1) The land to be irrigated is suitable for irrigation.
(2) The applicant has a right to use water for irrigation.
(3) The water is suitable to use for irrigation and is available in sufficient quantities to irrigate a specified amount of land.
(4) If irrigation specialists have prepared any feasibility studies, copies of these studies have been submitted to FmHA or its successor agency under Public Law 103-354.
(d)
(2) See § 1943.73(a) of this subpart for information about flood and mudslide hazard areas.
(3) Chattel security should be insured against hazards customarily insured against in the area if the loss of such security would jeopardize the interests of the Government.
(e)
(1) To both the life estate holder and the remainderman, provided:
(i) Both have a legal right to occupy and operate the farm; and
(ii) Both are eligible for the loan; and
(iii) Both parties sign the note and mortgage
(2) To the remainderman only, provided:
(i) The remainderman has a legal right to occupy and operate the farm; and
(ii) The lien instrument is signed by the remainderman, life estate holder, and any other party having any interest in the security.
(3) To the life estate holder only, provided:
(i) There is no legal restriction placed on a life estate holder who occupies and operates a farm; and
(ii) The lien instrument is signed by the life estate holder, remainderman, and any other party having any interest in the security.
(f)
(g)
(a)
(b)
(c)
(2) Other real estate appraisals completed by other State-certified general appraisers may be used providing such appraisals meet the ethics, competency, departure provisions, etc., and sections I and II of the Uniform Standards of Professional Appraisal Practices, and contain a mineral rights appraisal as set out in paragraph (c)(4) of this section. Prior to acceptance, the appraisal must have an acceptable desk review (technical) completed by an FmHA or its successor agency under Public Law 103-354 designated review appraiser.
(3) Real estate appraisals will be completed as provided in § 761.7 of this title. The rights to mining products, gravel, oil, gas, coal, or other minerals will be considered a portion of the security for Farmer Programs loans and will be specifically included as a part of the appraised value of the real estate securing the loans using Form FmHA or its successor agency under Public Law 103-354 1922-11, “Appraisal for Mineral Rights” or other format that contains the same information.
(4) The value of stock required to be purchased by Federal land Bank (FLB) borrowers may be added to the recommended market value of the security, provided:
(i) An assignment is obtained on the stock, or
(ii) An assignment is obtained which provided that:
(A) The value of the stock at the time the FLB loan is satisfied will be applied on the FLB loan, or
(B) The stock refund check is made payable to the borrower and FmHA or its successor agency under Public Law 103-354, or
(C) The stock refund check is made payable to the borrower and mailed to the County Supervisor.
(iii) The total of the stock value and the recommended market value of real estate is indicated in the comments section of the appraisal report.
(5) In the case of nonreal estate security, the following items apply:
(i) Form FmHA or its successor agency under Public Law 103-354 440-21, “Appraisal of Chattel Property,” will be used.
(ii) The property which will serve as security will be described in sufficient detail so it can be identified.
(iii) The current market value or, if appropriate, the current cash value will be determined.
The development work will be planned and completed in accordance
(a) An applicant will be requested to obtain credit from another source when information indicates such credit is available. When another lender will not make a loan for the total needs of the applicant but is willing to participate with an SW loan, consideration will be given to a participation loan. FmHA or its successor agency under Public Law 103-354 employees may not guarantee, personally or for FmHA or its successor agency under Public Law 103-354, repayment of advances made from other credit sources. However, lenders may be assured that lien priorities will be recognized.
(b) The County Supervisor and the other lender's representative should maintain a close working relationship in processing loans to a mutual applicant or borrower. When an SW loan is made at the same time as a loan from another lender, that lender's lien will have priority over the FmHA or its successor agency under Public Law 103-354 lien unless otherwise agreed upon. The lender's lien priority can cover the following in addition to principal and interest: Advances for payment of taxes, property insurance, reasonable maintenance to protect the security, and reasonable foreclosure costs including attorney's fees.
(a) Direct SW loans may be made simultaneously with other FmHA or its successor agency under Public Law 103-354 loans or to borrowers presently in debt on FmHA or its successor agency under Public Law 103-354 loans, only if the loan limits involved will not be exceeded and all requirements of the loans involved will be met.
(b) New applicants and borrowers indebted to FmHA or its successor agency under Public Law 103-354 and/or an FmHA or its successor agency under Public Law 103-354 guaranteed lender(s) for an EE loan may be considered for an SW loan(s) provided their total outstanding principal indebtedness to FmHA or its successor agency under Public Law 103-354 and/or the FmHA or its successor agency under Public Law 103-354 guaranteed lender(s) for the EE and any FO, RL, OL and SW loans will not exceed $650,000.
(c) A direct SW loan may be made to a borrower with an outstanding guaranteed FO, SW of RL loan when:
(1) The total direct and guaranteed FO, SW and RL principal balance, including the new loan, owed by the loan applicant does not exceed $300,000 at either loan approval or loan closing.
(2) Different lien positions on real estate are considered separate and identifiable collateral.
(3) All other requirements of the loan are met.
(d) A borrower may use the same collateral to secure two or more loans made, direct or guaranteed under this subpart except that the outstanding amount of such loans may not exceed the total value of the collateral.
(a)
(1) Section 1943.67 of this subpart, containing loan limitations, is not violated.
(2) No significant changes have been made in the development plan considered by the appraiser when real estate will be taken as security.
(b)
(i) The Agency has certified the applicant eligible;
(ii) Funds are requested for authorized purposes;
(iii) The proposed loan is based upon a feasible plan. Planning forms other than Form FmHA or its successor agency under Public Law 103-354 432-2, “Farm and Home Plan” may be used when they provide the necessary information.
(iv) The security is adequate;
(v) Necessary supervision is planned; and
(vi) All other pertinent requirements have been met or will be met.
(2) [Reserved]
When the loan is approved and real estate will serve as security, the County Supervisor will request the applicant to obtain title clearance as provided in subpart B of part 1927 of this chapter, when required if this has not been done. If an option is involved, the applicant will sign and send to the seller Form FmHA or its successor agency under Public Law 103-354 440-35, “Acceptance of Option,” or other suitable forms.
(a)
(1) When all loan funds can be disbursed at, or within 30 days after loan closing or if the amount of funds that cannot be disbursed does not exceed $5,000, the total amount of the loan will be requested in a single advance.
(2) When loan funds cannot be disbursed as outlined in paragraph (a)(1) of this section, the amount needed to meet the immediate needs of the borrower will be requested through the field office terminal system. The amount of each advance should meet the needs of the borrower as much as is possible, so the amount in the supervised bank account will be kept to a minimum. The Finance Office will continue to supply Form FmHA or its successor agency under Public Law 103-354 440-57 until the entire loan has been disbursed. The County Supervisor should tell the borrower to notify the County Office of amounts needed on a timely basis to avoid delays in receiving loan checks.
(b)
(2) If a loan check is received and the loan cannot be closed within 20 working days from the date of the check, the County Supervisor will take appropriate action in accordance with FmHA Instruction 2018-D, (available in any FmHA or its successor agency under Public Law 103-354 office). The applicant must agree to a delayed loan closing and the same will be documented in the case file by the County Supervisor.
(3) When a check is returned and the loan will be closed at a subsequent date, another check will be requested in accordance with FmHA Instruction 2018-D, a copy of which may be obtained as stated in paragraph (b)(2) of this section.
(c)
(1) The County Supervisor will notify the State Office of loan cancellation by using Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation.” The County Office will send a copy of Form FmHA or its successor agency under Public Law 103-354 1940-10 to the designated attorney, Regional Attorney, or the title insurance company representative providing loan closing instructions to indicate the loan has been canceled. If a check received in the County Office is to be canceled, the check will be returned as prescribed in FmHA Instruction 2018-D (available in any FmHA or its successor agency under Public Law 103-354 office).
(2) Interested parties will be notified of the cancellation as provided in subpart B of part 1927 of this chapter.
(d)
(1) Complete and distribute Form FmHA or its successor agency under Public Law 103-354 194-10 in accordance with the FMI.
(2) When necessary, prepare and execute a substitute promissory note reflecting the revised total of the loan and the revised repayment schedule. When it is not possible to obtain a substitute promissory note, the County Supervisor will show on Form FmHA or its successor agency under Public Law 103-354 440-57 the revised amount of the loan and the revised repayment schedule.
(e)
When a loan closing date has been agreed upon, the County Supervisor will notify the borrower of the loan closing date. The following appropriate actions will be taken in connection with, and after loan closing:
(a)
(b)
(1) Form FmHA or its successor agency under Public Law 103-354 440-15, “Security Agreement (Insured Loans to Individuals).”
(2) Form FmHA or its successor agency under Public Law 103-354 440-25, “Financing Statement,” or, when authorized, Form FmHA or its successor agency under Public Law 103-354 440-A25, “Financing Statement.”
(3) State forms may be used if National forms are not legally acceptable. Such forms will require OGC and National Office clearance.
(c)
(d)
(e)
(i) Transfer funds planned to be used for refinancing specific debts to other debts when there is a need to do so; and
(ii) Transfer funds planned to be used for other purposes to pay small deficiencies in estimates for refinancing debts, providing there are sufficient remaining funds to complete any land purchase and planned development.
(2) A revised docket will be developed when:
(i) The total amount of debts to be refinanced has increased in such an amount that planned loan purposes cannot be carried out; and
(ii) The applicant is unable to make up any deficiencies from other resources.
(f)
(1) For assignment of income, Form FmHA or its successor agency under Public Law 103-354 443-16, “Assignment of Income from Real Estate Security,” will be used, except, if it is legally inadequate in a State, it may be adapted to that State with the approval of the OGC or an authorized State form may be used instead.
(2) The County Supervisor, upon the advice of the designated attorney, escrow agent, title insurance company, or the OGC, as appropriate, may require acknowledgment and recordation of the assignment. Any cost incident thereto will be paid by the borrower.
(3) At the time Form FmHA or its successor agency under Public Law 103-354 443-16 is executed, appropriate notations will be made on Form FmHA or its successor agency under Public Law 103-354 1905-1, “Management System Card—Individual,” to insure the proceeds, or the specified portion of the proceeds assigned to FmHA or its successor agency under Public Law 103-354 from the transactions are remitted at the proper time.
(g)
(1) Separate notes will be prepared for any other FmHA or its successor agency under Public Law 103-354 Loan made simultaneously with the SW loan. The notes will be completed as provided in the appropriate loan regulation and FMI.
(2) All FmHA or its successor agency under Public Law 103-354 notes to be secured by real estate can be described in the same mortgage.
(3) The promissory note will be signed as follows:
(i)
(ii) Cooperatives or corporations. The promissory note(s) will be executed so as to evidence liability of the entity as well as individual liability of all member(s) or stockholder(s) in the entity.
(iii)
(h)
(i)
(j)
(k)
(1) Real estate mortgages:
(i) When the original recorded instrument is returned to the County Office:
(A) File the original in the County Office file, and
(B) Give a copy to the borrower.
(ii) When the original is retained by recorder:
(A) File a conformed copy in County Office file, and
(B) Give a conformed copy to the borrower.
(iii) The County Supervisor will provide copies that may be needed in some cases for interested third parties.
(2) Deeds:
(i) Give the original to the borrower, and
(ii) Retain one copy to file.
(3) Title insurance policies:
(i) File the Mortgagee title policy in the County Office file, and
(ii) Give the owner's title policy, if one is obtained, to the borrower.
(4) Water stock certificates or similar collateral will be retained in the County Office file.
(5) Abstracts of title:
(i) Return to the borrower, except when they were obtained from a third party with the understanding they would be returned, the abstracts will be sent to the third party. A memorandum receipt will be obtained when abstracts are delivered to the third party.
(ii) Form FmHA or its successor agency under Public Law 103-354 140-4, “Transmittal of Documents,” will be used and a receipted copy kept in the County Office. The FMI should be followed for preparing this form.
SW loans will be serviced in accordance with subpart A of part 1965 of this chapter. Chattel security for SW loans will be serviced in accordance with subpart A of part 1962 of this chapter. Bureau of Reclamation (BR) loans made during the period August 19, 1977, through September 30, 1977, will be serviced in the same manner as Soil and Water loans. See exhibit A of this subpart, “Memorandum of Understanding Between the Bureau of Reclamation, Department of the Interior, and the Farmers Home Administration or its successor agency under Public Law 103-354, Department of Agriculture,” for additional information on these loans.
A subsequent SW loan is a loan made to a borrower who is currently in debt for an SW loan.
(a) Subsequent loan may be made for the same purposes and under the same conditions as an initial loan.
(b) The subsequent loan will be processed in the same manner as an initial loan.
(c) A new real estate mortgage will not be necessary provided:
(1) All the land which will serve as security for the loan is described on the present real estate mortgage; or
(2) The real estate mortgage has a future advance clause and a State supplement provides authority for using such a clause; or
(3) The required lien priority is obtained with the existing mortgage and future advance clause.
Subordinations in favor of other lenders will be processed in accordance with subpart A of part 1965 of this chapter.
State supplements will be issued as necessary to implement this subpart.
Whereas, under section 8 of the 1977 Drought Emergency Act (P.L. 95-18), hereafter referred to as “the Act,” the Bureau of Reclamation (BR) is authorized to make loans to irrigators for the purpose of undertaking construction, management, conservation activities, or the acquisition and transportation of water, which can be expected to have an effect in mitigating losses and damages resulting from the 1976-1977 drought period;
Whereas, the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 has an existing soil and water program (SW) authorized by section 304 of the Consolidated Farm and Rural Development Act for loans to individuals that accomplish purposes similar to those in the Act;
Whereas, it is more efficient and in the best interests of the United States, and in accordance with section 6 of the Act, for BR to procure the services of FmHA or its successor agency under Public Law 103-354 pursuant to the terms of the Economy Act of 1932 (31 U.S.C. 686) to make and service loans to individual irrigators as authorized by the Act.
Now therefore the parties agree:
1. For purposes of this Memorandum the term
2. FmHA or its successor agency under Public Law 103-354 shall make and service loans to individual irrigators as authorized by the Act pursuant to its SW program and applicable FmHA or its successor agency under Public Law 103-354 regulations except as modified hereby.
3. The loans shall be only for the purposes relating specifically to irrigation and set forth in FmHA Instruction 443.2, IVA1, A8, B1, B2, and C. The loans shall be interest free. Loans for water acquisition and transportation shall be repaid over a period not to exceed 5 years. Other loans shall be repaid over a period not to exceed 5 years except such loans which generate benefits which are usable beyond 1977 shall be repaid within a period which shall be the shorter of the estimated useful life of the facilities or the reasonable payment capacity of the irrigator but in no event to exceed 40 years. All loans shall be obligated not later than September 30, 1977, and any construction related to any loan must be completed by November 30, 1977.
4. Services rendered by FmHA or its successor agency under Public Law 103-354 pursuant to this Memorandum of Understanding shall be on a nonreimbursable basis to the irrigator. For services rendered, BR shall pay to FmHA or its successor agency under Public Law 103-354 a charge of 5 percent of principal of each loan. BR directs that FmHA or its successor agency under Public Law 103-354 disburse such service charge to itself directly upon the closing of each loan.
5. Three million dollars shall be transferred to FmHA or its successor agency under Public Law 103-354 by Standard Form 1151, which amount shall be available for construction, management, and conservation activities. An additional sum of $5 million may be made available upon request of FmHA or its successor agency under Public Law 103-354 for the acquisition and transportation of water.
6.
7.
Date of June 29, 1977.
Dated: July 15, 1977.
WHEREAS, the Bureau of Reclamation (BR) and the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 consummated a Memorandum of Understanding on July 15, 1977, whereby BR would procure the services of FmHA or its successor agency under Public Law 103-354 pursuant to the terms of the Economy Act of 1932 (31 U.S.C. 686) to make and service loans to individual irrigators as authorized by section 8 of the 1977 Drought Emergency Act (Pub. L. 95-18); and
WHEREAS, item 3 of that Memorandum of Understanding provides in part that all loans shall be obligated not later than September 30, 1977, and any construction related to any loan must be completed by November 30, 1977; and
WHEREAS, Pub. L. 95-107, enacted on August 17, 1977, amends Pub. L. 95-18 to accomplish, among other things, an extension of the time for completing construction activities under the authorities of Pub. L. 95-18 from November 30, 1977, to January 31, 1978.
NOW THEREFORE the parties agree that the date November 30, 1977, in the last sentence of item 3 of the Memorandum of Understanding executed by BR on June 29, 1977, and FmHA or its successor agency under Public Law 103-354 on July 15 1977, be revised to January 31, 1978, so that the sentence will read, “All loans shall be obligated not later than September 30, 1977, and any construction related to any loan must be completed by January 31, 1978.”
Date of September 6, 1977.
This subpart provides procedures for administration of the Small Farmer Outreach Training and Technical Assistance Program whereby an 1890 or other eligible educational institution or community-based organization as referenced in § 1943.105 of this subpart, also referred to as the recipient, enters into a grant, cooperative, or other agreement with the Farm Service Agency (FSA)to provide outreach, training, and technical assistance to members of socially disadvantaged groups to own and operate farms and ranches and to participate in agricultural programs.
To meet the objectives of the program referenced in paragraphs (a) and (b) of this section, FSA will fund grant agreements, cooperative agreements, or enter into Memorandums of Understanding (MOU) with recipients as referenced in § 1943.105 of this subpart, for Small Farmer Outreach Training and Technical Assistance Projects which are determined to meet the objectives of the program:
(a) The long-term objective of the Small Farmer Outreach Training and Technical Assistance Program is to keep small farmers, especially those who are members of socially disadvantaged groups, on the farm and strengthen the rural economy.
(b) An immediate objective of the Small Farmer Outreach Training and Technical Assistance Program is to encourage and assist members of socially disadvantaged groups to own and operate farms and ranches and to participate in agricultural programs.
A cooperative agreement or other agreement will specify a project for a period generally of 5 years, with an option for renewal up to the 5-year period, subject to the availability of
For the purpose of the Small Farmer Outreach Training and Technical Assistance Program, the following definitions are applicable:
(1) The principal purpose of the award is to accomplish a public purpose authorized by statute, rather than acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal Government; and
(2) At the time an award is made, no substantial involvement is anticipated between FSA, acting for the Federal Government, and the recipient.
(a) FSA will consider proposals only from:
(1) 1890 Land-Grant Colleges, including Tuskegee University.
(2) Indian tribal community colleges.
(3) Alaska native cooperative colleges.
(4) Hispanic-serving post-secondary educational institutions.
(5) Other post-secondary educational institutions with demonstrated experience in providing agricultural education or other agriculturally-related services to socially disadvantaged farmers or ranchers in their region.
(6) Any community-based organization that:
(i) Has demonstrated experience in providing agricultural education or other agriculturally-related services to socially disadvantaged farmers and ranchers;
(ii) Provides documentary evidence of its past experience in working with socially disadvantaged farmers and ranchers during the 2 years preceding its application for assistance; and
(iii) Does not engage in activities prohibited under Section 501(c)(3) of the Internal Revenue Code of 1986.
(b) In addition to those entities referenced in paragraph (a) of this section, an applicant must:
(1) Have adequate financial resources for performance and the necessary experience, organizational and technical qualifications, and facilities or a firm commitment, arrangement, or ability to obtain same (including any to be obtained through subagreement(s));
(2) Have the ability to comply with the proposed or required completion schedule for the project;
(3) Have an adequate financial management system and audit procedures that provide efficient and effective accountability and control of all funds, property, and other assets;
(4) Have a satisfactory record of performance, including, in particular, any prior performance under grants, contracts, or cooperative agreements from the Federal Government; and
(5) Otherwise be qualified and eligible to receive funding for a grant agreement, cooperative agreement, or other agreement under the applicable laws and regulations.
(a) A program solicitation will be published in the
(b) The project proposal must contain the following information:
(1)
(2)
(3)
(4)
(ii) Show all funding sources and itemize costs by the following line items: personnel costs, equipment, material and supplies, travel, and all other costs.
(iii) Salaries of project personnel who will be working on the project may be requested in proportion to the effort that they will devote to the project.
(iv) Funds may be requested under any of the line items listed above provided that the item or source for which support is requested is identified as necessary for successful conduct of the project, is allowable under the authorizing legislation and applicable Federal cost principles, and is not prohibited under any applicable Federal statute.
(5)
(c) The State Office will review the proposal and forward the proposal to the National Office Project Manager, within 15 days of receipt, with the State Office's recommendations.
(d) The National Office will make a preliminary review of the proposal and reserves the right to return it to the State Office with any questions or comments to be clarified by the 1890 or other eligible educational institution or community-based organization. A time period for resubmission will be specified.
(e) All proposals from entities eligible for funding under § 1943.105 of this subpart shall be evaluated for funding consideration. To assist in the evaluation and obtain the best possible balance of viewpoints for funding consideration, a proposal review panel will be used. The proposal review panel will be selected and organized to provide maximum expertise and objective judgment in the evaluation of proposals. The proposal review panel will use Form FmHA or its successor agency under Public Law 103-354 1943-2, “EVALUATION—Small Farmer Outreach Training and Technical Assistance Program,” to evaluate each proposal. The proposal review panel will evaluate each proposal against the five criteria using the following scale: Highly Responsive (5); Fully Responsive (3); Marginally Responsive (1); and Not Responsive (0). The criteria used by the proposal review panel and the criteria weights are:
(1)
(2)
(3)
(4)
(5)
(f) The final decision to award is at the discretion of the awarding official. The awarding official shall consider the ranking, comments, and recommendations from the proposal review panel and any pertinent information before deciding which applications to approve and the order of approval. The awarding official will notify in writing entities whose proposals are rejected. In accordance with § 1900.55 of subpart B of part 1900 of this chapter, appeal rights will be provided only to those entities identified as eligible under § 1943.105 of this subpart.
(g) After a decision regarding funding is made, FSA and the recipient which is selected will enter into a grant or cooperative agreement. The awarding official will notify the recipient of approval and inform them of the necessary documents needed to execute the agreement. If no funding is involved, FSA and the recipient will enter into an MOU.
Any funds authorized under this subpart will be used solely for the operation and administration of the Small Farmer Outreach Training and Technical Assistance Program specifically for the project under the cooperative or
Several other Federal statutes and regulations apply to proposals considered for review or cooperative and other agreements awarded under the program. These include, but are not limited to the following:
(a) 7 CFR part 1b—USDA Implementation of the National Environmental Policy Act;
(b) 7 CFR part 3—USDA implementation of OMB Circular A-129 regarding debt collection;
(c) 7 CFR part 1.1—USDA implementation of the Freedom of Information Act;
(d) 7 CFR part 15, Subpart A—USDA implementation of Title VI of the Civil Rights Act of 1964;
(e) 7 CFR part 3015—USDA Uniform Federal Assistance Regulations, implementing OMB Directives (i.e., Circular Nos. A-110, A-21, and A-122) and incorporating provisions of 31 U.S.C. 6301-6308 (formerly, the Federal Grant and Cooperative Agreement Act of 1977, Public Law No. 95-224), as well as general policy requirements applicable to recipients of Departmental financial assistance;
(f) 7 CFR part 3016—USDA Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments;
(g) 7 CFR part 3017, as amended—USDA implementation of Governmentwide Debarment and Suspension (nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants);
(h) 7 CFR part 3018—USDA implementation of New Restrictions on Lobbying. Imposes prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans;
(i) 29 U.S.C. 794, Section 504—Rehabilitation Act of 1973, and 7 CFR part 15B (USDA implementation of the statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs; and
(j) 35 U.S.C. 200 et seq.—Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained 37 CFR part 401).
The method of payment will be by reimbursement by Treasury check, and payment will be requested on Standard Form (SF) 1034, “Public Voucher for Purchases and Services Other Than Personal,” or SF-270, “Request for Advance or Reimbursement,” whichever is applicable. Payments will be processed in accordance with 7 CFR parts 3015 and 3016.
(a) Recipients must comply with standards for the financial management and reporting and program performance reporting found in 7 CFR parts 3015 and 3016.
(b) Recipients must provide to the State Office quarterly financial and program performance reports. The reports are due 30 days after the reporting period, and an original and two copies of each report will be submitted. The financial report will be presented on SF-269A, “Financial Status Report,” and the financial and program performance reports will be prepared in accordance with 7 CFR parts 3015 and 3016.
(c) The program performance report should also address progress on the activities under each of the areas of Outreach, Training, and Technical Assistance, as stipulated in the cooperative agreement or other agreement.
(d) Within 30 days after receipt, the State Office will forward the reports to the National Office Project Manager, with the State Office's comments and recommendations.
(a) Recipients must establish safeguards to prevent employees, consultants, or members of governing bodies from using their positions for purposes that are, or give the appearance of being, motivated by a desire for private financial gain for themselves or others such as those with whom they have family, business, or other ties. Therefore, recipients receiving financial support must have written policy guidelines on conflict of interest and the avoidance thereof. These guidelines should reflect State and local laws and must cover financial interests, gifts, gratuities and favors, nepotism, and other areas such as political participation and bribery. These rules must also indicate the conditions under which outside activities, relationships, or financial interests are proper or improper, and provide for notification of these kinds of activities, relationships, or financial interests to a responsible and objective recipient official. For the requirements of a code of conduct applicable to procurements under grants and cooperative agreements, see the procurement standards prescribed by 7 CFR 3015.181.
(b) The rules of conduct must contain a provision for prompt notification of violations to a responsible and objective recipient official and must specify the type of administrative action that may be taken against an individual for violations.
(c) A copy of the rules of conduct must be given to each officer, employee, board member, and consultant of the recipient who is working on the FSA financed project, and the rules must be enforced to the extent permissible under State and local law or to the extent to which the recipient determines it has legal and practical enforcement capacity. The rules need not be formally submitted and approved by the awarding official; however, they must be made available for review upon request, for example, during a site visit.
(a)
(b)
(c)
The policies and regulations contained in subpart E of part 1901 of this chapter apply to grants and other agreements made under this subpart.
The policies and regulations contained in subpart G of part 1940 of this chapter apply to grants and other agreements made under this subpart.
5 U.S.C. 301; 42 U.S.C. 1480.
This subpart states the policies and procedures for making grants under section 509 of the Housing Act of 1949, as amended (42 U.S.C. 1479). Grants reimburse eligible organizations for part or all of the costs of conducting, administering, and coordinating an effective housing application packaging program in colonias and designated counties. Eligible organizations will aid very low- and low-income individuals and families in obtaining benefits from Federal, State, and local housing programs. The targeted groups are very low- and low-income families without adequate housing who will receive priority for recruitment and participation and nonprofit organizations able to propose rental or housing rehabilitation assistance benefitting such families. These funds are available only in the areas defined in exhibit D of this subpart. Participants will assist very low- and low-income families in solving their housing needs. One way of assisting is to package single family housing applications for families wishing to buy, build, or repair houses for their own use. Another way is to package applications for organizations wishing to develop rental units for lower income families. The intent is to make Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 housing assistance programs available to very low- and low-income rural residents in colonias and designated counties. FmHA or its successor agency under Public Law 103-354 will reimburse eligible organizations packaging loan/grant applications without discrimination because of race, color, religion, sex, national origin, age, familial status, or handicap if such an organization has authority to contract.
References in this subpart to County, District, State, National and Finance Offices, and to County Supervisor, District Director, State Director, and Administrator refer to FmHA or its successor agency under Public Law 103-354 offices and officials and should be read as prefaced by FmHA or its successor agency under Public Law 103-354. Terms used in this subpart have the following meanings:
(1) Twenty percent or more of the county population is at or below the poverty level; and
(2) Ten percent or more of the occupied housing units are substandard.
(1) A State, State agency, or unit of general local government or;
(2) A private nonprofit organization or corporation that is owned and controlled by private persons or interests, is organized and operated for purposes other than making gains or profits for the corporation, and is legally precluded from distributing any gains or profits to its members.
(1) Contacting and assisting very low- and low-income families in need of adequate housing by:
(i) Implementing an organized outreach program using available media and personal contacts;
(ii) Explaining available housing programs and alternatives to increase the awareness of very low- and low-income families and to educate the community as to the benefits from improved housing;
(iii) Assisting very low- and low-income families in locating adequate housing; and
(iv) Developing and packaging loan/grant applications for new construction and/or rehabilitation, or repair of existing housing.
(2) Contacting and assisting eligible applicants to develop multi-family housing loan/grant applications for new construction, rehabilitation, or repair to serve very low- and low-income families.
An eligible grantee is an organization as defined in § 1944.52 of this subpart and has received a current “Certificate of Training” pertaining to the type of application being packaged. In addition, the grantee must:
(a) Have the financial, legal, and administrative capacity to carry out the responsibilities of packaging housing applications for very low- and low-income applicants. To meet this requirement it must have the necessary background and experience with proven ability to perform responsibly in the field of housing application packaging, low-income housing development, or other business or administrative ventures which indicate an ability to perform responsibly in this field of housing application packaging.
(b) Legally obligate itself to administer grant funds, provide adequate accounting of the expenditure of such funds, and comply with FmHA or its successor agency under Public Law 103-354 regulations.
(c) If the organization is a private nonprofit corporation, be a corporation that:
(1) Is organized under State and local laws.
(2) Is qualified under section 501(c)(3) of the Internal Revenue Code of 1986.
(3) Has as one of its purposes assisting very low- and low-income families to obtain affordable housing.
RHS or its successor agency under Public Law 103-354 will deal only with authorized representatives designated by the applicant. The authorized representatives must have no pecuniary interest in the award of the architectural or construction contracts, the purchase of equipment, or the purchase of the land for the housing site.
Grant funds may only be used to reimburse a packager for delivered packages. Payment will be made for each complete package received and accepted in accordance with exhibit C of this subpart.
The following policies and regulations apply to grants made under this subpart:
(a) Grantees must comply with all provisions of the Fair Housing Act of 1988 and subpart E of part 1901 of this chapter which states in part, that no person in the United States shall, on the grounds of race, color, national origin, sex, religion, familial status, handicap, or age, be excluded from participating in, be denied the benefits of, or be subject to discrimination in connection with the use of grant funds.
(b) The policies and regulations contained in FmHA Instruction 1940-Q (available in any Agency Office), Departmental Regulation 2400-5, and 7 CFR part 3018 apply to grantees under this subpart.
(c) Grantees should be aware of the policies and regulations contained in subpart G of part 1940 of this chapter. They will supply needed information requested by the local Agency Office in connection with the loan/grant application.
(d) The grantee will retain records for three years from the date Standard Form (SF)-269A, “Financial Status Report (Short Form),” is submitted.
(e) Annual audits will be completed if the grantee has received more than $25,000 of Federal assistance in the year in which HAPG funds were received. These audits will be due 13 months after the end of the fiscal year in which funds were received.
(1) States, State agencies, or units of general local government will complete an audit in accordance with 7 CFR parts 3015 and 3016 and OMB Circular A-128.
(2) Nonprofit organizations will complete an audit in accordance with 7 CFR part 3015 and OMB Circular A-133.
(f) Performance reports, as required, will be submitted in accordance with 7 CFR part 3015.
The packager may not charge fees or accept compensation or gratuities directly or indirectly from the very low- and low-income families being assisted under this program. The packager may not represent or be associated with anyone else, other than the applicant, who may benefit in any way in the proposed transaction. If the packager is compensated for this service from other sources, then the packager is not eligible for compensation from this source except as permitted by Agency. Grantees who are funded to do Self-Help Housing, may not be reimbursed for packaging applications for participation in the Self-Help Housing effort.
Grantees must submit packages to the appropriate Agency office serving the designated county and/or colonias. Packages for Single Family Housing loans/grants are submitted to the appropriate County Office. All other packages are submitted to the appropriate District Office. The applicable forms required to develop a package can be obtained in any District or County Office. Packagers should coordinate their packaging activity with the appropriate District and County Offices.
(a) HAPG funds will be distributed administratively by the Administrator to achieve the success of the program. Allocations will be distributed to States as set forth in Attachment 2 of exhibit A of subpart L of part 1940 of this chapter.
(b) The State Director will determine based on the housing funds available and the personnel available, how many applications can be processed for each program during the fiscal year in each Agency office serving a designated county and/or colonias. The number of applications will be published in the advertisement required under § 1944.72 of this subpart.
(a) For Single Family Housing loans/grants, HAPG funds will be specifically available for designated counties. Packages may be submitted after the annual housing application packaging orientation and training is held. The grant period will end when sufficient packages are received for each designated county or colonia or on September 30, of the fiscal year, whichever is earlier. The State Director must send notification, in the form of a letter, to all packagers who attended the packaging orientation and training that the number of applications specified in the advertisement required under § 1944.72 of this subpart have been received. Any packages submitted after this date will be paid for only if the grantee can demonstrate the package was prepared in good faith and prior to receipt of the above notification.
(b) For Multi-Family Housing loans/grants, HAPG funds will be available for designated areas or colonias to the extent specified in FmHA or its successor agency under Public Law 103-354's advertisement. Preapplications approved in one fiscal year, for which
Agency approval officials will orient and train organizations on how to package. A newspaper advertisement will be published by Agency offices serving designated counties and/or colonias after October 1. The advertisement will announce that application packaging services are being requested and specify the date of the certification training. All eligible organizations may attend this training. This date will be no more than 30 days after the advertisement appears in the newspaper and no later than December 31 of any year. The advertisement will include the estimated number of packages needed by loan type, i.e., Single Family, Multi-Family, etc. Exhibit A of this subpart (available in any Agency office) is an example of an appropriate advertisement. “Certificates of Training” as required under § 1944.53 of this subpart will be signed by the State Director and given after completion of the training. Efforts will be made by the appropriate Agency office to complete this training process and certify packagers as quickly as possible. Grantees must attend this training each year in order to qualify for assistance.
(a) When submitting its first package to an FmHA or its successor agency under Public Law 103-354 office, in addition to the item in paragraph (b) of this section and the information set forth in exhibit C of this subpart, the organization must submit the following. A file of these documents will be established in the FmHA or its successor agency under Public Law 103-354 office and retained in accordance with FmHA Instruction 2033-A (available in any FmHA or its successor agency under Public Law 103-354 office).
(1) Proof of their nonprofit status under section 501(c)(3) or section 501(c)(4) of the Internal Revenue Code of 1986 or of their existence as a state agency or unit of general local government legally authorized to work in the designated county and/or colonias. If the FmHA or its successor agency under Public Law 103-354 approval official is in doubt about the legal status of the organization, the evidence will be sent to the State Director. The State Director may, if needed, submit the above documents with any comments or questions to the Office of General Counsel (OGC) for an opinion as to whether the applicant is a legal organization of the type required by these regulations.
(2) An original and copy of Forms FmHA 400-1, “Equal Opportunity Agreement,” and FmHA 400-4, “Assurance Agreement.”
(3) A copy of a current “Certificate of Training” pertaining to the type of application package submitted.
(b) All packages must contain a signed statement which states, “Neither the organization nor any of its employees have charged, received or accepted compensation from any source other than FmHA or its successor agency under Public Law 103-354 for packaging this application and are not associated with or represent anyone other than the applicant in this transaction.”
(c) Form SF-270, “Request for Advance or Reimbursement” will be submitted with each application package for the amount authorized for the specific loan type in exhibit B of this subpart.
(d) The FmHA or its successor agency under Public Law 103-354 approval official will review each package for completeness, accuracy, and conformance to program policy and regulations. Cost reimbursement will be made in accordance with exhibit B of this subpart. Packagers that submit “incomplete” packages for sections 502 and 504 loans/grants will be sent a letter within 5 working days after submission of the “incomplete” package advising of additional information needed. Payment will be held until all the information is received. Packagers for sections 502 loans and 504 loans/grants will not be paid for packages submitted on applicants who are obviously ineligible for the programs. For example, a
(e) Submissions for sections 514/516, 515, and 524 loans/grants will be reviewed and, if incomplete, a letter sent within 15 working days advising of additional information required.
(f) Form SF-269A, will be submitted within 15 days of the end of the fiscal year.
Certified packagers whose actions or acts warrant they not be allowed to participate in the program are to be investigated in accordance with § 1940.606 (c) or FmHA Instruction 1940-M (available in any FmHA or its successor agency under Public Law 103-354 office).
The Administrator may, in individual cases, make an exception to any requirement or provision of this subpart which is not inconsistent with the authorizing statute or other applicable law if the Administrator determines that the Government's interest would be adversely affected. The Administrator will exercise this authority only at the request of the State Director and recommendation of the Assistant Administrator, Housing. Requests for exceptions must be in writing by the State Director and supported with documentation to explain the adverse effect on the Government's interest and/or impact on the applicant, borrower, or community, proposed alternative courses of action, and show how the adverse effect will be eliminated or minimized if the exception is granted.
The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575-0157. Public reporting burden for this collection of information is estimated to vary from 30 minutes to five hours per response, with an average of 3 hours per response including time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Department of Agriculture, Clearance Officer, OIRM, Room 404-W, Washington, DC 20250; and to the Office of Management and Budget, Paperwork Reduction Project (OMB
The Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 approval official will execute and distribute Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request for Obligation of Funds,” in accordance with the Forms Manual Insert (FMI). HAPG funds will be used for the fees except as otherwise noted in paragraphs II (A) and (B) of this exhibit. Funds for all loan and/or grant application packages will be paid as follows.
I. For all Single Family Housing loans (Sections 502, 504, and 514 (“on” farm labor housing only) of the Housing Act of 1949, checks will be ordered when complete application packages as defined in § 1944.73 of this subpart and exhibit C of this subpart are received. The fees are as follows:
(A) Section 502 Single Family Housing Loans—$500
(B) Section 504 Rural Housing Loans and Grants—$500
(C) Section 514 “On” Farm Labor Housing Loans—$500
II. For all Multi-Family Housing loans and grants (sections 514/516, 515, 524, and 533 of the Housing Act of 1949), the entire amount of the fee coming from HAPG funds will be obligated when the packager has met all the requirements of the preapplication stage, however, payments will be made in accordance with the following schedules:
(A) Sections 514/516 Farm Labor Housing Loans and Grants
“Off” farm labor housing loans/grants—fees paid in accordance with the schedule for section 515 Rural Rental Housing loans.
(B) Section 515 Rural Rental Housing Loans.
(1) The scale for packaging fees is based on the percentage of the total development cost as follows:
For additional amounts between:
(2) Twenty-five percent paid from HAPG funds when Form AD-622, “Notification of Preapplication Review Action,” is sent inviting submission of a complete application.
(3) Twenty percent paid from HAPG funds when a complete application is filed including plans and specifications.
(4) The 55 percent balance paid when the loan is approved. Funds for this 55 percent will be drawn from loan funds in accordance with § 1944.212(j) of subpart E of 1944 of this chapter for Section 515 loans and § 1944.158(i) of subpart D of part 1944 of this chapter for Section 514 loans.
(C) Section 524 Rural Housing Site Loans—total fee is 1 percent of the loan amount payable in two installments.
(1) Thirty percent paid after FmHA or its successor agency under Public Law 103-354's review of the preapplication under § 1822.271(a) of subpart G of part 1822 of this chapter (paragraph XI A of FmHA Instruction 444.8).
(2) Seventy percent paid upon the completion of the docket in accordance with § 1822.271(c) of subpart G of part 1822 of this chapter (paragraph XI C of FmHA Instruction 444.8).
(D) Section 533 Housing Preservation Grants—total fee is 2 percent of the grant amount paid in two installments.
(1) Forty percent will be paid when the Form AD-622, inviting submission of a complete application, is sent.
(2) Sixty percent will be paid after grant closes.
A package will consist of the following requirements for the respective program.
A. Section 502—Complete applications packages will be submitted in accordance with the requirements of exhibit A of subpart A of part 1944 of this chapter. The package must also include the following:
Evidence of ownership in accordance with § 1944.461(a) of subpart J of part 1944 of this chapter.
Cost estimates or bid prices for removal of health or safety hazards in accordance with § 1944.463(a) of subpart J of part 1944 of this chapter.
C. Section 514/516—Complete application packages will be submitted in accordance with exhibit A-1 of subpart D of part 1944 of this chapter.
D. Section 515—Complete application packages will be submitted in accordance with the requirements of exhibit A-7 of subpart E of part 1944 of this chapter.
E. Section 524—Complete application packages will be submitted in accordance with § 1822.271(a) of subpart G of part 1822 of this chapter (paragraph XI A of FmHA Instruction 444.8). After Farmers Home Administration or its successor agency under Public Law 103-354's review and as instructed, the application should be completed in accordance with § 1822.271(c) of subpart G of part 1822 of this chapter (paragraph XI C of FmHA Instruction 444.8).
F. Section 533—Complete application packages will be submitted in accordance with the requirements of subpart N of part 1944 of this chapter.
This subpart sets forth the polices and procedures and delegates authority for making initial and subsequent insures loans under section 514 and grants under section 516 of the Housing Act of 1949, to provide housing and related facilities for domestic farm labor. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to FmHA or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an FmHA or its successor agency under Public Law 103-354 employee.
The basic objective of the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 in making domestic Farm Labor Housing (LH) loans is to provide decent, safe, and sanitary housing for domestic farm labor to be located in areas where a need for farm labor exists and in making LH grants where there is a pressing need for such facilities in the area for farm laborers and there is a reasonable doubt that the housing can be provided without the grant assistance.
(1) Legally organized and authorized to own and operate a farm business within the State,
(2) Legally able to carry out the purposes of the loan, and
(3) Prohibited from the sale or transfer of 90 percent of the stock or interest to other than family members by either the articles of incorporation, bylaws or by agreement between the stockholders or partners and the corporation or partnership.
(1) Is incorporated with the State, Puerto Rico, or Virgin Islands, or a federally recognized Indian Tribe;
(2) Is organized and operated on a nonprofit basis;
(3) Is legally precluded from distributing any profits or dividends to its members or any private individual during its corporate lifetime;
(4) Is not grower oriented (majority of board must be nonfarmers);
(5) Pledges to administer the housing as a community service in the interest of the whole community, regardless of race, color, national origin, sex, religion, age, handicap, and marital or familial status;
(6) Has at least 25 members for projects with a total development cost of up to $100,000 and additional members for projects costing more than $100,000; and
(7) Has a membership reflecting a variety of interests of the area where the housing will be located.
(1) The membership of the organization must be broadly representative of the region or state by having representation from either the counties or employment areas in which it provides or is planning to provide labor housing; and
(2) The membership must include at least eight (8) members from the employment area to be served by the project who represent a variety of interests of the employment area. If the project is located in a community or dependent upon a community for essential services, at least four of the eight members must be residents of that community.
(1) To determine if income is considered substantial, the measure to be used will be:
(i) For housing rented to farm laborers and owned by public bodies and public or private nonprofit organizations when charging rent:
(A) Actual dollars earned from farm labor by domestic farm laborers other than migrant farmworkers must equal at least 65 percent of the annual income limits indicated for the Standard Federal regions, as shown in exhibit J of this subpart (which is available in any FmHA or its successor agency under Public Law 103-354 office). For migrant farmworkers living in seasonal housing the actual dollars earned from farm labor by a domestic farm laborer must equal at least 50 percent of annual limits as shown in exhibit J of this subpart.
(B) An alternate measure for determining substantial portion of income when actual earnings are not available may be the duration of time a farm laborer worked on a farm as a domestic farm worker during the preceding 12 months. In order to be considered as substantial the farm laborer must have worked at least 110 whole days in farm work. For purposes of this section one whole day is the equivalent of at least 7 hours. When using a period of more than one year, a yearly average amounting to at least 110 days per year must be computed.
(ii) For housing owned by a farmer, family farm partnership, family farm corporation, or an association of farmers which was initially provided on a nonrental basis, substantial portion of income is earned down housing is provided by the owner as part of employment compensation for farm labor.
(2) When a natural disaster has occurred, such as a drought, flood, freeze, etc., figures for the last full year of work will be used to determine substantial portion of income under paragraph (1) of this definition.
(3) The tenant who qualifies as a domestic farm laborer in order to reside or continue to reside in any project with a nonrestrictive farm labor clause in the mortgage covenants (see § 1944.176(d) (5) of this subpart) must not have adjusted annual income which exceeds the moderate income limit as shown in exhibit C of subpart A of part 1944 of this chapter (which is available in any FmHA or its successor agency under Public Law 103-354 office), for the appropriate household size and appropriate geographical area. Tenants residing in housing which was initially rent free without the non-restrictive labor clause in the mortgage covenants (i.e. on-farm site projects where the tenant must work for the farm owner) need not certify income (see paragraph (1)(ii) of this definition), and need not be low or moderate income tenants in order to be eligible to occupy a unit.
(i) Income for purposes of this subpart is defined under the terms annual income (describing inclusive and exempted income), adjusted annual income, and adjusted monthly income in paragraph II of exhibit B of subpart C of part 1930 of this chapter.
(ii) For servicing purposes, an exception to the moderate income rule is permitted in accordance with paragraph VI of exhibit B of subpart C of part 1930 of this chapter.
(a) Tenant occupancy in labor housing is prioritized in the following order:
(1) First priority is to be given to eligible farm laborer households based upon percent of total earnings from farm labor in the following ranked categories: 71 to 100 percent; 51 to 70 percent; 26 to 50 percent; and less than 25 percent.
(i) For LH units without Rental Assistance, occupancy priority within each ranking category is according to the household's income, very-low, low-, then moderate.
(ii) For LH units with Rental Assistance, tenant occupancy priority is given to all eligible very-low income farm worker households by ranked category, then to low income farm worker households by ranked category. Moderate income may be served when there are no very-low or low-income eligible farm workers on the waiting lists, again by ranked category.
(2) Second priority is given to retired or disabled farm laborer households who were in the local farm market area at the time of retirement or becoming disabled. Occupancy priority will be by paragraph (a)(1) (i) or (ii) of this section without the farm income ranking category.
(3) Third priority is to be given to other retired or disabled farm laborer households. Occupancy priority will be by paragraph (a)(1) (i) or (ii) of this section without the farm income ranking category.
(b) When there is a diminished need for housing by persons or families in the above categories, such units may be made available to persons or families eligible for occupancy under the section 515, Rural Rental Housing program. Section 515 tenants may occupy the labor housing until such time the units are again needed by persons or families eligible under paragraph (a) of this section. As the basis for FmHA or its successor agency under Public Law 103-354's approval or disapproval of a borrower's determination of diminished need, the borrower must submit to FmHA or its successor agency under Public Law 103-354 a current analysis of need and demand, identical to the market survey required of applicants in exhibit A-I of this subpart. The borrower's determination and the State Director's recommendation should be forwarded to the National Office for concurrence.
(c) For additional guidance on occupancy and rental assistance, refer to FmHA Instruction 1930-C, exhibit B VI of this subpart, Renting Procedures, and exhibit E of this subpart, Rental Assistance Program. The Agency is required by statute to provide affordable housing to eligible farm workers and their families as a first program priority and to provide Rental Assistance as a second program priority. If it appears there is conflict in FmHA Instructions concerning the housing of an eligible Domestic or Migrant Farm Worker, document the problem and consult the District Director. If necessary, the problem may be referred to the State Office and/or the National Office for resolution.
(d)
(2) For tenants of housing when rent is charged and employment restrictions do not apply (reference
(e)
(2)
All LH loan and/or LH grant application processing and servicing is the responsibility of the FmHA or its successor agency under Public Law 103-354 District Director with redelegation authority for on-farm labor housing loans.
(a)
(b)
(c)
(a)
(1) Be a farmowner, family farm partnership, family farm corporation, or an association of farmers whose farming operations demonstrate a need for farm labor housing, or an organization, as these terms are defined in § 1944.153, which will own the housing and operate it on a nonprofit basis; or a nonprofit limited partnership in which the general partner is a nonprofit entity.
(2) Except for State and local public agencies, or a political subdivision
(i) There is a need in the area for housing for domestic farmworkers
(ii) There are no qualified State or political subdivisions or public or private nonprofit organizations currently available or likely to become available within a reasonable period of time that are willing and able to provide the housing; and
(iii) The interest rate for such loans is in accordance with subpart A of part 1810 of this chapter (FmHA Instruction 440.1).
(3) Provide from its own resources the borrower contribution required by § 1944.160 and have sufficient initial operating capital to pay costs such as property and liability insurance premiums, fidelity bond premiums if required, utility hookup deposits, maintenance equipment, movable furnishings and equipment, printing lease forms, and other initial expenses. LH loans made to nonprofit organizations and to State or local public agencies or political subdivisions thereof may include up to 2 percent of the development cost for initial operating expenses.
(4) After the loan is made, have income sufficient to pay operating expenses, make necessary capital replacements, make the payments on the loan and other authorized debts, and accumulate reasonable reserves as required.
(5) Possess the legal and actual capacity, character, ability, and experience to carry out the undertakings and obligations required for the loan, including the obligation to maintain and operate the housing and related facilities for the purpose for which the loan is made. Organizations operating in more than one local area will be required to indicate their ability to provide local management and supervision of the day-to-day operation of the housing project.
(6) Intend to use the housing for labor to be used in the farming operations of the applicant or farming operations of its members if an individual farmowner, family farm corporation or partnership, or an association of farmers.
(7) Own the housing and related land or become the owner when the loan is closed. An owner may include, in addition to the owner of full marketable title, a lessee of a tract of land owned by a State, political subdivision, public body or public agency, or Indian tribal lands which are not available for purchase. It may also include a lease of land when the State Director determines that long-term leasing of sites by nonpublic bodies is a well established practice and such leaseholds are fully marketable in the area, provided:
(i) The applicant is unable to obtain fee title to the property.
(ii) A recorded mortgage constituting a valid and enforceable lien on the applicant's leasehold will be given as security.
(iii) The amount of the labor housing (LH) loan against the property will not exceed the maximum security value or Maximum Debt Limit (MDL) determined in accordance with subpart E, or subparts B and C of part 1922 of this chapter, as appropriate.
(iv) The unexpired term of the lease on the date of loan approval is at least 25 percent longer than the repayment period of the loan and rental charged
(v) The borrower's interest may not be subject to summary foreclosure or cancellation.
(vi) The lease must:
(A) Not restrict the right to foreclose the LH mortgage or to transfer the lease.
(B) Permit FmHA or its successor agency under Public Law 103-354 to bid at foreclosure sale or to accept voluntary conveyance of the security in lieu of foreclosure.
(C) Permit FmHA or its successor agency under Public Law 103-354 after acquiring the leasehold through foreclosure, or voluntary conveyance in lieu of foreclosure, or in event of abandonment by the borrower, to occupy the property, or to sublet the property and to sell the leasehold for cash or credit.
(D) Permit the borrower, in the event of default or inability to continue with the lease and the LH loan, to transfer the leasehold, subject to the LH mortgage, to a transferee with assumption of the LH debt and grant obligation.
(vii) The advice of the Office of the General Counsel (OGC) will be obtained as to legal sufficiency of the lease. When the State Director is uncertain as to whether a loan can be made on a leasehold, the request should be submitted to the National Office for evaluation and instructions.
(8) If it is a private broad-based nonprofit organization or a nonprofit organization of farmworkers, meet the following additional requirements:
(i) In the event of its dissolution, be legally bound to transfer its net assets to a nonprofit organization of a similar type or a public body for use for domestic farm labor housing or other public purposes if the need for farm labor housing no longer exists.
(ii) Responsibility for management of the housing must be vested in the applicant's board of directors.
(A) A broad-based nonprofit organization must be governed by a board of directors of not less than five members who are experienced in such fields as real estate management, finance, or related businesses and who will not be users of the farm workers housed in the project.
(B) A nonprofit organization of farmworkers must have representation on the board from the area where the housing is located. Directors may be elected who are not members of the organization but are experienced in such fields as real estate management, finance, or related businesses provided member directors represent a majority of the board.
(iii) Be prohibited from requiring or preventing employment on any particular farm or farms as a condition of occupancy.
(iv) Except for an organization of farmworkers, be certified as exempt from Federal income taxation.
(9) Be an individual farmowner who is a citizen of the United States, the Commonwealth of Puerto Rico, the Virgin Islands, the territories and possessions of the United States, or the trust territory of the Pacific Islands or residents in one of the foregoing areas after being legally admitted for permanent residence or an indefinite parole. If the applicant is an organization, other than a State or political subdivision, the majority of the members and controlling interests must be individuals who meet the citizenship requirements for individual farmowners as stated above.
(b)
(1) Be an organization, as defined in § 1944.153 with an assured life over a period of years sufficient to carry out the purpose of providing low-rent housing for domestic farm labor. This should not be less than the anticipated useful life of the project as suitable housing for domestic farm labor, assuming proper maintenance and repair of the property. Ordinarily, this should not be less than 50 years.
(2) When the grant is closed, be the owner (as defined in this subpart) of the housing and related facilities, including the site.
(3) Be unable to provide the necessary housing from its own resources, including any power to levy taxes, assessments, or charges, and be unable to obtain the necessary credit through an LH loan or from other sources upon
(4) Possess the legal and actual capacity, ability, and experience to incur and carry out the undertakings and obligations required, including the obligations to maintain and operate the housing and related facilities for the purpose for which the grant is made.
(5) Legally obligate itself not to divert income from the housing to any other business, enterprise, or purpose.
(c)
LH loans and grants may be made to qualified applicants to:
(a) Build, buy, improve or repair housing as defined in § 1944.153(b).
(b) Purchase and improve the necessary land on which the housing will be located.
(1) The cost of land purchased with loan or grant funds may not exceed its present market value in its present condition. Present market value will be determined by a current appraisal in accordance with subpart B of part 1922 of this chapter.
(2) Loan or grants funds will not be used to buy land from a member of an applicant-organization, or from another organization in which any member of the applicant-organization has an interest, without prior approval of the State Director. In granting this approval the State Director should be sure that the purchase price does not exceed the present market value.
(3) Loan or grant funds may not be used to acquire land in excess of that needed for the housing, including related facilities, except when the applicant cannot acquire only the needed land at a fair price, can justify the acquisition, agrees to sell the excess land as soon as practicable and apply proceeds on the loan, and has legal authority to acquire and administer the land.
(c) Develop and install water supply, sewage disposal, streets, storm water retention facilities or areas, and heat and light systems necessary in connection with the housing. If the facilities are located offsite, the following requirements must be met:
(1) The applicant will hold the title to the facility or have a legally assured adequate right to use of the facility for at least the life of the loan or grant and such title or right can be transferred to any subsequent owner of the site.
(2) The facilities are provided for the exclusive use of the LH project or funds are limited to the prorated part of the total cost of the facility according to the use and benefit to the project. The applicant will agree in writing to the application of extra payments on the LH loan of any subsequent collection by the applicant from other users or beneficiaries of the facility.
(3) Adequate security can be obtained with or without a mortgage based on the offsite facilities.
(d) Construct other related facilities in connection with the housing such as:
(1) Maintenance workshop and storage facilities.
(2) Recreation center including lounge if the project is large enough to justify such a facility.
(3) Central cooking and dining facilities when the project is large enough to justify such services.
(4) Small infirmary for emergency care only when justified.
(5) Laundry room and equipment, including clotheslines, if not provided in the individual units.
(6) Appropriate outdoor recreational facilities and other facilities to meet essential needs.
(7) Child day care facilities when needed and feasible.
(8) Trash retention areas if necessary.
(9) Outdoor lighting in pedestrian areas where use is anticipated after sunset.
(e) Construct office and living quarters for the resident manager and other operating personnel if needed and advantageous to the project and the Government.
(f) Purchase and install ranges, refrigerators, drapes, drapery rods, clothes washers, and clothes dryers. If individual washer and dryer hookups are provided, clothes washers and clothes dryers may be installed in individual rental units only if the inclusion of such items in individual units is needed and is customary in the area for the type of housing involved and is consistent with the requirement that the construction be undertaken in an economical manner and not constitute elaborate or extravagant items. Otherwise, the clothes washers and clothes dryers must be installed in a central laundry room. The number of washers and dryers must be adequate to serve the tenant needs. Whenever practical, this equipment should be attached to the real property in a manner to prevent easy removal.
(g) Purchase and install essential equipment which upon installation becomes a part of the real estate.
(h) Provide landscaping, foundation planting, seeding or sodding of lawns, and necessary facilities related to buildings such as walks, yards, fences, parking areas, and driveways.
(i) Provide loan/grant funds to enable a nonprofit group or public body to be reimbursed for technical assistance received from a nonprofit organization, with housing and/or community development experience, to assist the nonprofit applicant entity in the development and packaging of its loan/grant docket and project.
(1) Loan and grant funds may also be used to reimburse any appropriate and necessary legal, architectural, engineering, technical, and professional fees.
(2) Costs incurred by the nonprofit applicant entity for development and packaging of its own loan/grant docket and project may also be reimbursed. Any costs incurred by the entity for its own formation and incorporation are not reimbursable.
(3) The amount to be reimbursed for developing and packaging the loan/grant docket and project are limited by the total development cost (excluding initial operating and capital expenses). Reimbursed costs may range from 2 to 4 percent of total development costs and should reflect costs that are reasonable and typical for the area. In no case will the Agency reimburse in excess of 4 percent.
(4) The packaging costs are not required to be considered a part of the security value of the project.
(5) Related project costs as listed in § 1944.169 of this subpart are not included as a part of the costs for development and packaging of the loan/grant docket and project.
(j) Pay interest which will accrue during the estimated construction period if interim financing is used [or if loan will be closed using multiple advances on daily interest accrual (DIAS) with annual installment and deferred principal]. In the case of multiple advances when the loan is closed on a predetermined amortization schedule system (PASS) or on DIAS with monthly installments, loan funds will not be used for construction interest. Accrued interest during the construction period will be capitalized when construction is substantially complete and the project is ready for full operation.
(k) Pay normal charges necessary to obtain interim financing.
(l) Pay initial operating expenses up to 2 percent of the development cost for any type applicant except an individual farmowner, family farm corporation or partnership, or an association of farmers.
(m) Pay for related costs incurred in compliance with the Uniform Relocation Assistance and Real Property Acquisition Act of 1970 and in accordance with § 1944.164(q) of this subpart.
(n) To make advances in accordance with § 1965.217 (d) of subpart E of part 1965 of this chapter to nonprofit corporations and public agencies to avert prepayment of the loan.
(a)
(b)
(c)
(a) For all applicants, including its members, who will be receiving any benefits from Low-Income Housing Tax Credits (LIHTC), the amount of the RHS loan will be limited to no more than 95 percent of the total development cost or 95 percent of the security value, whichever is less.
(b) For all applicants, including its members, not receiving any benefits from LIHTC, who are nonprofit entities or State or local public agencies, the amount of the RHS loan will be limited to the total development cost or the security value, whichever is less, plus the 2 percent initial operating capital.
(c) For all other applicants, including its members, not receiving any benefits from LIHTC, the amount of the RHS loan will be limited to no more than 97 percent of the development cost or the security value, whichever is less.
A grant may be made to an eligible applicant only when all of the following requirements can be met:
(a) The applicant will contribute at least one-tenth of the total development cost, obtained from its own resources, including any power to levy taxes, assessments, or charges, with funds from other sources, or with an LH loan. The applicant's contribution must be available at the time of grant closing. If an LH loan is needed, the applicant will file an application for a combination loan and grant at the same time.
(b) The housing and related facilities will fulfill a pressing need in the area in which the housing is or will be located and there is reasonable doubt that such housing can be provided without the grant.
(1) The applicant will furnish FmHA or its successor agency under Public Law 103-354 factual evidence of fulfilling a pressing need. This need will be documented in accordance with exhibits A-1 or A-2 of this subpart, as applicable, and using exhibit A-4 as a guideline if appropriate.
(2) When appropriate, the District Director may check with sources such as the State Department of Labor, Bureau of Employment Security, and other reliable sources to verify the information submitted.
(3) If, after evaluating the information furnished by the applicant and additional information that may be provided, the District Director determines that the housing will fulfill a pressing need and that a reasonable doubt exists that the housing can be provided without the grant, the District Director will prepare a narrative statement to support these conclusions.
(c) The housing will be constructed in accordance with exhibit A-3 of this subpart.
(d) The housing will be constructed in an economical manner and will not
(e) The housing must be durable and suitable for year round use unless the need for such housing is seasonal and year-round occupancy is not practical and will not be needed. Construction of seasonal farm labor housing will be permitted upon a finding of persistent need for migrant farmworker housing in the area and such housing will be used solely by migrant farmworkers while they are away from their residence. Seasonal farm labor housing that will be occupied for six months or less per year by migrant farmworkers while they are away from their residence, will be constructed in accordance with exhibit I to subpart A of part 1924. Farm labor housing that is to be occupied less than year-round but more than six months shall be in substantial conformance with and be easily convertible to the applicable development standards as required by § 1924.5(d)(1) of subpart A of part 1924 of this chapter. Such projects that are to be occupied less than year-round but more than six months may be approved after review of the savings in construction costs, the plan for conversion to full compliance with development standards and the long term need for such housing.
(f) Housing will be constructed and designed with the consideration given to selecting the most economic, energy efficient heating (and cooling, if applicable) systems including, but not limited to, insulation in excess of the requirements of exhibit D of subpart A of part 1924 of this chapter (FmHA Instruction 1924-A, exhibit D); active/passive solar design; building orientation; and sun control measures.
(a)
(1) Providing housing for the members of the immediate family of the applicant when the applicant is an individual farmowner, family farm corporation, or partnership, or an association of farmers. (Immediate family in this instance includes mother, father, brothers, sisters, sons and daughters of applicant(s) and spouse.)
(2) Housing, related facilities, or household furnishings which are elaborate or extravagant in design or material.
(3) Refinancing debts of the applicant.
(4) Moveable-type furnishings or equipment except household furnishings as defined in § 1944.153(c).
(5) Payment of any fees, charges, or commissions to any broker, negotiator, or other person for the referral of a prospective applicant or solicitation of the loan.
(6) Payment of any fee, salary, commission, profit, or compensation to an applicant, or any officer, director, trustee, stockholder, member, or agent of the applicant, except as provided in § 1944.158(i).
(b)
(1) Ninety percent of the total development cost; or
(2) That portion of the total cash development cost which exceeds the sum of any amount the applicant can provide from its own resources plus the amount of a loan which the applicant will be able to repay, with interest, from income from rentals which low-income farmworker families can be reasonably expected to be able to pay. The availability of rental assistance and HUD section 8 subsidies will be considered in determining the rentals that farmworkers will pay.
(c)
(d)
(1) The expenses were incurred:
(i) After the applicant filed a written application for a loan with RHS; or
(ii) before the date of application as part of a predevelopment loan specifically intended as interim financing from a public agency or nonprofit organization and prior concurrence of the National Office is obtained; or
(iii) before the date of application as part of a development loan made to a State or local public agency specifically intended as temporary financing and prior concurrence of the National Office is obtained.
(2) The applicant is unable to pay such expenses from its own resources or from credit from other sources, and failure to authorize the use of loan or grant funds to pay such expenses or reimburse the applicant would impair the applicant's financial position.
(3) The expenses were incurred or payments were made for authorized loan and grant purposes.
(4) Contracts, materials, construction and any land purchase meet FmHA or its successor agency under Public Law 103-354 standards.
(5) Payment of the expenses will remove any liens which have attached and any basis for liens that may attach to the property on account of such expenses.
(e)
(1) For a grant accompanied by an LH loan, the form of resolution attached as exhibit E to this subpart will be used with any necessary changes required or approved by OGC. For a grant not accompanied by an LH loan, the form of resolution will be provided or approved by the National Office, following exhibit E as closely feasible.
(2) The form of resolution to be adopted by the applicant will contain policy and procedural requirements which should be read and be fully understood by the applicant's Board of Directors and officers. Included in the resolution will be provisions authorizing FmHA or its successor agency under Public Law 103-354 to prescribe requirements regarding the operation of the housing and related facilities and other provisions including the following:
(i) The rentals charged domestic farm labor will not exceed such amounts as are approved by FmHA or its successor agency under Public Law 103-354 after considering the income of the occupants and the necessary costs of operation, debt service, and adequate maintenance of the housing.
(ii) The housing will be maintained at all times in a safe and sanitary condition in accordance with standards prescribed by State and local law, and as required by FmHA or its successor agency under Public Law 103-354.
(iii) In granting occupancy of the housing an absolute priority will be given at all times to domestic farm labor.
(3) The resolution will also authorize the appropriate officers of the applicant to execute a “Labor Housing Grant Agreement,” in the format of exhibit F of this subpart. If changes are required in exhibit F they must be approved by OGC.
(f)
(g)
(2) All other loan applicants of this subpart will execute a loan agreement in substantially the same format as exhibit D of this subpart (for rental units) or exhibit K of this subpart (for non-rental units). Any necessary changes must be approved by OGC.
(h) Restrictions on conditions of occupancy. No organizational borrower, other than an association of farmers or family farm corporation or partnership will be permitted to require that an occupant work on any particular farm or for any particular owner or interest as a condition of occupancy of the housing. Tenant selection should be in accordance with exhibit B of subpart C of part 1930 of this chapter. No borrower will discriminate, or permit discrimination by any agent, lessee, or other operator in the use or occupancy of the housing or related facilities because or race, color, religion sex, age, handicap, marital or familial status or National origin. Each borrower will comply with subpart E of part 1901 of this chapter and prepare and submit HUD Form 935.2, “Affirmative Fair Housing Marketing Plan,” which is available in any FmHA or its successor agency under Public Law 103-354 Office.
(i)
(j)
(2) Single family type housing designed for year-round occupancy, as explained in exhibit A-3 of this subpart, will be located:
(i) On plotted lots within a subdivision which complies with all local requirements and is developed in accordance with subpart C of part 1924 of this chapter; or
(ii) On scattered sites located to meet the location requirements of subpart C of part 1924 of this chapter and part 1944 subpart A.
(3) Housing designed for seasonal occupancy, whether single family or multifamily type housing may be located on the farm as long as it is not located near farm service buildings and will be situated to allow for possible conversion to full-year occupancy should the need for migrant farmworkers in the area change.
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(1) Generally, sites which will involve relocation of displaced persons should not be considered if alternative sites are available.
(2) For the purpose of determining the appraisal value of the site to be acquired in respect to LH projects which involve relocation of displaced persons, the designated FmHA or its successor agency under Public Law 103-354 multiple family housing appraiser or such other agency designated appraiser shall be used.
(a)
(b)
(2) If a first mortgage cannot be obtained, a junior mortgage may be taken provided:
(i) The prior mortgage as affected by the State law does not contain such
(ii) Such provisions are satisfactorily limited, modified waived, or subordinated.
(3) If it is impossible for an applicant which is a public or quasi-public organization to give a real estate mortgage, the security to be taken will be determined by the National Office upon the recommendation of the State Director. The State Director should consult OGC as to whether the proposed security is legally permissible
(4) In individual cases, additional security may be advisable to ensure that the loan objectives will be carried out. For example, to provide for more effective management and operation, one or more of the following types of security may be required.
(i) A mortgage on other real estate owned by the applicant.
(ii) A pledge, assignment, mortgage, or other security interest in income from the housing.
(iii) A cosigner on the promissory note, letter of credit, endorsements, assessments, user agreements, personal liability agreements, or membership subscription agreements.
(5) As a general policy, personal liability will be required of the members of an association of farmers.
(c)
(1) If the tract to be mortgaged is covered by a prior lien which also applies to other land, the tract to be given as security must either:
(i) Be released from the prior lien or subordinated to permit a first lien for the LH loan, or
(ii) Provide adequate security for the entire prior lien debt and the LH loan and comply with § 1944.18(b)(6) of part 1944 subpart A.
(2) Personal liability will be required of all stockholders or partners.
(a)
(2) If the loan includes funds for purchasing household furnishings or equipment which will not become part of the real estate, a narrative type appraisal, identifying the items, will be prepared by the employee preparing the real estate appraisal. The value placed on such furnishings will be based on comparable selling prices in the area.
(b)
(c)
(2)
(3)
(4)
(i) Attempt to integrate departmental and State and local land use policies and programs.
(ii) Identify and minimize to the extent practicable adverse environmental, economic, and social effects of FmHA or its successor agency under Public Law 103-354 projects and programs.
(iii) Provide landholders and other concerned people information about the alternatives to, and the associated environmental, social, and economic implications of proposed actions.
(iv) Refrain from enabling others to irreversibly convert these lands or encroaching or enabling other encroachments on flood plains unless there are no practicable alternatives.
(v) In unusual circumstances when the State Director is unable to make a determination regarding land classification, the State Director will request assistance from the Chief of the Natural Resources Conservation Service in Washington, DC.
(d)
(e)
(1) Fire and extended coverage will be required on all buildings included in the security for the loan in accordance with subpart A of part 1806 of this chapter (FmHA Instruction 426.1).
(2) Suitable Workman's Compensation Insurance will be carried by the applicant for all its employees.
(3) The applicant will be advised of the possibility of incurring liability and encouraged, or may be required when appropriate, to obtain liability insurance.
(f)
(g)
(1) Funds furnished by the borrower for the purchase of special equipment and furnishings to be used in connection with the project, for which loan or grant funds could not be used, should not be deposited in the supervised bank account with loan or grant funds.
(2) For all organizations collateral will be pledged by the financial institution for any loan or grant funds or borrower contribution in accordance with § 1902.7 of this chapter.
(3) Funds may be disbursed from the supervised bank account only for authorized loan or grant purposes.
(h)
(i)
(2) If the applicant is an organization, it will provide fidelity coverage for any personnel entrusted with the receipt, custody, and disbursement of any project monies, securities, or readily saleable personal property other than money or securities. Fidelity coverage will be in force as soon as there are assets in the organization in accordance with the provisions described at paragraph XV A of exhibit B of subpart C of part 1930 of this chapter.
(j)
A two-stage application process is used. In stage one, applicants submit a preapplication, which is used to determine preliminary eligibility and feasibility. Preapplications selected for further processing will be invited to submit an application. The preapplication consists of SF-424.2, “Application for Federal Assistance (For Construction)” and the information listed in exhibit A-1 or A-2 of this subpart, as applicable. Preapplications for off-farm new construction loans and grants will be accepted and processed in accordance with this section when NOFA is announced in the
(a)
(2) The preapplication must be submitted in accordance with NOFA and consists of SF-424.2, “Application for Federal Assistance (For Construction)”, and the information required by exhibit A-1 of this subpart. The preapplication will be used by the Agency to determine preliminary eligibility and to score and rank proposals.
(b)
(1) The preapplication was received by the submission deadline specified in NOFA;
(2) The preapplication is complete as specified in NOFA;
(3) The applicant is an eligible entity and is not currently debarred, suspended, or delinquent on any Federal debt; and
(4) The proposal is for authorized purposes.
(c)
(1) The following criteria will be used to score project proposals:
(i) The presence and extent of leveraged assistance, including donated land, for the units that will serve program-eligible tenants, calculated as a
(A) To count as leveraged funds for purpose of the selection criteria:
(
(
(B) For donated land to be scored as leveraged assistance, all of the following conditions must be met.
(
(
(
(C) Points for leveraged assistance will be awarded in accordance with the following table. Percentages will be rounded to the nearest whole number, rounding up at .50 and above and down at .49 and below. For example, 25.50 becomes 26; 25.49 becomes 25. If the total percentage of leveraged assistance is less than ten percent, and it includes donated land, two points will be awarded for the donated land.
(ii) The loan request is in support of an Agency initiative announced in NOFA. (10 points)
(iii) Seasonal, temporary, or migrant housing. (5 points for up to and including 50 percent of the units; 10 points for 51 percent or more)
(iv) For Fiscal Year 1999 and Fiscal Year 2000 funding cycles, outstanding applications or requests that were issued an AD-622, “Notice of Preapplication Review Action,” inviting a formal application, or had been reviewed and authorized by the National Office prior to October 29, 1998. (15 points)
(2) The Agency will rank preapplications by point score. For point-score ties within the State, rank order will be determined by giving first preference to the application with the greatest actual percentage of leveraged assistance. In case of further same-State ties, rank order will be determined by lottery.
(d)
(2) The National Office will rank the preapplications nationwide. In case of point-score ties in the National ranking, first preference will be given to a preapplication to develop units in a state that does not have existing RHS-financed off-farm LH units; second preference to a preapplication from a State that has not yet been selected in the current funding cycle. In the event there are multiple preapplications in either category, one preapplication from each State (the highest State-ranked) will compete by computer-based random lottery. If necessary, the process will be completed until all same-pointed preapplications are selected or funds are exhausted.
(3) The Agency will not select a preapplication for a new LH loan in an area with competing or problem projects when:
(i) The Agency has selected another LH proposal in the same market area for further processing;
(ii) A previously authorized or approved Agency, HUD, or similar assisted MFH project in the same market area serving farmworkers has not been completed or reached its projected occupancy level; or
(iii) An existing Agency, HUD, or similar assisted MFH project in the same market area serving farmworkers is experiencing high vacancy levels, unless such vacancy is planned as part of the occupancy cycle of a seasonally-operated migrant farmworker facility.
(4) If any selected preapplications cannot meet the processing deadlines established by the Agency to enable processing and fund obligation within the current funding cycle, or if requested leveraged funds are not committed within the timeframe established in NOFA, the Agency will select the next ranked preapplication for processing.
(e)
(1) Applicants selected for further processing will be notified and processed in accordance with this section and § 1944.171.
(2) Project proposals not selected for further processing, including incomplete proposals or those that failed to meet NOFA requirements, or those that could not be reached because of insufficient funds, will be returned to the applicant with the reason they were not selected.
(f)
(2) In all other cases involving loans or grants to organizations, the docket, with any questions or comments of the State Director, will be submitted to OGC for a preliminary opinion as to whether the applicant and the proposed loan meet or can meet the requirements of State law and this subpart.
(3) An original and one copy of the appropriate environmental review document required by subpart G of part 1940 of this chapter must be completed prior to submitting the docket to the National Office for review.
(4) In cases not receiving a National Office review, the following statement is to be added to the Form AD-622: “You are advised against taking any actions or incurring any obligations which would either limit the range of alternatives to be considered, or which would have an adverse effect on the environment. Satisfactory completion of the environmental review process in accordance with subpart G of part 1940 of this chapter must occur prior to loan approval. The issuance of this review action does not constitute site approval.”
(5)
(ii) Method of determining amount of grant. (A) The State Director will examine the income of the project based on the estimated rental charges and operating costs of the housing when in full operation to determine the soundness of the operations. When there is any doubt as to the probable soundness due to unrealistic planning of income or operating expenses, or for other reasons, the housing project and its operation will be discussed with the applicant to determine changes which can be made to correct the deficiencies.
(B) When a sound plan of operation has been agreed upon, the State Director will determine the amount of funds that can be expected to be available from other sources, including a LH loan. The State Director will also determine the amount of income available for loan repayments after allowing for reasonable and necessary maintenance costs, payments on debts of the applicant, and the orderly accumulation of an adequate reserve.
(C) The amount of the grants will be the difference between the amount of funds to be provided in accordance with paragraph (f)(5)(ii)(A) of this section, plus any funds available from the applicant's own resources and the total development cost of the project. In no
(6) When the State Director considers it necessary, any preapplication may be sent to the National Office for evaluation and instructions.
(a)
(b)
(c)
(d)
(e)
(i) Loans for multiple advance construction on PASS or DIAS monthly installments will include the cost of construction
(ii) Loans for interim financed construction may include the cost of interest during construction as authorized in § 1944.158 (j) of this subpart.
(iii) Loans for multiple advance construction on DIAS, with annual installment and deferred principal payments, may include the cost of interest during construction as authorized in § 1944.158 (j).
(2) The advice of the Office of the General Counsel (OGC) should be obtained for all loans and/or grants to organizations and associations of farmers and their comments included in the memorandum to the State Director. If the State Director determines that the loan and/or grant should be approved, the State Director will approve the
(f)
(g)
(h)
The State Director and District Director are authorized to approve loans and/or grants in accordance with this subpart and subpart A of part 1901 of this chapter. The State Director may delegate loan or grant approval in writing to State Office employees other than District Directors. No LH grant may be approved by the State Director without the prior consent of the National Office.
(a)
(1) The applicant is eligible.
(2) The funds are requested for authorized purposes.
(3) The proposed loan or grant is sound.
(4) The security is adequate for the loan.
(5) All preapproval requirements have been met.
(6) Compliance with title VI of the Civil Rights Act will be met.
(7) All other requirements will be met.
(b)
(1) The approving official will prepare and sign Form FmHA or its successor agency under Public Law 103-354 1944-51 in an original and one copy. The State Director, District Director or a designee will record the obligation of loan and/or grant funds for the project through a field office terminal in accordance with the FMI for Form FmHA or its successor agency under Public Law 103-354 1944-51 and the MFH User Procedure.
(2) The individual obligating the loan or grant will record the date and time of the obligation and sign Form FmHA or its successor agency under Public Law 103-354 1944-51 in accordance with the FMI.
(3) The obligation date of loan and/or grant funds will be confirmed through use of field terminals the following work day.
(4) The Finance Office will mail the State Office Form FmHA or its successor agency under Public Law 103-354 1944-57, “MFH Acknowledgement of Obligated Funds/Check Request,” confirming the reservation of funds with the obligation date inserted as required by the FMI for Form FmHA or its successor agency under Public Law 103-354 1944-57. Form FmHA or its successor agency under Public Law 103-354 1944-57 will be prepared and distributed in accordance with the FMI.
(5) Form FmHA or its successor agency under Public Law 103-354 1944-51
(6) Determine the maximum rental rates to be charged domestic farm labor for occupancy of the housing, and advise the applicant, in writing, of these maximum rates. In determining the maximum rental rates due consideration must be given to the income and earning capacity of the prospective occupants of the housing and the cost of operating and maintaining such housing. As a general guide, the rental charges should not exceed 25 percent of the occupant families' estimated adjusted annual income.
(c)
For a loan to an organization, or in special cases, the approved loan or grant docket, including any title evidence, will be sent to OGC by the State Office for preparation of closing instructions and any special legal documents required for closing. The original executed, witnessed loan and grant resolution, or a certified copy of the required loan and grant resolution must be supplied by the applicant in time to be included in the loan or grant docket. If applicable, the docket will also include the proposed grant agreement for OGC review. No docket will be considered which fails to include such a required resolution or proposed agreement. OGC will route the docket, including closing instructions and any such legal documents, to the District Office through the State Office for review and for inclusion of any further instructions needed in closing the loan.
(a)
(1) The docket will be processed to the stage where the FmHA or its successor agency under Public Law 103-354 loan or combination loan and grant would normally be closed. FmHA or its successor agency under Public Law 103-354 loan or combination loan and grant funds will be obligated before the applicant proceeds with the final arrangements for interim commercial financing.
(2) The State Director or District Director may deliver a copy of Form FmHA or its successor agency under Public Law 103-354 1944-57 as evidence of FmHA or its successor agency under Public Law 103-354 commitment, if necessary, or a letter stating that funds in specified amounts have been obligated
(3) FmHA or its successor agency under Public Law 103-354 will undertake similar functions as if FmHA or its successor agency under Public Law 103-354 funds had been advanced from the standpoint of approving construction contracts and the monitoring of construction.
(4) The supervised bank account will normally not be used for funds obtained through interim commercial financing. However, the District Director will approve Form FmHA or its successor agency under Public Law 103-354 1924-18, “Partial Payment Estimate,” to insure that funds are used for authorized purposes.
(5) When the interim financing funds have been expended, the FmHA or its successor agency under Public Law 103-354 loan or combination loan and grant will be closed and permanent instruments will be issued to evidence the FmHA or its successor agency under Public Law 103-354 indebtedness. The FmHA or its successor agency under Public Law 103-354 loan or combination loan and grant proceeds will be used to retire the interim commercial indebtedness.
(6) Before the FmHA or its successor agency under Public Law 103-354 loan or combination loan and grant is closed, the applicant will be required to provide the district Director with statements from the contractor(s), engineer, and attorney that they have been paid in full in accordance with their contracts or other agreements and that there are no unpaid obligations outstanding in connection with the construction of the project. See in addition § 1924.6 of subpart A of part 1924.
(b)
(1) When relatively large amounts of funds are to be expended for purchases of real estate or for other reasons at the time of closing, separate checks for such purposes may be ordered and endorsed by the borrower to the seller or other appropriate party. This will preclude the necessity for depositing such funds in the supervised bank account and reduce the amount of required collateral.
(2) Except as indicated in paragraph (b)(1) of this section, advances will be made only as needed to cover disbursements required by the borrower for a 30-day period. Normally, the advances should not exceed 24 in number or extend longer than 2 years beyond loan closing. The retained percentage withheld from the contract or to assure that construction will be completed in accordance with the contract documents will ordinarily be included in the last advance. Advances will be requested in sufficient amounts to insure that ample funds will be on hand to pay costs of construction, land purchase, legal, engineering, or architectural costs, interest when authorized, and other expenses, as needed. The borrower will prepare Form FmHA or its successor agency under Public Law 103-354 440-11, “Estimate of Funds Needed for 30-day Period Commencing ___,” modified as needed, to show the amount of funds required during the 30-day period. This form will be approved by the District Director. After the District Director determines that the estimates prepared by the borrower are adequate, the District Director will indicate the amount on Form FmHA or its successor agency under Public Law 103-354 1944-57 in accordance with the FMI and request the amount through field office terminals in accordance with MFH User Procedures. As an example, for a loan and/or grant of $100,000, the advances may be made as follows: Assuming that the loan and/or grant will be closed on July 1, the borrower will complete Form FmHA or its successor agency under Public Law 103-354 440-11 in sufficient time so that the funds will be available on, the day of loan closing. The estimates should be broken down for the first advance in a manner similar to the following:
(3) Any deviation from the multiple advance procedure must have the prior approval of the National Office.
(c)
(d)
(e)
(1) The District Director will prepare Form FmHA or its successor agency under Public Law 103-354 1944-53, “Multiple Family Housing Cancellation of U.S. Treasury Check and/or Obligation,” in accordance with the Forms Manual Insert (FMI) as prescribed in FmHA Instruction 1951-B (available in any FmHA or its successor agency under Public Law 103-354 office).
(2) If the loan or grant check is received in the District Office, the District Director will return the check as prescribed in FmHA Instruction 2018-D (available in any FmHA or its successor agency under Public Law 103-354 office).
(3) All interested parties will be notified of cancellation as provided in subpart B of part 1927 of this chapter.
(f)
(g)
(a)
(b)
(c)
(d)
(1) The mortgage or other instrument will contain the following covenant:
“The property described herein was obtained or improved through Federal financial assistance. This property is subject to the provisions of Title VI of the Civil Rights Act of 1964 and the regulations issued pursuant thereto for so long as the property continues to be used for the same or similar purpose for which financial assistance was extended or for so long as the purchaser owns it, whichever is longer.”
(2) For all LH loans, the restrictive-use provisions contained in exhibit A-1 of subpart E of part 1965 of this chapter will be included in the mortgage.
(3) When a loan resolution or loan agreement is used, an additional paragraph will be included in the mortgage to read as follows:
“This instrument also secures the obligations and covenants of Borrower set forth in Borrower's Loan Resolution (Loan Agreement) of
(4) When the borrower is an organization the mortgage will include the following provision:
“Borrower will not require any occupant of the housing or related facilities, as a condition of occupancy, to work or be employed on any particular farm or other place, or work for or be employed by any particular person, firm, or interest.”
(5) For a grant made at the same time as an LH loan, the mortgage securing the loan will contain a provision making it also secure the applicant's obligations under the LH grant agreement. For a grant not made at the same time as an LH loan, the type of security instrument will be determined by the National Office based upon the State Director's recommendation and the advice of OGC.
(e)
(2) The note will be dated the date of loan closing as authorized in subpart B of part 1927 of this chapter.
(3) In the case of multiple advances on PASS or DIAS monthly installments, payments will be deferred for the period of construction and any remaining period until the project is operational. When construction is substantially complete and/or the project is ready for full operation or interest plus principal reaches the “Maximum Debt Limit (MDL) at Amortization Effective Date (AED),” the accrued interest on advances will be capitalized establishing a new loan amount. The MDL at AED will be established according to § 1944.157(a)(7)(iii) of this subpart. The borrower's payment of principal and interest will be established according to the FMI, for Form FmHA or its successor agency under Public Law 103-354 1944-52, “Multiple Family Housing Promissory Note.” At loan closing the Finance Office will be notified of the projected AED and the MDL at AED on Form FmHA or its successor agency under Public Law 103-354 1944-57. When the MDL at AED is reached or the loan is fully advanced, Finance Office will:
(i) Capitalize the construction interest. When there is a remaining obligation balance, the remaining obligation will be cancelled by the Finance Office.
(ii) Notify the District Office of the new loan amount and the borrower's scheduled loan payment.
(iii) Prepare and forward to the District Office Form FmHA or its successor agency under Public Law 103-354 1944-7, “Multiple Family Housing Interest Credit and Rental Assistance Agreement” if RA has been obligated for the project.
(iv) The District Office will complete Forms FmHA 1944-52 and FmHA 1944-7 according to the FMI's.
(4) Deferred principal payments may be permitted up to 2 years when determined to be necessary and advisable. Accrued interest must be paid annually when the loan is closed on DIAS; however, smaller than regular payments of principal or no payments of principal may be provided for the first and second installments after loan closing.
(5) The promissory note(s) will be signed in accordance with subpart B of part 1927 of this chapter and any supplemental instructions from OGC.
(6) After loan closing the original note and copies will be distributed according to the FMI. The loan closing information will be transmitted via the field office terminals when the loan is closed with a promissory note.
(7) For a loan to a public body, the forms of obligation will be determined in accordance with exhibit H to this of subpart.
(f)
(g)
(2) After the loan and/or grant is closed, the account and case folder will be established in accordance with applicable FmHA or its successor agency under Public Law 103-354 regulations (FmHA Instruction 1905-A which is available in any FmHA or its successor agency under Public Law 103-354 office and FmHA Instruction 2033-A which is available in the FmHA or its successor agency under Public Law 103-354 State and National Offices.)
A borrower may obtain financing for more than one project. Each project will be coded as an initial loan or grant when the total number of units are built or purchased at one place at one time. A subsequent loan or grant will be so coded when an additional loan or grant is necessary to complete the units planned with the initial loan or grant. As an example, the borrower may obtain initial loans or grant for more than one project in the same district, in different counties under the same District Office jurisdiction, or in more than one District Office jurisdiction. Codes to be used will be in accordance with the FMI for Forms FmHA 1944-51 and FmHA 1944-57.
Any tenant or prospective tenant seeking occupancy or use of LH or related facilities who believes he/she has been discriminated against because of age, race, color, religion, sex, marital or familial status, handicap or National origin may file a complaint in person with, or by mail to the Office of Fair Housing and Equal Opportunity,
(a) Personnel in FmHA or its successor agency under Public Law 103-354 field offices will provide assistance to the aggrieved party when filling out required forms and filing a complaint.
(b) Each complaint must contain the following information:
(1) The name and address of the respondent.
(2) The name and address of the aggrieved person.
(3) A description and the address of the dwelling which is involved, if appropriate.
(4) A concise statement of the facts, including pertinent dates, constituting the alleged discriminatory housing practice.
(c) Participants in FmHA or its successor agency under Public Law 103-354's housing program failing to comply with the requirements of title VIII, as amended of the Civil Rights Act of 1968, and the respective Affirmative Fair Housing Marketing Plan will make themselves liable to sanction authorized by law, regulations, agreements, rules and/or policies governing the program pursuant to which the application was made. All complaints will be handled in accordance with prescribed procedure.
(a) For general purposes, LH loans and grants will be serviced in accordance with this subpart B of part 1924, subpart C of part 1930, and subpart D of part 1944 of this chapter. Requests for rent increases will be processed in accordance with exhibit C of subpart C of part 1930 of this chapter for nonprofit organizations.
(b) For special servicing of LH loans when the Loan Agreement was waived. There will be many instances where the loan agreement was waived because of a loan agreement waiver provision in this regulation that was in effect for more than 10 years. As a result of regulation change, the State Director shall notify all LH loan farm borrowers within 180 days of the effective date of this regulation, that such labor housing borrowers will be:
(1) Requested to sign a loan agreement;
(2) Required to report tenant occupancy, at least annually (reference exhibit K-1 of this subpart); and
(3) Provided with exhibit K-1 of this subpart.
(i) The above action need not be completed: If there is existing servicing action where a management agreement exists and such agreement is sufficient to satisfy the notification items, or; If there is a pre-existing loan agreement, and paragraphs (b) (2) and (3) of this section are addressed. If the existing loan agreement does not include annual occupancy reporting, then the borrower must be notified in accordance with paragraphs (b) (2) and (3) of this section.
(ii) Refusal of the borrower to participate in the regulatory change should be documented. It shall be the responsibility of the State Director to determine if compliance reviews should be increased from the minimum required by procedure. Additional servicing guidance may be found in subpart N of part 1951 and subpart B (with special emphasis on exhibit F) of part 1965 of this chapter.
(c) All special servicing needs for LH loans to farm borrowers should be incorporated in a management agreement in addition to a loan agreement. Examples of special servicing needs are: When the housing is temporarily not needed for farm laborers; When rent is being charged; When occupied by ineligibles, or; When farmers share housing costs with the borrower in exchange for the occupant(s) labor. The use of a management agreement is not
Rental assistance may be provided to eligible tenants in LH projects in accordance with exhibit E of subpart C of part 1930 of this chapter. Income will be verified for LH tenants requesting rental assistance from all easily identifiable sources by using Form FmHA or its successor agency under Public Law 103-354 1910-5, “Request for Verification of Employment.” Income or portions of income from sources that are not known or not easily contacted will be verified from the best information obtainable. This may include copies of payroll records, tenant's own records, contacts with individuals who may be knowledgeable of the tenant's income, or, if no other verifiable data is available, a notarized affidavit from the tenant attesting to his/her previous year's income. The borrower and tenant will execute Form FmHA or its successor agency under Public Law 103-354 1944-8, “Tenant Certification.” The borrower will be expected to certify only that the income is correctly stated based on the best information available. The borrower will be expected to have the tenants that occupy the project year round and do not have easily verifiable income report monthly income to enable accurate income certification at the end of one year of occupancy.
The Administrator of the Farmers Home Administration or its successor agency under Public Law 103-354 may, in individual cases, make an exception to any requirements of this subpart not required by the authorizing statute if the Administrator finds that application of such requirement would adversely affect the interest of the Government, the immediate health or safety of the tenants or the community. The Administrator will exercise the authority only at the request of the State Director. The State Director will submit the request supported by data: demonstrating the adverse impact; identifying the particular requirement involved; showing proper alternative courses of action; and, identifying how the adverse impact will be eliminated.
The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575-0045. Public reporting burden for this collection of information is estimated to vary from 5 minutes to 150 hours per response, with an average of 11 hours per response including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Department of Agriculture, Clearance Officer, OIRM, room 404-W, Washington, DC 20250; and to the Office of Management and Budget, Paperwork Reduction Project (OMB# 0575-0045), Washington, DC 20503.
The section 514 Labor Housing loan and section 516 Labor Housing grant programs are administered by the Rural Development's Rural Housing Service (RHS), herein referred to as the Agency. Interested parties are advised to contact any Rural Development office processing Labor Housing (LH) loans and grants to obtain information on program and application requirements prior
Payments for technical assistance incurred by a nonprofit group or public body applicant entity for developing and packaging an application will be reimbursed with loan and grant funds. If the services are performed, the proceeds will be limited and must be documented. The reimbursable costs should be negotiated and approved by the Agency in advance of the applicant entity's process of packaging and developing a pre-application. Based upon what is typical in the area, the Agency will respond in writing approving the packaging plan and a range of costs in advance.
Applicants should also be aware that rental assistance (RA) subsidies are available to eligible projects to reduce rents for very low- and low-income farmworkers. RA may be used in conjunction with LH grants to develop feasible LH projects to meet local farmworker housing needs. When at all possible, applicants should consider the use of RA in lieu of a full 90% grant for LH projects with year-round occupancy.
1. Financial Statement—A current, dated, and signed financial statement showing assets and liabilities with information on the repayment schedule and status of all debts. If the applicant is an association of farmers, a current financial statement will also be required from each member who holds an interest in the association in excess of 10 percent. If the applicant is a limited partnership, financial statements are required from each general partner who holds an interest in the organization, and from each limited partner who will have 10 percent or more ownership. The financial statement must reflect sufficient financial capacity to meet the initial operating capital requirements. Loan or grant funds may be used to provide the required initial operating capital for nonprofit entities and State or local public agencies. If the applicant is a limited partnership, the financial statement must also demonstrate sufficient capacity to meet the applicant's equity contribution.
2. All applicants, except State and local public agencies, must provide evidence that they are unable to obtain credit from other sources. Letters from credit institutions who normally provide real estate loans in the area should be obtained and these letters should indicate the rates and terms upon which a loan might be provided.
3. If a Labor Housing (LH) grant is requested, the applicant should provide a statement on their projected use of Rental Assistance (RA) and their need for a LH grant. This statement should include preliminary estimates of the rents required with and without a grant and the relative need for a grant if RA is provided to supplement market rents for eligible farmworkers. [LH grants and RA are not available to associations of farmers; LH grants are not available to limited partnerships.]
4. A statement of the applicant's experience in operating LH or other rental housing. If the applicant's experience is limited, additional information should be provided to indicate how the applicant plans to compensate for this limited experience. (i.e., obtaining assistance and advice of a management firm, non-profit group, public agency, or other organization which is experienced in rental management and will be available on a continuous basis).
5. A brief statement explaining the applicant's proposed method of operation and management. This does not have to be a full-fledged management plan, as outlined by exhibit B of this subpart; however, it should generally explain how the applicant proposes to operate the facility. (i.e., on-site manager, contracting for management services, etc.).
6. Applicants must provide a copy of or an accurate citation to the special provisions of State law under which the applicant is or is to be organized, a copy of the applicant's charter, Articles of Incorporation, bylaws, and other basic authorizing documents; names, occupations, and addresses of the applicant's members, directors, and officers; and, if a member or subsidiary of another organization, its name, address, and principal business.
A preliminary survey should be conducted to identify the supply and demand for LH in the market area. The market area must be clearly identified and may include only the area from which tenants can reasonably be drawn for the proposed project. The applicant must provide documentation to justify
1. The annual income level of farmworker families in the area and the probable income of those farmworkers who are most apt to occupy the proposed unit.
2. A realistic estimate of the number of farmworkers who are home-based in the area and the number of farmworkers who normally migrate into the area. Information on migratory workers should indicate the average number of months the migrants reside in the area and an indication of what type of family groups are represented by the migrants (i.e., single individuals as opposed to families). Much of this information may be available from the local office of the Rural Manpower Services section of the Department of Employment Services.
3. General information concerning the type of labor intensive crops grown in the area and prospects for continued demand for farm laborers (i.e., prospects for mechanization, etc.). Information may be available from the local U.S. Department of Agriculture (USDA) Cooperative, State, Research, Education and Extension Service office or from the Farm Service Agency.
4. The overall occupancy rate for comparable rental units in the area and rents charged and customary rental practices for these units (i.e., will they rent to large families, do they require annual leases, etc.). This information may be available from census data, local planning organizations, or local housing authorities.
5. The number, condition, adequacy, ownership and rental rates for units currently used or available to farmworkers. This information may be available from local farmworker advocacy groups, Rural Manpower Services, or social service agencies.
6. A description of the units proposed, including number, type, size, rental rates, amenities such as carpets and drapes, related facilities such as a laundry room or community room and other facilities providing supportive services in connection with the housing and the needs of the prospective tenants such as a health clinic or day care facility; estimated development timeline; estimated total development cost and applicant contribution. If the application includes leveraged funds, include documentation of the dollar amount, source, and commitment status.
The market survey is one of the most important determinates of the overall feasibility of the proposed project. Therefore, the applicant may wish to do a more detailed study of the market in accordance with item II J below. Endorsement of the proposal by community leaders will not be required.
The applicant will complete Form RD 1940-20, “Request for Environmental Information,” along with a description of anticipated environmental issues or concerns.
Each applicant will prepare and submit HUD 935.2, “Affirmative Fair Housing Marketing Plan,” where they propose developing five (5) or more units. The plan will reflect that occupancy is
1. Evidence of site control such as an option or sales contract; a map and description of the proposed site, including the availability of water, sewer, and utilities, and proximity to community facilities and services such as shopping, schools, transportation, doctors, dentists, and hospitals.
2. Preliminary plans and specifications, including plot plans, building layouts, and type of construction and materials.
3. A supportive services plan describing services that will be provided on-site or made available to tenants through cooperative agreements with service providers in the community, such as a health clinic or day care facility. Off-site services must be accessible and affordable to farmworkers and their families. Letters of intent from service providers are acceptable documentation at the preapplication stage.
A. After the applicant has received the signed SF 424.2 authorizing the applicant to proceed to develop a final application, the applicant and the applicant's architect should meet with the FmHA or its successor agency under Public Law 103-354 architect/engineer and other officials responsible for loan processing. During this preprocessing meeting, FmHA or its successor agency under Public Law 103-354 will discuss the services which the applicant's architect will be expected to provide and will also explain the items needed to complete the final application such as Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information,” if not previously submitted in the pre-application stage.
If after the preprocessing meeting the applicant believes that the Labor Housing (LH) project can be developed within the guidelines required by FmHA or its successor
B. If applicable, evidence of compliance with 7 CFR part 3015 subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities.” See FmHA Instruction 1940-J, available in any FmHA or its successor agency under Public Law 103-354 office.
C. Proposed contracts for architectural, engineering, and legal services as applicable. FmHA or its successor agency under Public Law 103-354 approval of these contracts should be obtained before execution of the contract.
D. A plot plan and detailed preliminary drawings and specifications prepared in accordance with subpart A of part 1924 of this chapter. Exhibit A-3 provides FmHA or its successor agency under Public Law 103-354's general philosophy and standards concerning the construction of LH facilities.
E. A detailed cost breakdown of the project for items such as land purchase, right-of-ways, building construction, equipment, utility connections, on-site improvements, architectural and/or engineering services, and legal services. Also, if applicable, the cost breakdown should include the costs incurred for the development and packaging of its own application. These costs may range from 2 to 4 percent of total development cost (excluding initial operating and capital expenses) and should reflect costs that are reasonable and typical for the area. Costs in excess of 4 percent will not be reimbursed. If an LH grant is proposed, construction will be subject to the provisions of the Davis-Bacon and related Acts. LH grant applications should, therefore, obtain a copy of the Department of Labor regulations (29 CFR part 5), which contain the applicable labor standards provisions.
F. Satisfactory evidence of review and approval of the proposed housing, including compliance with zoning requirements by State and local officials, as required by applicable State or local laws, ordinances, or regulations.
G. If not already provided in the pre-application submittal, a map of the proposed site showing the location of the site in relation to available facilities such as schools, shopping, churches, hospitals, etc. In addition, supporting information should be provided indicating that essential utilities such as sewer, water, electricity, etc., will be available to the project. (See exhibit A-3 for FmHA or its successor agency under Public Law 103-354's general requirements for location of LH facilities).
H. A description of and justification for any related facilities such as community or multi-purpose type buildings, cafeterias, dining halls, infirmaries, child care facilities, etc. To be included for funding by FmHA or its successor agency under Public Law 103-354, the facilities should not be of extravagant design and their size must be commensurate with the needs of the farmworkers who will occupy the housing facility. Any long-term agreements which are contemplated with other agencies for services such as manpower training, migrant health services, child care, and education programs should be explained and included as justification for the related facilities.
I. A detailed market analysis addressing in detail the pre-application information required under item I B above, “Need and Demand,” should be conducted in accordance with the following:
1. The market area (i.e., the area from which tenants can reasonably be drawn for the project) should be clearly identified.
2. Adequate existing units which are currently available or which could become available should be surveyed and information obtained and recorded in a format similar to exhibit A-4.
3. Individual farmworkers and farmworker groups should be contacted and their ideas obtained concerning the type of housing which would gain the greatest acceptance. (This information may not seem important at the outset of the loan if there is a pressing need for LH, however, to assure a long-term demand for the project, consideration should be given to the views of the prospective tenants).
4. The above items should then be correlated to arrive at a realistic estimate of the total need for units, type of units, estimated occupancy, maximum rental rates which can be charged for the units, and the type of amenities or related facilities which should be provided.
J. Proposed, detailed operating budgets for: (1) The first year of operation, and (2) a typical year's operation. The overall percentage of occupancy should be based upon the data collected in the market analysis. Operating costs should be realistic and should reflect somewhat higher than normal maintenance costs and an allowance for the establishment of a reserve as required by the loan agreement. The budget should be prepared in a format similar to exhibit A-5.
K. A management plan which includes the applicable items of exhibit B.
L. When the loan is to be secured by a junior real estate lien, certain agreements will be required from prior lien holders. The local or State FmHA or its successor agency under Public Law 103-354 Official will provide the applicable agreements.
M. An option to purchase or other evidence of ability to purchase or evidence of ownership for the proposed site.
When the final application is assembled it should be submitted to the local FmHA or
A.
B.
C.
D.
E.
F.
G.
H.
I.
J. Each applicant will prepare and submit HUD 935.2, “Affirmative Fair Housing Marketing Plan”, where they propose developing five (5) or more units. The plan will reflect that occupancy is limited to their employees and that they will not discriminate on the basis of race, color, sex, age, handicap, marital or familial status or National origin.
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This exhibit provides the Farmers Home Administration or its successor agency under Public Law 103-354's (FmHA's) general guidelines and policies concerning the planning, location, and construction of housing for farmworkers. The type of housing should be in accordance with the needs of the prospective tenants. Multi-family type units are encouraged whenever possible; however, when planning units for farmworker families, lower density building design and layout is normally desirable. Housing should be designed in such a manner that it will be decent, safe, sanitary, and modest in size and cost. Actual plans, specifications, and contract documents should be prepared in accordance with subpart A of part 1924.
a. Single-family type housing is defined as an individual or a group of individual single family detached dwelling units. These type units should meet the following standards:
1. All sites shall be planned and constructed in accordance with subpart C of part 1924 of this chapter.
2. All planning and construction other than seasonal farm labor housing and housing to be occupied more than six months but less than year-round shall be in conformance with the applicable development standard as required by § 1924.5(d)(1) of subpart A of part 1924 of this chapter and applicable state and local codes.
b. Multi-family type housing is defined as a project or a number of projects encompassing a building or buildings containing more than one dwelling unit and may include mixtures of detached and multi-unit structures in a project. These type units should meet the following standards:
1. All housing designed for year-round occupancy will be planned in compliance with the applicable development standard and will be compatible with conventional rental type housing.
2. Housing for seasonal occupancy (less than six months) shall be designed and constructed in accordance with exhibit I to subpart A of part 1924 of this chapter.
3. Housing to be occupied more than six months but less than year-round shall be designed and constructed in substantial conformance with and be easily converted to the applicable development standard requirements for year-round housing.
4. All planning and construction should be in conformance with applicable State and local codes.
The management of a rental project, regardless of the type of tenants, is one of the most, if not the most, important determinants of the success or failure of a proposed project.
The management plan, therefore, as the primary management charter should constitute a comprehensive description of the detailed policies and procedures to be followed in managing the project and should as a minimum address the following items:
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16. The management plan must be signed and dated by the borrower or the borrower's authorized representative.
LOAN RESOLUTION OF ________ _, 19_
Be it resolved:
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(b) With the prior consent of the Government, funds in the Reserve Account may be used by the Corporation—
(1) To meet payments due on the loan obligations in the event the amount in the Debt Service Account is not sufficient for the purpose.
(2) To pay costs of repairs or replacements to the housing caused by catastrophe or long-range depreciation which are not current expenses under section 7.
(3) To make improvements or extensions to the housing.
(4) For other purposes desired by the Corporation which in the judgment of the Government likely will promote the loan purposes without jeapordizing collectibility of the loan or impairing the adequacy of the security, or will strengthen the security, or will facilitate, improve, or maintain the orderly collectibility of the loan.
(c) Any amount in the Reserve Account which exceeds the aggregate sum specified in subsection (a), and is not agreed between the Corporation and the Government to be used for purposes authorized in subsection 9(b) shall be applied promptly on the loan obligations.
10.
(a) Impose and collect such fees, assessments, rents, and charges that the income of the Corporation will be sufficient at all times for operation and maintenance of the housing, payments on the loan obligations, and maintenance of the accounts herein provided for.
(b) Maintain complete books and records relating to the Corporation's financial affairs, cause such books and records to be audited at the end of each fiscal year, promptly furnish the Government without request a copy of each audit report, and permit the Government to inspect such books and records at all reasonable times.
(c) If required or permitted by the Government, revise the accounts herein provided for, or establish new accounts, to cover handling and disposition of income from and payment of expenses attributable to the housing or to any other property securing the loan obligations, and submit to the Government regular and special reports concerning the housing or the Corporation's financial affairs.
(d) Unless the Government gives prior consent—
(1) Not use or permit use of the housing for any purpose other than as housing and related facilities for domestic farm labor.
(2) Not enter into any contract or agreement for improvements or extensions to the housing or other property securing the loan obligations.
(3) Not cause or permit voluntary dissolution of the Corporation, nor merge or consolidate with any other organization, nor cause or permit any transfer or encumberance of title to the housing or any part thereof or interest therein, by sale, mortgage, lease, or otherwise, nor engage in any other new business, enterprise, or venture than operation of the housing.
(4) Not cause or permit the issuance or transfer of any stock, borrow any money, nor incur any liability aside from current expenses as defined in section 7.
(e) Submit the following to the Government for prior review and approval not less than __ days before the effective dates, unless approval is waived by the Government:
(1) Annual budgets and operating plans.
(2) Statements of management policy and practice, including eligibility criteria and implementing rules for occupancy of the housing.
(3) Proposed rents and charges and other terms of rental agreements.
(4) Rates of compensation to officers and employees of the Corporation payable from or chargeable to any account provided for in this resolution.
(f) If required by the Government, modify and adjust any matters covered by clause (e) of this section.
(g) Comply with all its agreements and obligations in or under the note, security instrument, and any related agreement executed by the Corporation in connection with the loan.
(h) Not alter, amend, or repeal without the Government's consent this resolution or the bylaws or articles of incorporation of the Corporation, which shall constitute parts of the total contract between the Corporation and the Government relating to the loan obligations.
(i) Do other things as may be required by the Government in connection with the operation of the housing, or with any of the Corporation's operations or affairs which may affect the housing, the loan obligations, or the security.
11.
12.
(a) It is expressly understood and agreed that any loan made will be administered subject to the limitations of the authorizing act of Congress and related regulations, and that any rights granted to the Government herein or elsewhere may be exercised by it in its sole discretion to carry out the purposes of the loan, enforce such limitations, and protect the Government's financial interest in the loan and the security.
(b) The provisions of this resolution are representations to the Government to induce the Government to make a loan to the Corporation as aforesaid. If the Corporation should fail to comply with or perform any provision of this resolution or any requirement made by the Government pursuant to this resolution, such failure shall constitute default as fully as default in payment of amounts due on the loan obligations. In the event of such failure, the Government at its option may declare the entire amount of the loan obligations immediately due and payable, and, if such entire amount is not paid forthwith, may take possession of and operate the housing and proceed to foreclose its security and enforce all other available remedies.
(c) Upon request by the Government the Corporation will permit representatives of the Government to inspect and make copies of any of the records of the Corporation pertaining to this loan. Such inspection and copying may be made during regular office hours of the Corporation, or any other time the Corporation and the Government finds convenient.
(d) Any provisions of this resolution may be waived by the Government in its sole discretion, or changed by agreement between the Government and the Corporation, after this resolution becomes contractually binding, to any extent such provisions could legally have been foregone, or agreed to in amended form, by the Government initially.
(e) Any notice, consent, approval, waiver, or agreement must be in writing.
(f) This resolution may be cited in the security instrument and any other instruments or agreements as the “Loan Resolution of (date of this resolution) _______ 19__.”
The undersigned, __________, the Secretary of the Corporation identified in the foregoing Loan Resolution, hereby certifies that the foregoing is a true copy of a resolution duly adopted by the board of directors on ___________ 19__, which has not been altered, amended, or repealed.
__________
(Date)
__________
(Secretary)
1.
2.
3.
4.
5.
6.
7.
8.
(a) Immediately after each transfer to the Debt Service Account as provided in section 7, any balance in the General Fund Account shall be transferred to the Reserve Account. Funds in the Reserve Account may be used only as authorized in this agreement and until so used shall be held by the Borrower in trust as security for the loan obligations. Transfers at a rate not less than $________
(b) With the prior consent of the Government, funds in the Reserve Account may be used by Borrower—
(1) To meet payments due on the loan obligations in the event the amount in the Debt Service Account is not sufficient for the purpose.
(2) To pay costs of repairs or replacements to the housing caused by catastrophe or long-range depreciation which are not current expenses under section 6.
(3) To make improvements or extensions to the housing.
(4) For other purposes desired by Borrower which in the judgment of the Government likely will promote the loan purposes without jeopardizing collectibility of the loan or impairing the adequacy of the security, or will strengthen the security, or will facilitate, improve, or maintain the orderly collectibility of the loan.
(5) For any purpose desired by Borrower, provided Borrower determines that after such disbursement (a) the amount in the Reserve Account will be not less than that required by subsection 8(a) to be accumulated by that time, and (b) during the next 12 months the amount in the Reserve Account will likely not fall below that required to be accumulated by the end of such period.
(c) Any amount in the Reserve Account which exceeds the aggregate sum specified in subsection 8(a) and is not agreed between the borrower and the Government to be used for purposes authorized in subsection 8(a) shall be applied promptly on the loan obligations.
9.
(a) Impose and collect such fees, assessments, rents, and charges that his income will be sufficient at all times for operation and maintenance of the housing, payments on the loan obligations, and maintenance of the accounts herein provided for.
(b) Maintain complete books and records relating to his financial affairs, cause such books and records to be audited at the end of each fiscal year, promptly furnish the Government without request a copy of each audit report, and permit the Government to inspect such books and records at all reasonable times.
(c) If required by the Government, revise the accounts herein provided for, or establish new accounts, to cover handling and disposition of income from and payment of expenses attributable to the housing or to any other property securing the loan obligations, and submit regular and special reports concerning the housing or Borrower's financial affairs.
(d) Unless the Government gives prior consent—
(1) Not use the housing for any purpose other than as labor housing and related facilities for domestic farm laborers.
(2) Not enter into any contract or agreement for improvements or extensions to the housing or other property securing the loan obligations.
(3) Not cause or permit the transfer or encumbrance of title to the housing or any part thereof or interest therein, by sale, mortgage, lease, or otherwise.
(e) Submit the following to the Government for prior review and approval not less than ____ days before the effective dates.
(1) Annual budgets and operating plans, including proposed rents and charges and other terms of rental agreements for occupancy and compensation to employees chargeable as operating expenses of the housing.
(2) Statements of management policy and practice, including eligibility criteria and implementing rules for occupancy of the housing.
(f) If required by the Government, modify and adjust any matters covered by clause (e) of this section.
(g) Do other things as may be required by the Government in connection with the operation of the housing or with any of Borrower's operations or affairs which may affect the housing, the loan obligations, or the security.
10.
11.
(a) It is understood and agreed by Borrower that any loan made or insured will be administered subject to the limitations of the authorizing act of Congress and related regulations, and that any rights granted to the Government herein or elsewhere may be exercised by it in its sole discretion to carry out the purposes of the loan, enforce such limitations, and protect the Government's financial interest in the loan and the security.
(b) Borrower shall also comply with all covenants and agreements set forth in the note, security instrument, and any related agreements executed by Borrower in connection with the loan.
(c) The provisions of this agreement are representations to the Government to induce the Government to make or insure a loan to Borrower as aforesaid. If Borrower should
(d) Upon request by the Government the Borrower will permit representatives of the Government to inspect and make copies of any of the records of the Borrower pertaining to this loan. Such inspection and copying may be made during regular office hours of the Borrower, or any other time the Borrower and the Government finds convenient.
(e) Any provisions of this agreement may be waived by the Government, or changed by agreement between the Government and Borrower to any extent such provisions could legally have been foregone, or agreed to in any amended form, by the Government initially. Any notice, consent, approval, waiver, or agreement must be in writing.
(f) This agreement may be cited in the security instrument and other instruments or agreements as the “Loan Agreement of (date of this agreement)________ 19___.”
Loan and Grant Resolution of ____, 19__ Resolution of the Board of Directors of _________ providing for obtaining financial assistance in the amount $_____ to aid in financing federally defined low-rent housing and related facilities for low-income domestic farm labor, and related matters. Whereas _____________________ (herein referred to as the “Corporation”) is organized and operating under and the board of (authorizing State statute) ___________________ directors of the Corporation has determined that—
(a) The Corporation should provide low-rent housing and related facilities for low-income domestic farm labor, as defined in title V of the Housing Act of 1949.
(b) The estimated total cash development cost of such housing and facilities amounts to $_____.
(c) For such purpose the Corporation is able to furnish from its own resources $_____.
(d) The Corporation will need financial assistance in the amount of $_____ which the Corporation is unable to obtain from other sources for such purpose upon terms and conditions which the Corporation could reasonably be expected to fulfill.
(e) Of such amount of needed financial assistance the Corporation will be able to repay, with interest at 1% per annum, the amount of $_____ over a repayment period of___ years, if the balance of $_____ is made available to the Corporation as a grant.
(f) The housing and related facilities will fulfill a pressing need in the area in which they are or will be located.
(g) The housing and facilities cannot be provided without the aid of a grant in the amount stated above:
1.
2.
3.
4.
5.
6.
7.
8.
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(b) With the prior consent of the Government, funds in the Reserve Account may be used by the Corporation—
(1) To meet payments due on the loan obligations in the event the amount in the Debt Service Account is not sufficient for the purpose.
(2) To pay costs of repairs or replacements to the housing caused by catastrophe or long-range depreciation which are not current expenses under section 7.
(3) To make improvements or extensions to the housing.
(4) For other purposes desired by the Corporation which in the judgment of the Government likely will promote the loan or grant purposes without jeopardizing collectibility of the loan or impairing the adequacy of the security, or will strengthen the security, or will facilitate, improve, or maintain the orderly collectibility of the loan.
(c) Any amount in the Reserve Account which exceeds the sum specified in sub-section (a), and is not agreed between the Corporation and the Government to be used for purposes authorized in subsection (b) shall be applied promptly on the loan obligations.
10.
(a) Impose and collect such fees, assessments rents, and charges that the income of the Corporation will be sufficient at all times for operation and maintenance of the housing payments on the loan obligations, and maintenance of the accounts herein provided for.
(b) Maintain complete books and records relating to the Corporation's financial affairs, cause such books and records to be audited at the end of each fiscal year, promptly furnish the Government without request a copy of each audit report, and permit the Government to inspect such books and records at all reasonable times.
(c) If required or permitted by the Government, revise the accounts herein provided for, or establish new accounts to cover handling and disposition of income from the payment of expenses attributable to the
(d) Unless the Government gives prior consent—
(1) Not use or permit use of the housing for any purpose other than as low-rent housing and related facilities for low-income domestic farm labor, as those terms are defined by the Government.
(2) Not enter into any contract or agreement for improvements or extensions to the housing or other property securing the loan or grant obligations.
(3) Not cause or permit voluntary dissolution of the Corporation, nor merge or consolidate with any other organization, nor transfer or encumber title to the housing or any part thereof or interest therein, by sale, mortgage, lease, or other conveyance or encumbrance, nor engage in any other new business, enterprise, or venture than operation of the housing.
(4) Not borrow any money, nor incur any liability aside from current expenses as defined in Section 7.
(e) Submit the following to the Government for prior review not less then _____ days before the effective dates:
(1) Annual budgets and operating plans.
(2) Statements of management policy and practice including eligibility criteria and implementing rules for occupancy of the housing.
(3) Proposed rents and charges and other terms of rental agreements for occupancy of the housing.
(4) Rates of compensation to officers and employees of the Corporation payable from or chargeable to any account provided for in this resolution.
(f) If required by the Government, modify and adjust any matters covered by clause (e) of this section.
(g) Comply with all its agreements and obligations in or under this resolution, the note, Grant Agreement, security instrument, and any related agreement executed by the Corporation in connection with the loan or grant.
(h) Not alter, amend, or repeal without the Government's consent this resolution or the bylaws or articles of incorporation of the Corporation, which shall constitute parts of the total contract between the Corporation and the Government relating to the loan and grant obligations.
(i) Do other things as may be required by the Government in connection with the operation of the housing, or with any of the Corporation's operations or affairs which may affect the housing, the loan or grant obligations, or the security.
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12
(b) The provisions of this resolution are representations of the Corporation to induce the Government to make or insure a loan or make a grant to the Corporation as aforesaid. If the Corporation should fail to comply with or perform any of its loan or grant obligations, such failure shall constitute default as fully as default in payment of amounts due on the loan obligations. In the event of default, the Government at its option may declare the entire amount of the loan and grant obligations immediately due and payable and, if such entire amount is not paid forthwith, may take possession of and operate the housing and proceed to foreclose its security and enforce all other available remedies.
(c) Upon request by the Government the corporation will permit representatives of the Government to inspect and make copies of any of the records of the corporation pertaining to the financial assistance. Such inspection and copying may be made during regular office hours of the corporation, or any other time the corporation and the Government finds convenient.
(d) Any provisions of this resolution may be waived by the Government in its sole discretion, or changed by agreement between the Government and the Corporation, after this resolution becomes contractually binding, to any extent such provisions could legally have been foregone, or agreed to in amended form, by the Government initially.
(e) Any notice, consent, approval, waiver, or agreement must be in writing.
(f) This resolution may be cited in the security instrument and elsewhere as the “Loan and Grant Resolution of (date of this resolution) _________ 19__.”
The undersigned, _________, the Secretary of the corporation identified in the foregoing resolution, hereby certifies that the foregoing is a true copy of a resolution duly adopted by the board of directors
THIS AGREEMENT dated ______, 19__,
Whereas Grantee has determined to undertake a project of acquisition, construction, enlargement and/or capital improvement of a Labor Housing Project to serve domestic farm laborers at an estimated cost of $_____ and has duly authorized the undertaking of such project.
Grantee is able to finance not more than $_____ of the development costs through revenues, charges, taxes or assessments, or funds otherwise available to Grantee resulting in a reasonable rental rate.
Said sum of $_____ has been committed to and by Grantee for such project development costs.
Grantor has agreed to grant the Grantee a sum not to exceed $_____ subject to the terms and conditions established by the Grantor. Provided, however, that the proportionate share of any grant funds actually advanced and not needed for grant purposes shall be returned immediately to the Grantor. The Grantor may terminate the grant in whole, or in part, at any time before the date of completion, whenever it is determined that the Grantee has failed to comply with the conditions of the grant.
Now therefore, in consideration of said grant by Grantor to Grantee, to be made pursuant to Section 516 of the Housing Act of 1949 for the purpose only of defraying a part not to exceed __ percent of the development costs, as defined by applicable Farmers Home Administration or its successor agency under Public Law 103-354 instructions.
Grantee agrees that Grantee will:
A. Cause said project to be constructed within the total sums available to it, including said grant, in accordance with the project plans and specifications and any modifications thereof prepared by Grantee and approved by Grantor.
B. Permit periodic inspection of the construction by a representative of Grantor during construction.
C. Manage, operate and maintain the project, including these units if less than the whole of said project, continuously in an efficient and economic manner.
D. Make services of said project available within its capacity to all domestic farm laborers in borrowers/grantees service area without discrimination because of race, color, religion, sex, age, handicap, marital or familial status, or National origin at reasonable rental rates, whether for one or more types of units, adopted by resolution dated __ 19 __, as may be revised from time to time by Grantee. The initial rental rates must be approved by the Grantor. Thereafter, Grantee may not make changes to the rental rate structure without prior authorization from the Grantor.
E. Adjusts its operating costs and service charges from time to time to provide for adequate operation and maintenance, emergency repair reserves, obsolescence reserves, debt service and debt service reserves.
F. Provide Grantor with such periodic reports as it may require and permit periodic inspection of its operations by a representative of the Grantor.
G. To execute Form FmHA or its successor agency under Public Law 103-354 400-1, “Equal Opportunity Agreement,” and to execute Form 400-4, “Assurance Agreement,” and to execute any other agreements required by Grantor which Grantee is legally authorized to execute. If any such form has been executed by Grantee as a result of a loan being made to Grantee by Grantor contemporaneously with the making of this grant, another form of the same type need not be executed in connection with this grant.
H. Upon any default under its representations or agreements set forth in this instrument, Grantee, at the option and demand of Grantor, will repay to Grantor forthwith the original principal amount of the grant stated hereinabove, with interest at the rate of 5 percentum per annum from the date of the default. Default by the Grantee will constitute termination of the grant thereby causing cancellation of Federal assistance under the grant. The Provisions of this Grant agreement may be enforced by Grantor, at its option and without regard to prior waivers by it of previous defaults of Grantee, by judicial proceedings to require specific performance of the terms of this Grantee Agreements or by such other proceedings in law or equity, in either Federal or State courts, as may be deemed necessary by Grantor to assure compliance with the provisions of this Grant Agreement and the laws and regulations under which this grant is made.
I. Return immediately to Grantor, as required by the regulations of Grantor, any grant funds actually advanced and not needed by Grantee for approved purposes.
J. Use the real property including land, land improvements, structures, and appurtenances thereto, for authorized purposes of the grant as long as needed.
1. Title to real property shall vest in the recipient subject to the condition that the Grantee shall use the real property for the authorized purpose of the original grant as long as needed.
2. The Grantee shall obtain approval by the Grantor agency for the use of the real property in other projects when the Grantee determines that the property is no longer needed for the original grant purposes. Use in other projects shall be limited to those under other Federal grant programs or programs that have purposes consistent with those authorized for support by the Grantor.
3. When the real property is no longer needed as provided in 1 and 2 above, the Grantee shall request disposition instructions from the Grantor agency or its sucessor Federal agency. The Grantor agency shall observe the following rules in the disposition instructions.
(a) The Grantee may be permitted to retain title after it compensates the Federal Government in an amount computed by applying the Federal percentage of participation in the cost of the original project to the fair market value of the property.
(b) The Grantee may be directed to sell the property under guidelines provided by the Grantor agency and pay the Federal Government an amount computed by applying the Federal percentage of participation in the cost of the original project to the proceeds from sale (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the Grantee is authorized or required to sell the property, proper sales procedures shall be established that provide for competition to the extent practicable and result in the highest possible return.
(c) The Grantee may be directed to transfer title to the property to the Federal Government provided that in such cases the Grantee shall be entitled to compensation computed by applying the Grantee's percentage of participation in the cost of the program or project to the current fair market value of the property.
This Grant Agreement covers the following described real property (use continuation sheets as necessary).
K. Abide by the following conditions pertaining to nonexpendable personal property which is furnished by the Grantor or acquired wholly or in part with grant funds. Nonexpendable personal property means tangible personal property having a useful life of more than one year and an acquisition cost of $300 or more per unit. A Grantee may use its own definition of nonexpend-able personal property provided that such definition would at least include all tangible personal property as defined above.
1. Use of nonexpendable property.
(a) The Grantee shall use the property in the project for which it was acquired as long as needed. When no longer needed for the original project, the Grantee shall use the property in connection with its other Federally sponsored activities, if any, in the following order of priority:
(1) Activities sponsored by the FmHA or its successor agency under Public Law 103-354.
(2) Activities sponsored by other Federal agencies.
(b) During the time that nonexpendable personal property is held for use on the project for which it was acquired, the Grantee shall make it available for use on other projects if such other use will not interfere with the work on the project for which the property was originally acquired. First preference for such other use shall be given to FmHA or its successor agency under Public Law 103-354 sponsored projects. Second preference will be given to other Federally sponsored projects.
2. Disposition of nonexpendable property. When the Grantee no longer needs the property as provided in paragraph (a) above, the property may be used for other activities in accordance with the following standards:
(a) Nonexpendable property with a unit acquisition cost of less than $1000. The Grantee may use the property for other activities without reimbursement to the Federal Government or sell the property and retain the proceeds.
(b) Nonexpendable personal property with a unit acquisition cost of $1000 or more. The Grantee may retain the property for other uses provided that compensation is made to the original Grantor agency or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the property. If the Grantee has no need for the property and the property has further use value, the Grantee shall request disposition instructions from the original Grantor agency.
The Grantor agency shall determine whether the property can be used to meet the agency's requirements. If no requirement exists within the agency, the availability of the property shall be reported, in accordance with the guidelines of the Federal Property Management Regulations (FPMR), to the General Services Administration by the Grantor agency to determine whether a requirement for the property exists in other Federal agencies. The Grantor agency shall issue instructions to the Grantee no later
(1) If so instructed or if disposition instructions are not issued within 120 calendar days after the Grantee's request, the Grantee shall sell the property and reimburse the Grantor agency an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the Grantee shall be permitted to deduct and retain from the Federal share $100 or ten percent of the proceeds, whichever is greater, for the Grantee's selling and handling expenses.
(2) If the Grantee is instructed to ship the property elsewhere the Grantee shall be reimbursed by the benefitting Federal agency with an amount which is computed by applying the percentage of the Grantee participation in the cost of the original grant project or program to the current fair market value of the property, plus any reasonable shipping or interim storage costs incurred.
(3) If the Grantee is instructed to otherwise dispose of the property, the Grantee shall be reimbursed by the Grantor agency for such costs incurred in its disposition.
3. The Grantee's property management standards for nonexpendable personal property shall also include:
(a) Property records which accurately provide for: a description of the property; manufacturer's serial number or other identification number; acquisition date and cost; source of the property; percentage (at the end of budget year) of Federal participation in the cost of the project for which the property was acquired; location, use and condition of the property and the date the information was reported; and ultimate disposition data including sales price or the method used to determine current fair market value if the Grantee reimburses the Grantor for its share.
(b) A physical inventory of property shall be taken and the results reconciled with the property records at least once every two years to verify the existence, current utilization, and continued need for the property.
(c) A control system shall be in effect to insure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft of nonexpendable property shall be investigated and fully documented.
(d) Adequate maintenance procedures shall be implemented to keep the property in good condition.
(e) Proper sales procedures shall be established for unneeded property which would provide for competition to the extent practicable and result in the highest possible return.
This Grant Agreement covers the following described nonexpendable property (use continuation sheets as necessary).
L. Provide Financial Management Systems which will include:
1. Accurate, current, and complete disclosure of the financial results of each grant. Financial reporting will be on an accrual basis.
2. Records which identify adequately the source and application of funds for grant-supported activities. Those records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.
3. Effective control over and accountability for all funds, property and other assets. Grantees shall adequately safeguard all such assets and shall assure that they are used solely for authorized purposes.
4. Accounting records supported by source documentation.
M. Retain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of at least three years after grant closing except that the records shall be retained beyond the three-year period if audit findings have not been resolved. Microfilm copies may be substituted in lieu of original records. The Grantor and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the Grantee's government which are pertinent to the specific grant program for the purpose of making audits, examinations, excerpts and transcripts.
N. Provide information as requested by the Grantor to determine the need for and complete any necessary Environmental Impact Statements.
O. Provide an audit report prepared in sufficient detail to allow the Grantor to determine that funds have been used in compliance with the proposal, any applicable laws and regulations and this Agreement.
P. Agree to account for and to return to Grantor interest earned on grant funds pending their disbursement for program purposes when the Grantee is a unit of local government. States and agencies or instrumentalities of states shall not be held accountable for interest earned on grant funds pending their disbursement.
Q. Not encumber, transfer or dispose of the property or any part thereof, furnished by the Grantor or acquired wholly or in part with Grantor funds without the written consent of the Grantor except as provided in item J above.
R. To include in all contracts for construction or repair a provision for compliance with the Copeland “Anti-Kick Back” Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR, part 3). The Grantee shall report all suspected or reported violations to the Grantor.
S. Pay all laborers and mechanics employed by contractors and subcontractors wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5).
T. In construction contracts in excess of $2,000 and in other contracts in excess of $2,500 which involve the employment of mechanics or laborers, to include a provision for compliance with Sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-330) as supplemented by Department of Labor regulations (29 CFR, part 5).
U. To include in all contracts in excess of $100,000 a provision that the contractor agrees to comply with all the requirements of Section 114 of the Clean Air Act (42 U.S.C. § 1875C-9) and Section 308 of the Water Pollution Control Act specified in Section 114 of the Clean Air Act and Section 308 of the Water Pollution Control Act and all regulations and guidelines issued thereunder after the award of the contract. Such regulations and guidelines can be found in 40 CFR 15.4 and 40 FR 17126 dated April 16, 1975. In so doing the Contractor further agrees:
1. As condition for the award of contract to notify the Owner of the receipt of any communication from the Environmental Protection Agency (EPA) indicating that a facility to be utilized in the performance of the contract is under consideration to be listed on the EPA list of Violating Facilities. Prompt notification is required prior to contract award.
2. To certify that any facility to be utilized in the performance of any nonexempt contractor subcontract is not listed on the EPA list of Violating Facilities. Prompt notification is required prior to contract award.
3. To include or cause to be included the above criteria and the requirements in every nonexempt subcontract and that the Contractor will take such action as the Government may direct as a means of enforcing such provisions.
As used in these paragraphs the term
Grantor agrees that it: A. Will make available to Grantee for the purpose of this Agreement not to exceed $_____ which it will advance to Grantee to meet not to exceed __ percent of the development costs of the project in accordance with the actual needs of Grantee as determined by Grantor.
B. Will assist Grantee, within available appropriations, with such technical assistance as Grantor deems appropriate in planning the project and coordinating the plan with local official comprehensive plans and with any State or area plans for the area in which the project is located.
C. At its sole discretion and at any time may give any consent, deferment, subordination, release, satisfaction, or termination of any or all of Grantee's grant obligations, with or without available consideration, upon such terms and conditions as Grantor may determine to be (1) advisable to further the purpose of the grant or to protect Grantor's financial interest therein and (2) consistent with both the statutory purposes of the grant and the limitations of the statutory authority under which it is made.
This agreement may be terminated for cause in the event of default on the part of the Grantee as provided in paragraph I above or for convenience of the Grantor and Grantee prior to the date of completion of the grant purpose. Termination for convenience will occur when both the Grantee and Grantor agree that the continuation of the project will not produce beneficial results commensurate with the further expenditure of funds.
In witness whereof Grantee on the date first above written has caused these presence to be executed by its duly authorized
Agreement made this _________ day of _________, 19__
Whereas the owners intent to form a corporation, hereinafter called the corporation, to construct and operate a labor housing project in
1. Prepare and file necessary incorporating papers and supervise and assist in taking other necessary or incidental actions to create the Corporation and authorize it to finance, construct, and operate the proposed housing project.
2. Prepare for, and furnish advice and assistance to the owners, and to the Board of Directors and officers of the Corporation, in connection with (a) notices and conduct of meetings; (b) preparation of minutes of meetings; (c) preparation and adoption of necessary resolutions in connection with the authorization, financing, construction, and initial operation of a rural rental housing project; (d) necessary construction contracts; (e) preparation of adoption of bylaws and related documents; (f) any other action necessary for organizing the Corporation or financing, constructing, and initially operating the proposed housing project.
3. Review of construction contract, bid-letting procedure, and surety and performance bonds.
4. Examination of real estate titles and preparation, review, and recording of deeds and any other instruments.
5. Cooperation with the architect employed by the owners or the Corporation in connection with preparation of survey sheets, easements, and any other necessary title documents, construction contracts, and other instruments.
6. Rendering of legal opinions as required by the owners or the Corporation or the Farmers Home Administration or its successor agency under Public Law 103-354, United States Department of Agriculture.
7. Owners agree to pay to the attorney for professional services in accordance with this agreement, as follows:
The owners and the attorney further covenant and agree that, if upon organization and incorporation the Corporation fails or refuses to adopt and ratify this Agreement by appropriate resolution within ___ days, this Agreement shall terminate and owners shall be liable only for payment for legal services rendered in connection with such organization and incorporation.
Signed this __________ day of __________, 19__.
This exhibit includes information for use by public body applicants in the preparation and issuance of evidences of debt (“bonds” or “debt instruments”). This information is made available to applicants as appropriate for application processing and loan docket preparation.
(1)
(ii) Preparation of the bonds and the bond transcript documents will be the responsibility of the applicant. Public body applicants will obtain the services and opinion of recognized Bond Counsel with respect to the validity of a bond issue. The applicant normally will be represented by a local attorney who will obtain the assistance of a recognized Bond Counsel firm which has had experience in municipal financing with such investors as investment dealers, banks, and insurance companies.
(iii) At the option of the applicant for issues of $250,000 or less, Bond Counsel may be used for the issuance of a final opinion only and not for the preparation of the other documents and of the bond docket when the applicant, FmHA or its successor agency under Public Law 103-354, and Bond Counsel have agreed in advance as to the method of
(iv) At the option of the applicant and with the prior approval from the National Office of FmHA or its successor agency under Public Law 103-354, for issues of $50,000 or less, the applicant need not use Bond Counsel if:
(A) The amount of the issue does not exceed $50,000 and the applicant recognizes and accepts the fact that processing the application may require additional legal and administrative time.
(B) There is a significant cost saving to the applicant particularly with reference to total legal fees after determining what Bond Counsel would charge as compared with what the local attorney will charge without Bond Counsel.
(C) The local attorney is able and experienced in handling this type of legal work.
(D) The applicant understands that, if it is required by FmHA or its successor agency under Public Law 103-354 to refinance its loan pursuant to the statutory refinancing requirements, it will probably have to obtain at its expense a Bond Counsel's opinion at that time.
(E) All bonds will be prepared in accordance with this regulation and will conform as nearly as possible to accepted methods of preparation of similar bonds in the area.
(F) Many matters necessary to comply with FmHA or its successor agency under Public Law 103-354 requirements such as land rights, easements, and organizational documents will be handled by the applicant's local attorney. Specific closing instructions in addition to any requirements of Bond Counsel will be issued by the Office of the General Counsel of the U.S. Department of Agriculture for the guidance of FmHA or its successor agency under Public Law 103-354.
(2)
(i) Copies of all organizational documents.
(ii) Copies of general incumbency certificate.
(iii) Certified copies of minutes or excerpts therefrom of all meetings of the applicant's governing body at which action was taken in connection with the authorization and issuance of the bonds.
(iv) Certified copies of documents evidencing that the applicant has complied fully with all statutory requirements incident to calling and holding of a favorable bond election, if such an election is necessary in connection with bond issuance.
(v) Certified copies of the resolutions or ordinances or other documents, such as the bond authorizing resolution or ordinance and any resolution establishing rates and regulating the use of the improvement, if such documents are not included in the minutes furnished.
(vi) Copies of official Notice of Sale and affidavit of publication of Notice of Sale where a public sale is required by State statute.
(vii) Specimen bond, with any attached coupons.
(viii) Attorney's no-litigation certificate.
(ix) Certified copies of resolutions or other documents pertaining to the bond award.
(x) Any additional or supporting documents required by Bond Counsel.
(xi) For loans involving multiple advances of FmHA or its successor agency under Public Law 103-354 loan funds, a preliminary approving opinion of Bond Counsel if a final unqualified opinion cannot be obtained until all funds are advanced. The preliminary opinion for the entire issue shall be delivered on or before the first advance of loan funds and state that the applicant has the legal authority to issue the bonds, construct, operate and maintain the facility, and repay the loan subject only to changes during the advance of funds such as litigation resulting from the failure to advance loan funds, and receipt of closing certificates.
(xii) Preliminary approving opinion, if any, and final unqualified approving opinion of recognized Bond Counsel including opinion regarding interest on bonds being exempt from Federal and any State income taxes. On approval of the Administrator, a final opinion may be qualified to the extent that litigation is pending relating to Indian claims that may affect title to land or validity of the obligation.
(3)
(4)
(5)
(i)
(ii)
See the FMI for Form FmHA or its successor agency under Public Law 103-354 1944-52 for specific instructions.
(iii)
(A) The repayment terms described in paragraph (a)(5)(ii) of this exhibit “Second preference” apply.
(B) The instruments shall contain in substance the following provisions:
(
(
(iv)
(6)
(i) The date from which each advance will bear interest.
(ii) The interest rate.
(iii) A payment schedule providing for interest on outstanding principal at least annually.
(iv) A maturity date which shall be no earlier than the anticipated issuance date of the permanent instrument(s).
(7)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(A) Provisions for the holder to manually post each payment to the instrument.
(B) Provisions for returning the permanent or temporary debt instrument to the borrower in order that it, rather than FmHA or its successor agency under Public Law 103-354, may post the date and amount of each advance or repayment on the instrument.
(8)
Reference is made to a request from the (Smith Housing Assoc.) through (John Smith) its President, for interim financing from your firm to construct a rental housing facility at the interest rate and terms and conditions agreed upon as reflected in the attached letter.
Reference is made to a request from (John Jones) for interim financing from your firm
This letter is to confirm certain understandings on behalf of the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354.
Final drawings, specifications, and all other contracts documents have been prepared and approved, and the applicant is prepared to commence construction. It has been determined by the applicant and the Farmers Home Administration or its successor agency under Public Law 103-354 that the conditions of loan closing can be met. Funds have been obligated for the project, as evidenced by the attached copy of Form FmHA or its successor agency under Public Law 103-354 1944-57, ‘Multiple Family Housing Acknowledgement of Obligated Funds/Check Request.’
The applicant has been required by FmHA or its successor agency under Public Law 103-354 to deposit $______ with your firm to be utilized prior to any interim loan funds. The applicant has proposed and FmHA or its successor agency under Public Law 103-354 has agreed that you may first advance any applicant funds on deposit, and then advance the proceeds of the interim loan in accordance with the terms and conditions stated in your attached letter, as needed to pay for construction and other authorized and legally eligible expenses incurred by the applicant. It is understood, however, that advances of both the applicant's funds and the interim loan funds will be made only upon presentation of proper statements and partial payment estimates prepared by the builder, and approved for payment by the consulting architect, the applicant, and the FmHA or its successor agency under Public Law 103-354 District Director.
We have scheduled the Farmers Home Administration or its successor agency under Public Law 103-354 loan to be closed when construction to be financed with loan funds is substantially complete in accordance with the FmHA or its successor agency under Public Law 103-354 approved contract documents, drawings and specifications (except for minor punch list items), and the applicant provides evidence indicating that there are no unpaid obligations outstanding in connection with the project. At that time, funds not exceeding the FmHA or its successor agency under Public Law 103-354 loan amount will be available to pay off the amount of loan advances your lending institution has made for authorized approved purposes, including accrued interest to the date of closing.
FmHA or its successor agency under Public Law 103-354 cannot provide you with an unconditional letter of commitment guaranteeing FmHA or its successor agency under Public Law 103-354 loan closing. Factors such as noncompletion, default, unacceptable workmanship, and marked deviation from approved drawings and specifications could prevent the FmHA or its successor agency under Public Law 103-354 loan from being closed.
These problems can be minimized by making a thorough review of the [contract documents,]* drawings and specifications, evaluating the qualifications and past performance of the builder, and obtaining an adequate corporate surety bond guaranteeing both payment and performance.
The following are additional safeguards to help assure FmHA or its successor agency under Public Law 103-354 loan closing:
1. We invite you or your representatives to accompany FmHA or its successor agency under Public Law 103-354 personnel during construction inspections so that at least 3 or 4 joint inspections at critical points during construction (including the final inspection), can be made to help assure that construction is proceeding in accordance with the FmHA or its successor agency under Public Law 103-354 approved drawings and specifications.
2. FmHA or its successor agency under Public Law 103-354 will maintain its commitment in the amount of the obligated loan funds for a reasonable period of time after the expiration of any specified completion dates, provided work on the project is progressing satisfactorily and any identified problems have been resolved.
3. FmHA or its successor agency under Public Law 103-354 will not arbitrarily abandon your lending institution in the event of default. Should the contractor default, FmHA or its successor agency under Public Law 103-354 will attempt to provide financial assistance to the applicant in accordance with our administrative procedures and lending requirements, provided a new contractor can complete the project for a total cost within the security value of the project. If this is not possible, or should the FmHA or its successor agency under Public Law 103-354 loan applicant become unable or unwilling to continue with the project, FmHA or its successor agency under Public Law 103-354 also will attempt to provide financial assistance to any eligible applicant (subject to the availability of funds, our administrative procedures, and our lending requirements), to purchase the completed project from your lending institution.
4. FmHA or its successor agency under Public Law 103-354 is aware that circumstances, such as subsurface ground conditions and change orders necessitated by required changes in the work to be performed, may cause cost increases after FmHA or its successor agency under Public Law 103-354 loan approval and the obligation of FmHA or its successor agency under Public Law 103-354 loan funds. It is a general practice for
Your assistance to the applicant is appreciated.
Sincerely,
A. General provisions:
1. This agreement is entered into
________ (Date).
2. This agreement is between ______
3. This agreement is made in return
4. The borrower agrees to comply with Government regulations governing the LH loan program.
5. This agreement is in addition to any other agreements entered into with the Government, such as any promissory note, mortgage or deed of trust, loan approval requirements, etc.
B. Rent and Occupancy.
Occupancy of the housing will be limited to domestic farmworkers or migrant farmworkers as defined by the Government, unless the Government gives prior written approval for other occupancy, except that in no case will a member of the borrower's immediate family occupy the housing.
The borrower agrees:
1. To meet the LH loan objectives by providing decent, safe, and sanitary housing for eligible tenants;
2. To provide the housing rent free to eligible farmworker tenants;
3. To get the Government's prior approval before collecting utility charges (i.e. electricity, fuel, water, waste disposal, etc.) or requiring a refundable damage deposit or cleaning fee from tenants;
4. To get the Government's prior approval if there is a need to permit occupancy by tenants who are not working in the borrower's farming operation or not normally eligible to occupy the housing unit; and
5. To get the Government's prior approval if there is a need to charge rent to tenants or change any existing rents. To provide a management plan, which meets requirements set out in Government regulations, whenever rents are charged to tenants. The management plan will describe how the housing operation will be conducted.
C. Recordkeeping.
The borrower agrees:
1. To provide the Government financial information as required by Government regulations;
2. To provide annual verification of employment of eligible tenants as occupancy changes, not less than once per year; and
3. To keep information required by Government regulations and make the information available for Government inspection, to include tenant nonrent affidavits.
D. Compliance with Federal, State, and Local Laws and Regulations.
The borrower agrees to comply with applicable Federal, State, and local laws and regulations, including but not limited to, the following:
1. To provide equal housing opportunities to tenants;
2. To operate the housing in a safe environment;
3. To maintain comprehensive property insurance on the property taken as security;
4. To pay taxes and assessments on the property taken as security; and
5. To make the security property available for inspection by the Government.
E. Disposition of LH Security Property.
The borrower agrees:
1. Not to sell or otherwise dispose of property taken as security for the LH loan without the Government's prior written approval;
2. Not to sell or enter into any business arrangement which may potentially or actually place the housing operation under the management or control of another party without the prior approval of the Government; and
3. To prohibit any liens to be taken on the security property without the prior approval of the Government.
F. Enforcement Considerations.
The. borrower understands that any violation of the terms of this agreement may enable the Government to declare the note immediately due and payable and may adversely affect the borrower's ability to obtain other Government loans or grants.
G. General Provisions.
This agreement may be cited in the
H. Signature(s).
SUBJECT: Verification of Domestic Farm Labor and Occupancy in Rent Free Housing
On______, _, I/We became the occupant(s) of the rent free dwelling owned by the above named borrower. The dwelling is provided as a condition of my farm labor employment.
If the rent free status changes, I/we will notify the Farmers Home Administration or its successor agency under Public Law 103-354 at:
Distribution:
Original to occupant.
1 copy for borrower's records to be kept available for inspection upon request by Farmers Home Administration or its successor agency under Public Law 103-354 for all current tenants.
I.
II.
III.
The market rent determination, one set, will remain in place for the project; therefore, the determination must be recorded in a narrative statement which must be filed with the Promissory Note.
IV.
This subpart sets forth the policies and procedures and delegates authority for making Rural Rental Housing (RRH) and Rural Cooperative Housing (RCH) loans under sections 515 and 521 of the Housing Act of 1949. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to FmHA or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an FmHA or its successor agency under Public Law 103-354 employee.
The basic objective of RRH and RCH loans is to provide eligible persons with economically designed and constructed rental or cooperative housing and related facilities suited to their living requirements.
(1) Is organized under the cooperative laws of a State or Federally recognized Indian tribe;
(2) Will own and operate the housing on a cooperative basis solely for the benefit of the members;
(3) Will operate at cost and, for this purpose, any patronage refunds accruing to members as defined in § 1944.205 of this subpart will not be considered gains or profits; and
(4) Will restrict membership in the housing to eligible persons and, to any extent the cooperative and FmHA or its successor agency under Public Law 103-354 permit, to others in special circumstances.
(1) A parent or another person having legal custody of such individual or individuals; or
(2) The designee of such parent or other person having such custody, with the written permission of such parent or other person, or a person who is pregnant or is in the process of securing legal custody of any individual who has not attained the age of 18 years.
(1) The person has an inability to engage in any substantial gainful activity, but with use of auxiliary aids apparatus can otherwise participate in gainful activity, by reason of any medically determinable physical or mental impairment where the disability:
(i) Has lasted or can be expected to last for a continuous period of not less than 12 months, or which can be expected to result in death, and
(ii) Substantially impedes the ability to live independently, and
(iii) Is of such a nature that such ability could be improved by more suitable housing conditions, or
(iv) In the case of a sight impaired person who is at least 55 years old (within the meaning of sight impairment as determined in section 223 of The Social Security Act), is unable, because of the sight impairment, to engage in substantial gainful activity in which he/she has previously engaged with some regularity over a substantial period of time.
(v) Receipt of veteran's benefits or Social Security Disability Payments for disability, whether service oriented or otherwise, does not automatically establish disability.
(2) The person has a developmental disability; a severe, chronic disability which:
(i) Is attributable to a mental or physical impairment or combination of mental and physical impairment; and
(ii) Was manifested before age 22; and
(iii) Is likely to continue indefinitely; and
(iv) Results in substantial functional limitations in three or more of the following areas of major life activity:
(A) Self-care;
(B) Receptive and expressive language;
(C) Learning;
(D) Mobility;
(E) Self-direction;
(F) Capacity for independent living; and
(G) Economic self-sufficiency.
(v) Reflects the person's need for a combination and sequence of special, interdisciplinary, or generic care or treatment, or for other services which are of lifelong or extended duration and are individually planned and coordinated.
(i) Is expected to be of long-continued and indefinite duration: and
(ii) Substantially impedes the person or is of such a nature that the person's ability to live independently could be improved by more suitable housing conditions.
(2) The term handicap further means, with respect to a person, a physical or mental impairment which substantially limits one or more major life activities; a record of such an impairment; or being regarded as having such an impairment. This term does not include current illegal use of or addiction to a controlled substance. As used in this definition:
(i) Physical or mental impairment includes:
(A) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological; musculoskeletal; special senses organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatics; skin; and endocrine; or
(B) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and special learning disabilities. The term
(ii) Major life activities means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working.
(iii) Has a record of such an impairment means has a history of, or has been misclassified as having a mental or physical impairment that substantially limits one or more of major life activities.
(iv) Is regarded as having an impairment means:
(A) Has a physical or mental impairment that does not substantially limit one or more major life activities but that is treated by another person as constituting such a limitation;
(B) Has a physical or mental impairment that substantially limits one or more major life activities only as a result of the attitudes of others toward such impairment; or
(C) Has one of the impairments defined in paragraphs (2)(i)(A) and (2)(i)(B) of this definition but is treated by another person as having such an impairment.
(1) Is controlled by private persons or interests;
(2) Is organized and operated for purposes other than making gains or profits for the corporation or its members;
(3) Is legally precluded from distributing to its members any gains or profits during its existence; and
(4) In the event of its dissolution, is legally bound to transfer its net assets to a nonprofit corporation of a similar type or to a public corporation which will operate the housing for the same or similar purposes.
(a)
(1) Be a citizen of the United States or a legally admitted alien for permanent residence in the United States; an organization as defined in § 1944.205 of this subpart; or an American Indian tribe, band, group, or nation (including Alaskan Indians, Aleuts, Eskimos, and any Alaskan native village), which is considered an eligible recipient under the Indian Self-Determination and Education Assistance Act (Pub. L. 93-638) or under the State and Local Fiscal Assistance Act of 1972 (Pub. L. 92-512).
(2) Be unable to obtain the necessary credit from private or cooperative sources on terms and conditions that allow establishment of rent or occupancy charges within the payment ability of eligible tenants or members.
(i) For an individual, the assets of both the applicant and spouse will be considered.
(ii) For nonprofit organizations, the assets of the individual members will not be considered.
(3) Have the ability and intention to maintain and operate the housing for the purposes for which the loan is made.
(4) With the exception of a nonprofit organization, consumer cooperative or public body, provide from its own resources the borrower contribution required by § 1944.213 (b) of this subpart. This contribution must be in the form of cash, land, or a combination thereof.
(5) Own the housing and related land or become the owner when the loan is closed. In addition to the owner of full marketable title, an owner may be a lessee of a tract of land owned by a nonpublic body, State, political subdivision, public body, or public agency, or American Indian tribal lands which are not available for purchase. The State Director must determine that leaseholds are fully marketable in the area. The following conditions must be met when considering leasehold interests:
(i) A recorded mortgage constituting a valid and enforceable lien on the applicant's leasehold will be given as security.
(ii) The amount of the RRH or RCH loan against the property will not exceed the estimated market value determined in accordance with subpart B of part 1922 of this chapter (available in any FmHA or its successor agency under Public Law 103-354 office).
(iii) The unexpired term of the lease on the date of loan approval must be at least 25 percent longer than the repayment period of the loan and rent charged for the lease does not exceed the rate being paid for similar leases in the area.
(iv) The borrower's interest must not be subject to summary foreclosure or cancellation.
(v) The lease must:
(A) Not restrict the right to foreclose the RRH or RCH mortgage or to transfer the lease.
(B) Permit FmHA or its successor agency under Public Law 103-354 to bid at a foreclosure sale or to accept voluntary conveyance of the security in lieu of foreclosure.
(C) Permit FmHA or its successor agency under Public Law 103-354 to occupy or sublet the property and sell the leasehold for cash or credit if the leasehold is acquired through foreclosure (or voluntary conveyance in lieu of foreclosure), or if the borrower abandons the property.
(D) Permit the borrower, in the event of default or inability to continue with the lease and the loan, to transfer the leasehold, subject to the RRH or RCH mortgage, to a transferee with the assumption of the RRH or RCH debt.
(vi) The advice of OGC will be obtained as to legal sufficiency of the lease. When the State Director is uncertain as to whether a loan can be made on a leasehold, he/she should request National Office evaluation and instruction.
(6) Have or be able to obtain the initial operating capital and other assets needed for a sound loan. Loans made to nonprofit organizations, consumer cooperatives, and to State or local public agencies may include up to 2 percent of the development cost for initial operating expenses.
(i) The applicant will provide a detailed list of all materials and equipment needed to be funded by the initial operating capital including, but not limited to, property and liability insurance premiums, fidelity bond premiums when the applicant is an organization, utility hook-up charges and deposits, maintenance and other equipment, lease forms, furnishings, loan payments that may become due during construction, purchase of office equipment and furniture, community room furnishings, other movable equipment and furnishings, congregate items referenced in § 1944.224 of this subpart, advertising expenses, management fees, etc. The list will be approved by the servicing office based upon similar projects in the State. The initial 2 percent operating and maintenance (O&M) expenses, plus any amounts needed for these items above the 2 percent, must be provided in cash.
(ii) The O&M cash will be deposited into the general operating account in accordance with the provisions of the loan agreement or loan resolution. FmHA or its successor agency under Public Law 103-354 will be provided
(iii) If the borrower provided the initial 2 percent operating capital from its own funds, the State Director may, in accordance with subpart C of part 1930 of this chapter, authorize the borrower to make a one-time withdrawal from project funds. The borrower must request in writing the withdrawal after 2 years, but before 5 full (12-month) borrower fiscal years of operation.
(7) Possess the ability, experience, and the legal and financial capacity to incur and carry out the obligations required for the loan.
(8) Agree to comply with all FmHA or its successor agency under Public Law 103-354 requirements, such as those set forth in the loan resolution, loan agreement, the form of note, the mortgage and FmHA or its successor agency under Public Law 103-354 regulations.
(9) Provide necessary management to assure the successful operation of the project. Management services may be provided by the applicant, a management firm or an agent. Management will be handled in accordance with exhibit B to subpart C of part 1930 of this chapter.
(10) In the case of a private nonprofit organization:
(i) If operating in one community and its trade area, meet the following additional requirements for an RRH loan:
(A) The organization must maintain a broadly-based membership reflecting a variety of interests in the community. The organization should have at least 25 members. The number of members may be decreased for projects with less than 25 units.
(B) Each member must be limited to one vote in the affairs of the organization.
(C) A majority of the members must reside in the community or the trade area where the housing will be located.
(D) At least five of the members must be recognized as leaders in civic, governmental, fraternal, religious, and other community organizations of the community where the housing will be located.
(E) There must be at least five people on the board of directors and they must be selected by a procedure that insures that the interests of minorities and women are adequately represented.
(F) The directors must be members of the organization.
(G) The organization should adopt articles of incorporation and bylaws substantially conforming to the model articles and bylaws set forth in exhibits C and D, modified as appropriate in accordance with State law. The State Director, with the assistance of OGC, may develop a model set of articles of incorporation and bylaws for the State which are consistent with exhibits C and D and publish an appropriate State supplement.
(ii) If operating in more than one community or on a county or regional basis and providing or planning to provide rental housing in more than one community, meet the following requirements in addition to those in paragraph (a)(10)(i) of this section, with the exception of (a)(10)(i)(C) of this section:
(A) The membership base should be representative of the area being served with at least five members representing a variety of interests from each community where the housing will be located.
(B) The organization's articles of incorporation and bylaws must include the requirements outlined in paragraph (a)(10)(ii)(A) of this section.
(11) In the case of transfers of projects to nonprofit corporations which receive subsequent loans to avert prepayment, meet the requirements of § 1965.216 (c) of subpart E of part 1965 of this chapter.
(12) In the case of a cooperative:
(i) Each member must be limited to one vote in the affairs of the Cooperative.
(ii) The number of directors must not be less than 5, or whatever is allowable under State law.
(13) In the case of a limited partnership:
(i) The general partners must be able to meet the financial requirements of § 1944.211(a)(4) of this subpart if the partnership is not able to when the loan request is filed.
(ii) The general partners must maintain a minimum 5 percent financial interest in the partnership. For this purpose, the minimum 5 percent requirement will be deemed to have been met if the general partner has a minimum 5 percent interest in the residuals or refinancing proceeds. The general partner will not be required to have a minimum 5 percent interest in current profits, losses, and cash distributions of the partnership. For example, an agreement where the general partners have such a 5 percent interest in a limited partnership and receive only 1 percent of the profits while the limited partners receive 99 percent of the profits would be allowable.
(iii) The partnership must agree that new general partners can be brought into the organization only with the prior written consent of FmHA or its successor agency under Public Law 103-354.
(14) Be willing to honor the long-term commitment associated with receipt of a section 515 loan. Borrowers or principals of borrower organizations who sell or transfer loans less than 5 years old will not be considered eligible for further participation in the program as borrowers or principals (i.e., a general partner in a limited partnership) for at least 5 years from the date of the loan or assumption closing. The State Director may make an exception to this provision only if the transfer or sale meets the hardship provisions of § 1965.65(a)(4) of subpart B of part 1965 and the applicant meets all other eligibility requirements.
(15) Meet the following requirements if the applicant, including the principals, has prior or existing RHS debts and is applying for a new or subsequent loan or requesting incentives to preclude prepayment. Applicants who do not meet these requirements will be rejected for failure to meet the applicable provisions of this section, as well as § 1965.213(c)(2)(i) of subpart E of part 1965 of this chapter, if applicable.
(i) The applicant, including the principals, must be in compliance with existing debts in accordance with all legal and regulatory requirements and agreements, including the Promissory Note, Loan Agreement, and mortgage, all applicable local, state, and federal laws, and must provide regular financial and other required reports within required timeframes; or, if the applicant fails to meet any of these requirements, has an approved workout plan in effect that meets the provisions of paragraph (a)(15)(ii) of this section.
(ii) An applicant or principal with an approved workout plan in effect to correct deficiencies in an existing RHS debt may be considered for eligibility if the applicant or principal has been in compliance with the provisions of the workout plan for 6 months. The State Director may waive this requirement for borrowers who have acted in good faith but are in noncompliance through circumstances beyond their control, including substantial local economic downturn, natural disaster, assuming responsibility for a troubled loan through substitution of the general partners, or assuming a loan with an existing workout plan.
(iii) Applicants and principals must be in compliance with the provisions of the Civil Rights Act of 1964 (in accordance with their Form RD 400-4, “Assurance Agreement”) and all other civil rights laws. If the Agency has reasonable grounds, based on a substantiated complaint, the Agency's own investigation, or otherwise, to believe that the representations of an applicant or borrower as to civil rights compliance are in some material respect untrue or are not being honored, assistance may be deferred or denied.
(iv) Applicants or principals who have been debarred but whose debarment period has expired will be considered for eligibility subject to all requirements of this section.
(v) Applicants, including principals, who have been determined ineligible by one state may not be determined eligible by another State until the problems have been corrected or workout plans are in effect in all States in which the applicant or principal is operating.
(b)
RRH and RCH loans may be made to qualified applicants to:
(a) Construct new housing.
(b) Purchase and rehabilitate existing buildings only when the loan for such purchase and rehabilitation does not exceed by 5 percent the loan for new construction in the same area and when moderate or substantial modifications, repairs or improvements to the structures are necessary to meet the requirements of decent, safe, and sanitary living units.
(1) All rehabilitation work to be performed must be classified as either moderate or substantial rehabilitation as defined in exhibit K of subpart A to part 1924 of this chapter.
(2) The structure to be rehabilitated must be physically and structurally sound enough to afford maximum safety (including fire safety) to the residents of the structure after rehabilitation.
(3) Rehabilitation must be planned and accomplished so that the resulting housing will:
(i) Meet the applicable development standards as provided for in § 1924.5(d)(1) of subpart A of part 1924 of this chapter and any applicable historic preservation requirements.
(ii) Create a suitable and appealing living environment and be substantially equivalent to new construction in quality and livability.
(4) The applicant must submit complete plans and specifications for rehabilitation for FmHA or its successor agency under Public Law 103-354's review and acceptance.
(5) The rehabilitated project must generally meet the provisions of § 1944.215(b) of this subpart.
(6) When the downtown location of a rehabilitation project dictates such, a portion of the structure (such as part of the ground floor and basement) can be designated for commercial use on a lease basis. Loan funds, however, cannot be used to finance any cost associated with the commercial space. In order to determine the correct loan amount for the residential portion of such a structure, the following guidelines will apply:
(i) The applicant must supply a complete cost breakdown for purchasing and rehabilitating the entire structure into its joint residential/commercial use.
(ii) The costs that can be easily and appropriately identified as being part of either the commercial or residential portion of the structure should be separated.
(iii) The costs which cannot be easily and appropriately isolated (such as the cost associated with repair or renovation of a boiler, the value of the structure “as is,” and certain mechanical or electrical components that will benefit both commercial and residential tenants or members will be prorated between the two uses based on the percentage of equipment load (example—central boiler or air conditioning) which would be necessary for each portion of the structure.
(iv) For the purposes of the loan limitations in § 1944.213(b) (1) and (2) of this subpart, the term
(v) The applicant must rely on other sources of financing for all costs associated with or prorated to the commercial space, given the FmHA or its successor agency under Public Law 103-354 security requirements of § 1944.221 of this subpart.
(7) The applicant may not lease any authorized commercial space without the prior written consent of the State Director. Prior to loan closing, the advice of OGC will be obtained as to any
(i) The lease contains a provision by which the lessee agrees to vacate the premises if FmHA or its successor agency under Public Law 103-354 withdraws its consent to the lease.
(ii) The proposed use of the leased space has a mutually supportive relationship to the needs of the residential tenants or member and to the use of the residential portion of the structure.
(iii) The terms of the lease and the proposed use of the leased space do not jeopardize the interests of the tenants or members of the project or the continued use of the residential portion of the structure.
(iv) The lease has been reviewed by OGC and found to be legally sufficient and in compliance with the requirements of this subpart.
(c) Purchase and improve the necessary land on which the housing will be located.
(1) Loan funds used to purchase land may not exceed the estimated market value of the site in its present condition as shown by a current appraisal in accordance with FmHA Instruction 1922-B (available in any FmHA or its successor agency under Public Law 103-354 office).
(2) With prior written approval of the State Director, loan funds may be used to buy land from a member of a broadly-based nonprofit applicant/organization.
(3) Loan funds may be used to acquire land in excess of that needed for the housing, including related facilities, only when:
(i) The applicant cannot acquire only the needed land at a fair price, can justify the acquisition, agrees to sell the land as soon as practicable and apply proceeds on the loan, and has legal authority to acquire and administer the land; and
(ii) The cost of the excess land is a reasonable portion of the loan; and
(iii) The site density requirements of § 1944.215(a)(6) of this subpart are met.
(d) Develop and install streets, a water supply, and sewage disposal, heating, cooling, and light systems necessary in connection with the housing. If the facilities are located offsite, the following requirements must be met:
(1) The applicant will hold the title to the facility or have a legal right to use the facility for a period of at least 25 percent longer than the life of the loan and the title or right can be transferred to any subsequent owner of the site.
(2) The facilities are provided for the exclusive use of the project or funds are limited to the prorated part of the total cost of the facility according to the use and benefits to the project. The applicant will agree in writing to the application, as extra payments on the loan, of any subsequent collection by the borrower from other users or beneficiaries of the facility.
(3) Adequate security can be obtained with or without a mortgage based on the offsite facilities.
(e) Develop other related facilities in connection with the housing such as:
(1) Maintenance workshop and storage facilities.
(2) Recreation center when the project is large enough to justify the facility. In all projects, passive recreation (such as outdoor seating) for elderly rental projects and active facilities (such as tot lots) for family projects will be provided.
(3) Central cooking and dining in congregate and group living housing when the project is large enough to justify them to supplement the kitchen facilities in each unit. All equipment purchased with loan funds for the central cooking and dining facilities, such as stoves, refrigerators, ovens, dish washing machines and steam tables, should be attached to the land or buildings in a manner regarded in law as part of the real estate.
(4) Space for a small infirmary for emergency care only when justified by the size of the project. An infirmary will not be justified if facilities for emergency care expected to be needed by the tenants are readily accessible elsewhere.
(f) Construct office and living quarters for the resident manager and other operating personnel if the facilities would be to the advantage of the
(g) Purchase and install ranges, refrigerators, drapes, blinds/shades, drapery rods, and clothes washers and dryers. Laundry facilities are required in all projects and clothes washers and dryers should be provided in a central laundry room. Normally, a minimum of one washer and dryer should be provided for every 8 to 12 units in a project. Clothes washers and dryers may not be installed in individual units if the installation is not customary in the area for the size of project and type of housing involved. In any case, both central and individual laundry facilities will not be provided in a single project.
(h) Provide landscaping, seeding or sodding of lawns, and other necessary facilities related to buildings such as walks, yards, fences, parking areas, and driveways.
(i) Pay related costs such as fees and charges for market studies, tax credit application, legal (costs pertaining to the closing of the FmHA or its successor agency under Public Law 103-354 loan only), archeological, architectural, engineering, environmental, and other appropriate technical and professional services. The fees and charges may be paid to an applicant or officer, director, trustee, stockholder, member, or agent of the applicant provided those fees and charges are reasonable and typical for the area and are earned and the identity of interest is disclosed. Legal, technical, and professional fees do not include the costs incurred in the formation or incorporation of the limited profit applicant, costs of syndication, or the payment of a loan packaging or development fee.
(j) Provide loan funds to enable a nonprofit group or public body to pay fees for technical assistance received from a nonprofit organization, with housing and/or community development experience, to assist it in the formation or incorporation and development and packaging of its loan docket and project, as well as legal, technical and professional fees incurred in the formation or incorporation of the applicant entity.
(1) Fees can also be provided to pay the nonprofit applicant entity for packaging of its loan docket and project, but not to include the formation and incorporation of the entity.
(2) The amount to be paid for packaging of the loan docket and project should not exceed 1% of the FmHA or its successor agency under Public Law 103-354 loan or whatever is reasonable and typical for the area.
(3) Related project costs as listed in § 1944.222 of this subpart are not included as a part of the fee for packaging of the loan docket and project.
(k) Provide loan funds to pay for the cost of educational programs for the board of directors both before and after incorporation of the cooperative.
(l) Pay construction interest as follows:
(1) In the case of multiple advances, loan funds will not be used to pay construction interest. Accrued interest during construction will be capitalized when construction is substantially complete, loan funds are fully advanced and the project is ready for full operation or when advances plus accrued interest reach the maximum debt limit (MDL). When requested by the borrower, each month the servicing official will provide the borrower monthly computations of the amount of interest that is accruing during the construction period.
(2) In the case of interim financed construction, interest accrued and customary charges necessary to obtain interim financing may be included in the loan amount.
(m) Purchase housing from an interim lender that holds fee simple title to an RRH project upon which construction commenced pursuant to § 1944.235(c)(1) and after issuance of a letter of commitment to the interim lender in accordance with exhibit B of this subpart, when all of the following conditions exist.
(1) The interim lender holds title to the property because the original RRH applicant for whom funds were obligated will not or cannot continue with the project after a letter such as that shown in exhibit B to this subpart was issued.
(2) The owner of the property is the interim lender to whom FmHA or its
(3) The project is substantially complete (see § 1944.235(c)(1)(vi) of this subpart), all work has been satisfactorily completed in a workmanlike manner in accordance with the originally approved drawings, specifications and contract documents, and is in compliance with subparts A and C of part 1924 of this chapter.
(4) There are no unpaid obligations outstanding in connection with the project.
(5) All other requirements of this subpart have been met.
(n) Pay for related costs incurred in compliance with the Uniform Relocation Assistance and Real Property Acquisition Act of 1970 and in accordance with § 1944.215(t) of this subpart.
(o) Contruct demonstration projects involving innovative housing units and systems which do not meet existing published standards, rules, regulations, or policies, but do meet the intent of providing decent, safe, and sanitary rural housing. Only the Administrator may authorize loan funds to be used for this purpose.
(p) Finance the conversion of section 502 units in inventory to a section 515 project, in accordance with requirements of this subpart and subpart C of part 1955 of this chapter. Loans for this purpose can be made only to public agencies and private nonprofit organizations. Units should be repaired or rehabilitated prior to conversion to section 515 housing. To facilitate a cooperative's self-maintenance plan, the use of 502 inventory houses will be considered only if the units are located in the same subdivision and in a clustered configuration.
(q) Grants for advances to nonprofit corporations or public agencies for costs to develop an application package or close a loan to purchase a project to avert prepayment. Such grants shall not exceed $10,000 and shall be administered in accordance with § 1965.217 (d) of subpart E of part 1965 of this chapter.
(a)
(1)
(i) Builder's profit: up to 10% of the construction contract.
(ii) General overhead: up to 4% of the construction contract.
(iii) General requirements: up to 7 % of the construction contract.
(2)
(ii) For transfer proposals that include acquisition costs, RHS has established the developer's fee on the acquisition costs at up to 8% of the acquisition costs only when authorized by the state agency and only for tax credit purposes. (A developer's fee is not an authorized Section 515 loan purpose.)
(3)
(ii) In all cases where the results of an analysis indicate that there will be excess assistance (defined as more than the lesser of $25,000 or 1 percent of the total development cost as authorized
(iii) In the event that excess assistance is not reduced through an agreement with the applicant and state agency, RHS will adjust the amount of equity contribution by the amount of excess assistance (through the reduction of the loan) to ensure that assistance provided is not more than is necessary to provide affordable housing after taking into account assistance from all Federal, state and local sources.
(b)
(1) For all applicants, including its members, who will be receiving any benefits from Low Income Housing Tax Credits (LIHTC), the amount of the RRH loan(s) will be limited to no more than 95 percent of the development cost or 95 percent of the security value, whichever is less.
(2) For all applicants, including its members, not receiving any benefits from LIHTC, who are comprised solely of nonprofits, consumer cooperatives, State or local public agencies, the amount of the loan(s) will be limited to the development cost or the security value of each project, whichever is less, plus the 2 percent initial operating capital and/or the relocation costs incurred as indicated in § 1944.215(v) of this subpart. Grants made in accordance with § 1944.212(q) of this subpart are not included in the preceding limitations.
(3) For all other applicants, including its members, not receiving any benefits from LIHTC, the amount of the RRH loan(s) will be limited to no more than 97 percent of the development cost or 97 percent of the security value, whichever is less.
(4) The examples set forth in exhibit A-13 of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office) provide clarity in determining the proper loan amount for various types of loans.
(5) For equity loans to avert prepayment, the amount of the RRH equity loan will be limited to no more than the difference between 90 percent of current value of the project as appraised as conventional unsubsidized housing and current unpaid balance(s).
(6) For all applicants, the amount of the loan after capitalized construction interest is considered will not exceed the loan limits in paragraphs (b)(1), (2), and (3) of this section. However, Predetermined Amortization Schedule System (PASS) loans closed with multiple advances may exceed that amount when an additional amount is permitted to allow interest to be capitalized to the first of the following month.
(7) All applicants must agree in writing to provide funds from their own resources to pay any cost for completing planned construction after the MDL is reached.
(c)
(1) Specialized equipment for training and therapy.
(2) Commercial facilities except essential service-type facilities for tenants or members when such facilities are not conveniently available.
(3) Housing to serve primarily temporary and transient residents.
(4) Nursing homes, special care facilities, or institutional-type homes.
(5) Operating capital for a central dining facility or any items which do not become affixed to the real estate security, such as special portable equipment, furnishings, kitchen ware, dining ware, eating utensils, movable tables, and chairs, etc.
(6) Facilities contrary to cost containment measures defined in § 1944.215 (a) of this subpart.
(7) Refinancing debts of the applicant except:
(i) As authorized in §§ 1944.235(c) and 1944.213(d)(1) of this subpart; or
(ii) When a nonprofit organization or a State or local public agency applicant already owns land on which a lien exists and a subordination or release cannot be obtained and the applicant does not have the financial resources necessary to obtain a release of the existing lien(s). In this situation, loan funds may be used to obtain a release of the land needed for the site of the proposed project. The amount of funds used for such purposes will be limited to the amount necessary to obtain the release but will not exceed this “as is” value of the land as determined in accordance with FmHA Instruction 1922-B (available in any FmHA or its successor agency under Public Law 103-354 office).
(8) Payment of any fee, charge or commission to any broker, negotiator or other person for the referral of a prospective applicant or solicitation of a loan.
(9) Payment of any fee, salary, commission, profit, or compensation to an applicant or to any officer, director, trustee, stockholder, member, or agent of an applicant except as provided in § 1944.212(j) of this subpart.
(10) Land which the applicant or a member of an applicant/organization owns or land which is owned by any other organization in which any member of the applicant/organization has an interest, or has had an interest within the last 3 years, including any commission due on the sale thereof, except as authorized in § 1944.212(c)(2) of this subpart.
(11) Compensation to an applicant for value of land contributed in excess of the initial contribution as required by paragraph (b) of this section.
(d)
(1) The debts were incurred:
(i) After the applicant filed a written loan request for a loan with FmHA or its successor agency under Public Law 103-354;
(ii) Prior to the date of loan request as part of a predevelopment loan specifically intended as temporary financing from a public agency or nonprofit organization and the State Director secures prior concurrence from the National Office; or
(iii) Prior to the date of application as part of a development loan made to a State or local public agency specifically intended as temporary financing and the State Director secures prior concurrence from the National Office.
(2) The applicant is unable to pay the debts from its own resources or to obtain credit from other sources and failure to authorize the use of loan funds to pay the debts would impair the applicant's financial position.
(3) The debts were incurred for eligible loan purposes.
(4) Contracts, materials, construction, and any land purchased meet FmHA or its successor agency under Public Law 103-354 standards and requirements.
(5) Payment of the debts will remove any liens which have attached and any basis for liens that may attach to the property on account of such debts.
(e)
(1) No increase in per unit development cost will be approved, whether the circumstance causing the cost increase occurs before, during, or after the construction period, unless these conditions were unforeseen factors beyond the owner's control and the increase in cost was approved by FmHA or its successor agency under Public Law 103-354 in writing before the expense was incurred. (In case of an emergency, the requirement that the cost be approved by FmHA or its successor agency under Public Law 103-354 in writing before the expense is incurred is waived as long as the servicing official is notified by the next working day.) Such costs are:
(i) Design changes required by FmHA or its successor agency under Public Law 103-354 or State or local government having jurisdiction over the development of the project; or
(ii) Changes in financing approved by FmHA or its successor agency under Public Law 103-354.
(2) Any cost increase which cannot be approved for funding by FmHA or its successor agency under Public Law 103-354 must be satisfied by the owner from its own resources. Whenever there is doubt as to the resulting effect of a cost increase upon per unit development cost, the cost increase request may be conditionally approved provided:
(i) The owner agrees in writing to provide any funds necessary in excess of its initial contribution and the loan amount to complete the project; and
(ii) The owner furnishes surety that guarantees payment under the assurance agreement in the form of a surety bond, unconditional and irrevocable letter of credit or cash which is put into an interest or noninterest bearing supervised bank account. Such funds will not result in a lien on the project or its operating income.
(3) Under no circumstances will a cost increase request be approved without concurrent agreement between FmHA or its successor agency under Public Law 103-354 and the applicant/borrower as to how the cost increase will be funded.
(f)
(i)
(ii)
(2)
(i) Another RRH or RCH loan request in the same market area has been selected for further processing; or
(ii) A previously authorized/approved FmHA or its successor agency under Public Law 103-354, HUD, LIHTC or similar type rental housing assistance project in the same market area has not been completed or reached its projected occupancy level. For example, a recently completed FmHA or its successor agency under Public Law 103-354 project is 85 percent occupied, reflecting a 15 percent vacancy. The Form FmHA or its successor agency under Public Law 103-354 1930-7, “Multiple Family Housing Project Budget,” approved when this loan was obligated indicated a proposed vacancy rate of 10
(iii) An existing FmHA or its successor agency under Public Law 103-354, HUD, LIHTC or similar type rental housing assistance project in the same market area is experiencing high vacancies. The State Director, without authority to redelegate, will determine a reasonable vacancy rate for this purpose on a state, district or regional basis. Generally, a high vacancy rate would be in the 5 to 10 percent range. For the purpose of this paragraph, a high vacancy rate due to documented mismanagement will not be considered as a reason to defer processing a viable loan request provided there is an adequate market for the existing and proposed units. In addition, substandard units or excessive nonmarketable efficiency apartments would not be a reason to defer a viable loan request; or
(iv) A request for a Servicing Market Rate Rent (SMR), or similar servicing tool, as defined in subpart C of part 1930 of this chapter in the same market is pending, or in effect and still needed; or
(v) The need in the market area is for additional rental assistance (RA) or similar subsidy and not for additional housing units. This can be evidenced by similar rental housing in the market area in which tenants are experiencing rent overburden; existing projects in the market area which are experiencing vacancies due to lack of RA, Section 8 or similar subsidy; high vacancies in conventionally financed apartments or other circumstances where the market needs affordable housing but not additional housing.
(3)
(4)
(ii)
(a)
(b)
(a)
(1) Each State architect/engineer (A/E) will compile and maintain data on costs of all projects. Total project estimates will be compared with estimates available through the Marshall & Swift computer program. These estimates, along with the line item costs recorded in FmHA or its successor agency under Public Law 103-354's Automated Multi-Housing Accounting System (AMAS) cost tracking system, will be used to establish a benchmark for future project costs. Any proposal that exceeds these costs must be carefully evaluated for possible cost reductions. The borrower will be responsible for resolving the differences in cost to bring the project into line with the lesser of the cost tracking system or Marshall & Swift estimates. Final determinations must be realistic, interrelated to maintenance and operation costs, and based upon local conditions and common sense. The State will consider circumstances such as high land costs, remote rural areas, etc., which could present a problem in achieving such an alignment of costs. The AMAS cost tracking system will be used to record both estimates and actual line item costs. At the time the estimates are being examined by FmHA or its successor agency under Public Law 103-354, the percentages for builder's profit, general overhead, and general requirements will be calculated to determine if they are within the allowable percentages established in accordance with §1944.213(a)(1)(iii) and (a)(1)(iv). They will again be calculated at the time the final estimates are submitted to FmHA or its successor agency under Public Law 103-354. Estimated amounts in excess of the allowable percentages will be reduced to the appropriate percentage. Once the final estimates are approved by FmHA or its successor agency under Public Law 103-354, payment of builder's profit, general overhead, and general requirements will not exceed the estimated amounts.
(2) The elimination or reduction of unnecessary delays in application processing can contribute to cost containment through lower interest and other business expenses on land, inventory, tests, design studies, etc. When reasonable processing timeframes are established, known and followed, appropriate time can be planned for preparing quality application and construction documents. This can result in better instructions to the builder, fewer errors and lower construction costs.
(3) Most materials and systems are available in a range of qualities and prices. The construction documents will be carefully reviewed for specifications that require qualities or grades higher than necessary. These specifications will be accepted only if fully justified and no reasonable alternatives are available.
(4) Designs which employ standard building material dimensions and reduce waste will be used.
(5) Sites will require a minimum amount of site development work. The
(i) The proposed site and site development costs are less than the cost of the normal site and site development costs; or
(ii) There are no other sites available in the market area with a lower combined cost.
(6) All project site densities (units per acre) will be within the following ranges, regardless of site conditions unless local zoning requirements dictate otherwise:
(i) For example: A 24-unit project composed of two-story buildings must have a site of at least 1.3 acres. FmHA or its successor agency under Public Law 103-354 will finance the purchase and development of larger sites, but not more than 1.7 acres. Ranges for projects with a mixture of building heights can be interpolated.
(ii) An exception may be made to this provision only if the site in question is the only site available in the market area and its size, shape, or condition makes a portion of the site unsuitable for building. An exception to this requirement must be granted by the State Director or a designee. The applicant must provide written documentation that no other sites are available.
(7) Sound judgment and common sense must also be used in construction inspections and final acceptance of projects. Field staff involved in these activities must be careful not to impose additional or unreasonable requirements on the builder that will increase construction costs. States should consider hiring enough construction inspectors to provide more than the required inspections and to allow multiple unscheduled and unannounced visits. The State Office may also, with National Office authorization, contract for inspection services to deter deviations from the FmHA or its successor agency under Public Law 103-354-accepted construction documents. Prefinal and final inspections must be conducted by qualified FmHA or its successor agency under Public Law 103-354 personnel.
(8) Buildings will not include numerous wall and roof breaks, unusual designs requiring excessive corners and foundation off-sets, or that require more exterior entrances than absolutely necessary. Designs will not be considered acceptable that place dining facilities in structures attached to the main building when these amenities can be less expensively included within the main structure.
(9) Buildings will not include roof slopes less than 3/12 nor greater than 6/12 unless otherwise required by local authorities or in order to accommodate severe weather conditions.
(10) The use of repeat designs will be required from applicants whose architects have designed projects previously approved by FmHA or its successor agency under Public Law 103-354. This does not mean “cloned” projects are required throughout the State and/or region. When a repeat design is being used in the same community, the exterior facade (such as color, siding material, etc.) must be noticeably changed except in the case of subsequent phases. The State Office architect will ensure that sufficient differences are included in the proposed plans which will preclude the appearance of “cloned” designs. “Predesigned” buildings must fit the basic existing contours of the proposed site.
(11) The following facilities are considered nonessential and will not be included in the loan unless required by local codes or ordinances:
(i) Garages/covered parking;
(ii) Bay/box/picture or similar type windows;
(iii) Fireplaces;
(iv) Community room furniture;
(v) Sliding glass/atrium or similar type doors;
(vi) Materials atypical for the area;
(vii) Atriums/solariums;
(viii) Saunas;
(ix) Whirlpools;
(x) Gyms (facilities to accommodate physical exercises may be included in elderly projects without regard to this restriction); and
(xi) Swimming pools.
(12) Other design features which will only be accepted if determined customary for the area are:
(i) Patios/balconies (minimum size which will accommodate handicapped accessibility);
(ii) Washer and dryer hookups in individual units; and
(iii) Washers and dryers in individual units.
(13) The following is a list of allowable amenities according to the type of units:
(14) Total on-site parking spaces per living unit will be within the following ranges unless otherwise required by local authorities:
Additional spaces for visitors, staff, or health care workers may be provided.
(15) Management, maintenance, and community rooms should be in accordance with Guide 2 of subpart A of part 1924 of this chapter (available in any FmHA or its successor agency under Public Law 103-354 office). Laundry rooms should be no larger than necessary to accommodate equipment, circulation (including handicapped accessibility) and areas for sorting and folding clothes.
(b)
(1) Be economically constructed and not of elaborate design or materials. All new construction will conform with the applicable development standards of § 1924.5(d)(1) of subpart A of part 1924 of this chapter. The gross square foot living area of new units will be within the ranges listed below. Living area is defined as: All enclosed space for the unit (except unfinished storage space for outdoor items and space needed for heating and/or cooling equipment) and measured from the exterior surface of the framing of exterior walls and the center line of interior party or corridor walls. States should establish ranges within these dimensions to be commensurate with unit sizes in the local market. For example, when conventional units in the market are at the low end of FmHA or its successor agency under Public Law 103-354's range scale, FmHA or its successor agency under Public Law 103-354 will also build a comparably smaller unit.
(i) An additional 100 to 120 square feet of living area may be added to the 4-bedroom unit guideline for each bedroom in excess of four. Floor areas for living and dining rooms should comply with Guide 2 of subpart A of part 1924 of this chapter (available in any FmHA or its successor agency under Public Law 103-354 office). The maximum square footage in congregate housing units will not exceed 110 percent of the minimum square footages listed above.
(ii) In townhouse units where living area is on two floor levels of the unit, the maximum gross square footage of living area may be exceeded by up to 70 square feet, but only to the extent necessary to accommodate interior stairways.
(iii) Room sizes must be in compliance with the applicable development standard. Minimum room sizes may be determined by the minimum areas in Guide 2 of subpart A of part 1924 of this chapter (available in any FmHA or its successor agency under Public Law 103-354 office).
(iv) Additional area to accommodate energy conserving and solar heating elements such as vestibules, heat sinks, solar greenhouses, solar heat storage devices and the like may be allowed in excess of the stated maximum size guidelines. However, such devices, if included, must be justified on a cost effective basis.
(2) Consist of multi-unit type housing with two or more units and appropriate related facilities except for the conversion of section 502 inventory housing as covered in § 1944.212(p) of this subpart, manufactured homes and group homes. Single family structures may be considered for cooperative housing projects if economically feasible.
(3) Be residential in character and be designed to meet the needs of eligible tenants or members. Generally, structures should not be more than three stories high. However, low-rise structures with elevators can be considered when the following conditions exist:
(i) There is a serious shortage of suitable building sites, the number of units needed cannot be built due to lack of space on available suitable sites and other building sites are not available.
(ii) Land costs are such that one- to three-story construction would result in a unit cost and rental/occupancy rates in excess of what eligible tenants and members can afford.
(iii) The number of stories proposed for the structure is compatible with other rental structures in the community. If there are no other low-rise rental structures in the community, the proposed structure must be in character with surrounding structures.
(iv) The cost of the units should compare favorably with one- to three-story construction financed with RRH loans. If the costs are higher, the loan will not be approved until the FmHA or its successor agency under Public Law 103-354 State architect or engineer has reviewed the plans, specifications and cost data to assure that further cost savings cannot be achieved without sacrificing the quality and serviceability of the housing.
(v) Elevators will be provided in accordance with the applicable development standards. If elevators are included, the subsoil conditions of the site must be adequate for the installation of elevators and sufficient service personnel must be available in the area for service and repair work.
(4) Provide kitchen and bath facilities consistent with the size of the unit. For example, units with three or less bedrooms typically can be designed with one bath. However, townhouse units with three or more bedrooms where living area is on two floors may contain bath facilities on both levels. Kitchen facilities are required in all units; however, in congregate housing, some or all of the units may have limited facilities, such as a cooktop with a small oven and refrigerator.
(5) Give maximum consideration to energy conservation measures and practices. To keep operating costs at a minimum, units should be individually metered for utilities unless adequate justification is provided to show that it would be infeasible.
(6) Meet the needs of tenants with handicaps in rental projects. At least 5 percent of the units in the project or one unit, whichever is greater, must be accessible to or adaptable for persons with physical handicaps. The percentage of the units provided may be modified if an applicant shows, through information obtained from a State, local or independent agency or organization serving people with handicaps, that a different percentage of accessible or adaptable units is appropriate. However, at least one accessible unit will be provided. Adaptable units must be constructed in accordance with the Uniform Federal Accessibility Standards, sections 4.34.3 through 4.34.6.
(7) For covered dwellings, handicap accessibility requirements will be met as set forth in section 504 of the Rehabilitation Act of 1973 and the Fair Housing Act.
(c)
(2) When an interim financed loan is closed other than the first day of the month, principal payments will be deferred for the remaining period of the month in which the loan is closed.
(3) When construction is substantially complete and the project is ready for full operation, or the total of principal advances plus accrued interest reaches the MDL, interest on the advances will be accrued to the Amortization Effective Date (AED) and will be capitalized, establishing a new principal (loan) amount.
(4) At loan obligation, the MDL will be established according to § 1944.213(a) of this subpart. When the final advance on the loan is issued or the MDL is reached, the Finance Office will:
(i) Accrue interest on all advances through the last day of the month and capitalize the interest as of the AED. When there is a remaining obligation balance, it will be canceled by the Finance Office.
(ii) Establish the new loan amount and the borrower's monthly payments computed over the remaining term of the loan.
(5) The District Office will:
(i) Contact the applicant and complete Form FmHA or its successor agency under Public Law 103-354 1944-52, “Multiple Family Housing Promissory Note.”
(ii) Implement Form FmHA or its successor agency under Public Law 103-354 1944-7, “Multiple Family Housing Interest Credit and Rental Assistance Agreement,” at AED or when the project is substantially complete and ready for full operation, whichever is later.
(d)
(e)
(1) Form FmHA or its successor agency under Public Law 103-354 1944-33, “Loan Agreement.”
(2) Form FmHA or its successor agency under Public Law 103-354 1944-34, “Loan Agreement.”
(3) Form FmHA or its successor agency under Public Law 103-354 1944-35, “Loan Resolution.”
(f)
(1) Self-management. The primary management objective for small housing cooperatives. To achieve this, education and training efforts should be an on-going part of their early years of operation. Accordingly, modest educational costs will be permitted in the budget as a subheading under management expenses. It is understood that, in the beginning, it may be necessary to obtain some outside services, such as a bookkeeper. If so, then partial self-management can be considered. It will be necessary for a qualified nonmember (individual or organization) to
(2) Partial self-management. Certain management and/or supervisory services contracted from a technical service organization, housing authority, or management firm, etc. If this additional assistance does not enable the cooperative to manage itself, then the ultimate solution will have to be contract management.
(3) Contract management. Professional services contracted for the day-to-day supervision of cooperative operations. The board of directors would develop the policies which would then be administered by the management agent.
(g)
(h)
(2) Inflation equity which accrues on cooperative property is not considered part of members' limited equity and will not be taken from the project when a member vacates the project.
(i)
(2) RA may be provided to eligible tenants and members in eligible projects in accordance with exhibit E to subpart C of part 1930 of this chapter.
(3) At least 95 percent of RA units available for newly constructed projects must be used to assist very low-income tenants and members. Up to 5 percent can be used for low-income tenants and members.
(4) Cooperative members must have sufficient incomes to pay their management reserve charge. RA will not be used for this purpose. Management reserve charge is further described in exhibit A to this subpart.
(j)
(k)
(l)
(m)
(n)
(1) Cash contributions made by the applicant from the applicant's own resources, which, when added to the loan and grant amounts from all sources, do not exceed the security value of the project. Proceeds received by the applicant from the syndication of low-income housing tax credits (LIHTC) and contributed to the project may be considered funds from the applicant's own resources for the portion of the proceeds which exceeds:
(i) the allowable developer's fee determined by the State Agency administering the LIHTC, and
(ii) the amounts expected to be contributed to the transaction, as determined by the State Agency administering the LIHTC.
(2) The value of the building site or essential related facilities contributed by the applicant up to the amount which, when added to the loan and grant amounts from all sources, is not in excess of the security value of the project. An appraisal will be completed in accordance with applicable RHS regulations. Value of the applicant's contribution will be determined on an “as is” basis less liens against the property.
(3) Borrowers receiving incentives to avert prepayment may have the amount of borrower equity redefined to include the difference between the value used in determining the incentives and the balance of all loans, including the equity loan, if any. Redefined equity may be received only as a part of an incentive offer developed under § 1965.213 of subpart E of part 1965 of this chapter.
(o)
(p)
(q)
(r)
(2) Project locations are to promote equal access for the inclusion of all groups regardless of race, color, religion, sex, national origin, age, marital status, physical or mental disability, or familial status, thereby opening up nonsegregated housing opportunities for minorities.
(3) Except as otherwise permitted by paragraph (r)(6) of this section, housing projects must be located in residential areas as part of established rural communities where essential public facilities (such as schools, hospitals and generally central water and sewer systems) and services (such as shopping, medical, and pharmaceutical) are readily available in close and convenient proximity to the site. Public facilities
(4) In order to provide housing at the lowest cost possible, preference in accordance with § 1944.231 of this subpart will be given to loan requests in which specific tracts of land will be donated by States, units of local government, public bodies, and nonprofit organizations, provided the following conditions are met:
(i) The land is suitable for the proposed housing and meets the site criteria of this paragraph (r) and the environmental requirements of part 1940, subpart G, of this chapter; and
(ii) Site development costs of the donated site do not exceed the cost of purchasing an alternative site and the site development costs for the alternative site. For example, if the site development costs of the donated site are $50,000 and purchasing an alternative site would cost $20,000 and $15,000 to develop, donation of the site would not be cost effective or qualify for preference; and
(iii) Due to no land cost, the overall cost of the project has been reduced compared to similar type projects; and
(iv) The donor of the site has owned the site for at least 1 year. The State Director may waive the 1-year restriction when it is clearly documented that the donation of the land was not intended to circumvent the provisions of this paragraph; and
(v) A return on investment is not paid to the borrower for the value of the donated land nor is the value of the land considered as part of the borrower's contribution; and
(vi) There is no identity of interest between the donor of site (including any members of the donor entity) and the applicant for the loan (including any members of the applicant entity); or
(vii) In cases where there is an identity of interest between the donor of the site (including any members of the donor entity) and the applicant for the loan (including any members of the applicant entity), the applicant meets the requirements of § 1944.231(e) of this subpart.
(5) Noncontiguous rental sites. (i) Noncontiguous sites within the same community may be considered if feasible. Each site must meet all FmHA or its successor agency under Public Law 103-354 site criteria and an appraisal must be made on each site in accordance with subpart B to part 1922 of this chapter (available in any FmHA or its successor agency under Public Law 103-354 office). The units must be managed under one management plan with one loan agreement/resolution.
(ii) If a small community cannot support a project containing enough units to make it cost effective or in cases involving conversion of 502 inventory units, FmHA or its successor agency under Public Law 103-354 will consider a project which includes more than one site in the same or different communities. The State Office and applicant must mutually agree that the location of the sites will not adversely effect the efficiency of management and servicing of the projects. The requirements of paragraph (r)(5)(i) of this section will also apply.
(6) FmHA or its successor agency under Public Law 103-354 will consider financing new construction or the purchase and rehabilitation of existing structures (in accordance with § 1944.212(b) of this subpart) located in the downtown business areas of rural communities that have established a comprehensive strategy for meeting their community development and housing needs. That strategy must include the redevelopment, rehabilitation, restoration or revitalization of the downtown business area. The proposed project site must be located within the downtown business redevelopment/revitalization area and the following conditions must be met:
(i) Essential public facilities (such as schools, hospitals and generally central water and sewer systems) and services (such as shopping, medical and pharmaceutical) must be readily available in close and convenient proximity to the site and must be adequate to support the needs of the tenants and members and the housing project.
(ii) The community must have an official short-term community development and housing plan which sets forth its comprehensive strategy for meeting identified community development and housing needs. The plan will include the need for eliminating and preventing economic decay, slums or blight; the need of benefiting the lower-income population; or other community development needs having a particular urgency. The strategy should include a community-wide component which describes the development strategy of the governing body, the major objectives the governing body seeks to accomplish, the priorities it has established, the factors taken into account in selecting areas for treatment and the anticipated public and private sources of funds necessary to conduct the treatment of each area selected. In addition, the plan should contain the following component strategies:
(A)
(B)
(C)
(iii) Evidence must be presented from the local governing body verifying that the community has adopted, through resolution or other official act, the community development and housing plan referenced in paragraph (r)(6)(ii) of this section. A copy of the adopted plan should be made available to FmHA or its successor agency under Public Law 103-354. While it is not necessary that the downtown redevelopment/revitalization area be formally designated as an urban renewal or other similar area, evidence supporting a local determination that the downtown business area meets the criteria established in the community development and housing plan must be maintained in the locality's records. Documentation received from the local governing body must also identify the site or structure involved in the applicant's proposal as part of or essential to the downtown redevelopment/revitalization area.
(iv) Evidence must be presented to FmHA or its successor agency under Public Law 103-354 verifying the intended commitment of public and private resources which will be available for completing any other integrally related redevelopment/revitalization activities being undertaken in the downtown business area along with the applicant's proposed project.
(v) Prior review and concurrence must be received from the National Office before the State Director or servicing official authorizes the applicant to develop a complete application. All of the information required in paragraph (r)(6) of this section must be provided by the applicant before National Office review.
(7) The property for which a loan is made must be located in a rural area as defined in 7 CFR 3550.10. However, if the area where the site is located has changed from rural to nonrural in accordance with the most current official census figures, loan requests received before the date the area was determined nonrural will be processed as expeditiously as possible and loans closed if the applicants are otherwise eligible. Such loans must still be eligible and feasible, and processed in accordance with § 1944.231 of this subpart.
(s)
(t)
“The Farmers Home Administration or its successor agency under Public Law 103-354, as a potential lender or insurer of funds to defray the costs of this contract, and without liability for any payments thereunder, hereby concurs with the form, content, and execution of this contract.”
(u)
(v)
(w)
(2) To evidence market feasibility for projects which are expected to use RA from sources other than RHS, applicants will be required to demonstrate that:
(i) The assistance will be provided for at least 5 years.
(ii) A market exists for persons and families eligible for the assistance. The amount of the RA to be provided must be considered when determining the number of families that would be income eligible for the project.
(iii) For the term of the loan remaining after RA is no longer available, an adequate rental market exists for the project without the assistance.
(iv) During the term of the RA contract, the provider will make available the amounts required at least annually.
(3) Feasibility for projects receiving tax credits will require a more extensive examination since tax credits are predicated on renting to very-low income persons. Applicants choosing to apply for tax credits will be responsible for identifying the amount of tax credits it anticipates requesting from the State, as well as the income percentage on which the credits will be based, and the percentage of units targeted for tax credit eligible persons. The market study must substantiate the presence of persons whose incomes would qualify for tax credits who cannot afford the basic rent and those persons whose incomes are tax credit eligible but who are still able to afford the basic rent.
(x)
(a)
(1) A second mortgage will be taken on a site developed with prior loan(s) when a subsequent loan is made to complete or finish out units on the site or when a second initial loan is made to develop units on a contiguous site.
(2) Personal liability will not be required for the members or stockholders of any corporation or trust or any partners in a limited partnership. Personal liability will be required of all members of other partnerships. For limited partnerships, the State Director will obtain the advice of the Regional Attorney as to any modifications needed in the promissory note and mortgage.
(3) If it is impossible or inadvisable for an applicant which is a public or quasi-public organization to give a real estate mortgage, the security to be taken will be determined by the National Office upon the recommendation of the State Director. The State Director should consult OGC as to whether the proposed security is legally permissible.
(b)
(c) If a bond is used in lieu of a promissory note to evidence a loan, it must be sent to the National Office for review prior to loan closing. OGC must also review the proposed bond.
(a)
(b)
(2) A written contract for architectural services will be required as outlined in subpart A of part 1924 of this chapter.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(1) Fire and extended coverage will be required on all buildings included in the security for the loan in accordance with subpart A of part 1806 of this chapter (FmHA Instruction 426.1) and subpart C of part 1930 of this chapter.
(2) Suitable worker's compensation insurance will be carried by the applicant for all its employees.
(3) The applicant will be advised of the possibility of incurring liability and encouraged or required, when appropriate, to obtain liability insurance.
(4) Flood insurance will be required on all buildings located in or to be located in special flood or mudslide prone areas in accordance with subpart B of part 1806 (FmHA Instruction 426.2).
(k)
(2) If the applicant is an organization, it will see that fidelity coverage is in place on any personnel entrusted with the receipt, custody and disbursement of any project monies, securities, or readily salable property other than money or securities. Fidelity coverage will be in force as soon as there are assets in the organization in accordance with the provisions described at paragraph XV A of exhibit B of subpart C of part 1930 of this chapter.
(l)
This section includes additional provisions that apply to the making of loans for manufactured home rental and cooperative project development. This section will apply in addition to all other applicable requirements contained elsewhere in this subpart. All references in this subpart to projects and housing for rent to eligible tenants will also mean the rental of sites with manufactured homes within a rental project development.
(a)
(1) The borrower must be the first owner purchasing the manufactured homes for purposes other than resale.
(2) The project must include two or more continguous sites with dwelling units. Each manufactured home unit must not have been previously occupied as a residence or for any other purpose and be less than 1 year old from date of manufacture.
(3) A project is not eligible if the purpose of the loan is to refinance the project, except as provided in § 1944.212(l) of this subpart.
(4) A loan may be made to rehabilitate manufactured home units of an existing project only if the units to be rehabilitated are currently financed by FmHA or its successor agency under Public Law 103-354 under this subpart.
(5) An eligible project may include the purchase of the real property of an existing project which will be redeveloped with the placement of new, previously unoccupied, manufactured homes conforming to the development, installation and set-up requirements of exhibit J to subpart A of part 1924 of this chapter.
(b)
(c)
(d)
(e)
(2) Manufactured home projects will be designed to provide for a desirable residential environment. Innovative and imaginative design is encouraged. Stylized patterns and monotony will be avoided. All property improvements will relate to the individual characteristics of the land. The project, including structures, streets, and all site improvements, should be harmoniously, efficiently and conveniently arranged in relation to the topography and the shape of the property.
(3) The borrower will not use or permit the use of any portion of the security property for demonstrating mobile home models for sale promotion purposes.
(4) The manufactured home, when placed on site, will have floor space area of not less than 400 square feet, and a width of 12 feet or more for single wide and 20 feet or more for a double wide unit. The unit must:
(i) Be placed on a site-built permanent foundation that meets or exceeds applicable requirements of the FmHA or its successor agency under Public Law 103-354 adopted standards which are identified in exhibit J to subpart A of part 1924 of this chapter or other building codes approved by FmHA or its successor agency under Public Law 103-354.
(ii) Be permanently attached to the foundation by anchoring devices adequate to resist all loads identified in exhibit J to subpart A of part 1924 of this chapter or other building codes approved by FmHA or its successor agency under Public Law 103-354.
(iii) Be constructed in compliance with FmHA or its successor agency under Public Law 103-354 thermal performance construction standards as specified in exhibit D to subpart A of part 1924 of this chapter. The unit must have an affixed label as specified in paragraph XIV(c)(3) of exhibit F to subpart A of part 1944 of this chapter indicating that the unit is constructed to FmHA or its successor agency under Public Law 103-354 thermal requirements for the appropriate winter degree days.
(iv) Be constructed in compliance with applicable standards and manuals adopted by FmHA or its successor agency under Public Law 103-354 as evidenced in part A, paragraph V of exhibit J to subpart A of part 1924 of this chapter. All units must conform to the HUD “Federal Manufactured Home Construction and Safety Standards,” and be identified by an affixed certification label according to exhibit J to subpart A of part 1924 of this chapter.
(f)
(1) The warranty will provide that the manufactured homes, foundations, positioning and anchoring of the units to their permanent foundations, and all contracted improvements are constructed in substantial conformity with applicable approved plans and specifications.
(2) The warranty will also include provisions that the manufactured homes sustained no hidden damage during transportation and, for double-wide units, that the sections were properly joined and sealed.
(3) The general contractor or dealer-contractor must warrant that the manufacturer's warranty is in addition to and not in derogation of all other warranties, rights and remedies that the borrower may have.
(4) The seller of the manufactured homes will deliver to the borrower the manufacturer's warranty. The warranty will identify the units by serial number.
This section includes additional provisions that apply to the making of loans for congregate housing and group homes. It will apply in addition to all other applicable requirements contained elsewhere in this subpart. Congregate housing and group homes are types of section 515 RRH that require a broader commitment from applicants to ensure that needed and desired services will be provided when requested by prospective tenants. The concept may not be desired or feasible in all market areas. Congregate housing is unique and has many components. It is not merely an elderly housing project with services. It must be designed and managed to meet the needs of aging tenants. The management of congregate housing requires supervision of support services and more interaction and consultation with tenants. We strongly recommend that applicants who have not dealt with this type of housing obtain assistance from organizations or individuals who have experience in planning and designing congregate housing.
(a)
(1)
(2)
(i) Applicants must pay particular attention to the site requirements contained in § 1944.215(r) of this subpart. Congregate housing should be located as close to services and shopping as possible, considering the availability of affordable residential sites. The time it takes to reach services is also important especially when considering potential medical emergencies.
(ii) Facilities needed to accommodate the services described in § 1944.224 (a)(5) of this subpart must be designed in accordance with acceptable practices. Specific design guidelines are provided in chapter 1 of guide 2 of subpart A of part 1924 of this chapter. These facilities may be larger than necessary to meet the tenants' requirements if they are needed in the community and other sources of funds are available to pay a pro rata share of the cost.
(iii) The design must accommodate the needs of the individuals the housing is designed to serve. The walkways and corridors between living units and the support service facilities must be safe, comfortable and minimal in length. Handrails that comply with the Uniform Federal Accessibility Standards must be provided on at least one side of all public corridors.
(iv) Areas used by the tenants will be separated as much as possible from areas needed for delivery of food and supplies and other building services. Interior spaces and finish materials must be residential in character and designed to help prevent tenants from becoming disoriented within the building(s).
(v) Emergency lighting must be provided in every public space, corridor, stairway, elevator and other means of egress.
(vi) The entrances to all living units must be on a route accessible to individuals with handicaps. Living units accessible only via exterior steps or interior stairs will not be acceptable.
(vii) The size of rooms and spaces in the living units must be comparable to units provided in other housing for the elderly. Kitchen facilities must be provided in all living units and include, as a minimum, a cooktop, oven, sink, refrigerator and a food preparation surface.
(viii) The bathroom and one bedroom in each living unit, and any public toilet rooms, must be furnished with an emergency call system that is appropriate for the size and management of the housing facility.
(3)
(i) Items which do not become affixed to the real estate security, such as special portable equipment, furnishings, kitchen bars, dining ware, eating utensils, movable tables and chairs, etc. Congregate housing projects require additional items that will not become affixed to the real estate. Developers are responsible for ensuring that these items are made available to the project. The initial operating capital can be used for these items in accordance with § 1944.211(a)(6)(i) of this subpart.
(ii) Specialized equipment for training and therapy.
(iii) Operating capital for a central dining facility.
(4)
(5)
(i)
(A) To ensure that the meals are wholesome and meet the needs of individual tenants, a professionally trained dietitian or nutritionist must be involved in planning the menus.
(B) The feasibility of sustained meal service may be dependent on the number of people who elect to use it. Congregate housing borrowers should actively solicit tenant participation in the meal service if the economic feasibility of the service depends on user charges.
(C) If the entity that operates the service is eligible to accept food stamps under the regulations of the Food and Nutrition Service (FNS) of the United States Department of Agriculture (USDA), the entity must be authorized by FNS to accept food stamps from tenants for the purchase of meals.
(ii)
(iii)
(iv)
(v)
(6)
(7)
(8)
(b)
(1) A group home is generally designed as a single household dwelling; however, it can also be a small multi-unit structure. Specific design guidelines are provided in chapter 1 of guide 2 of subpart A of part 1924 of this chapter. In addition, group homes must meet the following design criteria:
(i) The potential decreasing physical and mental capabilities of tenants must be considered in the design.
(ii) Interior spaces and finish materials must be residential in character.
(iii) Emergency lighting must be provided in every corridor, stairway and other means of egress.
(iv) The entrances to all living units must be on a route accessible to handicapped persons.
(2) Prospective tenants must be evaluated to determine if they meet the essential eligibility requirements to reside in a group home. Applicants should be guided by paragraph VI B 1 b of exhibit J of subpart C of part 1930 of this chapter.
(3) A group may limit occupancy to a specific group of tenants. For example, a group home may limit occupancy to eligible elderly tenants, developmentally disabled people, or mentally impaired tenants. Refer to exhibit J of subpart C of part 1930 of this chapter for additional information.
(4) A group home may be associated with another organization, such as a workshop for the developmentally disabled. However, it must be a separate entity and able to function without being dependent on another organization.
(5) Applicants must show that adequate support services needed by the tenants will be available on a continual long range basis. Support services can be provided by the project or by a State or local public agency. A nonprofit organization with an estimated ongoing service program also may be deemed capable of providing support services.
(6) Food stamps must be accepted from tenants as part of their contribution for meals in accordance with 1944.224 (a)(5)(C) of this section.
(7) A legal guardian (an individual) may execute a lease agreement on behalf of a tenant in a group home when that tenant does not possess the legal capacity to enter into a legal contract with the project owner.
(8) Instructions on how to determine the per unit rental rates for group homes are stipulated in exhibit J of subpart C of part 1930 of this chapter.
(c)
(1) Market studies must address the need for housing with services. Local agencies on aging and other groups familiar with the elderly can be a valuable source of information on the needs and wants of elderly people in the market area. Applicants can conduct a mail-out survey to age and income qualified elderly people if information is not available from other sources.
(2) An expanded market area may be considered only when the additional communities are part of the trade area and are so rural that they cannot support development of a congregate or group home facility. If an expanded market area is proposed, the market study must establish conclusively that the community will be able to draw enough tenants from the market area to ensure feasibility of the project. The market study must clearly identify the expanded area and contain separate information on the additional communities. If used, mail-out surveys must clearly address the probability of respondents relocating to the proposed site.
(3) Market studies should include income information from the local social
(4) Demand for congregate housing generally is displayed by elderly people who are older than 70 years. Therefore, the market study must contain demographic information particular to those over the age of 62 and those over 70 years old. The study must also address the growth trends of people who are over 85 years old.
(5) Market studies must include information concerning alternative service providers as required in paragraph (a)(6) of this section.
(d)
The Agency will rank rural places based on greatest need for Section 515 housing in accordance with this section. Places may be incorporated population centers such as cities, boroughs, towns, and villages; or unincorporated population centers identified by the Census Bureau (known as Census Designated Places (CDPs)). States must be consistent state-wide in their use of place types that are included in the list of designated places. Ranking will be based on the following:
(a) Qualifies as a rural area in accordance with 7 CFR 3550.10.
(b) Lacks mortgage credit for borrowers in accordance with §1944.211(a)(2).
(c) Demonstrates a need for multi-family housing based on the following factors, with equal weight given to each. Data for this purpose will be provided to States by the National Office from the most recent rural place data obtained from the Census Bureau. If Census data is not available for an eligible rural place, the State may request authority from the National Office to include the place on the list of designated places established in accordance with § 1944.229, provided the place meets the requirements of § 1944.229(b) and it can be demonstrated that there is a high need for assisted multi-family housing based on information obtained from reliable local or state sources. The State may request authority from the National Office to use other state-wide data if it is objective and consistent with the Housing Act of 1949, as amended.
(1) The incidence of poverty, measured by determining households below 30 percent of the county rural median income.
(2) The existence of substandard housing, measured by determining the number of occupied housing units that lack complete plumbing or have more than one occupant per room.
(3) The lack of affordable housing, measured by determining households below 30 percent of county rural median income paying more than 30 percent of income in rent.
States will compile a list of designated places for which Section 515 applications will be invited, in accordance with the provisions of this section and the ranking process described in § 1944.228. Inclusion on the list of designated places does not indicate that market need and demand has been established; this will be a loan feasibility determination. Once placed on the list of designated places, places will be considered equal, with no regard to their ranking on the ranking list or order of selection. In exceptional circumstances, there may be an instance when a place with an urgent need for multi-family housing is not reflected in the ranking process in § 1944.228; for example, a place that has had a substantial increase in income-eligible
(a)
(1) States may designate a higher number of places than 10 percent or the minimum 10 places to reach high-need areas in accordance with paragraph (c)(3) of this section.
(2) States that anticipate high loan activity because of leveraging may designate a number of places higher than 10 percent or the minimum 10 places with the concurrence of the National Office.
(b)
(1) Must have 250 or more households as a minimum feasibility threshold for multi-family housing, or, for Indian reservations, must have 250 or more households within the boundaries of the reservation; and
(2) May not have any of the “build and fill” conditions described in § 1944.213(f)(2). Places thus identified will be deferred for inclusion on the current year's list of designated places. Deferred places will be reviewed annually and, at such time that the “build and fill” conditions no longer exist, will be considered for inclusion on the list for the next fiscal year in accordance with this section. To the extent practicable, States will consult with HUD and other state or local agencies or entities that provide very low- or low-income rental housing to determine places where loan proposals have been approved or are in process.
(c)
(1) At least 80 percent of the State's total designated places must be selected in rank order from the list.
(2) With concurrence from the National Office, up to 20 percent of the State's designated places may be selected for geographic diversity. For example, in a state with 1,000 total rural places, the State has elected to select designated places equal to the maximum 10 percent, or 100 places. Of the 100 places, at least 80 percent, or 80 places, must be selected from the places that meet the requirements of paragraph (b) of this section in order of their ranking; up to 20 percent, or 20 places, may be selected for geographic diversity. Places selected for geographic diversity must be the highest ranked place in each geographic division designated by the State, which must correspond with established State divisions, such as districts, regions, or servicing areas.
(3) In addition to the designated places selected in accordance with paragraphs (c)(1) and (c)(2) of this section, States may designate the following high need areas for multi-family housing:
(i) Places identified in the state Consolidated Plan or similar state plan or needs assessment report.
(ii) EZ/ECs, Indian reservations or communities located within the boundaries of tribal allotted or trust land, colonias, or REAP communities.
(d)
(e)
(f)
(a)
(b)
(a)
(b)
(2)
(i) To determine if the loan request is complete and includes the additional information required in NOFA;
(ii) To determine if the request is for an authorized purpose; and
(iii) To establish a point score based on the following factors:
(A) The presence and extent of leveraged assistance for the units that will serve RHS income-eligible tenants at basic rents comparable to those if RHS provided full financing. Eligible types of leveraged assistance include loans and grants from other sources, contributions from the borrower above the required contribution indicated by the Sources and Uses Comprehensive Evaluation, and tax abatements or other savings in operating costs provided that, at the end of the abatement period when the benefit is no longer available, the basic rents are comparable to or lower than the basic rents if RHS provided full financing. Scoring will be based on the presence and extent of leveraged assistance for each loan request compared to the other loan requests being reviewed, computed as a percentage of the total development cost of the units that will serve RHS income-eligible tenants. A total monetary value will be determined for leveraged assistance such as tax abatements or services in order to compare such items equitably with leveraged funds. As part of the loan application, the applicant must include
(B) The loan request is for units to be developed in a colonia, tribal land, EZ/EC, or REAP community, or in a place identified in the state Consolidate Plan or state needs assessment as a high need community for multi-family housing. (20 points)
(C) The loan request is in support of a National Office initiative announced in NOFA. (20 points)
(D) The loan request is in support of an optional factor developed by the State that promotes compatibility with special housing initiatives in conjunction with state-administered housing programs such as HOME funds or low income housing tax credits.
A factor thus developed cannot duplicate factors already included in this paragraph and must be provided to the National Office prior to the funding cycle for concurrence and inclusion in NOFA. (20 points)
(E) The loan request includes donated land meeting the provisions of § 1944.215(r)(4). (5 points)
(3)
(i) If one of the same-pointed requests is from an entity meeting the requirements of paragraph (e) of this section, it will be denoted with a
(ii) After all requests from entities meeting the requirements of paragraph (e) of this section have been numbered, the next sequential number will be assigned to a loan request from an entity not meeting the requirements of paragraph (e) of this section. If there are two or more requests from entities not meeting the requirements of paragraph (e) of this section, a lottery will be held and each request numbered in the order it is drawn, beginning with the next sequential number.
(iii) States with a partnership designated place list developed in accordance with § 1944.229(f) of this subpart, will score and rank loan requests as follows:
(A) All loan requests (including those for places on the partnership designated place list) will be reviewed and scored together as one group, following the process described in paragraph (b)(2) of this section.
(B) Using the point score and rank order established in accordance with paragraphs (b)(3)(i) and (b)(3)(ii) of this section, two separate ranking lists will be formed: the RHS ranking list will consist of loan requests for places on the State's designated place list; the partnership ranking list will consist of loan requests for places on the partnership designated place list. Selection of loan requests for further processing will be in accordance with paragraph (b)(6) of this section.
(4)
(i) A review of the preliminary plans and cost estimates.
(ii) A market feasibililty review, including the Agency's review of the market, a review of HUD's (and similar lender's, if applicable) feedback on the market area, and a review to ensure
(iii) A site visit and preliminary review to determine if the site criteria of §1944.215(r) can be met.
(iv) A review of the Affirmative Fair Housing Marketing Plan.
(v) Analysis of a current (within 6 months) credit report.
(5)
(i) If any selected loan requests are later withdrawn, rejected, or delayed for a period of time that will not permit funding in the current funding cycle, the Agency will select additional loan requests in ranking order as funding levels permit. For this purpose, the State may keep the next highest ranked loan request until it is determined that all selected loan requests will be funded. Applicants whose loan requests are held for this purpose will be advised that their loan request was not selected but ranked sufficiently high to be retained in the event a selected request is withdrawn or rejected in the current funding cycle.
(ii) Loan requests not funded in the funding cycle, including incomplete requests, or requests not meeting the requirements of exhibit A-7 of this subpart or NOFA, will be returned to the applicant with the reason it was not considered.
(6)
(i) Loan requests must first be selected in rank order from the RHS ranking list that, based on total development cost (TDC), are proportionate to the State's RHS allocation amount.
(ii) After loan requests have been selected in accordance with paragraph (b)(6)(i) of this section, remaining RHS funds must be used for the next highest scoring loan requests (or point score and tie-breaker number assigned in accordance with paragraph (b)(3) of this section), regardless of whether they are on the RHS ranking list or the partnership ranking list.
(c)
(d)
(1) Applicants will be given 15 calendar days from the date of the Agency's site rejection letter to submit a new site option. If the applicant appeals the decision but submits a new site option within 15 days, the new site option will be accompanied by a copy of their letter to the National Appeals Division withdrawing their appeal request. If the new site is acceptable, processing will continue. If the new site is not acceptable, the loan request will be rejected.
(2) If the applicant does not submit a new site option within 15 days, and has appealed the Agency's decision, the Agency will not delay processing of loan requests in other market areas pending the outcome of the appeal. The next ranked loan request, within available funding limits, will be selected for further processing.
(3) If the applicant prevails in the appeal, the loan request will be considered in the next funding cycle. The applicant will be given the opportunity to amend their loan request consistent with NOFA.
(e)
(1) Is a local nonprofit organization, public body, or Indian Tribe whose principal purposes include the planning, development, and management of low-income housing;
(2) Is exempt from Federal income taxes under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code (26 U.S.C. 501(c)(3) or 501(c)(4));
(3) Is not wholly or partially owned or controlled by a for-profit or limited-profit type entity;
(4) Whose members, or the entity, do not share an identity of interest with a for-profit or limited-profit type entity;
(5) Is not co-venturing with another entity; and
(6) The entity or its members will not be receiving any direct or indirect benefits pursuant to LIHTC.
(f)
(2) All loan requests for RCH assistance will be reviewed for eligibility and feasibility. In cases where the proposal is not eligible or feasible, the proposal will be rejected. Proposals which appear eligible and feasible will be forwarded to the National Office for review and authorization.
(3) If authorized by the National Office, the State will notify the applicant that the proposal appears eligible and feasible. The applicant will be requested to provide the additional information required by exhibit A-9 of this subpart and any additional State requirements.
(4) If funds are not available in the current funding cycle, the loan request will be considered for funding in the next funding cycle.
(g)
(2) A loan request for MFH assistance may be withdrawn upon written request of the applicant at any time. The Agency may withdraw a loan request for failure of an applicant to provide necessary information to process a request for assistance should the applicant fail to respond to a written request which provides the applicant with a reasonable time period to submit the information.
RA from sources other than FmHA or its successor agency under Public Law 103-354 may be used in new or existing RRH projects upon National Office authorization. FmHA or its successor agency under Public Law 103-354 will consider authorizing such private RA (PRA) proposals which offer RA in the same general dollar amount and terms in which FmHA or its successor agency under Public Law 103-354 RA is calculated and granted. PRA proposals will be in the form of a memorandum of understanding (MOU) between the provider and FmHA or its successor agency under Public Law 103-354.
(a)
(1) Reason for providing PRA and its intended purpose.
(2) The length of time PRA will be provided.
(3) Actions to be taken at the end of the PRA proposal to minimize impact on tenants losing PRA and avoid displacement.
(4) A copy of the proposed PRA agreement, which is the instrument of agreement involving the tenant, owner, and provider of assistance. FmHA or its successor agency under Public Law 103-354 will not be a party to the PRA agreement nor have any responsibilities under the agreement. The PRA agreement must state that:
(i) The payments should be paid directly to the tenants or a separate project operating account for this purpose. The tenants must be advised of the amount and source of the assistance through the lease or a supplement to the lease.
(ii) Sufficient funds will be set aside in a way that assures availability of PRA for the life of the PRA agreement, which must be for a minimum of 5 years. The method of supplying the funds must be clearly set forth and acceptable to FmHA or its successor agency under Public Law 103-354.
(b)
(2) The provider must provide FmHA or its successor agency under Public Law 103-354 with reasonable assurances that tenants receiving the PRA will not be displaced when the PRA expires.
(3) In accordance with § 1944.215(w)(2)(ii) of this subpart, it must be demonstrated that for the term of the loan remaining after PRA is no longer available, an adequate rental market exists for the project without the assistance.
(4) For complexes with LIHTC, if the PRA term is less than the LIHTC compliance periods, the marketability of the PRA units must be further demonstrated by either:
(i) Demonstrating that there are sufficient households within the LIHTC income limits to support the units without rent overburden; or
(ii) The applicant's certification that the targeted percentage of LIHTC units (not the minimum set-aside option) does not include the PRA units, so that the units will be marketable to households in all FmHA or its successor agency under Public Law 103-354 income ranges.
(c)
In order to develop the maximum number of affordable housing units and promote partnerships with states, local communities, and other partners with similar housing goals, RHS participation loans are encouraged.
Apartment complexes developed with participation funds may serve lower income households exclusively (RHS very-low and low income-eligible households; LIHTC income-eligible households) or may be marketed to households with mixed incomes. The following will apply:
(a)
(2) If RHS RA is being provided, RHS loan participation should equal at least ten percent of the project's total development cost unless authorization for a lower percentage of participation is obtained from the National Office in accordance with §1944.240.
(3) RHS RA may be provided on any unit where the basic rent does not exceed what the basic rent would have been on that unit if RHS provided full financing. The number of RHS RA units available for participation loans is limited and established annually through subpart L of part 1940 of this chapter.
(b)
(2) The total funds provided by all sources may not exceed what is necessary to make the project feasible in accordance with §1944.213(a).
(3) The total debt from all sources is limited to the State Director's loan approval authority unless written authorization is obtained from the National Office in accordance with §1944.213(b).
(4) The complex will be operated and managed in compliance with RHS requirements and regulations.
(5) If Low Income Housing Tax Credits are anticipated on a proportion of units higher than the percentage receiving RA or similar tenant subsidy, the market study must clearly reflect a need and market for units without deep subsidy. It is not the intent of
(c)
(1) Design features such as patios or balconies, washers and dryers, and garbage disposals may be included if they are customary for the area and needed for marketability.
(2) Mixed income complexes may include nonessential common facilities such as swimming pools provided:
(i) The facility is not financed with RHS funds,
(ii) The complex is able to support the facility's operating and maintenance costs through collection of a user fee from tenants who subscribe to the service, and
(iii) The facility is designed and operated with appropriate safeguards for tenant health and safety.
(d)
(2) For limited profit borrowers, additional funds exceeding the minimum required contribution that are provided from the borrower's own resources (not loans or grants from other sources) may be included in the borrower's initial investment, for purposes of determining return on investment, as provided in §1944.215(n).
(3) A loan from the borrower to the project may be considered, provided the loan proposal meets all conditions of this section and the loan to the project is from the borrower's own resources. LIHTC proceeds may be considered the borrower's own resources as provided in §1944.215(n)(1).
(e)
(f)
(2) If RHS participation is less than 50 percent, every effort should be made to obtain a parity lien position. If a parity lien cannot be negotiated, an exception may be requested to accept a second lien position in accordance with §1944.240. The State Director will submit requests to accept a second lien position to the Deputy Administrator, Multi-Family Housing with comments and recommendations.
(3) RHS will take a first lien on project revenue from rent or occupancy payments; RHS, State, or private RA payments; and operating and reserve accounts.
(g)
Prior to loan approval the application will be reviewed for continued eligibility. The applicant may be required
(a)
(1) FmHA or its successor agency under Public Law 103-354 will obtain closing instructions from OGC in accordance with the requirements of subpart B of part 1927 of this chapter and §§ 1944.236(a) and 1944.236(b)(4) of this subpart.
(2) Ensure that the servicing office has on file evidence that a deposit has been made to the general operating account of an amount of initial operating capital sufficient to cover the expected start-up costs.
(3) The applicant will provide evidence indicating the terms and final arrangements for interim financing.
(4) The applicant will certify as to the availability or non availability of other government assistance as defined in § 1944.205 of this subpart immediately prior to loan closing. If other government assistance becomes available prior to loan closing, the loan amount will be decreased in accordance with paragraph (e)(3) of this section.
(b)
(1)
(2)
(3) Monetary default by original applicant/entity. An obligation may be transferred to any person or applicant eligible to receive an RRH loan when the original applicant/entity is in monetary default which has or may result in foreclosure by the interim lender, and:
(i) The applicant/entity assuming the obligation, or the interim lender, removes any liens filed against the property;
(ii) There have been no deviations from the FmHA or its successor agency under Public Law 103-354 approved plans and specifications;
(iii) The transferee will not be composed of any principals of the transferor;
(iv) The transfer will be in the best interest of the FmHA or its successor agency under Public Law 103-354 and prospective tenants;
(v) The applicant/entity and all members thereof whose obligations are transferred will not be considered eligible for further participation in the RRH program for at least 5 years from the date of the transfer of the FmHA or its successor agency under Public Law 103-354 loan obligation; and
(vi) Prior approval is obtained from the National Office.
(c)
(i) FmHA or its successor agency under Public Law 103-354 will proceed
(ii) The guide letter shown as exhibit B of this subpart will be used to inform a proposed interim lender that a specified amount of funds have been obligated and will be available to retire the interim financing if the applicant complies with the approval conditions, the builder's performance is acceptable and all construction bills are paid.
(iii) Since FmHA or its successor agency under Public Law 103-354's commitment to the applicant is contingent upon acceptable performance by the builder and payment of all construction bills, the interim lender should be advised of the additional risk involved if the builder is unable to provide, or the interim lender does not require a payment and performance bond. Although partial payments to the builder constructing the project by the contract method of construction must be made in accordance with the approved construction contract, the interim lender should not be permitted to make disbursements of more than 90 percent of the value of acceptable work in place.
(iv) Any cash for land purchase or development that is to be furnished by the applicant in fulfillment of the applicant's contribution requirement in § 1944.213(b) of this subpart must be placed on deposit with the interim lender and disbursed prior to any disbursement of interim loan funds. Obligations incurred prior to loan closing and the start of construction will be handled in accordance with § 1944.213(d) of this subpart.
(v) A supervised bank account need not be established for funds obtained through interim financing except for any small amounts held to complete construction so loan funds can be fully advanced and AED can be established. However, in order to assure that funds are requested and used for authorized purposes, requests for partial payments will be submitted through the servicing official on Form FmHA or its successor agency under Public Law 103-354 1924-18, “Partial Payment Estimate,” or other professionally recognized form containing the certifications of the architect, applicant and FmHA or its successor agency under Public Law 103-354 representative shown on Form FmHA or its successor agency under Public Law 103-354 1924-18. For recordkeeping purposes, Form FmHA or its successor agency under Public Law 103-354 402-2, “Statement of Deposits and Withdrawals,” should be used to record the deposit of applicant funds for construction with the interim lender and payments of estimates where FmHA or its successor agency under Public Law 103-354 has approved the estimate.
(vi) When the project is substantially complete, the FmHA or its successor agency under Public Law 103-354 loan may be scheduled for closing. A project is substantially complete when it is possible, in accordance with any contract documents, applicable State or local codes or ordinances and the FmHA or its successor agency under Public Law 103-354 approved drawings and specifications, to permit safe and convenient occupancy and use of the buildings. Upon substantial completion, the owner's architect must issue a dated and signed statement certifying to substantial completion. The owner's architect will also prepare and verify a punch list of any minor items of development that need to be corrected and completed.
(vii) The FmHA or its successor agency under Public Law 103-354 loan may be closed, permanent instruments issued to evidence the FmHA or its successor agency under Public Law 103-354 indebtedness and FmHA or its successor agency under Public Law 103-354 loan funds used to retire the interim indebtedness when the project is substantially complete and all bills have been paid. To evidence that there are no unpaid obligations outstanding in connection with the project, the applicant must submit to the servicing official, at or prior to loan closing, signed statements from the contractor, architect, engineer and attorney indicating that obligations for material, labor or services have been paid in full in accordance with their contracts or other agreements, less any funds withheld for minor punch list items. Form FmHA or
(A) Statements to the extent possible are obtained.
(B) The interests of FmHA or its successor agency under Public Law 103-354 can be adequately protected and its security position is not impaired.
(C) Adequate provisions are made for paying the unpaid accounts by withholding or escrowing sufficient funds to pay such claims or obtaining a release bond.
(viii) Because interest rates can fluctuate between the time construction estimates are finalized and completion of construction, any excess funds remaining from interim financing will be returned on the FmHA or its successor agency under Public Law 103-354 loan. Also, interim funds remaining because of early completion of construction will be returned. The leftover interest may be used for certain other eligible loan purposes critical to the completion of the project which were unknown to the applicant and contractor at the time the loan was approved, provided prior National Office concurrence is obtained.
(2)
(i) In cases where relatively large amounts of funds are to be expended for purchases of real estate or for other reasons at the time of closing, separate checks for these purposes may be ordered and endorsed by the borrower to the seller or other appropriate party. This will preclude the necessity for depositing these loan funds in the supervised bank account and reduce the amount of required collateral.
(ii) Except as indicated in paragraph (c)(2)(i) of this section, advances will be made only as needed to cover disbursements required by the borrower for a 30-day period. Normally, there should be no more than 24 advances. These advances should generally be used within 2 years of loan closing. The retained percentage withheld from the contract to assure that construction will be completed in accordance with the contract documents will ordinarily be included in the last advance. Advances will be requested in sufficient amounts to insure that ample funds will be on hand to pay costs of construction, land purchase, legal, engineering or architectural costs, interest and other expenses as needed. The borrower will prepare Form FmHA or its successor agency under Public Law 103-354 440-11, “Estimate of Funds Needed for 30-day Period Commencing _______,” modified as needed, to show the amount of funds required during the 30-day period. This form will be approved by the servicing official or his/her designee.
(iii) After it is determined that the estimate prepared by the borrower is adequate, the advance will be requested through field office terminals in accordance with the MFH user procedure. As an example, for a loan of $100,000, the advances may be made as follows: Assuming that the loan will be closed on July 1, the borrower will complete Form FmHA or its successor agency under Public Law 103-354 440-11 in sufficient time so that the funds will be available on the day of loan closing. The estimates should be broken down for the first advance in a manner similar to the following:
An advance of $40,000 would then be available on July 1, the date of loan closing.
(iv) The second advance is also based on the borrower's estimate prepared on Form FmHA or its successor agency under Public Law 103-354 440-11 which must be prepared in sufficient time so that the estimated amount of funds will be available on August 1. This estimate of funds might be broken down as follows:
(v) When the project is substantially complete in accordance with
(vi) If funds remain after the loan is fully disbursed and AED has been reached, they must be put into a supervised bank account. The funds cannot be returned on the loan to be drawn later since AMAS will treat as a refund.
(vii) Any deviation from the multiple advance procedure must have the prior approval of the National Office.
(d)
(e)
(2) If it is necessary to increase the amount of the loan in
(3) If it is necessary to decrease the amount of the loan before closing, the deobligation will be processed through field office terminals.
(f)
(1)
(2)
(g)
(h)
(1) The servicing official will review the applicant's marketing plan to determine that it is complete and all supplemental information is provided. If the plan needs to be modified before marketing activity begins, approval must be granted from the official authorized to approve the loan. The servicing official will review the approved
(2) The servicing official should be assured that the applicant will sincerely direct marketing activity in an effort to attract applications for housing from all groups in the market area determined least likely to apply for the available housing. If it is anticipated that applications for housing may result in a concentration of occupancy by race, color, religion, sex or national origin, outreach efforts will be extended to persons who would not be expected to apply for the housing. The efforts will be conducted for a reasonable period of time prior to the normal period for receipt of applications and commencing not less than 90 days prior to project completion.
(3) Prior to initial occupancy by any person, the servicing official and the applicant will reconvene to assess implemented marketing activity by thoroughly reviewing the marketing plan, and the extent of achievement of plan objectives. If original marketing concepts prove to be less than effective and/or if there are changes in the housing market, the applicant may be required to modify the marketing plan for the project. If the servicing official determines that the applicant is in noncompliance with the plan and a modification to the plan is not warranted, the matter will be referred to the FmHA or its successor agency under Public Law 103-354 Administrator, attention Equal Opportunity Staff Director, through the State civil rights coordinator.
(a)
(b)
(1) The mortgage or other instrument will contain the following covenant:
The property described herein was obtained or improved through Federal financial assistance. This property is subject to the provisions of Title VI of the Civil Rights Act of 1964 and the Rehabilitation Act of 1973 and the regulations issued pursuant thereto for as long as the property continues to be used for the same or similar purpose for which financial assistance was extended or for as long as the purchaser owns it, whichever is longer.
(2) When a loan resolution or loan agreement is used, include an additional paragraph in the mortgage to read as follows:
This instrument also secures the obligations and convenants of borrower set forth in borrower's Loan Resolution (Loan Agreement) of (
(3) For a loan to an individual when a loan agreement is not used, additional paragraphs will be included in the mortgage to read as follows:
(i) “Occupancy of the housing and related facilities on the property will be
(ii) “As required by the Government: Borrower will permit the Government to inspect and examine the operation of the housing and the books, records, and operations of borrower; submit regular and special reports pertinent to the purpose of the loan or the Government's financial interest; subject rents and charges and other terms of rental agreements with tenants of the housing, and compensation to employees connected with its operation, to prior approval by the Government, or to adjustment at the direction of the Government when necessary in its judgment to carry out the purpose of the loan or protect its financial interests; and comply with any other requirements which in the discretion of the Government are reasonably appropriate to the purpose of the loan or protection of the Government's interests. Revenue from the housing will be first used to pay operation and maintenance costs of such housing and to make adequate provision to meet required payments as they become due on the FmHA or its successor agency under Public Law 103-354 rural rental housing loan.”
(4) For a loan to a limited partnership, the following nonrecourse language should be inserted, subject to modification by the OGC:
No partner, either general or limited, will have any personal liability for the payment of all or any part of the indebtedness.
(5) For all section 515 RRH and RCH loans used to build or acquire new units made pursuant to a contract entered into on or after December 15, 1989, the following language will be included in the mortgage:
The borrower and any successors in interest agree to use the housing for the purpose of housing people eligible for occupancy as provided in section 515 of title V of the Housing Act of 1949, and FmHA or its successor agency under Public Law 103-354 regulations then in effect during the full term of this mortgage. No eligible person occupying the housing will be required to vacate nor any eligible person denied occupancy for housing prior to the close of such period because of a prohibited change in the use of the housing. A tenant or person wishing to occupy the housing may seek enforcement of this provision as well as the Government.
(6) For the following categories of loans, the language set forth in exhibit A-1 or A-2, as appropriate, of subpart E of part 1965 of this chapter will be included in the mortgage instead of the language contained in paragraph (b)(5) of this section:
(i) Equity loans made to avert prepayment.
(ii) Subsequent loans to nonprofit organizations or public agencies made in conjunction with transfers to avert prepayment.
(iii) Subsequent loans for any purpose other than to build or acquire new units.
(7) Additional guidance on closing transfers and loans to nonprofit corporations and public agencies to avert prepayment is contained in § 1965.217(e) of subpart E of part 1965 of this chapter.
(c)
(2) The amount to be shown on the note will be obligated amount as shown on Form FmHA or its successor agency under Public Law 103-354 1944-51, “Multiple Family Housing Obligation-Fund Analysis.” The note will be dated the date of loan closing except as authorized in subpart B of part 1927 of this chapter. If the first day of the month falls on Saturday, Sunday or a holiday, the note may be dated the first, loan closing will be the last working day prior to the first and the closing documents will be filed on the first working day following the first.
(3) Payments on loans will be scheduled on the note in accordance with the FMI and as provided in § 1944.215(c) of this subpart.
(4) The note(s) will be signed in accordance with the FMI and subpart B of part 1927 of this chapter.
(5) All loans will be closed on PASS as described in subpart K of part 1951 of this chapter. If the loan is a subsequent loan, all other loans on the project must be converted to PASS.
(6) All loans to be secured by revenue bonds or other forms of security other than a real estate mortgage or deed of trust will be sent to the National Office prior to loan approval with all necessary information for review and further instructions.
(d)
(e)
(2) After the loan is closed, the account and case folder will be established at the servicing office following the requirements of FmHA Instructions 1905-A and 2033-A (available in any FmHA or its successor agency under Public Law 103-354 office).
(a) A subsequent loan is made to an applicant/borrower to complete, improve, repair, and/or make modifications to the project initially financed by FmHA or its successor agency under Public Law 103-354, or for equity and/or other purposes when authorized by the provisions of subpart E of part 1965 of this chapter to avert prepayment. A subsequent loan to develop additional units must compete for funding in accordance with § 1944.231 of this subpart. Other subsequent loan requests do not have to compete for funding.
(b) If the designation of an area changed from rural to nonrural after the initial FmHA or its successor agency under Public Law 103-354 loan was made, a subsequent loan can be made, only to make necessary improvements and repairs to the property or for equity and other purposes when necessary to avert prepayment.
(c) In case where the loan is to complete the original housing under the initial FmHA or its successor agency under Public Law 103-354 loan:
(1) If the applicant/borrower provided an initial investment greater than required under the initial FmHA or its successor agency under Public Law 103-354 loan, the excess may be credited toward the required amount of the initial investment of the subsequent loan per § 1944.213 (b) of this subpart; the applicant/borrower should only be required to put up additional funds for this purpose if needed. The same applies to initial Operating and Maintenance (O and M) requirements.
(2) If the initial investment and 2 percent O and M amounts are sufficient to cover only the initial FmHA or its successor agency under Public Law 103-354 loan, the applicant/borrower must provide the additional respective amounts to cover the subsequent loan. The 2 percent O and M amounts must be in the form of cash as described in § 1944.211 (a)(6) of this subpart. The required amount of the initial investment is described in § 1944.213 (b) of this subpart.
(d) If the loan is to repair and/or improve an existing project which has been in operation for some time, then:
(1) The applicant/borrower should not be required to provide the initial 2 percent O and M amount since its purpose is to cover project start-up costs.
(2) The applicant/borrower must provide the initial investment per § 1944.213(b) of this subpart unless it provided more than the required initial investment when the loan was made. When the applicant/borrower has more than the required amount invested in the initial loan, the excess may be
(e) Subsequent loans, other than those made to a nonprofit corporation or public agency to avert prepayment, will be subject to the restrictive-use provisions contained in exhibit A-1 of subpart E of part 1965 of this chapter. Subsequent loans made to nonprofit organizations or public agencies to avert prepayment will be subject to the restrictive-use provisions contained in exhibit A-2 of subpart E of part 1965 of this chapter. The required restrictive-use language for subsequent loans shall be appended to the mortgage referencing all notes for the applicable term, beginning on loan closing. The advice of OGC shall be obtained to carry out the requirements of this paragraph.
(f) For additional requirements in closing quality loans to avert prepayment, see exhibit A-11 of this subpart.
(g) For additional requirements in closing subsequent loans to nonprofit corporations and public agencies made in conjunction with transfers to avert prepayment, see § 1965.65(f) of subpart B of part 1965 of this chapter.
The Agency shall not accept an offer to prepay, or request refinancing of any loan made to build or acquire new units made or insured under section 515 pursuant to a contract entered into on or after December 15, 1989 regardless of the fact the borrower has received previous RRH loans on the project. For purposes of this requirement, the date a “contract is entered into” is the date on which the Form FmHA or its successor agency under Public Law 103-354 1944-51 is mailed or delivered to the applicant/borrower.
Any tenant/member or prospective tenant/member seeking occupancy or use of RRH, RCH or related facilities who believes he/she has been discriminated against because of age, race, color, religion, sex, familial status, handicap or national origin may file a complaint in person with, or by mail to the Office of Fair Housing and Equal Opportunity, Department of Housing and Urban Development (HUD), Washington, DC, 20410, or any HUD office, or to the Administrator, FmHA or its successor agency under Public Law 103-354, USDA, Washington, DC 20250. If a complaint is made to an FmHA or its successor agency under Public Law 103-354 County, District or State Office, it must be directed to the Director of Equal Opportunity Staff (EOS), National Office, by the FmHA or its successor agency under Public Law 103-354 employee in charge of that office. When a complaint is sent to FmHA or its successor agency under Public Law 103-354-EOS by a county or servicing office, the State Director will be made aware of the complaint.
(a) Personnel in FmHA or its successor agency under Public Law 103-354 field offices will provide assistance to the aggrieved party when filling out required forms and filing a complaint.
(b) Each complaint must contain the following information:
(1) The name and address of the respondent.
(2) The name and address of the aggrieved person.
(3) A description and the address of the dwelling which is involved, if appropriate.
(4) A concise statement of the facts, including pertinent dates, constituting the alleged discriminatory housing practice.
(c) Participants in FmHA or its successor agency under Public Law 103-354's housing program failing to comply with the requirements of Title VIII of the Civil Rights Act of 1968, as
(d) All complaints will be handled in accordance with prescribed procedure.
The Administrator may, in individual cases, make an exception to any requirements of this subpart not required by the authorizing statute if he/she finds that application of such requirement would adversely affect the interest of the Government or adversely affect the accomplishment of the purposes of the program or result in undue hardship by applying the requirement. The Administrator may exercise the authority at the request of the State Director. The State Director will submit the request supported by data that demonstrates the adverse impact, citing the particular requirement involved and recommending proper alternative course(s) of action, and outlining how the adverse impact could be mitigated. Exception to any requirement may also be initiated by the Assistant Administrator for Housing.
(a)
(b)
(i) The applicant is eligible and has legal authority to contract for a loan and enter into the required statements.
(ii) The location of the housing meets the requirements outlined in § 1944.215(p) of this subpart.
(iii) The funds are requested for authorized purposes.
(iv) The proposed loan is sound.
(v) The security is adequate.
(vi) All preapproval requirements have been met, including the applicant's execution of Form FmHA or its successor agency under Public Law 103-354 400-4.
(vii) For projects with four or less units, the State Director has taken the necessary action to comply with § 1944.406 of subpart I of part 1940 of this chapter.
(viii) All other requirements will be met.
(2)
(ii)
(3)
The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575-0047. Public reporting burden for this collection of information is estimated to vary from 15 minutes to 40 hours per response, with an average of 6.4 hours per response including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Department of Agriculture, Clearance Officer, OIRM, room 404-W, Washington, DC 20250; and to the Office of Management and Budget, Paperwork Reduction Project (OMB# 0575-0047), Washington, DC 20503.
A. Most areas in rural America need more adequate rental housing. Some people with modest incomes live in impoverished housing that is cold in the winter and hot in the summer because adequate housing at a reasonable rent is not available. Other households that prefer to rent have the choice of either commuting many miles to work or living in the substandard rental housing that is available in small rural communities. To help reduce this rental housing shortage, the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 finances rental housing in rural communities.
B. To augment the choice of living accommodations available to modest income persons, FmHA or its successor agency under Public Law 103-354 also provides financing for cooperative-type housing units. Although this kind of housing units is appropriate only to a particular group of persons, it also serves to help reduce the existing housing shortage in rural communities. Nonprofit organizations, other types of organizations and individuals may qualify for these housing loans. Information about the loans is available at the local FmHA or its successor agency under Public Law 103-354 office.
C. This handbook will assist interested persons and groups in applying for a rural rental or cooperative housing loan. It also briefly
D. The basic guidelines in this handbook apply to all applicants; however, some procedural requirements will vary depending on the size of the project being proposed and the type of applicant/borrower. However, in no instance will different policies, practices or procedures be utilized in the evaluation or in determination of the creditworthiness of any organization or person(s) in connection with the provision of any RRH or RCH loan or other financial assistance for a project or other financial assistance which is secured by residential real estate because of race, color, religion, sex, handicap, marital or familial status, age, or National origin.
E. The objective of the FmHA or its successor agency under Public Law 103-354 housing loan program is to provide credit for housing that serves the needs of eligible very low-, low-, and moderate-income permanent residents.
F. Successful housing depends on the existence of the following three important conditions:
1. There must be a need for the housing to be built.
2. The housing must fit the needs of prospective tenants or cooperative members from the standpoint of location, design and cost.
3. The applicant for a loan must provide adequate information to FmHA or its successor agency under Public Law 103-354 to show that these basic conditions can be met.
A. An individual, organization, or group organizing to provide housing may contact any Rural Development office processing Section 515 loan requests to obtain information and necessary forms. The Section 515 program is administered by Rural Development's Rural Housing Service (RHS).
B. Each funding cycle, RHS will publish in the
C. Applicants must submit a loan request by the deadline announced in the
D. The loan request consists of SF-424.2, “Application for Federal Assistance (For Construction),” the supporting material or information listed in exhibit A-7 of this subpart, and any additional information required in NOFA. This information will enable the Agency to determine:
1. The eligibility of the applicant;
2. The feasibility (economic, environmental, and architectural) of the proposed housing;
3. That prospective cooperative members have read and understand their responsibilities as outlined in “What is Cooperative Housing?” (available in any Rural Development office) before agreeing to a cooperative housing project;
4. Whether the proposed housing can appropriately be financed by RHS; and
5. Its Civil Rights impact.
E. This information usually can be furnished by the applicant without hiring extensive professional services. However, fees for professional packaging services rendered to a nonprofit organization can be made a part of loan development costs.
A. Loan requests received by the deadline announced in the NOFA will be reviewed, scored, and ranked based on the loan selection criteria announced in the NOFA. Requests that rank sufficiently high will be reviewed for eligibility and feasibility.
B. Upon completion of the loan review process, applicants will be advised of RHS’ decision. Applicants whose loan requests are selected for further processing will be notified of the additional steps that need to be taken. Loan requests not selected for further processing in the current funding cycle will be returned to the applicant.
A. When a loan request is selected for further processing, the servicing official will review the items required in exhibit A-9. The amount of information required will vary based on the complexity and size of the proposed project. The servicing official will also provide forms and guides to assist the applicant in recording required information. Some of the guides are included as exhibits in this handbook. The applicant is responsible for providing the information required. The servicing official will assemble this information and complete the docket.
B. The following information will be helpful in developing a loan docket. The first two items are applicable only to nonprofit organizations. The other items apply to any applicant. In addition, the requirements of exhibit A-7 of this subpart must be met when
1.
b.
c.
d.
2.
b. The purpose of the broadly based membership requirement is to obtain community support, provide enough members to be able to rotate officers and members of the board of directors, protect the Government's financial interest as mortgagee and provide assurance that the housing will be a success and the purpose of the loan carried out.
c. In RRH loans made to nonprofit organizations and public bodies, there is no profit incentive. The term of the loan may be for as long as 30 years, with an amortization period not to exceed 50 years. Therefore, factors such as the prospect for continuous competent management and supervision, maintenance and adequate community support for the housing project over the expected life of the loan are important.
d. A membership list showing the names and addresses of each member should be maintained by the secretary of the organization.
(1)
(2)
3.
b. The board of directors, with assistance from the adviser to the board (discussed in a later section), will devise the rules and regulations under which the cooperative will operate. Additionally, the board will be responsible for management of the cooperative.
c. A membership list showing the names and addresses of each member will be maintained by the secretary of the cooperative.
d. Cooperative membership will require the deposit of a membership fee by each member as outlined in § 1944.215(g) of this subpart. The fee will be retained by the cooperative for as long as the person remains a member of the cooperative. The fee will be refunded to the person when membership is terminated.
4. The applicant should communicate with officials of the community early in the development of the proposal to explain the benefits of the proposed housing to the community. This meeting will serve to remove the uncertainty of the impact of the housing on the community and may aid in a timely processing of the loan request. The support of community officials is helpful in obtaining environmental clearances, possible zoning changes, favorable taxation, etc.
5.
b. At least 2 percent of the total development cost of the project is required for initial operation and maintenance costs. The applicant can determine the amount required by working out a detailed budget of income and expenses for the period of time until the housing is ready for occupancy and income will be available. The actual budget may indicate that more than 2 percent is needed.
6.
b. Exhibits A-2 and A-3 are sample forms which may be modified by the applicant to assist in the assembly of the information for the market analysis.
7.
(1) Convenient, attractive, safe and comfortable.
(2) Easily maintained.
(3) Located where tenants or members can have easy access to the goods and services they require for daily living.
(4) Planned to meet all codes, regulations, and acceptable construction practices.
(5) Priced within an affordable range of its prospective tenants and members.
(6) Energy efficient and complies with FmHA or its successor agency under Public Law 103-354's thermal performance standards.
b. The servicing official and State Office architect can provide information that will help the applicant in planning the housing.
8.
b. Before anything more than schematic drawings are prepared, the applicant and its architect, the FmHA or its successor agency under Public Law 103-354 architect/engineer and the servicing official should arrange a meeting. This meeting will acquaint the applicant's architect with the purposes of the housing and FmHA or its successor agency under Public Law 103-354's requirements. This will be helpful in eliminating misunderstandings. Among the topics that should be discussed are:
(1) Objectives of the housing program.
(2) Design requirements that will produce good housing at reasonable cost.
(3) Stages at which FmHA or its successor agency under Public Law 103-354 must review plans and specifications.
(4) Services the architect will be expected to perform.
(5) Agreement between architect and applicant.
9.
b. Site cost is also important. The total cost of the site, including the cost of improvements and the price of the land, must be considered. Both may be included in the loan. However, loan funds made available to purchase land may not exceed the present market value of the land in its present condition as determined by an FmHA or its successor agency under Public Law 103-354 appraisal.
c. Before buying a site, the applicant should consult the architect to determine the suitability of the site for the proposed housing. The applicant must consider the site requirements detailed in paragraph III of exhibit A-7 of this instruction. The applicant should not enter into any firm agreement to buy a site with the expectation of receiving an FmHA or its successor agency under Public Law 103-354 loan without consulting with the servicing official and prior to the Agency's completion of the environmental impact review.
10.
11.
b. This budget should be based on a typical annual operation after the project is occupied. Budgeting is an important part of the management. The applicant should spend enough time working on it to assure that the estimates are realistic. Budgets will be required each year until the FmHA or its successor agency under Public Law 103-354 loan
(1) Helps determine rental or occupancy rates.
(2) Indicates financial soundness.
(3) Serves as a guide for paying expenses.
c. Form FmHA or its successor agency under Public Law 103-354 1930-7, “Multiple Family Housing Project Budget,” and its accompanying exhibit A-6 of this subpart are a sample budget form and utility allowance form.
12.
13.
14.
b. The use of an onsite manager should be based on the size of the project. The manager should be readily available to the tenants. The manager might be one of the tenants or a member of the board of directors of a nonprofit corporation. The manager's duties should be specified in the management plan.
c. The board of directors of a corporation is responsible for overall supervision and management of all its affairs. The board should delegate actual operating and management responsibility to committees or individuals and meet often enough to see that enterprise is being managed successfully.
15.
b. It will be necessary for the proposed board of directors to become familiar with how a cooperative is supposed to work before it is able to successfully assume the responsibilities of running the cooperative. This can best be achieved by participating in programs designed for the express purpose of educating potential board members. The prospective board members will be expected to take part in such a training program.
c. Participation on committees by members will be on a voluntary basis. However, if it appears a committee does not have sufficient numbers for it to adequately operate, then additional members will be expected to volunteer their time and talents. Thus, participation on committees is voluntary up to a point. If a member has experience in a particular area, that member should be encouraged to join the committee which will benefit from his/her experience. The cooperative will need a total commitment from the membership in order to assure success of self-management. Examples of the types of committees which may be considered are:
(1) Maintenance
(2) Groundskeeping
(3) Communications
(4) Budget and finance
(5) Rules
(6) Recreation
(7) Home service
d. If the cooperative is not successful in managing itself, professional management will be hired by the cooperative.
16.
(1) The housing must be open to all eligible persons regardless of race, color, religion, sex, handicap, familial status, age, or national origin.
(2) The incomes of tenants and the initial incomes of cooperative members must be within the maximum income limits approved by FmHA or its successor agency under Public Law 103-354.
b. Additional guidance concerning occupancy in congregate housing projects can be found in exhibit J of subpart C of part 1930 of this chapter.
17.
18.
19.
20.
21.
22.
A. When the applicant has developed the complete loan docket, it should furnish and
B. If the docket is submitted to the State Office for consideration, the State Director will indicate any special requirements that need to be met before loan approval or loan closing.
C. Commercial financing should be used for projects during the interim construction period if available at reasonable rates and terms, FmHA or its successor agency under Public Law 103-354 can make a conditional commitment to the interim lender that will loan the funds to finance the construction of the project. The commitment will be conditioned upon acceptable performance by the builder and payment of all construction bills. After the conditions have been met, the FmHA or its successor agency under Public Law 103-354 loan will be closed to pay the interim construction indebtedness. Draws on interim loan funds will be made only as needed and will require the joint approval of the applicant and the FmHA or its successor agency under Public Law 103-354 servicing official.
D. In other cases FmHA or its successor agency under Public Law 103-354 can make advances of loan funds for construction, the note and mortgage will be signed by the applicant and the loan funds deposited in a joint bank account at loan closing. The loan funds are disbursed from the bank account as needed. Checks on the account must be signed by the borrower and countersigned by the FmHA or its successor agency under Public Law 103-354 servicing official.
The start of construction is the first physical sign that the housing will become a reality. The construction period is a most critical period of time.
A.
2. The applicant and the architect should invite competent contractors to bid on the housing. If bids are within the estimates, the successful bidder will be selected and the contract for construction will be awarded. During construction, a qualified FmHA or its successor agency under Public Law 103-354 representative and the applicant and its architect will inspect the work to protect their respective interests in the project. Payment will be made from the FmHA or its successor agency under Public Law 103-354 loan funds, or interim loan funds, according to provisions in the contract.
B.
C.
Promotion of the housing availability should start at least 90 days prior to completion. The applicant may want to create interest in the housing and build up the list of prospective tenants or members by having a dedication ceremony. This will attract attention and remind the local residents of what the housing means to the community. This is especially recommended for housing developed by nonprofit corporations.
The following exhibits may be used when applicable and, if necessary, adapted to meet the specific needs of applicants.
Agreement made this ___ day of ________, 19__ between the __________, hereinafter called the (owner) (board of directors), and __________, hereinafter called the attorney, witnesseth:
Whereas the (owner) (board of directors) intend to form a cooperative or other nonprofit corporation, hereinafter called the (corporation) (cooperative), to construct and operate a rural housing project in
1. Prepare and file incorporating papers and supervise and assist in taking other necessary or incidental actions to create the (corporation) (cooperative) and authorize it to finance, construct, and operate and proposed housing project.
2. Prepare for and furnish advice and assistance to the owner, or to the board of directors and officers of the corporation, in connection with (a) notices and conduct of meetings; (b) preparation of minutes of meetings; (c) preparation of adoption of necessary resolutions in connection with the authorization, financing, construction, and initial operation of a rural housing project; (d) special tax treatment applicable to housing cooperatives; (e) necessary construction contracts; (f) preparation of adoption of bylaws and related documents; (g) any other action necessary for organizing the (corporation) (cooperative) or financing, constructing, and initially operating the proposed housing project.
3. Review construction contract, bid-letting procedure, and surety and performance bonds.
4. Examine real estate titles and prepare, review and record deeds and any other instruments.
5. Cooperate with the architect employed by the (owner) (board of directors) in connection with preparation of survey sheets, easements, and any other necessary title documents, construction contracts, and other instruments.
6. Render legal opinions as required by the (owner) (board of directors) or the Farmers Home Administration or its successor agency under Public Law 103-354, United States Department of Agriculture.
7. (Owner) (board of directors) agree to pay the attorney for professional services in accordance with this agreement, as follows:
The (owner) (board of directors) and the attorney further covenant and agree that, if upon organization and incorporation, the (corporation) (cooperative) fails or refuses to adopt and ratify this agreement by appropriate resolution within ___ days, this agreement shall terminate and (owner) (board of directors) shall be liable only for payment for legal services rendered in connection with such organization and incorporation.
Signed this ___ day of ______ 19 __.
A rental housing project is being planned for (name of community.) The project would provide comfortable living at monthly rental rates of (Indicate proposed basic rent by number of bedrooms.) Your opinion on the following will help us to determine whether such a project is practical. This information does not obligate you in any way.
1. What age group are you in? 62 or over [] 50-61 [] 35-49 [] Under 35 []
2. Are you or members of the household handicapped or impaired and in need of specially designed housing arrangements? yes [] no []
3. Number of person(s) in your household: ___.
4. Approximate annual income from all sources including any social security pension, payments made on behalf of minor children, public assistance, etc.: $___.
5. Do you own () or rent () present residence?
6. Do you live in house () apartment () room () mobile home () on a farm () in town ()?
7. Is your present housing modern () not modern, but adequate () inadequate (). If inadequate, in what respect? ___.
8. What amount of monthly rent do you pay with utilities included? $___.
9. Would you pay 30 percent of your monthly income for modern housing for your family? yes () no ()
10. Would you be willing to move in if an apartment were available___, 19__? yes () no ()
11. Do you have a car? No, 1, 2, 3 (circle)
12. Number of meals you would like prepared for you per day ___
13. What other services would you like to have available to you?
14. List any hobbies or organizational membership you have.
This sample survey form is for your use in evaluating the need for new rental units in the community and its market area. You should be prepared to explain the methodology of the survey since FmHA or its successor agency under Public Law 103-354 will be spotchecking the respondents' answers. How the survey is performed can influence the outcome; therefore, it is encumbent upon you to see that the manner in which it is conducted is suitable and acceptable to FmHA or its successor agency under Public Law 103-354. For instance, compensation being paid to someone for survey work should not be dependent upon the number of respondents who would be willing to move into the project. The survey should be based on a random sampling of persons now residing in the market area. Things to avoid are surveying from the telephone book listing or a door-to-door canvass of a certain segment of the community. We want the development of rental units to be based upon actual circumstances prevailing in the market area in order that the housing development will present a secure and economical living arrangement for the persons in need of the housing.
(Circle yes or no)
1. Are you willing to share the responsibilities required of a cooperative member?
yes ____no____
2. If asked, will you serve on the board of directors or on a committee?
yes ____no____
3. Are you willing to help in maintaining the cooperaive property?
yes ____no____
4. Do you now have a better idea of what cooperative housing really is?
yes ____no____
5. Do you want to ask more about the cooperative before deciding whether to join?
yes ____no____
6. If the answer to question 5 is “yes,” will you come to an information meeting to be held in town?
yes ____no____
7. Have you answered the questions truthfully? Did you answer “no” to any of questions 1, 2, or 3? If so, this type of housing is not for you. If you are interested, please go on to complete the second portion of this survey.
1. How many persons in your household?
2. Approximate annual income from all sources: $______
3. Are you or members of the household handicapped or impaired and in need of specifically designed housing arrangements?
yes ____no____
4. An informal meeting is scheduled for ___ a.m./p.m., on ______, 19__, for the purpose of discussing a proposed __ -unit cooperative planned for this community. At that time a representative of the cooperative will be on hand to answer other questions you may have.
So that we may know how many persons to expect at the meeting, we ask that you give us your name, address, and phone number.
You will be billed directly for utilities and service charges. Block B sets forth the allowances credited in your rent for the payment of utilities. You may be billed for more or less than shown in Block B depending on your use of utilities
I.
II.
A.
1. Electric utility suppliers.
2. Natural gas utility suppliers
3. Water and sewer suppliers.
4. Fuel oil and bottle gas suppliers.
5. Public service commissions.
6. Real estate and property management firms.
7. State and local agencies including public housing authorities.
In cases where a project uses a single meter for more than one living unit or where a single fuel supply or heating or cooling plant is used for more than one unit, the following factors will be used to determine the pro rata share of utility costs or public service fees per living unit:
B.
General appliance and lighting loads and fees for public services should be estimated using data from the local utility companies and from other sources listed in paragraph II A above.
C.
1. Separate heating and cooling allowances will be estimated for the various types of multiple family housing financed by FmHA or its successor agency under Public Law 103-354 in the project. For example, separate allowances may be needed for duplexes, row or townhouses, or for garden and low and medium rise apartments. In addition to establishing different heating and cooling allowances for various types of structures, attention should be given to different allowances for water depending on whether the tenants will have responsibility for lawn care.
2. Allowances for air-conditioning will be established only for projects in which the owner furnishes a central air-conditioning system or other type unit as a part of the permanent equipment.
3. The cost of gas and electricity varies according to amounts consumed as shown on the appropriate rate schedules of the supplier. It is not possible to compute exactly the cost of electricity for any given function without knowing the total electrical usage for a unit. However, because neither the borrower nor the tenants know beforehand what the combination of utilities for any unit rented will be, it will be necessary to approximate the allowances for each function (e.g., heating, cooking, etc.) as follows: For electricity, the rates used for lighting, refrigeration and appliances should be from the top of the rate schedule or the higher unit costs. Allowances for electric cooling, water heating and space heating should be computed from the middle or lower steps in the rate schedules. Similarly, allowances for gas used for water heating and cooking should be computed using rates from the top of the rate schedule and for heating from the lower steps.
III.
A.
B.
1. Completed exhibit A-5.
2. List of local sources contacted for information and copies of any data provided by such sources.
3. Any data on allowances already established for the area.
4. Complete narrative statement and computations on method used in arriving at the allowances.
IV.
V.
The following information is to be submitted with SF 424.2:
I.
A. Financial Statements for Rental Projects—Each applicant must submit a current, signed, and dated financial statement. The financial statement must reflect sufficient financial capacity to meet the applicant's equity capital and initial operating capital requirements. Applicants may contribute cash, free and clear title to the building site, or a combination of both as an equity contribution. The initial operating capital must be furnished in cash.
(1) For a corporation (other than a nonprofit corporation) or a trust, financial statements will be required from each member, stockholder or beneficiary who holds an interest in the organization in excess of 10 percent.
(2) For a partnership, financial statements will be required from each general partner who holds an interest in the organization.
(3) A financial statement will be required for limited partners in a limited partnership who will have 10 percent or more ownership.
(4) For applicants that are not legally organized at the time of filing the loan request, financial statements will be required from all of the proposed parties in proportion to the proposed ownership interest of each part. However, the applicant must be legally organized prior to loan approval and must submit financial statements.
(5) For cases in which financial statements are required from an individual, the financial statements must also include the financial interest and signature of the spouse.
(6) When the applicant and/or general partner(s) have multiple applications pending and/or when the State Director is uncertain of the applicant's ability to provide the necessary borrower contribution required by § 1944.213 (b) of this subpart, 2 percent initial capital contribution and/or other assets needed for a sound loan, the State Director may request the applicant to submit additional financial information relative to its financial position.
(7) All financial statements submitted must contain the following statement immediately preceding the signature line:
(A) In new projects in which the loan has not been closed:
I/we certify the above is a true and accurate reflection of my/our financial condition as of the date stated herein. This statement is given for the purpose of inducing the United States of America to make a loan or to enable the United States of America to make a determination of continued eligibility of the applicant for a loan as requested in the loan application of which this statement is a part.
(B) For projects in which the loan has been closed and the applicant has been formed:
I/we certify the above is a true and accurate reflection of my/our financial condition as of the date stated herein. This statement is given for the purpose of enabling the United States of America to make a determination of continued eligibility of the borrower organization for a loan as requested in the application of which this statement is a part.
B. Financial Statements for Cooperative Members—Each prospective member must provide a statement of monthly income and expenses showing the repayment of debts and whether those payments are current. The statement must indicate that the person will have the financial ability to meet the monthly occupancy rate requirement, while still meeting other monetary obligations. FmHA Form 1944-38, “Application for Cooperative Housing Assistance,” may be used for this purpose. (See FMI for preparation instructions.)
C. The names and addresses of persons who have expressed an interest in becoming members of the cooperative. Signature and date evidencing this interest from each person will be obtained to fully document the need for the cooperative housing. This certification should contain a statement that the prospective member understands the cooperative type of organization and the time and effort each member must spend in its operating and maintenance.
D. For all cooperative projects containing over four units, the applicant must submit an Affirmative Fair Housing Marketing Plan for approval in accordance with § 1901.203 of subpart E to part 1901 of this chapter. The plan must be prepared in a complete, meaningful, responsive and detailed manner.
E. Evidence Concerning the Test for Other Credit—Applicants must be unable to obtain other credit at rates and terms that will allow a unit rent or occupancy charge within the payment ability of the occupants. Based upon a review of the applicant's financial condition, the servicing official may require
F. Statement of applicant's experience in operating rental housing and related business, including a statement on the proposed method of operation and management.
G. For an Organization Applicant—A copy of, or an accurate citation to, the specific provisions of State law under which the applicant is, or is to be organized; a certified copy of the applicant's actual, or a copy of the applicant's proposed charter, articles of incorporation, bylaws, partnership agreement, certification of limited partnership, or other basic authorizing documents; the names and addresses of the applicant's members, directors and officers; and, if a member of a subsidiary of another organization, its name, address, and principal business, if available.
H. Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 requires that applicants disclose identities of interest that will exist in the development of the proposed housing. Forms FmHA 1944-30, “Identity of Interest (IOI) Disclosure Certificate,” and 1944-31, “Identity of Interest (IOI) Qualification Form,” (available in any FmHA or its successor agency under Public Law 103-354 office) will be completed and submitted as part of the loan request package.
I. The social security or tax identification number will be required in all cases. The loan will be denied for refusal to furnish the required social security or tax identification number.
(1) In the case of an individual, the social security number of the applicant must be provided. The spouse's social security number must also be provided when they have joint responsibility for the loan.
(2) In the case of a partnership, the tax identification number of the partnership must be provided if available and also the social security numbers of all the general partners and their spouses.
(3) In the case of a limited partnership, the tax identification number of the limited partnership is required. The social security number of all the general partners and their spouses should be secured if possible.
(4) In the case of a company, corporation or nonprofit organization, the tax identification number of the organization is required. The social security number of the officers should be secured if possible.
(5) If an organization does not have a tax identification number, the social security number of one of the officers must be used.
J. All known principals and affiliates are required to submit a properly completed Form HUD 2530/FmHA 1944-37, “Previous Participation Certification.” Architects and attorneys who have any interest in the project other than an arms length fee arrangement for professional services are also considered principals. The form will be completed and processed according to the instructions attached to the form.
II.
A. Economic justification, the number of units, and the type of facility (family, elderly, congregate, mixed, group home, or cooperative) will be based on the housing need and demand of eligible prospective tenants or members who are permanent residents of the community and its surrounding trade area. Since the intent of the program is to provide housing for the eligible permanent residents of the community, temporary residents of a community (such as college students in a college town, military personnel stationed at a military installation within the trade area, or others not claiming their current residence as their legal domicile) may not be included in determining need and project size. Similarly, homeowners may not be included in determining need and project size. The market study must include a discussion of the current market for single family houses and how sales, or the lack of sales, will affect the demand for elderly rental units. The market study may discuss how elderly homeowners may reinforce the need for rental housing, but only as a secondary market and not as the primary market. The market study must assess need and demand for both family and elderly renter households. The conclusions of the market study must be provided to the community by the applicant, through direct contact with community officials whenever possible. The type of complex (family, elderly, etc.) that is proposed by the applicant must reflect the greater proportionate need and demand of the community, that is, the share or percentage of the community's total rental units that are designated for the elderly will be compared to the community's share of elderly households, and the share of total rental units for families will be compared to the share of family households in the community. (For mixed complexes, the unit mix must reflect the proportionate need of each household type.) In unusual circumstances, where there is a compelling need for a complex type that does not represent the greater proportionate need (i.e., family vs. elderly need), the State Director may consider granting an exception to this requirement. At least one of the following conditions must be met in order to consider an exception: the community's or State's housing plan indicates that the greater immediate need is for the complex type of the smaller proportionate need and the plan includes a specific proposal to address the housing needs of the other household type; the complex has the support of a public community forum represented by diverse interests; or the units are needed due to an emergency or hardship situation, for example, a loss of housing
B. The applicant must provide a schedule of the proposed rental or occupancy rates and, for congregate housing proposals, a separate schedule listing the proposed cost of any nonshelter service to be provided.
C. For proposals where the applicant is requesting Low-Income Housing Tax Credits (LIHTC), the applicant must provide the number of LIHTC units and the maximum LIHTC incomes and rents by unit size. This information will determine the levels of incomes in the market area which will support the basic rents while also qualifying the borrower for tax credits.
D. For Rural Cooperative Housing (RCH) proposals, market feasibility will be evidenced by the names and addresses of prospective members who have definitely affirmed their intention of becoming cooperative members in the proposed project. In the event some persons cannot be accepted for membership for financial or other reasons, the cooperative should obtain more names than the number of proposed units in order to assure adequate feasibility coverage. Exhibit A-4 of this subpart contains a Cooperative Housing Survey form which may be used for this purpose.
E. For Rural Rental Housing (RRH) proposals, except as permitted by section II. G. of this exhibit, a professional market study is required. The qualifications of the person preparing the market study should include some housing or demographic experience. The following requirements apply:
(1) A table of contents, the analyst's statement of qualifications, and a certification of the accuracy of the study must be included.
(2) Market analysts must affirm that they will receive no fees which are contingent upon approval of the project by RHS, before or after the fact, and that they will have no interest in the housing project. An analyst with an identity of interest with the developer will need to fully disclose the nature of the identity.
(3) The analyst must personally visit the market area and project site and must certify to same in the market study. Failure to do so may result in the denial of further participation by the analyst in the Section 515 program.
(4) A detailed study based upon data obtained from census reports, state or county data centers, individual employers, industrial directories, and other sources of local economic and housing information such as newspapers, realtors, apartment owners and managers, community groups, and chambers of commerce is required. Exhibit A-8 of this subpart details the specific information which professional market studies are required to provide. The study must be presented in clear, understandable language. Negative as well as positive market trends must be disclosed and discussed. Statistical data must be accompanied by analytical text which explains the data and its significance to the proposed housing. Mathematical calculations must be expressed in actual numbers and may be accompanied by percentages. Each table or section must identify the source of the data. A brief statement of the methodology used in the study should be included in the foreword and in other sections where necessary for clarity. RHS personnel will utilize the market study checklist found at exhibit A-12 of this subpart (available in any Rural Development office) as a means of measuring market study credibility.
(5) The market study will include:
a. A complete description of the proposed site and its location with respect to city boundary lines, residential developments, employment centers, and transportation; the location and description of available services and facilities and their distances from the site; a discussion of the site's desirability and marketability based on its location in the community, adjacent land uses, traffic conditions, air or noise pollution, and the location of competitive housing units; and a description of the site in terms of its size, accessibility, and terrain.
b. Pertinent employment data, including the name and location of each major employer within the community and market area, its product or service, number of employees and salary range, commute times and distances, and the year the employer was established at the location. If income data cannot be obtained from individual employers, salary information for the community can be obtained from the state employment commission.
c. Population data required by exhibit -A-8 of this subpart, including population figures by year, number and percentage of increase or decrease, and population characteristics by age.
d. Household data required by exhibit -A-8 of this subpart, including number of households by year, tenure (owner or renter), age, income groups, and number of persons per household.
e. Building permits issued and demolitions by year by single unit dwelling and multiple unit dwelling. In nonreporting jurisdictions, this information may be substituted with the number of requests for electric service connections, number of water or sewer hookups, etc., obtained from local suppliers.
f. Housing stock by tenure and vacancy rates for total number of units, one-unit buildings, two- or more-unit buildings, mobile homes, and number lacking some or all plumbing facilities.
g. A survey of existing rental housing by name, location, year built, number of units, amenities, bedroom mix, type (family, elderly, etc.), rental rates, and rental subsidies if any.
h. A projection of housing need and demand and the analyst's recommendation for the number, type, and size of units, based on the number of RHS and LIHTC income-eligible renter households, the existing comparable housing supply and vacancy rates, the absorption rate of recently completed units, the number of comparable units currently proposed or under construction, and current and projected economic conditions.
F. For congregate housing proposals with central dining area or housing involving a group living arrangement, a narrative statement from local, state, or federal government agencies supporting the current and long-range need for the facilities in the community and its trade area is required.
G. For RRH proposals of 12 or fewer units, the State Director may authorize the use of a market survey to establish market feasibility on a case-by-case basis. This authority may be used when there is evidence of strong market demand, for example, very low vacancy rates and long waiting lists in existing assisted or comparable rental units. The casefile must be documented accordingly. Exhibits A-2, A-3, and A-5 of this subpart may be used for the market survey.
III.
A. Size of tract and a plot map identifying its boundaries.
B. A map showing the location and other supporting information on the neighborhood and existing facilities, such as distance to shopping areas, churches, schools, available transportation, drainage, santitation facilities, water supply and access to essential services such as doctors, dentists, pharmacies and hospitals. The map should also show significant features such as main highways, railroads, rivers and lakes. The use of property surrounding the site should also be indicated.
C. The applicant will provide evidence of having control of the proposed site either by ownership or by executing an option to buy with the current owner of public record.
D. Appropriate zoning or evidence of capability to be appropriately zoned.
A. The type of project and structures proposed, such as garden apartments for elderly and handicapped persons; townhouses for low- and moderate-income persons; congregate housing for senior citizens and handicapped persons, or housing designed for cooperative living.
B. The size of each type of rental unit measured in square feet of living area.
C. The size and type of other facilities to be included in the project, such as laundry rooms, storage spaces, etc., and a justification for any related facilities to be financed wholly or in part by RHS funds.
D. The total number of units and the number of each type of unit proposed.
E. The type of construction proposed and the method of construction, i.e., owner/builder, negotiated bid or public bid.
F. A detailed cost breakdown of the project on Form FmHA or its successor agency under Public Law 103-354 1924-13, “Estimate and Certificate of Actual Cost,” will be prepared and submitted by all applicants. In addition to completing the individual line items, the cost of items such as rights-of-way, equipment, and utility connections must be included and identified with the Form FmHA or its successor agency under Public Law 103-354 1924-13. Off-site improvements and the method of prorating the cost between eligible and noneligible loan items must be provided with the Form FmHA or its successor agency under Public Law 103-354 1924-13. The cost breakdown must also separately show items not included in the loan, such as furnishings, equipment, and the noneligible off-site improvements. The trade item cost breakdowns must be updated just prior to loan approval.
G. Type of utilities such as water, sewer, gas and electricity and whether each is publicly, community or individually owned.
H. The comments and recommendations of any professional consultants regarding on- or off-site conditions that could affect the proposed project should be submitted, if available. Any comments addressing an adverse condition should include recommended corrective actions. Any special regulation waivers or variances that may be necessary should also be identified.
I. Schematic design drawings should be included with the narrative description and contain, as a minimum:
(1) Site plan, including significant ground contour lines.
(2) Floor plans of each living unit type and other type spaces.
(3) Building exterior elevations.
(4) Typical building exterior wall section.
J. A plot plan showing the relationship of the proposed structures, the property lines,
V. The applicant must submit a signed statement agreeing to pay cost overruns from its own resources.
VI. Form RD 1940-20, “Request for Environmental Information.”
VII.
(A) Applicants will submit information regarding any other government assistance as defined in § 1944.205 of this subpart from the Federal Government, a State, or a unit of general local government, or any agency or instrumentality thereof, that is expected to be made available with respect to the project for which the applicant is seeking.
(B) The applicant will submit the names of any interested parties as defined in § 1944.205 of this subpart.
(C) The applicant will also submit a report detailing the expected sources and uses of funds that are to be made available for the project.
(D) The disclosures required in paragraphs (A)-(C) will be updated within 30 days of any substantial change during the period of the application process.
The following information is to be used by analysts in the preparation of market studies for the Section 515 housing program. It generally contains the type and depth of information which Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 requires for evaluating the feasibility of prospective housing developments. The analyst will be expected to provide sufficient quantitative data (such as census tables), primary data (such as survey of existing comparables), and qualitative data (such as local contacts in the community) to support the conclusions reached. The analyst may present any other discussions and/or data which will help support the complete analysis of the market.
The outline provides for the demonstration of historical trends and allows the analyst to project into the 2 years beyond the last actual year of record. Additional guidance is offered in individual segments of the outline. You will need to provide a statement of your experience and why you think you are qualified to prepare such a study.
Determination of need and demand will be derived for prospective rental tenants only from: (1) Persons migrating into the area, (2) persons dwelling in family units who desire to move into their own units (elderly living with family members will only be considered if evidence of their interest in moving into the project is furnished with the market study), (3) conservative estimate (not to exceed 20 percent) of households living in substandard rental housing, (4) demolition of rental stock, (5) allowance for a 5 percent vacancy rate, and (6) conservative estimate (not to exceed 20 percent) of households experiencing rent overburden provided the analyst has made a determination there are sufficient households in the market area to occupy any rental units vacated by those lower income persons who choose to move into the proposed project from the existing units. Substandard is defined as (1) Units lacking complete plumbing and (2) overcrowded (1.01 or more persons per room).
For proposed congregate projects, the analyst will be responsible for researching the current need for, and usage of, services in the market area. The types of services being used, the provider of the services, and their location will be included.
A statement, with signature, certifying that the analyst (including an individual under contract to the analyst's company) actually traveled to and physically surveyed the community where the proposed project will be located is also required.
The market area will be the community where the project will be located and only those outlying rural areas which will be impacted by the project (excluding all other established communities). Except in specific cases of congregate housing projects where an expanded market may be justified, the market area will not include the entire county (or parish, township, or other subdivision). Any deviation from this definition must be coordinated with the servicing office. The market area must be realistic. The criteria for selection should be described by the analyst. A map showing the market area will be required. The following is an example of a market area description:
A. Based on an analysis of population and housing development patterns, major employers and commuting patterns, the effective market area for the subject proposal is defined to include all of (Name), 35 percent of (Name) and 25 percent of (Name) census divisions. This area is shown on Map 2 following Table 4 (page 11) in Section II of this report. In 1980, this geographic market area contained an estimated 6,350 persons (6.1 percent of the county total of 103,829 persons). During the 1970's decade, the overall market area experienced growth of 1,253 persons (representing 13.5 percent of total gains in the county). In 1990, the (Name) market area population of 7,603 represented 6.7 percent of the county population of 113,086. (See Table 4 and Map 2 in Section II for details.)
B. The effective market area for the subject proposal includes the town of (Name) and a portion of the unincorporated areas to the east and south. The (Name) River forms a natural barrier restricting development to the west. Housing development and population growth have occurred along major transportation corridors, particularly Interstate 81 and U.S. 11 between (Name) and (Name). Secondary growth has occurred along State Roads 63 and 68 to the northwest and southeast of (Name). The Interstate Industrial Park, with 16 employers providing 999 jobs, is centrally located within the market area.
This section will contain a full description of the site, its position in the community and location with respect to residential support services.
A. The proposed site is located in the eastern section of (Town) on (Major Thoroughfare). The area surrounding the site is predominantly comprised of modest single family dwellings. The terrain is gently sloped, with grass, oak trees, and some shrubs.
B. The site is currently zoned for commercial business and is currently owned by a local car dealer.
C. The site is approximately .3 mile east of the heart of town which contains a grocery store, drugstore, restaurants, banking facilities, the post office, and town hall. Other shopping is available .2 mile south at (Town) Plaza.
D. The medical clinic, which provides services of an osteopath, X-ray technician, a physician's assistant, and a nurse, is approximately .8 mile north of this site. This clinic is open daily and also provides 24-hour emergency service. The nearest hospitals are (Large Town) and (Town).
E. All public services are available at the site.
F. Photographs of the site are required.
G. Communities suitable for multi-family projects may have certain smaller businesses necessary for the day-to-day living convenience of the tenants and to supplement the employment base. For example, these may include, but not be limited to, pharmacy, restaurants and fast food establishments, grocery and department stores, hardware and sundries, etc. A representative number of these businesses are to be listed (by name) and location with respect to the proposed site.
A.
1.
Civilian Labor Force and Employment Trends and Forecasts, _______ County, 1980-19__
2.
3.
In addition, the study will include the number of employees and average weekly salary listed in the place of work employment data for the classification groups of manufacturing; construction; trade; services; transportation, communications, and utilities (TCU); finance, insurance, and real estate (FIRE); and government.
4.
B.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Incomes of those eligible to live in the proposed project, considering tax credits and availability of rental assistance (RA):
Incomes of those eligible to live in the proposed project, considering tax credits and availability of RA:
1.
2.
3.
4.
a. Additional narrative which describes the rental stock and provides tenant characteristics may be included. The survey will include both subsidized and nonsubsidized rentals. In those communities containing too many rental properties to list, all subsidized and a representative number of conventional projects will be included. Those conventional projects which have rent levels comparable to the proposed project will be listed. Because elderly persons may reside in family designated projects, the analyst will need to list all existing units and not just the existing elderly units. Photographs of the comparables are required.
b. The analyst will explore the availability of individual Section 8 certificates with the local housing authority since they can be used on any project to bring the existing rents into an affordable range. For instance, 10 to 15 available Section 8 certificates in a community could have an influence on the determination for new units and the number should be reduced to correspond to this availability. However, before automatically reducing the number of proposed units to match the number of available Section 8 units, the reason the certificates are available must be explored, (e.g., owners of non-Government subsidized units will not accept the certificates). (The bedroom sizes which the certificates cover must match the prospective bedroom sizes in the proposed project bedroom mix.)
c. The information needed in the survey must include the characteristics shown below. In conjunction with the survey, the analyst is expected to discuss the reasons for extended vacancies, either in individual developments or in the community in general. The data needed are:
The analyst must give a projection of the housing needs for a specified forecast period. The information should include the following as a minimum:
If a penetration percentage is used in the study analysis, explain how that particular percentage was chosen.
Names and positions of individuals in the community who provided information for the study:
1. Drawings and specifications, including any cost containment considerations and special design features for elderly or handicapped persons.
2. Updated cost estimates on Form FmHA or its successor agency under Public Law 103-354 1924-13, “Estimate and Certificate of Actual Cost,” will be submitted by all applicants, along with the updated estimates of associated costs specified in exhibit A-7 of this subpart.
3. Information on the method of construction, the proposed contractor if a construction contract is to be negotiated, and the architectural, engineering and legal services included in the proposal.
4. Satisfactory evidence of review and approval of the proposed housing by applicable State and local officials whose approval is required by State or local laws, ordinances or regulations. This could be an indication of approval to proceed with the development of the project rather than final approval of plans and specifications.
5. If more than 12 months have transpired since the market analysis was completed, the State Director may require that it be updated if he/she determines it necessary.
6. For all projects containing over four units, the applicant must submit an Affirmative Fair Housing Marketing Plan for approval in accordance with § 1901.203 of subpart E to part 1901 of this chapter. The plan must be prepared in a complete, meaningful, responsive and detailed manner.
7. If more than 90 days have transpired since the applicant submitted the dated financial statement, the State Director may require a new one if he/she determines it necessary.
8. If there is any change in related assistance available to the applicant from other government agencies or in the interested parties as defined in § 1944.205 of this subpart, it must be disclosed at this time.
9. Detailed operating budgets showing a schedule of proposed rental rates for the first year's operation and a typical year's operation. The first year's budget should show that the applicant has sufficient operating capital on hand or sufficient planned income to pay all operating costs and meet scheduled payments on debts during the planning and construction period prior to occupancy. The typical year's budget should show there will be ample income to pay essential operating costs, meet required debt payments and permit accumulation of required reserves. Form FmHA or its successor agency under Public Law 103-354 1930-7, “Multiple Family Housing Project Budget,” and exhibit A-5 of this subpart (or similar forms) may be used for this purpose. The operating budgets should be updated if necessary just prior to loan approval.
a. The initial budgets should include an allowance of 10 percent for vacancies, nonpayment of rent and contingency expenses. The allowance in subsequent year budgets may be adjusted to be consistent with the actual past experience in vacancy, nonpayment of rent and contingency needed for the project.
b. The budgets should provide for accumulating a reserve at the rate of 1 percent per annum of the amount of the loan until a minimum reserve equal to 10 percent of the loan is reached. Budgets should not include an additional item for depreciation since the reserve account is to provide funds for this purpose.
c. All applicable taxes, including Federal and State income taxes, should be included in the budgets and separately identified. If the applicant considers itself tax-exempt, evidence of exemption must be included in the loan docket before the loan is closed. An eligible nonprofit organization should ordinarily be able to qualify for Federal income tax exemption under section -501(c) (4) of the Internal Revenue Code.
10. The applicant will submit all proposed agreements for architectural, engineering, and legal services.
11. A statement in narrative form outlining the proposed manner of management of the housing, such as whether by owner or by hired management firm or agent. Experience and other factors pertaining to the qualifications of the manager should be set forth and will be taken into consideration. If management will be performed by a hired management firm or agent, a copy of the proposed management agreement should be submitted. It must contain the clause stating that it is not in full force and effect until approved by FmHA or its successor agency under Public Law 103-354.
12. A management plan which sets forth clear and concise statements of policy concerning management and operation of the project in accordance with the requirements of paragraph V of exhibit B of subpart C to part 1930 of this chapter. Copies of the proposed application for occupancy, sample waiting lists, lease or rental agreement, and rules and regulations governing administration, occupancy and pet policies should be included. The management plan must be submitted in writing and the applicant must certify that it is in compliance with the requirements of subpart C to part 1930 of this chapter.
13. A schedule of any separate charges for the use of any related facilities and, in the case of congregate housing, a schedule of any separate charges for nonshelter services (such as meals, personal care and housekeeping). These schedules should be supported by appropriate operating budgets for services to be provided.
14. A satisfactory survey of the land to be given as security prepared by a licensed surveyor will be included in the loan docket. If necessary, a new survey will be obtained.
15. Form FmHA or its successor agency under Public Law 103-354 1910-11, “Applicant Certification, Federal Collection Policies for Consumer or Commercial Debts.”
16. [Reserved]
17. Comments must be submitted in accordance with 7 CFR, part 3015, subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities.” See RD Instruction 1940-J (available in any Rural Development office).
To apply for an equity loan to avert prepayment, the borrower should submit the following items in accordance with exhibit A-6 of this subpart and this exhibit:
1. Form SF-424.2 with a narrative discussion of the borrower's equity loan request,
2. Current Financial Statement,
3. Proposed budget showing anticipated rents to cover revised financing package, including updated figures on required reserve contributions and return on investment (if any),
4. Data on current tenants' income, rents and RA, and incomes of those on the waiting list to show that new rents will not displace or prevent occupancy by eligible tenants, unless sufficient RA is made available.
Reference is made to a request from the
Reference is made to a request for
This letter is to confirm certain understandings on behalf of the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354.
Final drawings, specifications and all other contract documents have been prepared and approved, and the applicant is prepared to start construction. The applicant and FmHA or its successor agency under Public Law 103-354 have determined that the conditions of loan closing can be met. Funds have been obligated for the project.
FmHA or its successor agency under Public Law 103-354 has required the applicant to deposit $____ with your firm to be used before any interim loan funds. The applicant has proposed and FmHA or its successor agency under Public Law 103-354 has agreed that you may first advance any applicant funds on deposit, and then advance the proceeds of the interim loan in accordance with the terms and conditions stated in your attached letter to pay for construction and other authorized and legally eligible expenses incurred by the applicant. It is understood, however, that advances of both the applicant's funds and the interim loan funds will be made only upon presentation of proper statements and partial payment estimates proposed by the builder and approved for payment by the consulting architect, applicant and FmHA or its successor agency under Public Law 103-354 servicing official.
We have scheduled the FmHA or its successor agency under Public Law 103-354 loan to be closed when construction to be financed with loan funds is substantially complete in accordance with the FmHA or its successor agency under Public Law 103-354 approved (contract documents), drawings and specifications, (except for minor punch list items), and the applicant provides evidence and a signed certification indicating that there are no unpaid obligations outstanding in connection with the project. At that time, funds not exceeding the FmHA or its successor agency under Public Law 103-354 loan amount will be available to pay off the amount of loan advances your lending institution has made for authorized approved purposes, including accrued interest to the date of closing.
FmHA or its successor agency under Public Law 103-354 cannot provide you with an unconditional letter of commitment guaranteeing FmHA or its successor agency under Public Law 103-354 loan closing. Factors such as noncompletion, default, unacceptable workmanship and marked deviation from approved drawings and specifications could prevent the FmHA or its successor agency under Public Law 103-354 loan from being closed.
These problems can be minimized by making a thorough review of the [contract documents]
The following are additional safeguards to help assure FmHA or its successor agency under Public Law 103-354 loan closing:
1. We invite you or your representatives to accompany FmHA or its successor agency under Public Law 103-354 personnel during construction inspections so that at least three or four joint inspections at critical points during construction, including the final inspection, can be made to help assure that construction is proceeding in accordance with the FmHA or its successor agency under Public Law 103-354 approved drawings and specifications.
2. FmHA or its successor agency under Public Law 103-354 will maintain its commitment in the amount of the obligated loan funds for a reasonable period of time after the expiration of any specified completion dates provided work on the project is progressing satisfactorily and any identified problems have been resolved.
3. FmHA or its successor agency under Public Law 103-354 will not arbitrarily abandon your lending institution in the event of default. If the contractor defaults, FmHA or its successor agency under Public Law 103-354 will attempt to provide financial assistance to the applicant in accordance with our administrative procedures and lending requirements if a new contractor can complete the project for a total cost within the security value of the project. If this is not possible or if the FmHA or its successor agency
4. FmHA or its successor agency under Public Law 103-354 is aware that circumstances such as subsurface ground conditions and change orders necessitated by required changes in the work to be performed may cause cost increases after FmHA or its successor agency under Public Law 103-354 loan approval and the obligation of FmHA or its successor agency under Public Law 103-354 loan funds. When justified, FmHA or its successor agency under Public Law 103-354 may make subsequent loans when necessary to help cover the eligible costs, provided additional loan funds are available, the change orders were approved by FmHA or its successor agency under Public Law 103-354, the increased costs are legitimate and are for authorized loan purposes, and the total cost of the project is within its security value.
We, the undersigned, incorporators, hereby associate ourselves together to form and establish a (corporation) (cooperative) not for profit under the laws of the State of ______.
First: The name of the (corporation) (cooperative) is
Second: The location of its principal place of business in this State is ______, ______ County.
Third: The location of its registered office in this State is ______, ______ County.
Fourth: The name and address of its resident agent in this State is ______ County.
Fifth: This (corporation) (cooperative) is organized not for profit under , _________ and the objects and purposes to be transacted and carried on are to promote the general social welfare of the community and for that purpose:
To acquire, construct, provide, and operate (rental) (cooperative) housing and related facilities suited to the special needs and living requirements of eligible occupants as determined by FmHA or its successor agency under Public Law 103-354 regulations, without regard to race, color, religion, sex, age, handicap, marital or familial status or national origin;
To acquire, improve, and operate any real or personal property or interest or right herein or appurtenant thereto;
To sell, convey, assign, mortgage, lease any real and personal property;
To borrow money and to execute such evidence of indebtedness and such contracts, agreements, and instruments as may be necessary, and to execute and deliver any mortgage, deed of trust, assignment of income, or other security instrument in connection therewith; and to do all things necessary and appropriate for carrying out and exercising the foregoing purposes and powers.
Sixth: The number of directors shall be prescribed in the bylaws, but shall not be less than five nor more than nine.
Seventh: The (corporation) (cooperative) formed hereby shall have no capital stock. It shall be composed of members rather than shareholders. The conditions and regulations of membership and the rights or other privileges of the classes of members shall be determined and fixed by the bylaws.
Eighth: (Rental only) The corporation is not organized for pecuniary profit and shall have no power to declare dividends. No part of its net earnings shall inure to the benefit of any member, director, or individual. The balance, if any, of all money received by the corporation from its operations, after payment in full of all operating expenses, debts, and obligations of the corporation of whatsoever kind and nature as they become due shall be used to make advance payments on a ______ owed by the corporation, to lower the lease-rental charge to occupants of the housing, to provide additional housing and related facilities, or for some related purpose.
Eighth: (Cooperative only) The cooperative is not organized for pecuniary profit and shall have no power to declare dividends. The balance, if any, of all money received by the cooperative from its operations, after payment in full of all operating expenses, debts, and obligations of the cooperative of whatsoever kind and nature as they become due,
Ninth: The name and place of residence (post office address) of each of the incorporators and initial directors until the first annual meeting:
Tenth: (Rental only) In the event of dissolution of this corporation, or in the event it shall cease to carry out the objectives and purposes herein set forth, all business, property, and assets of the corporation shall go and be distributed to one or more such nonprofit corporations or municipal corporations as may be selected by the board of directors of this corporation, to be used for and devoted to the purpose of carrying on a nonprofit housing project for such rural residents or other purposes to promote the general social welfare of the community. In no event shall any of the assets or property, in the event of dissolution thereof, go or be distributed to members, either for the reimbursement of any sum subscribed, donated, or contributed by such members or for any other purposes, provided that nothing herein shall prohibit the corporation from paying its just debts.
Tenth: (Cooperative only) In the event of dissolution of this cooperative, or in the event it shall cease to carry out the objectives and purposes herein set forth, all business, property, and assets of the cooperative, except members' patronage capital and membership fees, shall be used for providing low income rental housing or other purposes to promote the general welfare of the community. In no event shall any of the assets or property, in the event of dissolution thereof, go or be distributed to members, except that the membership fee and money accrued to members in their patronage capital accounts shall be paid to members prior to conversion or satisfaction of the Government's debt.
Eleventh: (Cooperative only) At any time prior to dissolution the member wishes to terminate membership in the cooperative, money which has accrued in the member's patronage capital account and the member's membership fee shall be paid to the member provided the member's occupancy account is not delinquent and that any other charges to which the member is liable are paid.
Twelfth: The duration of the existence of this corporation shall be perpetual.
IN TESTIMONY WHEREOF, We have here unto subscribed our names on _____ 19 ___.
Section 1.01.
The principal office of the corporation in the State of ______, shall be located at ______, County of ______ Section 1.02. Registered Office and Agent. The corporation shall have and continuously maintain in the State of ______ a registered office and a registered agent whose office is identical with such registered office.
Section 2.01.
The corporation shall have one class of members. Members may be individuals or organizations. Any legally competent person of good reputation who resides in the town of ______ or in the surrounding trade area, applies for membership, and pays the required membership fee shall be eligible.
Section 2.02.
All applications for membership shall be approved at: (1) Any special or regular meeting of the board of directors, when a quorum is present, by a majority vote of the board members or (2) by a majority vote of the existing membership present at any annual or special meeting held in accordance with Article III herein.
Section 2.03.
Each member shall be entitled to one vote on each matter submitted to a vote of the members.
Section 2.04.
A member may be suspended or expelled, for cause, by the vote of not less than three-fourths of the members present at a meeting of the members, provided notice of such proposed action shall have been duly given in the notice of meeting and provided the member has been informed in writing of the charges preferred against the member at least ten days before such meeting. The members shall be given an opportunity to be
Section 2.05.
Any member may resign by filing a written resignation with the secretary.
Section 2.06.
Upon written request signed by a former member and filed with the secretary, the board may reinstate such former member to membership upon such terms as the board may deem appropriate.
Section 2.07.
Membership in this corporation is not transferable or assignable.
Section 2.08.
The membership fee shall be $______ or such other amount as may be fixed by the members at any annual meeting or at any special meeting called for the purpose. No person shall attain membership before paying the treasurer the membership fee.
Section 2.09.
Fully paid members shall not be liable for any debts or obligations of the corporation and shall not be subject to any assessment; but the members at any annual meeting or at any special meeting called for the purpose, may fix reasonable annual dues to become effective after not less than 30 days' notice to all members of such action.
Section 2.10.
The board will make all reasonable efforts to maintain a broad community-wide membership of not less than 25 members at any time.
Section 2.11.
A majority of the members shall be residents of the community where the housing is or will be located.
Section 3.01.
An annual meeting of the members shall be held at ______, on the ______ of the month of ______ each year, beginning with the year 19__, at the hour of ____ o'clock, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in said State, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for any annual meeting, or at any adjournment thereof, the board shall cause the election to be held at a special meeting of the members as soon thereafter as convenient.
Section 3.02.
Special meetings of the members may be called by the president, the board, or not less than one-tenth of the members.
Section 3.03
The board of directors may designate any place within or not more than __ miles from ___ as the place for an annual meeting or for any special meeting called by the board. If no designation is made or if a special meeting be otherwise called, the place of meeting shall be the registered office of the corporation in said State.
Section 3.04.
Written or printed notice stating the place, day, and hour of any meeting of members shall be delivered either personally or by mail, to each member entitled to vote at such meeting, not less than seven or more than thirty days before the date of such meeting, by or at the direction of the president, or the secretary, or the officers or persons calling the meeting. In case of a special meeting or when required by statute of these bylaws, the purpose or purposes for which the meeting is called shall be stated in the notice. If mailed, the notice of a meeting shall be deemed to be delivered when deposited in the United States mail addressed to the member at the address as it appears on the records of the corporation, with postage thereon prepaid.
Section 3.05.
Any action required by law to be taken at a meeting of the members, or any action which may be taken at a meeting of the members, may be taken without a meeting upon written consent or approval of all the members, setting forth the action so taken.
Section 3.06.
At such meeting, a quorum shall consist of 30 percent of the members, or twice the number of directors, whichever is greater. If a quorum is not present at any meeting of members, a majority of the members present may adjourn the meeting from time to time without further notice.
Section 3.07.
(a) At any meeting of the members, a member entitled to vote may vote by proxy executed in writing by the member. No proxy shall be valid after eleven months from the date of its execution. A proxy may be canceled by notice executed by the member with like formality and delivered to the secretary.
(b) At each meeting of the members, every member shall be entitled to vote in person or by proxy and shall be entitled to cast one vote. The votes for directors shall be by ballot. Only the person in whose name membership is standing in the books of the corporation on the day of such meeting shall be entitled to vote in person or by proxy.
(c) For any person to represent a member by proxy, such person must submit a power of attorney to the secretary of the board for
Section 4.01.
The affairs of the corporation shall be managed by its board of directors.
Section 4.02.
The number of directors shall be ___. The directors elected at the annual meeting to succeed the directors named in the Articles of Incorporation shall be elected for staggered terms of three, two, and one year. As the terms of such directors expire, their successors shall be elected for terms of three years and until their successors are elected and have qualified. Directors shall be members of the corporation and residents of the community where the housing is or will be located. Of the total number of directors, at least five must be among the leaders in such community.
Section 4.03.
A regular annual meeting of the board shall be held, without other notice than these bylaws, immediately after and at the same place as the annual meeting of the members. The board may provide by resolution the time and place, within or not more than ___ miles from ____ for holding of additional regular meetings of the board without other notice than such resolution.
Section 4.04.
Special meetings of the board may be called by or at the request of the president and shall be called by the secretary at the request of any two directors. The authorized person or persons calling a special meeting of the board may fix any place within or not more than ___ miles from ____ as the place for holding such meeting.
Section 4.05.
Notice of any special meeting of the board shall be given at least two days previously thereto by written notice delivered personally, or four days notice sent by mail or telegram, to each director at the director's address as shown by the records of the corporation. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail in a sealed envelope so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Any director may waive notice of any meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. The business to be transacted at the meeting need not be specified in the notice or waiver of notice of such meeting, unless specifically required by law or these bylaws.
Section 4.06.
A majority of the board shall constitute a quorum for the transaction of business at any meeting of the board; but if less than a majority of the directors are present at said meeting, a majority of the directors present may adjourn the meeting from time to time without further notice.
Section 4.07.
The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the board, unless the act of a greater number is required by law or by these bylaws. The board may also act by written consent of all the directors of the corporation setting forth the action taken.
Section 4.08.
Any vacancy occurring in the board shall be filled by the board until the next meeting of the members and until a successor has been elected by the members to fill a vacancy. Such person shall be elected for the unexpired term of office of the predecessor in office.
Section 4.09.
Directors shall not receive any compensation for their services as directors.
Section 4.10.
Any director who is absent from ___ consecutive meetings without excuse satisfactory to the board shall be deemed to have surrendered the office as director.
Section 4.11.
The board shall have the powers and duties necessary or appropriate for the administration of the affairs of the corporation. All powers of the corporation except those specifically granted or reserved to the members by law, the articles of incorporation, or these bylaws shall be vested to the board.
Section 4.12.
A director may be removed from office, for cause, by the vote of not less than three-fourths of the members present at a meeting of the members, provided notice of such proposed action shall have been duly given in the notice of the meeting and provided the director has been informed in writing of the charges preferred against the director at least 10 days before such meeting. The director involved shall be given an opportunity to be heard at such meeting. Any vacancy created by the removal of a director shall be filled by a majority vote, which may be
Section 5.01.
The officers of the corporation shall be a president, a vice president, a secretary, and a treasurer. The board may elect or appoint such other officers as it shall deem desirable, such officers to have the authority and perform the duties prescribed, from time to time, by the board. The offices of secretary and treasurer may be combined and held by one person.
Section 5.02.
(a) The officers of the corporation specified in Section 5.01 shall be elected from the membership of the board by the board at its annual meeting or as soon thereafter as feasible. New offices may be created and filled at any meeting of the board. Each officer shall hold office until the next annual election of directors and until a successor shall have been duly elected and shall have qualified.
(b) The term of office shall be one year. Election of officers shall take place at the annual board meeting and shall be by ballot cast by qualified directors. A plurality of votes cast shall elect.
Section 5.03.
Any officer elected or appointed by the board may be removed by the board by two-thirds vote of the remaining directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the officer so removed.
Section 5.04.
A vacancy in any office because of death, resignation, removal, disqualification, or otherwise, may be filled by the board by majority vote for the unexpired portion of the term.
Section 5.05.
The president shall be the principal executive officer of the corporation and shall in general supervise and control all the business and affairs of the corporation. The president shall preside at all meetings of the members and of the board. The president may sign, with attestation of the secretary or any other proper officer of the corporation authorized by the board, any deeds, mortgages, bonds, contracts, or other instruments which the board authorizes to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of these bylaws or statutes to some other officer or agent of the corporation and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the board from time to time.
Section 5.06.
In the absence of the president or in the event of an inability or refusal to act, the vice president shall perform the duties of the president and, when so acting, shall have all the powers of and be subject to all restrictions upon the president. Any vice president shall perform such other duties as from time to time may be assigned by the president of the board.
Section 5.07.
The treasurer shall give a bond for the faithful discharge of duties in such sum and with such surety or sureties as the board shall determine. The treasurer shall have charge and custody of and be responsible for all funds and securities of the corporation; receive and give receipts for moneys due and payable to the corporation from any source whatsoever, deposit all such moneys in the name of the corporation in such banks, trust companies, or other depositories as shall be selected in accordance with the provisions of Article VIII of these bylaws; and in general perform all duties incident to the office of treasurer and such other duties as from time to time may be assigned by the president or the board.
Section 5.08.
The secretary shall keep the minutes of the meeting of the members and the board in one or more books provided for that purpose, see that all notices are duly given in accordance with the provisions of these bylaws or as required by law; be custodian of and see that the seal of the corporation is affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized in accordance with the provisions of these bylaws; keep a register of the post office address of each member, which shall be furnished to the secretary by such member; and in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned by the president or the board.
Section 6.01.
The order of business at any regular or special meeting of the members or the board shall be:
(a) Reading and approval of any unapproved minutes.
(b) Reports of officers and committees.
(c) Unfinished business.
(d) New business.
(e) Adjournment.
Section 6.02.
On questions of parliamentary procedure not covered in these bylaws, a ruling by the president shall prevail.
Section 7.01.
The board of directors, by resolution adopted by a majority of the directors in office, may designate one or more committees, each of which shall consist of one or more directors, which committees, to the extent provided in said resolution, shall have and exercise the authority of the board in the management of the corporation; but the designation of such committees and the delegation thereto of authority shall not operate to relieve the board, or any individual director, of any responsibility imposed upon the board, or any individual director, by law.
Section 7.02.
Other committees not having and exercising the authority of the board in the management of the corporation may be designated by a resolution adopted by a majority of the directors present at a meeting at which a quorum is present. Except as otherwise provided in such resolution, members of each such committee shall be members of the corporation, and the president of the corporation shall appoint the member thereof. Any member thereof may be removed by the person or persons authorized to appoint such member whenever in their judgment the best interest of the corporation shall be served by such removal.
Section 7.03.
Each member of a committee shall continue as such until the next annual meeting of the members of the corporation and until a successor is appointed, unless the committee shall be sooner terminated, or unless such member to be removed from such committee, or unless such member shall cease to qualify as a member thereof.
Section 7.04.
One member of each committee shall be appointed chairman by the persons authorized to appoint the members thereof.
Section 7.05.
Vacancies in the membership of any committee may be filled by appointments made in the same manner as provided in the case of the original appointments.
Section 7.06.
Unless otherwise provided in the resolution of the board of directors designating a committee, a majority of the whole committee shall constitute a quorum and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the committee.
Section 7.07.
Each committee may adopt rules for its own government not inconsistent with these bylaws or with rules adopted by the board of directors.
Section 8.01.
The board may authorize any officer or officers, agent or agents of the corporation, in addition to the officers so authorized by these bylaws, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation; and such authority may be general or confined to specific instance.
Section 8.02.
All checks, drafts, or orders for the payment of money, notes, or other evidence of indebtedness issued in the name of the corporation shall be signed by the officer or officers, agent or agents of the corporation, and in a manner as shall from time to time be determined by resolution of the board. In the absence of determination by the board, these instruments shall be signed by the treasurer and countersigned by the president of the corporation.
Section 8.03.
All funds of the corporation shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the board may select.
Section 8.04.
The board may accept on behalf of the corporation any contribution, gift, bequest, or devise for the general purposes or for any special purposes of the corporation.
Section 9.01.
The board may provide for the issuance, and determine the form of certificates evidencing membership in the corporation. Such certificates shall be signed by the president and the secretary, sealed with the seal of the corporation, and consecutively numbered. The name and address of each member and the date of issuance of the certificate shall be entered on the records of the corporation. If any certificate becomes lost, mutilated or destroyed, a new certificate may be issued upon such terms and conditions as the board may determine.
Section 9.02.
When a member has been elected to membership and has paid any dues that may then be required, a certificate of membership shall be issued in his or her name and delivered to the member by the secretary.
The corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its members, the board, and committees having
The fiscal year of the corporation shall begin on the first day of January and end on the last day of December in each year.
The board shall provide a corporate seal, which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words, “corporate seal.”
Whenever any notice is required to be given under the provisions of the statutes of said State or the articles of incorporation or the bylaws of the corporation, a waiver thereof in writing signed by the person or persons entitled thereto, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
Section 14.01. These bylaws may be repealed or amended by a majority vote of the members present at any annual meeting of the members, or at any special meeting of the members called for such purpose, at which a quorum is present: provided, however, no such action shall change the purposes of the corporation so as to impair its rights and powers under the laws of said State, or to waive any requirements of bond or any provision for the safety and security of the property and funds of the corporation or its members or to deprive any member without any express assent of rights, privileges, or immunities then existing. Notice of any amendment to be offered at any meeting shall be given not less than 7 nor more than 30 days before such meeting and shall set forth such amendment.
That the undersigned secretary of the corporation identified in the foregoing bylaws does hereby certify that the foregoing bylaws were duly adopted by the members of said corporation, as bylaws of said corporation, on the ___ day of ___, 19___ at a duly called and constituted meeting of the members, and that they do now constitute the bylaws of said corporation.
Section 1.01.
Section 1.02.
Section 2.01.
Section 2.02.
All applications for membership received after the cooperative has been established and in operation shall be approved at any special or regular meeting of the board of directors, when a quorum is present, by a majority vote of the board members.
Section 2.03.
Section 2.04.
Section 2.05.
Section 2.06.
Section 2.07.
a. Any amounts due to the cooperative from the member under the Occupancy Agreement;
b. The cost or estimate cost of all deferred maintenance, including painting, redecorating, floor finishing, and such repairs and replacements as are deemed necessary by the cooperative to place the dwelling unit in suitable condition for another occupancy; and
c. Legal and other expenses incurred by the cooperative in connection with the default of such member. In the event the retiring member fails, within a 10-day period after demand, to deliver to the cooperative his endorsed membership certificate, the membership certificate shall be deemed to be canceled and may be reissued by the cooperative to a new member.
Section 2.08.
Section 2.09.
Section 2.10.
a. The membership fee paid by the member on the books of the cooperative, and
b. The amount of the patronage capital which has accrued to the member during his/her period of membership as shown on the books of the cooperative.
Section 2.11.
(a) The subscription agreement of a named applicant has been terminated pursuant to its terms and such withdrawal is required to repay the amount paid by him under such agreement; or
(b) A sufficient number of applicants for ____ dwelling units has not been established and such withdrawal is required to repay established applicants the amounts paid by them; or
(c) Applicants for ____ dwelling units have signed subscription agreements, have been approved as to their eligibility by the board of directors, and have made at least a downpayment on their subscription (membership) fee. If these requirements have been met and the mortgage loan has been scheduled for closing, the entire amount of the funds in the subscription escrow account may be transferred to the cooperative which shall at that time deliver membership certificates to all members.
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 3.06.
Section 3.07.
(b) At each meeting of the members, every member shall be entitled to vote in person or by proxy and shall be entitled to cast one vote. The votes for Directors shall be by ballot. Only the person in whose name membership is standing in the books of the cooperative on the day of such meeting shall be entitled to vote in person or by proxy. If the membership is jointly owned, co-members are limited to one-half vote each.
(c) For any person to represent a member by proxy, such person must submit a power of attorney to the secretary of the board for examination at least one hour before the time of meeting. When the secretary has certified the power of attorney is in good order, the proxy holder shall have the right to do any and all things which might be done by the member were the member present in person, which right shall include the establishment of a quorum and the organizing of any meeting.
Section 4.01.
Section 4.01.
a. To accept or reject all applications for membership and admission to occupancy of a dwelling unit in the cooperative housing project, either directly or through an authorized representative;
b. To establish monthly occupancy charges, subject to approval of FmHA or its successor agency under Public Law 103-354, as provided for in the Occupancy Agreement and based on an operating budget formally adopted by the board;
c. To engage an agent or employees, subject to the approval of FmHA or its successor agency under Public Law 103-354, for the management of the project under such terms as the board may determine;
d. To authorize the recording of patronage capital assignments on the cooperative's books to members;
e. To terminate membership and occupancy rights for cause; and
f. To promulgate such rules and regulations pertaining to use and occupancy of the premises as may be deemed proper and are consistent with these bylaws and the Certificate of Incorporation and with any requirements of FmHA or its successor agency under Public Law 103-354 while mortgagee.
The affairs of the cooperative shall be managed by its board of directors.
Section 4.02.
Section 4.03.
The directors shall hold office until their successors have been elected and hold their first meeting. (If a larger board of directors is contemplated, the terms of office should be established in a similar manner so that they will expire in different years.) The term of any director who becomes more than 30 days delinquent in payment of his occupancy charges shall be automatically terminated and the remaining directors shall appoint his successor as provided in § 4.11.
Section 4.04.
Section 4.05.
Section 4.06.
Section 4.07.
Section 4.08.
Section 4.09.
Section 4.10.
Section 4.11.
Section 4.12
Section 4.13.
Section 4.14.
Section 4.15.
Section 4.16.
Section 5.01.
Section 5.02.
(b) The term of office shall be one year. Election of officers shall take place at the annual board meeting and shall be by ballot cast by qualified directors. A plurality of votes cast shall elect.
Section 5.03.
Section 5.04.
Section 5.05.
Section 5.06.
Section 5.07.
Section 5.08.
Section 6.01.
If present, a representative of FmHA or its successor agency under Public Law 103-354 will be given an opportunity to address any regular or special meeting.
Section 6.02.
Section 7.01.
Section 7.02.
Section 7.03.
Section 7.04.
Section 7.05.
Section 7.06.
Section 7.07.
Section 8.01.
Section 8.02.
Section 9.01.
Section 10.01.
Section 10.02.
The fiscal year of the cooperative shall begin on the first day of January and end on the last day of December in each year, except that the first fiscal year of the cooperative shall begin at the date of incorporation.
The board shall provide a cooperative seal, which shall be in the form of a circle and shall have inscribed thereon the name of the cooperative and the words “Cooperative Seal.” The seal will be kept by the secretary.
Whenever any notice is required to be given under the provisions of the statutes of said State or the Articles of Incorporation or the Bylaws of the cooperative, a waiver thereof in writing signed by the person or persons entitled thereto, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
Section 14.01.
This exhibit prescribes support services for congregate housing and group homes.
The success of congregate housing and group homes will depend on the quality and
Applicants should check local service agencies to determine what services are already available in the community. Services can often be provided more inexpensively through local service agencies or other groups which assist in providing services. In many communities there are established volunteer groups that may be willing to provide volunteer assistance to congregate housing tenants. Volunteer groups with a history of assisting elderly people may be able to supplement the delivery of services and help keep the costs affordable. Applicants should explore the availability of volunteers from the Retired Senior Volunteer Program (RSVP), local church groups and other community organizations. If volunteer groups are used, an alternative method of service delivery must be addressed in case the availability of volunteers ceases in the future. Applicants must also verify State and local licensing and certification requirements and include relevant information in the loan request.
Applicant must submit a service agreement(s) for services that will not be provided by employees of the project. If services will be provided by employees of the project, the applicant must submit a separate budget for services and describe how tenants will be billed for services. Employees of congregate housing facilities who perform tasks for the management of the building and spend an appreciable amount of time in providing services to tenants should have their salaries prorated between the project's operation and maintenance budget and the services budget.
The following services must be made available to tenants of congregate housing projects:
A.
1. Who will provide the meals (i.e., meals offered by a local agency with tenant contribution; supplied or contracted for by owner with charge to tenant)?
2. If the service will be provided by employees of the project, a proposed breakdown of costs for the meal service. The breakdown should include the cost of food, personnel and utilities needed to prepare and serve the meals. Information concerning the proposed staffing should be included.
3. The cost to the tenant. Will tenants pay by the meal or be charged a rate for a specified time?
4. A statement concerning the frequency of meals, including the number of meals to be served per week.
5. Information concerning how the meals will be served (i.e., waiter style, buffet, tray service).
6. Any licensing requirement necessary for the service.
B.
1. Who will provide the service (i.e., transportation provided by a local agency with tenant contribution; vehicle leased or purchased by applicant with charge to tenant)?
2. If the service will be provided by employees of the project, a proposed breakdown of costs for the transportation service. The applicant should address the following costs: vehicle purchase or lease payment; personnel to operate the vehicle; fuel; maintenance; and insurance.
3. The cost to the tenant. Will tenants pay for each trip or will they be charged a monthly rate?
4. A typical proposed schedule.
C.
1. Who will provide the service (i.e., housekeeping offered by a local agency with tenant contribution; supplied or contracted for by applicant with charge to tenant)?
2. If the service is provided by employees of the project, a proposed cost breakdown for the service which includes the cost of labor and supplies.
3. The type of tasks that will be offered (i.e., light housekeeping, laundry, shampooing carpeting). What is the planned frequency of the tasks?
4. The cost to the tenant.
D.
1. Who will provide the service (i.e., personal services offered by a local agency with tenant contribution; volunteer health services; contracted for by applicant with charge to tenant)?
2. If the service is provided by employees of the project, a proposed cost breakdown for the service which includes the cost of labor and supplies.
3. The type of tasks that will be provided.
4. The cost to the tenant.
5. Any licensing requirement necessary for the services.
E.
1. Who will provide the service (i.e., recreational/social activities offered by a local agency with tenant contribution; supplied or contracted for by applicant with charge to the tenant)?
2. If the service is provided by employees of the project, a proposed cost breakdown which includes the cost of labor and supplies.
3. The types and frequency of recreational/social activities that will be offered.
4. The cost to the tenant.
The following services must be made available to tenants of a group home:
A.
B.
C.
D.
E.
Congregate housing/group home projects require additional items that will not become affixed to the real estate. These items can include special portable equipment, furnishings, kitchen bars, dining ware, eating utensils, movable tables and chairs, steamtables, etc. In accordance with § 1944.224(a)(3) of this subpart, loan funds cannot be used to finance these items. As a part of the loan request, applicants must include a proposed list of additional items that will be needed by the project and state how these items will be paid for.
In the Board's analysis of the talents and abilities of a person to handle the job of adviser, the first attribute most desirable is the capacity to be a friend. The definitions of a friend include (1) A person whom one knows, likes, and trusts; (2) one with whom one is allied in a struggle or cause; (3) one who supports, sympathizes with or patronizes a group, cause, or movement.
The adviser must care about the person he or she is trying to help. That means having patience and understanding during the trial and error period of a new cooperative's operation and also when it becomes necessary to explain complicated regulations or legal documents more than just once to those who have had less educational opportunities than the adviser.
The adviser must teach a totally new housing concept to persons who have only had experience with a rental environment. This means that the adviser must be able to talk to each and every person who is interested in the cooperative housing and explain just what the person is facing. The adviser must also be able to listen to those who rely on someone's “being there” to hear their problems and ideas. The adviser must be someone who is able to work with low-income persons and one who both understands their particular circumstances and strives to improve their well-being. The adviser, in this regard, must be able to learn as well as to teach.
The adviser must be dedicated to those persons with whom he or she is associated as well as to have the capacity to work with city officials, Government officials, politicians, and other professionals to achieve the goal of housing the local citizens.
a. Experience in working with—
b. Administrative background for—
c. Training to—
I. The adviser must be able to teach the members and the members must be willing to learn management and maintenance of total Cooperative while they gradually assume more and more responsibilities, until the cooperative is completely self-managed.
II. In order to be effective, the adviser should have the ability to teach to members:
III. The adviser must be able to help the people understand that there are rules which must be followed. The adviser must make certain that the members realize that, by signing their occupancy agreement, they are agreeing to live up to all aspects of that agreement. In so doing, they are agreeing to abide by all of the funding agency's regulations pertaining to the cooperative. These regulatory documents must be taught over and over and consulted by the members in all major decisions. The adviser would also be expected to:
I. Responsibilities of the adviser to the board will include—
This Agreement, dated ______, by and between ______ (hereinafter “referred to as the “Cooperative”), a corporation having its principal office and place of business at ______ and Farmers Home Administration or its successor agency under Public Law 103-354, United States Department of Agriculture (hereinafter referred to as FmHA).
The purpose of the cooperative is to own and operate cooperative housing on behalf of its members, and the cooperative has applied to FmHA or its successor agency under Public Law 103-354 for mortgage financing as authorized under Section 515 of the Housing Act of 1949, as amended.
The purpose of FmHA or its successor agency under Public Law 103-354 is to provide long term housing financing for very-low, low-, and moderate-income persons and households, although initially eligible cooperative members may remain in occupancy after exceeding the income limit established for moderate income.
The additional purpose of FmHA or its successor agency under Public Law 103-354 is to maintain the availability of units financed by FmHA or its successor agency under Public Law 103-354 for very-low, low-, and moderate-income persons for as long as possible up to the 30-year maximum life of the loan.
As a means for implementing and carrying out these purposes, the cooperative pledges to FmHA or its successor agency under Public Law 103-354 that:
(a) Equity accumulated by the cooperative, other than through the appreciation in value of real estate, furnishings, and equipment of the cooperative, will be assigned on the cooperative's books equally to members at the end of its fiscal year and in accordance with the IRS ruling concerning patronage capital.
(b) The members will be notified, in writing, of the amount assigned to his or her patronage account each year after the assignment has been made.
(c) The officers, board of directors, and members of the cooperative may not act to dissolve the cooperative for the purpose of distributing equity, or for other reasons, except as necessary due to default or other circumstances beyond the cooperative's control, and
(d) Should it become necessary to dissolve the cooperative, all property and assets of the cooperative will be transferred to another nonprofit or such other municipal organization and be maintained for the same purposes for which it was started.
(e) Only membership fees and money accrued in the member's patronage capital accounts will be distributed to the members and represents the entire equity payment to which the members are entitled. The cooperative reserves the right to withdraw from the equity payment or membership fee any amount due the cooperative through member's delinquency in payment of occupancy charge or through damage to the premises.
In witness thereof, the parties hereto have caused this agreement to be signed and sealed the day and year first above written.
This agreement will be filed with the member's record.
1. Subscription Amount:
(a) I/We ______, a legal resident(s) of ______, hereinafter called “Subscriber,” hereby subscribe for membership in ______, a cooperative housing corporation hereinafter called the “Cooperative,” and hereby subscribe to a Membership Certificate in said Cooperative having a par value of $______.
(b) Subscriber hereby agrees to pay for the Membership Certificate, also referred to as Membership Fee, as follows:
(1) $______ upon signing this Agreement.
(2) $______ in monthly payments of ______ payable over ______ consecutive months (not to exceed 12 months).
2.
3.
4.
5.
(b) It is understood that the Subscriber's credit is subject to approval by FmHA or its successor agency under Public Law 103-354, and that said Subscriber's total household income must not exceed any limitations for initial occupancy established by FmHA or its successor agency under Public Law 103-354. In the event FmHA or its successor agency under Public Law 103-354 determines that the Subscriber does not meet FmHA or its successor agency under Public Law 103-354 credit, income limitation, or other eligibility requirements for participation in this project, the Cooperative shall return to Subscriber the sums paid hereunder. In the event FmHA or its successor agency under Public Law 103-354 determines that the necessary loan to finance the Cooperative housing project cannot be made or insured by FmHA or its successor agency under Public Law 103-354, or the Cooperative withdraws its application for such loan, the Cooperative shall return to Subscriber all sums paid by Subscriber hereunder. Upon either determination by FmHA or its successor agency under Public Law 103-354 and the return of the sums to Subscriber as provided in this paragraph (b), this agreement shall become null and void and all rights and liabilities hereunder of the parties shall cease and terminate.
(c) If the Subscriber within five (5) days after the execution of this subscription agreement, notifies the Cooperative in writing that he wishes to withdraw from the agreement, the amounts paid by the Subscriber under this agreement will be returned to the Subscriber and thereupon all rights and liabilities of the Subscriber hereunder shall cease and terminate. If, at the end of the five-day period, the Subscriber has not exercised this right to withdraw, the right will be terminated. If FmHA or its successor agency under Public Law 103-354 determines that membership has not been achieved to the extent required by FmHA or its successor agency under Public Law 103-354, the Subscriber will again have the right to withdraw within a five-day period.
(d) If the Subscriber defaults in any obligation under this Agreement, and such default continues for fifteen (15) days after notice sent by registered mail by the Cooperative to the Subscriber at the address given below, then at the option of the Cooperative, the Subscriber shall lose any and all rights under this agreement. Any amount paid toward this subscription price at the option of the Cooperative may be retained by the Cooperative as liquidated damages or be returned, less the Subscriber's proportionate share of expenses incurred by the Cooperative as determined solely by the Cooperative. The Cooperative may, at its option, release the obligations of the Subscriber under this agreement in the event the Subscriber secures an assignee of this agreement who assumes the obligations herein contained and is satisfactory to the Cooperative and FmHA or its successor agency under Public Law 103-354 while mortgagee. This Agreement is not otherwise assignable.
6.
This Agreement, dated _____, by and between _____ (hereinafter referred to as the “Cooperative”), at _____ and _____ (hereinafter referred to as “Member”).
The purpose of the Cooperative is to acquire, own, and operate a cooperative housing project and its members shall have the right to occupy its dwelling units under the terms and conditions set forth in this agreement:
Member is the owner and holder of a certificate of membership of the Cooperative and intends to occupy a dwelling unit in the project as permanent residence; and
Member has certified to the accuracy of the statements in Member's application and agrees and understands that household income and other eligibility requirements are substantial and material requirements of his initial and continuing occupancy.
To Have and To Hold dewelling unit Number _____ on the terms and conditions set forth in this agreement, in the corporate charter, bylaws, and any other rules and regulations of the Cooperative. The term of this agreement shall be for a three-year period ending on _____, 19 __,
Section 1.01. Commencing at the time indicated in ARTICLE 2, the Member agrees to pay to the Cooperative a monthly sum referred to as the “Occupancy Charge.” This amount will be equal to one-twelfth of the Member's proportionate share of the total amount required by the Cooperative, as estimated by its board of directors, to meet its annual expenses and the requirements of the FmHA or its successor agency under Public Law 103-354 loan. These inlcude but are not limited to, the following items:
(a) Project operating expenses and cost of services furnished.
(b) Necessary management reserve and administrative costs.
(c) Taxes and assessments levied against the project or the Cooperative which it is required to pay.
(d) Fire and extended coverage insurance on the project and any other insurance which the Cooperative may require.
(e) The cost of furnishing any water, electricity, heat, gas, garbage and trash collection, and other utilities, if furnished by the Cooperative.
(f) Payments to other reserves set up by the board of directors.
(g) Estimated costs of repairs, maintenance, and replacements of project property to be made by the Cooperative.
(h) The amount of principal, interest, and any other required payments on any indebtedness of the Cooperative, including any loan made or insured by the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354, United States Department of Agriculture.
(i) Any other expenses of the Cooperative approved by the board of directors and by FmHA or its successor agency under Public Law 103-354, while mortgagee, including operating deficiencies, if any, for prior periods.
(a) Any repairs or maintenance necessitated by Members's own negligence or misuse;
(b) Any redecoration of own dwelling unit authorized, done or contracted for by Member;
(c) Any repairs, maintenance, or replacements required on the following items: (Insert the items desired, subject to FmHA or its successor agency under Public Law 103-354 approval.)
(a) If, during the term of this agreement, Member ceases to be the owner and legal holder of a membership of the Cooperative.
(b) If Member attempts to transfer or assign this agreement in a manner inconsistent with the provisions of the bylaws.
(c) If, during continuance of this agreement, Member is declared bankrupt under the laws of the United States so as to be released from any debt or obligation to the Cooperative or to interfere with his full exercise of his rights as Member and occupant.
(d) If, during continuance of this agreement, a receiver of Member's property is appointed under the laws of the United States or of any State.
(e) If, during continuance of this agreement, Member shall make a general assignment for the benefit of creditors.
(f) If, during continuance of this agreement, any of the membership rights in the Cooperative owned by Member are duly levied upon and sold under the process of any court.
(g) If Member fails to effect and/or pay for repairs and maintenance as provided for in Article 11.
(h) If Member fails to pay any sum due pursuant to Article 1.
(i) If default occurs with respect to any obligation of Member under this agreement.
(j) If, during the term of this agreement, Member fails to comply promptly with all requests by the Cooperative for information
(k) If, during the term of this agreement, limitations for continued occupancy are established from time to time by the FmHA or its successor agency under Public Law 103-354 and are exceeded.
In Witness Whereof, the parties hereto have caused this agreement to be signed and sealed the day and year first above written.
The requirements of this subpart augment the requirements of section 802 of the National Affordable Housing Act of 1990 (approved November 28, 1990, Public Law 101-625) (42 U.S.C. 8011), (hereinafter, section 802), as amended by the Housing and Community Development Act of 1992 (Public Law 102-550, approved October 28, 1992), which authorizes the Congregate Housing Services Program (hereinafter, CHSP or Program).
In addition to the definitions in section 802(k), the following definitions apply to CHSP:
(1) The minimum requirements of ADLs include:
(i) Eating (may need assistance with cooking, preparing or serving food, but must be able to feed self);
(ii) Dressing (must be able to dress self, but may need occasional assistance);
(iii) Bathing (may need assistance in getting in and out of the shower or tub, but must be able to wash self);
(iv) Grooming (may need assistance in washing hair, but must be able to take care of personal appearance);
(v) Getting in and out of bed and chairs, walking, going outdoors, using the toilet; and
(vi) Household management activities (may need assistance in doing housework, grocery shopping or laundry, or getting to and from one location to another for activities such as going to the doctor and shopping, but must be mobile. The mobility requirement does not exclude persons in wheelchairs or those requiring mobility devices.)
(2) Each of the Activities of Daily Living noted in paragraph (1) of this definition includes a requirement that a person must be able to perform at a specified minimal level (e.g., to satisfy the eating ADL, the person must be able to feed himself or herself). The determination of whether a person meets this minimal level of performance must include consideration of those services that will be performed by a person's spouse, relatives or other attendants to be provided by the individual. For example, if a person requires assistance with cooking, preparing or serving food plus assistance in feeding himself or herself, the individual would meet the minimal performance level and thus satisfy the
(1) A person shall be considered to have a disability if such person is determined under regulations issued by the Secretary to have a physical, mental, or emotional impairment which:
(i) Is expected to be of long-continued and indefinite duration;
(ii) Substantially impedes his or her ability to live independently; and
(iii) Is of such a nature that the person's ability could be improved by more suitable housing conditions.
(2) A person shall also be considered to have a disability if the person has a developmental disability as defined in section 102(5) of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6001-7). Notwithstanding the preceding provisions of this paragraph, the terms
(2) The Secretary of Agriculture with reference to programs administered by the Administrator of the Rural Housing Service.
(a)
(b)
(a)
(i) Direct hiring of staff, including a service coordinator;
(ii) Supportive service contracts with third parties;
(iii) Equipment and supplies (including food) necessary to provide services;
(iv) Operational costs of a transportation service (e.g., mileage, insurance, gasoline and maintenance, driver wages, taxi or bus vouchers);
(v) Purchase or leasing of vehicles;
(vi) Direct and indirect administrative expenses for administrative costs such as annual fiscal review and audit,
(vii) States, Indian tribes and units of general local government with more than one project included in the grant may receive up to 1% of the total cost of the grant for monitoring the projects.
(2) Allowable costs shall be reasonable, necessary and recognized as expenditures in compliance with OMB Cost Policies, i.e., OMB Circular A-87, 24 CFR 85.36, and OMB Circular A-128.
(b)
(2) Examples of nonallowable costs under the program are:
(i) Capital funding (such as purchase of buildings, related facilities or land and certain major kitchen items such as stoves, refrigerators, freezers, dishwashers, trash compactors or sinks);
(ii) Administrative costs that represent a non-proportional share of costs charged to the Congregate Housing Services Program for rent or lease, utilities, staff time;
(iii) Cost of supportive services other than those approved by the Secretary concerned;
(iv) Modernization, renovation or new construction of a building or facility, including kitchens;
(v) Any costs related to the development of the application and plan of operations before the effective date of CHSP grant award;
(vi) Emergency medical services and ongoing and regular care from doctors and nurses, including but not limited to administering medication, purchase of medical supplies, equipment and medications, overnight nursing services, and other institutional forms of service, care or support;
(vii) Occupational therapy and vocational rehabilitation services; or
(viii) Other items defined as unallowable costs elsewhere in this subpart, in CHSP grant agreement, and OMB Circular A-87 or 122.
(c)
(a) Supportive services or funding for such services may be provided by state, local, public or private providers and CHSP funds. A CHSP under this section shall provide meal and other qualifying services for program participants (and other residents and nonresidents, as described in § 1944.125(a)) that are coordinated on site.
(b) Qualifying supportive services are those listed in section 802(k)(16) and in section 1944.105.
(c) Meal services shall meet the following guidelines:
(1)
(2)
(3)
(4)
(5)
(6)
(a)
(b)
(a) Each grantee must have at least one service coordinator who shall perform the responsibilities listed in section 802(d)(4).
(b) The service coordinator shall comply with the qualifications and standards required by the Secretary concerned. The service coordinator shall be trained in the subject areas set forth in section 802(d)(4), and in any other areas required by the Secretary concerned.
(c) The service coordinator may be employed directly by the grantee, or employed under a contract with a case management agency on a fee-for-service basis, and may serve less than full-time. The service coordinator or the case management agency providing service coordination shall not provide supportive services under a CHSP grant or have a financial interest in a service provider agency which intends to provide services to the grantee for CHSP.
(d) The service coordinator shall:
(1) Provide general case management and referral services to all potential participants in CHSP. This involves intake screening, upon referral from the grantee of potential program participants, and preliminary assessment of frailty or disability, using a commonly accepted assessment tool. The service coordinator then will refer to the professional assessment committee (PAC) those individuals who appear eligible for CHSP;
(2) Establish professional relationships with all agencies and service providers in the community, and develop a directory of providers for use by program staff and program participants;
(3) Refer proposed participants to service providers in the community, or those of the grantee;
(4) Serve as staff to the PAC;
(5) Complete, for the PAC, all paperwork necessary for the assessment, referral, case monitoring and reassessment processes;
(6) Implement any case plan developed by the PAC and agreed to by the program participant;
(7) Maintain necessary case files on each program participant, containing such information and kept in such form as HUD and RHS shall require;
(8) Provide the necessary case files to PAC members upon request, in connection with PAC duties;
(9) Monitor the ongoing provision of services from community agencies and keep the PAC and the agency providing the supportive service informed of the progress of the participant;
(10) Educate grant recipient's program participants on such issues as benefits application procedures (e.g. SSI, food stamps, Medicaid), service availability, and program participant options and responsibilities;
(11) Establish volunteer support programs with service organizations in the community;
(12) Assist the grant recipient in building informal support networks with neighbors, friends and family; and
(13) Educate other project management staff on issues related to “aging-in-place” and services coordination, to help them to work with and assist other persons receiving housing assistance through the grantee.
(e) The service coordinator shall tailor each participant's case plan to the individual's particular needs. The service coordinator shall work with community agencies, the grantee and third party service providers to ensure that the services are provided on a regular,
(f) Service coordinators shall not serve as members of the PAC.
(a)
(2) The PAC shall utilize procedures that ensure that the process of determining eligibility of individuals for congregate services affords individuals fair treatment, due process, and a right of appeal of the determination of eligibility, and shall ensure the confidentiality of personal and medical records.
(3) The dollar value of PAC members' time spent on regular assessments after initial approval of program participants may be counted as match. If a community agency discharges the duties of the PAC, staff time is counted as its imputed value, and if the members are volunteers, their time is counted as volunteer time, according to sections 1944.145(c)(2) (ii) and (iv).
(b)
(1) Perform a formal assessment of each potential elderly program participant to determine if the individual is frail. To qualify as frail, the PAC must determine if the elderly person is deficient in at least three ADLs, as defined in section 1944.105. This assessment shall be based upon the screening done by the service coordinator, and shall include a review of the adequacy of the informal support network (i.e., family and friends available to the potential participant to assist in meeting the ADL needs of that individual), and may include a more in-depth medical evaluation, if necessary;
(2) Determine if non-elderly disabled individuals qualify under the definition of person with disabilities under section 1944.105. If they do qualify, this is the acceptance criterion for them for CHSP. Persons with disabilities do not require an assessment by the PAC;
(3) Perform a regular assessment and updating of the case plan of all participants;
(4) Obtain and retain information in participant files, containing such information and maintained in such form, as HUD or RHS shall require;
(5) Replace any members of the PAC within 30 days after a member resigns. A PAC shall not do formal assessments if its membership drops below three, or if the qualified medical professional leaves the PAC and has not been replaced.
(6) Notify the grantee or eligible owner and the program participants of any proposed modifications to PAC procedures, and provide these parties with a process and reasonable time period in which to review and comment, before adoption of a modification;
(7) Provide assurance of nondiscrimination in selection of CHSP participants, with respect to race, religion, color, sex, national origin, familial status or type of disability;
(8) Provide complete confidentiality of information related to any individual examined, in accordance with the Privacy Act of 1974;
(9) Provide all formal information and reports in writing.
(c)
(2) No PAC member may be affiliated with organizations providing services under the grant.
(3) Individuals or staff of third party organizations that act as PAC members may not be paid with CHSP grant funds.
(d)
(2) The PAC, upon completion of a potential program participant's initial
(3) Once a program participant is accepted into CHSP, the PAC must provide a supportive services case plan for each participant. In developing this plan, the PAC must take into consideration the participant's needs and wants. The case plan must provide the minimum supportive services necessary to maintain independence.
(e)
(1) Gains physical and mental health and is able to function without supportive services, even if only for a short time (in which case readmission, based upon reassessment to determine the degree of frailty or the disability, is acceptable);
(2) Requires a higher level of care than that which can be provided under CHSP; or
(3) Fails to pay services fees.
(f)
(i) Serving the participant with a written notice containing a clear statement of the reasons for termination;
(ii) A review of the decision, in which the participant is given the opportunity to present written or oral objections before a person other than the person (or a subordinate of that person) who made or approved the termination decision; and
(iii) Prompt written notification of the final decision to the participant.
(2) Procedures must ensure that any potential or current program participant, at the time of initial or regular assessment, has the option of refusing offered services and requesting other supportive services as part of the case planning process.
(3) In situations where an individual requests additional services, not initially recommended by the PAC, the PAC must make a determination of whether the request is legitimately a needs-based service that can be covered under CHSP subsidy. Individuals can pay for services other than those recommended by the PAC as long as the additional services do not interfere with the efficient operation of the program.
(a) Before actual acceptance into CHSP, potential participants must work with the PAC and the service coordinator in developing supportive services case plans. A participant has the option of accepting any of the services under the case plan.
(b) Once the plan is approved by the PAC and the program participant, the participant must sign a participatory agreement governing the utilization of the plan's supportive services and the payment of supportive services fees. The grantee annually must renegotiate the agreement with the participant.
(a)
(2) Section 802(i)(1)(B)(ii) creates a cost-sharing provision between grantee and the Secretary concerned if total participant fees collected over a year are less than 10 percent of total program cost. This provision is subject to availability of appropriated grant funds. If funds are not available, the grantee must assume the funding shortfall.
(b)
(c)
(2) Matching funds may include:
(i) Cash (which may include funds from Federal, State and local governments, third party contributions, available payments authorized under Medicaid for specific individuals in CHSP, Community Development Block Grants or Community Services Block Grants, Older American Act programs or excess residual funds with the approval of the Secretary concerned),
(ii) The imputed dollar value of other agency or third party-provided direct services or staff who will work with or provide services to program participants; these services must be justified in the application to assure that they are the new or expanded services of CHSP necessary to keep the program participants independent. If services are provided by the state, Indian tribe, unit of general local government, or local nonprofit housing sponsor, IHA, PHA, or for-profit or not-for-profit owner, any salary paid to staff from governmental sources to carry out the program of the grantee and any funds paid to residents employed by the Program (other than from amounts under a contract under section 1944.155) is allowable match.
(iii) In-kind items (these are limited to 10 percent of the 50 percent matching amount), such as the current market value of donated common or office space, utility costs, furniture, material, supplies, equipment and food used in direct provision of services. The applicant must provide an explanation for the estimated donated value of any item listed.
(iv) The value of services performed by volunteers to CHSP, at the rate of $5.00 an hour.
(d)
(i) PHA operating funds;
(ii) CHSP funds;
(iii) Section 8 funds other than excess residual receipts;
(iv) Funds under section 14 of the U.S. Housing Act of 1937, unless used for service coordination or case management; and
(v) Comprehensive grant funds unless used for service coordination or case management;
(2) Local government contributions are limited by section 802(i)(1)(E).
(e)
(a)
(b)
(2) Food Stamps; and
(3) Contributions or donations to other eligible programs acceptable as matching funds under section 1944.145(c).
(c)
(d)
(2) The fees for residents receiving meal services less frequently than as described in paragraph (d)(1) of this section shall be in an amount equal to 10 percent of the adjusted income of the project resident, or the cost of providing the services, whichever is less.
(e)
(f)
(a)
(b)
(c)
(d)
(e)
(1) These actions may be taken for:
(i) A grantee's non-compliance with the grant agreement or HUD or RHS regulations;
(ii) Failure of the grantee to provide supportive services within 12 months of execution of the grant agreement.
(2) Sanctions include but are not limited to the following:
(i) Temporary withholding of reimbursements or extensions or renewals under the grant agreement, pending correction of deficiencies by the grantee;
(ii) Setting conditions in the contract;
(iii) Termination of the grant;
(iv) Substitution of grantee; and
(v) Any other action deemed necessary by the Secretary concerned.
(f)
(1) Grantees funded initially under this subpart shall be eligible to receive continued, non-competitive renewals after the initial five-year term of the grant.
(2) Grantees will receive priority funding and grants will be renewed within time periods prescribed by the Secretary concerned.
(g)
Grantees funded initially under 42 U.S.C. 8001 shall be eligible to receive continued, non-competitive funding subject to its availability. These grantees will be eligible to receive priority funding under this subpart if they comply with the regulations in this part and with the requirements of any NOFA issued in a particular fiscal year.
(a) Grantees shall submit annually to the Secretary concerned, a report evaluating the impact and effectiveness of CHSPs at the grant sites, in such form as the Secretary concerned shall require.
(b) The Secretaries concerned shall further review and evaluate the performance of CHSPs at these sites and shall evaluate the Program as a whole.
(c) Each grantee shall submit a certification with its application, agreeing to cooperate with and to provide requested data to the entity responsible for the Program's evaluation, if requested to do so by the Secretary concerned.
The Secretary concerned may reserve funds subject to section 802(o). Requests to utilize supplemental funds by the grantee shall be transmitted to the Secretary concerned in such form as may be required.
In addition to the Federal Requirements set forth in 24 CFR part 5, the following requirements apply to grant recipient organizations in this program:
(a)
(b)
(c)
(d)
(2) The Affirmative Fair Housing Marketing Program requirements of 24 CFR part 200, subpart M, and the implementing regulations at 24 CFR part 108; and
(3) Racial and ethnic collection requirements—Recipients must maintain current data on the race, ethnicity and gender of program applicants and beneficiaries in accordance with section 562
(e)
This subpart sets forth the policies and procedures and delegates authority for providing Technical Assistance (TA) funds to eligible applicants to finance programs of technical and supervisory assistance for self-help housing, as authorized under section 523 of the Housing Act of 1949. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to FmHA or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an FmHA or its successor agency under Public Law 103-354 employee. This financial assistance may pay part or all of the cost of developing, administering, or coordinating programs of technical and supervisory assistance to aid needy very low- and low-income families in carrying out self-help housing efforts in rural areas. Very low-income families must receive a priority for recruitment and participation and may not comprise less than the percentage stated in subpart L of part 1940 of this chapter of those assisted in any grant. The primary purpose is to fund organizations that are willing to locate and work with families that otherwise do not qualify as homeowners. Generally, these are families below 50 percent of median incomes, living in substandard housing, and/or lacking the skills to be good homeowners. Grantees will comply with the nondiscrimination regulation subpart E of part 1901 of this chapter which states that no person in the United States shall, on the grounds of race, color, national origin, sex, religion, marital status, mental or physical handicap, or age, be excluded from participating in, be denied the benefits of, or be subject to discrimination in connection with the use of grant funds and all provisions of the Fair Housing Act of 1988.
Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 may contract or make a grant to an organization to:
(a) Give technical and supervisory assistance to eligible very low- and low-income families as defined in exhibit C of subpart A of this part, in carrying out self-help housing efforts.
(b) Assist other organizations to provide technical and supervisory assistance to eligible families.
(c) Develop a final application, recruit families and related activities necessary to participate under paragraph (a) of this section.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(2) A private nonprofit corporation that is owned and controlled by private persons or interests and is organized and operated for purposes other than making gains or profits for the corporation and is legally precluded from distributing any gains or profits to its members.
(k)
(l)
(m)
(n)
(1) Recruiting families who are interested in sharing labor in the construction of each other's homes and assisting such families in obtaining housing loans.
(2) Conducting meetings of the families to explain the self-help program and subjects related to home ownership, such as loan payments, taxes, insurance, maintenance, and upkeep of the property.
(3) Helping families in planning and developing activities that lead to the acquisition and development of suitable building sites.
(4) Assisting families in selecting or developing house plans for homes which will meet their needs and which they can afford.
(5) Assisting families in obtaining cost estimates for construction materials and any contracting that may be required.
(6) Providing assistance in the preparation of loan applications.
(7) Providing construction supervision and training for families while they construct their homes.
(8) Providing financial supervision to individual families with section 502 Rural Housing (RH) loans which will minimize the time and effort required by FmHA or its successor agency under Public Law 103-354 in processing borrower expenditures for materials and contract services.
(9) Assisting families in solving other housing problems.
(o)
To receive a grant, the applicant must:
(a) Be an organization as defined in § 1944.403(j) of this subpart.
(b) Have the financial, legal, administrative, and actual capacity to assume and carry out the responsibilities imposed by the Agreement. To meet the requirement of actual capacity it must either:
(1) Have necessary background and experience with proven ability to perform responsibly in the field of mutual self-help or other business management or administrative ventures which indicate an ability to perform responsibility in the field of mutual self-help; or
(2) Be sponsored by an organization with background experience, and ability, which agrees in writing to help the applicant to carry out its responsibilities.
(c) Legally obligate itself to administer TA funds, provide adequate accounting of the expenditure of such funds, and comply with the Agreement and FmHA or its successor agency under Public Law 103-354 regulations.
(d) If the organization is a private nonprofit corporation, be a corporation that:
(1) Is organized under State and local laws.
(2) Is qualified under section 501(c)(3) of the Internal Revenue Code of 1986.
(3) Has as one of its purposes the production of affordable housing.
(4) Has a Board of Directors which consist of not less than five.
(a) Payment of salaries of personnel as authorized in the Agreement.
(b) Payment of necessary and reasonable office expenses such as office rental, office utilities, and office equipment rental. The purchase of office equipment is permissible when the grantee determines it to be more economical than renting. As a general rule, these types of expenses would be classified as
(c) Purchase of office supplies such as paper, pens, pencils, and trade magazines.
(d) Payment of necessary employee benefit costs including but not limited to items such as Worker's Compensation, employer's share of social security, health benefits, and a reasonable tax deferred pension plan for permanent employees.
(e) Purchase, lease, or maintenance of power or specialty tools such as a power saw, electric drill, sabre saw, ladders, and scaffolds, which are needed by the participating families. The participating families, however, are expected to provide their own hand tools such as hammers and handsaws.
(f) Payment of liability insurance and special purpose audit costs associated with self-help activities. These would be considered direct costs, even though the grantee's general liability insurance cost and the cost of audits for the organization are generally indirect costs.
(g) Payment of reasonable fees for training of grantee personnel including board members. This may include the cost of travel and per diem to attend in or out-of-State training as authorized by the board of directors and, when necessary, for the employee to do the current job. These costs are generally direct costs.
(h) Payment of services rendered by a sponsor or other organization after the grant is closed and when it is determined the sponsor can provide the necessary services which will result in an overall reduction in the cost of assistance. Typically, this will be limited to new grantees and an existing grantee for the period of time that its size or activity does not justify a full staff. A full staff is a full or part-time director, project worker, secretary-bookkeeper, and a construction supervisor. This type of cost is generally direct.
(i) Payment of certain consulting and legal costs required in the administration of the grant if such service is not available without cost. This does not include legal expenses for claims against the Federal Government. (Legal costs that may be incurred by the organization for the benefit of the participating families may be paid with prior approval of the State Director).
(j) Payments of the cost of an accountant to set up an accounting system and perform audits that may be required. Generally, these costs are indirect.
(k) Payments of reasonable expenses of board members for attending regular or special board meetings. These costs are indirect.
(a) Hiring personnel specifically for the purpose of performing any of the construction work for participating families in the self-help projects.
(b) Buying real estate or building materials or other property of any kind for participating families.
(c) Paying any debts, expenses, or costs which should be the responsibility of the participating families in the self-help projects.
(d) Paying for training of an employee as authorized by Attachment B of OMB Circular A-122.
(e) Paying costs other than approved indirect (including salaries) that are not directly related to helping very low- and low-income families obtain housing consistent with the objectives of this program.
The amount of the TA grant depends on the experience and capability of the applicant and must be justified based on the number of families to be assisted. As a guide, the maximum grant amounts for any grant period will be limited to:
(a) An average TA cost per equivalent unit of no more than 15 percent of the cost of equivalent value of modest homes built in the area. (Upon request, the County Supervisor will provide the grantee the average cost of modest homes for the area); or
(b) An average TA cost per equivalent unit that does not exceed the difference between the equivalent value of modest homes in the area and the average mortgage of the participating families minus $1,000; or
(c) A TA per equivalent unit cost that does not exceed an amount established by the State Director. The State Director may authorize a greater TA cost than paragraph (a) or (b) of this section when needed to accomplish a particular objective, such as requiring the grantee to serve very low-income families, remote areas, or similar situations; or
(d) A negotiated amount for repair and rehabilitation type proposals. At a minimum, applicants applying for repair and rehabilitation grants must include information on the proximity of the houses in a project, the typical needed repairs, and the cost savings between self-help and contractor rehabilitation and repair.
The self-help program is subject to the provision of Executive Order 12372 which requires intergovernmental consultation with State and local officials. Under subpart J of part 1940 of this chapter (available in any Agency office), new applicants for the self-help program must submit their Statement of Activities to the State single point of contact prior to submitting their preapplication to Agency. The name of the point of contact is available from the State Office.
(a)
(1) Complete information about the applicant's previous experience and capacity to carry out the objective of the agreement.
(2) If the applicant organization is already formed, a copy of or an accurate reference to the specific provisions of State law under which the applicant is organized; a certified copy of the applicant's Articles of Incorporation and Bylaws or other evidence of corporate existence; certificate of incorporation for other than public bodies; evidence of good standing from the State when the corporation has been in existence 1 year or more; the names and addresses of the applicant's members, directors, and officers; and, if another organization is a member of the applicant-organization, its name, address, and principal business. If the applicant is not already formed, attach copies of the proposed organizational documents demonstrating compliance with § 1944.404(d) of this subpart.
(3) A current (no more than 12 months old) dated and signed financial statement showing the amounts and specific nature of assets and liabilities together with information on the repayment schedule and status of any debt owed by the applicant. If the applicant is being sponsored by another organization, the same type of financial statement also must be provided by the applicant's sponsor.
(4) A narrative statement which includes information about the amount of the grant funds being requested, area(s) to be served, need for self-help housing in the area(s), the number of self-help units proposed to be built, rehabilitated or repaired during the agreement period, housing conditions of low-income families in the area and reasons why families need self-help assistance. Evidence should be provided that the communities support the activity and that there are low-income families willing to contribute their labor in order to obtain adequate housing. Evidence of community support may be letters of support from local officials, individuals and community organizations. The pre-application may contain information such as census
(5) A plan of how the organization proposes to reach very low-income families living in houses that are deteriorated, dilapidated, overcrowded, and/or lacking plumbing facilities.
(6) A proposed budget which will be prepared on SF-424A, “Budget Information (Non-Construction Programs)” will be completed to address applicable assurances as outlined in § 3015.205 of 7 CFR part 3015. State and local Government will include an assurance that the grantee shall comply with all applicable Federal statutes and regulations in effect with respect to the periods for which it receives grant funding. The State and local governments shall also comply with 7 CFR part 3016.
(7) A preliminary survey as to the availability of lots and projected cost of the sites.
(8) A list of other activities the applicant is engaged in and expects to continue, and a statement as to other sources of funding and whether it will have sufficient funds to assure continued operation of the other activities for at least the period of the agreement. If multi-funded, its cost allocation plan or indirect cost rate must be part of the pre-application.
(9) Whether assistance under paragraph (d) of this section is requested and a brief narrative identifying the need, amount of funds needed, and projected time period.
(10) If a project is planned for five or more housing lots or units, an Affirmative Fair Marketing Plan is required. The plan will be in effect until the completion of the project.
(b)
(i) Form SF-424,
(ii) Original and one copy of Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information,”
(iii) Eligibility recommendations, and
(iv) HUD Form 935.2 “Affirmative Fair Housing Marketing Plan”, if applicable.
(2) The State Director may, if needed, submit the organizational documents with any comments or questions to the Office of General Counsel (OGC) for a preliminary opinion as to whether the applicant is or will be a legal organization of the type required by these regulations and for advice on any other aspects of the preapplication.
(3) The State Director, if unable to determine eligibility or qualifications with the advice of the OGC, may submit the preapplication to the National Office for review. The preapplication will contain all memoranda from OGC giving the results of its review. The State Director will identify in the transmittal memorandum to the National Office the specific problem and will recommend possible solutions and any information about the applicant which would be helpful to the National Office in reaching a decision.
(4) After an eligibility determination has been made, which should be completed within 30 days unless OGC is involved, the State Director will:
(i) If the applicant is eligible, contact the National Office as to the availability of funds or submit the proposal to the National Office for authorization if the requested amount exceeds the State Director's approval authority. If funds are available, the final review officer, either the State Director or the Assistant Administrator, Housing will issue a letter of conditions that the applicant must meet and direct the District Director to issue Form AD-622, “Notice of Preapplication Review Action.”
(ii) If the applicant is determined not eligible, the State Director will direct the District Director to issue Form AD-622.
(c)
(2) If the applicant is not eligible and after the State Director has returned the preapplication information, the District Director will within 5 days notify the applicant on Form AD-622. The notification will inform the applicant that an appeal of the decision may be made to the National Appeals Staff under subpart B of part 1900 of this chapter.
(3) If the applicant is eligible and no grant or loan funds are available, the State Director will return the preapplication information to the District Director who will, within 10 days, notify the applicant on Form AD-622. The notification will explain the facts concerning the lack of funding and that FmHA or its successor agency under Public Law 103-354 will notify them when funding will be available. This is not an appealable decision.
(d)
(e)
(1) Names, addresses, number in household, and total annual household income of families who have been contacted by the applicant and are interested in participating in a self-help housing project. Community organizations including minority organizations may be used as a source of names of people interested in self-help housing.
(2) Proof that the first group of prospective participating self-help families have qualified for financial assistance.
(3) Evidence that lots are optioned by the prospective participating self-help families for the first group. Evidence that lots are available for the remaining groups.
(4) Detailed cost estimates of houses to be built by the mutual self-help method. Plans and specifications should be submitted with the cost estimates.
(5) Proposed staffing need, including qualifications, experience, proposed hiring schedule, and availability of any prospective employees.
(6) Name, address, and official position of the applicant's representative
(7) Budget information including a detailed budget for the Agreement period based upon the needs outlined in the proposal. SF 424A will be completed to furnish the budget information.
(8) Indirect or direct cost policy and proposed indirect cost rate developed in accordance with 7 CFR part 3015 and part 3016.
(9) Personnel procedures and practices that will be established or are in existence. Forms to be used should be submitted with the application.
(10) A proposed monthly activities schedule showing the proposed dates for starting and completing the recruitment, loan processing and construction phases for each group of participant families.
A grant may be approved for an eligible applicant when the conditions in the letter of conditions are met and the following conditions are present:
(a) The applicant has or can hire, or contract directly or indirectly with, qualified people to carry out its responsibilities in administering the grant.
(b) The applicant has met all of the conditions listed in § 1944.410(e) of this subpart.
(c) The grantee furnishes a signed statement that it complies with the requirements of the Departmental Regulations found in 7 CFR part 3015 and part 3016.
(d) A resolution has been adopted by the board of directors which authorizes the appropriate officer to execute exhibit A of this subpart and Form FmHA or its successor agency under Public Law 103-354 400-4, “Assurance Agreement.”
(e) The grantee has fidelity bonding as covered in 7 CFR part 3015 if a nonprofit organization or, if a State or local government, to the extent required in 7 CFR part 3016.
(f) The grantee has agreed by completing SF-424B, “Assurances-Non Construction Programs,” that it will establish a recordkeeping system that is certifiable by a certified public accountant that it adequately meets the Agreement.
(g) The grantee has established an interest bearing checking account on which at least two bonded officials will sign all checks issued and understands that interest earned in excess of $250.00 annually must be submitted to FmHA or its successor agency under Public Law 103-354 quarterly. (The use of minority depository institutions is encouraged.)
(h) The grantee has developed an agreement to be executed by the grantee and the self-help participants which clearly sets forth what is expected of each and has incorporated exhibit B-2 of this subpart which clearly shows what work is expected of the participating family.
When the application and all items required for the complete docket have been received, the District Director will thoroughly examine it to insure the application has been properly and accurately prepared and that it includes the required dates and signatures. The docket items will be assembled and distributed by the District Director in the following order:
(a)
(1) Execute and distribute Form FmHA or its successor agency under Public Law 103-354 1940-1 in accordance with the Forms Manual Insert (FMI).
(2) After the Finance Office acknowledges that funds are obligated, request an initial advance of funds on Form FmHA or its successor agency under Public Law 103-354 440-57, “Acknowledgment of Obligated Funds/Check Request,” in accordance with the FMI. The amount of this request should cover the applicant's needs for the remainder of the month in which the grant is closed plus the next month. Subsequent advances will cover only a one-month period.
(b)
(1) The District Director will prepare Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation,” according to the FMI and send it to the State Director with the reasons for cancellation. If the State Director approves the request, Form FmHA or its successor agency under Public Law 103-354 1940-10 will be returned to the District Office for processing in accordance with the FMI.
(2) The District Director will notify the applicant of the cancellation and the right to appeal under subpart B of part 1900 of this chapter. If the applicant requested the cancellation, no appeal rights are provided, but the applicant will still be notified of the cancellation.
(c)
(a) The State Director is authorized to approve or disapprove TA grants under this subpart. For a grant in excess of $300,000, or in the case of a grant amendment when the amount of the grant plus any unexpended funds from a previous grant will exceed $400,000, prior written consent of the National Office is required. In such cases, the docket, along with the State Director's recommendations, must be submitted to the National Office for review.
(b) The State Director may approve a grant not to exceed $10,000 to an eligible organization under § 1944.410(d) of this subpart. The grant must be limited to 6 months and funds must be used for the development of the final application, family recruitment, and related activities as explained in § 1944.410(e) of this subpart. The amount of this grant will not be included in figuring TA cost per units.
(c) The authority to contract for services is limited to the Administrator of FmHA or its successor agency under Public Law 103-354.
(d) Monthly expenditures of the grantee will normally be approved by the District Director unless:
(1) The grantee operates in only one county, in which case the authority may be delegated to the County Supervisor.
(2) The grantee operates in more than one FmHA or its successor agency under Public Law 103-354 District, in which case the State Director will designate the approving official.
(3) The grantee operates in more than one State Director's jurisdiction, in which case the Administrator will designate the approving official.
(4) The expenditure is under contract authority, in which case the Contracting Official Representative will approve the monthly expenditure.
The grant is closed on the date the Agreement is executed as defined in § 1944.403(a) by the applicant and the Government. Funds may not be advanced prior to the signing of the Agreement. The District Director or Assistant District Director are authorized to execute the Agreement for FmHA or its successor agency under Public Law 103-354. Person(s) authorized by resolution may sign for the applicant.
FmHA or its successor agency under Public Law 103-354 has a responsibility to help the grantee be successful and help the grantee avoid cases of fraud and abuse. Servicing actions also include correlating activities between the grantee and FmHA or its successor agency under Public Law 103-354 to the benefit of the participating families. The amount of servicing actions needed will vary in accordance with the experience of the grantee, but as minimum the following actions are required:
(a) Monthly, the grantee will provide the District Director with a request for additional funds on Form SF-270, “Request for Advance or Reimbursement.” This request need only show the amount of funds used during the previous month, amount of unspent funds, projected need for the next 30 days, and written justification if the request exceeds the projected need for the next 30 days. This request must be in the District Director's office fifteen days prior to the beginning of the month. Upon receipt of the grantee's request, the District Director will:
(1) If the request appears to be in order, process Form FmHA or its successor agency under Public Law 103-354 440-57 so that delivery of the check will be possible on the first of the next month.
(2) If the request does not appear to be in order, immediately contact the grantee to resolve the problem. After the contact:
(i) If the explanation is acceptable, process Form FmHA or its successor agency under Public Law 103-354 440-57 so delivery may be possible by the first of the next month, or
(ii) If the explanation is not acceptable, immediately notify the grantee and request the amount of funds that appear reasonable for the next 30 days on Form FmHA or its successor agency under Public Law 103-354 440-57, so that delivery may be possible by the first of the next month. Unapproved funds that are later approved will be added to the next month's request.
(b) Quarterly, the grantee will submit exhibit B of this subpart in an original and three copies to the County Supervisor on or before January 15, April 15, July 15, and October 15 which will verify its progress toward meeting the objectives stated in the Agreement and the application. The County Supervisor will immediately complete the County Office review part and forward the report to the District Office. After exhibit B is received in the District Office, a meeting should be scheduled between the grantee, District Director, and the County supervisor since this is an opportune time for both the grantee and FmHA or its successor agency under Public Law 103-354 to review progress to date and make necessary adjustments for the future. This meeting is required if the grantee was previously identified as a problem grantee or will be identified as a problem grantee at this time. Regardless of whether a meeting will be held, the following will be done:
(1) Exhibit B and other information will be evaluated to determine progress made to date. The District Director will comment on exhibit B as to whether the grantee is ahead or behind schedule in each of the following areas:
(i)
(ii)
(iii)
(iv)
(2) The District Director will submit exhibit B to the State Director who will evaluate the quarterly report along with the District Director's comments. If the State Director determines the grantee is progressing satisfactorily, the State Director will sign and forward exhibit B to the National Office. However, if the State Director determines the grantee is not performing as expected, the State Director will notify the grantee that it has been classified a “High Risk” grantee. The notice will specify the deficiencies and inform the grantee of proposed remedies for noncompliance. The notice will advise the grantee that FmHA or its successor agency under Public Law 103-354 is available to assist and provide the name and address of an organization that is under contract with FmHA or its successor agency under Public Law 103-354 to assist them. The State Director will forward a copy of exhibit B, District Directors comments, and the reasons for classifying them as “High Risk” to the National Office, Single Family Housing, Special Programs Branch. When the period of time provided for corrective action has expired, an assessment will be made of the progress by the grantee toward correcting the situation. If the State Director determines:
(i) The situation has been corrected or reasonable progress has been made toward correcting the situation, the “High Risk” status will be lifted and the grantee so notified.
(ii) The situation has not been corrected but it is correctable if additional time is granted, an extension will be issued.
(iii) The situation has not been corrected and it is unlikely to be corrected if given additional time, the grant will be terminated under § 1944.426(b)(1) of this subpart.
Near the end of the grant period but prior to the last month, an evaluation of the grantee will be conducted by FmHA or its successor agency under Public Law 103-354. The State Director may use FmHA or its successor agency under Public Law 103-354 employees or an organization under contract to FmHA or its successor agency under Public Law 103-354 to provide the evaluation. The evaluation is to determine how successful the grantee was in meeting goals and objectives as defined in the agreement, application, this regulation, and any amendments.
(a) This is a quantitative evaluation of the grantee to determine if it met its goals in:
(1) Assisting the project number of families in obtaining adequate housing.
(2) Meeting the goal of assisting very low-income families.
(3) Meeting the family labor requirement in § 1944.411(h) and exhibit B-2 of this subpart.
(4) Keeping costs within the guides set in § 1944.407.
(5) Meeting order objectives in the Agreement.
(b) The evaluation is a narrative addressed to the State Director with a copy of the National Office, Single Family Housing Processing Division. It will be in 3 parts, namely; findings, recommendations, and an overall rating. The rating will be either unacceptable, acceptable, or outstanding, as follows:
(1) Outstanding if the grantee met or exceeded all of the goals in paragraph (a) of this section.
(2) Acceptable if the grantee met or exceeded all of the goals as defined in paragraph (a) except two.
(3) Unacceptable if the grantee failed to obtain an acceptable rating.
(c) After the State Director has reviewed the evaluation, a copy will be mailed to the grantee. The grantee may request a review of the evaluation with the District Director. This review is for clarification of the material and to dispute the findings if they are known to be wrong. The rating is not open for discussion except to the extent it can be proven that the findings do not support the rating. If this is the
The State Director may authorize the District Director to execute on behalf of the Government, exhibit C of this subpart, at any time during the grant period provided:
(a) The extension period is for no more than one year from the final date of the existing Agreement.
(b) The need for the extension is clearly justified.
(c) If additional funds are needed, a revised budget is submitted with complete justification, and
(d) The grantee is within the guidelines in § 1944.407 of this subpart or the State Director determines that the best interest of the Government will be served by the extension.
Grantees wishing to continue with self-help efforts after the end of the current grant plus any extensions should file Form SF-424, in accordance with § 1944.410(e). It is recommended that it be filed at least 6 months before the end of the current grant period. Funds from the existing grant may be used to meet the conditions of a new grant to serve the same or redefined geographic area. If the grantee is targeting a different geographic area, a new preapplication must be submitted in accordance with § 1944.410 and the grantee may apply for a predevelopment grant in accordance with § 1944.410(d). In addition to meeting the conditions of an applicant as defined in § 1944.411 of this subpart, the grantee must also have received or will receive an acceptable rating on its current grant unless an exception is granted by the State Director. The State Director may grant an exception to the rating if it is determined that the reasons causing the previous unacceptable rating have been removed or will be removed with the approval of this grant.
The grantee must submit an audit to the appropriate FmHA or its successor agency under Public Law 103-354 District Office annually (or biennially if a State or local government with authority to do a less frequent audit requests it) and within 90 days of the end of the grantee's fiscal year, grant period, or termination of the grant. The audit, conducted by the grantee's auditors, is to be performed in accordance with Generally Accepted Government Auditing Standards (GAGAS), using the publication “Standards for Audit of Governmental Organizations, Programs, Activities and Functions” developed by the Comptroller General of the United States in 1981, and any subsequent revisions. In addition, the audits are also to be performed in accordance with 7 CFR parts 3015 and 3016 and FmHA or its successor agency under Public Law 103-354 requirements as specified in this subpart. Audits of borrower loan funds will be required. The number of borrower accounts audited will be determined by the auditor. In incidences where it is difficult to determine the appropriate number of accounts to be audited, auditors should be authorized by the State Director to audit the lesser of 10 loans or 10 percent of total loans.
(a)
(1) An audit conducted by the grantee's auditor shall be supplied to the FmHA or its successor agency under Public Law 103-354 District Director as soon as possible but in no case later than ninety (90) days following the period covered by the grant agreement.
(2) Auditors shall promptly notify United States Department of Agriculture's Office of the Inspector General Regional Inspector General and the FmHA or its successor agency under Public Law 103-354 District Office, in writing, of any indication of fraud, abuse, or illegal acts in grantees use of grant funds or in the handling of borrowers accounts.
(3) Nonprofit organizations that receive less than $25,000 a year in Federal financial assistance need not be audited.
(b)
(1) State and local governments and Indian tribes that receive $25,000 or more a year in Federal financial assistance shall have an audit made in accordance with 7 CFR part 3016.
(2) State and local and Indian tribes that receive less than $25,000 a year in Federal financial assistance shall be exempt from 7 CFR part 3016.
(3) Public hospitals and public colleges and universities may be excluded by the State Director from OMB Circular A-128 audit requirements. If such entities are excluded, audits shall be made in accordance with paragraph (a) of this section.
A grantee is required to assist 502 RH applicants in submitting their application for a RH loan. Loan packaging will be performed in accordance with exhibit A of subpart A of part 1944 of this chapter; therefore, it is important that the grantee be trained at an early date in the packaging of RH loans. Typically, this training should take place before the first applications are submitted to the County Office and before the grant is closed. A grantee should become very knowledgeable of FmHA or its successor agency under Public Law 103-354's eligibility requirements but must understand that only FmHA or its successor agency under Public Law 103-354 can approve or deny an applicant assistance. Grantee must work cooperatively with FmHA or its successor agency under Public Law 103-354 in the 502 loan approval process and must work within the regulations for the 502 program and recognize FmHA or its successor agency under Public Law 103-354's ultimate decision making authority to approve or deny loans. However, the grantee may ask for clarification that may be helpful in working with future applicants. Grant funds may not be used to pay any expense in connection with an appeal that the applicant may file or pursue.
All construction will be performed in accordance with subpart A of part 1924 of this chapter. The planned work must meet the building requirements of subpart A of part 1944 of this chapter and meet the Development Standards as defined in subpart A of part 1924 of this chapter and in any local codes. Sites and site developments must conform to the requirements of subpart C of part 1924 of this chapter.
Grantees will be required to administer borrower loan funds during the construction phases. The extent of their involvement will depend on the experience of the grantee and the amount of authority delegated to them by the District Director in accordance with § 1924.6(c) of subpart A of part 1924 of this chapter. Training should include FmHA or its successor agency under Public Law 103-354's non-discrimination policies in receiving applications.
(a)
(1) The grantee will immediately refund to FmHA or its successor agency under Public Law 103-354 any balance of grant funds advanced that are not committed for the payment of authorized expenses as prescribed in § 1951.58(j) of FmHA Instruction 1951-B (available in any FmHA or its successor agency under Public Law 103-354 office).
(2) The grantee will furnish Form SF-269A, “Financial Status Report (short form)” to FmHA or its successor agency under Public Law 103-354 within 90 days after the date of completion of the grant. All other financial, performance, and other reports required as a condition of the grant also will be completed.
(3) After the grant closeout, FmHA or its successor agency under Public Law 103-354 retains the right to recover any disallowed costs which are discovered as a result of the final audit. Subpart M of part 1951 of this chapter will be used by FmHA or its successor agency under Public Law 103-354 to recover any unauthorized expenditures.
(4) The grantee will provide FmHA or its successor agency under Public Law 103-354 an audit conforming to those requirements established in this part, including audits of self-help borrower accounts.
(5) Upon request from the recipient, any allowable reimbursable cost not covered by previous payments shall be promptly paid by FmHA or its successor agency under Public Law 103-354.
(b)
(i) If the State Director determines that termination is not necessary, the grantee will be informed by letter along with the District Director.
(ii) If the State Director determines that termination of the grant is appropriate, he/she will promptly inform the grantee by the use of exhibit B-3 of subpart B of part 1900 of this chapter.
(2)
(ii) The National Office will then obtain a comprehensive report on the matter from the State Office. This information will be considered together with any additional information that may be provided by the grantee.
(c)
(d)
(1)
(2)
Annually or more often, the board of directors will evaluate their own self-help program. Exhibit E of this subpart is provided for that purpose. It is also recommended that they review their personnel policy, any audits that may have been conducted and other reports to determine if they need to make adjustments in order to prevent fraud and abuse, and meet the goals in the current grant agreement.
The reporting and recordkeeping requirements contained in this regulation have ben approved by the Office of Management and Budget and have been assigned OMB control number 0575-0043. Public reporting burden for this collection of information is estimated to vary from 10 minutes to 18 hours per response, with an average of 1.17 hours per response including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Department of Agriculture, Clearance Officer, OIRM, room 404-W, Washington, DC 20250; and to the Office of Management and Budget, Paperwork Reduction Project (OMB# 0575-0043), Washington, DC 20503.
THIS GRANT AGREEMENT dated ____, 19__, is between ______
In consideration of financial assistance in the amount of $____ (called “Grant Funds”) to be made available by FmHA or its successor agency under Public Law 103-354 to Grantee under section 523(b)(1)(A) of the Housing Act of 1949 to be used in (specify area to be served) ____ for the purpose of providing a program of technical and supervisory assistance which will aid low-income families in carrying out mutual self-help housing efforts. Grantee will provide such a program in accordance with the terms of this Agreement and FmHA or its successor agency under Public Law 103-354 regulations.
(a) This Agreement shall terminate ____ years from this date unless extended or sooner terminated under paragraphs (e) and (f) of this Agreement.
(b) Grantee shall carry out the self-help housing activity described in the application docket which is attached to and made a part of this Agreement. Grantee will be bound by the conditions set forth in the docket, 7 CFR part 1944, subpart I, and the further conditions set forth in this Agreement. If any of the conditions in the docket are inconsistent with those in the Agreement or subpart I of part 1944, the latter will govern. A waiver of any condition must be in writing and must be signed by an authorized representative of FmHA or its successor agency under Public Law 103-354.
(c) Grantee shall use grant funds only for the purposes and activities specified in FmHA or its successor agency under Public Law 103-354 regulations and in the application docket approved by FmHA or its successor agency under Public Law 103-354 including the approved budget. Any uses not provided for in the approved budget must be approved in writing by FmHA or its successor agency under Public Law 103-354 in advance.
(d) If Grantee is a private nonprofit corporation, expenses charged for travel or per diem will not exceed the rates paid FmHA or its successor agency under Public Law 103-354 employees for similar expenses. If Grantee is a public body, the rates will be those that are allowable under the customary practice in the government of which Grantee is a part; if none are customary, the FmHA or its successor agency under Public Law 103-354 rates will be the maximum allowed.
(e) Grant closeout and termination procedures will be as follows:
(1) Promptly after the date of completion or a decision to terminate a grant, grant closeout actions are to be taken to allow the orderly discontinuation of Grantee activity.
(i) Grantee shall immediately refund to FmHA or its successor agency under Public Law 103-354 any uncommitted balance of grant funds.
(ii) Grantee will furnish to FmHA or its successor agency under Public Law 103-354 within 90 days after the date of completion of the grant a “Financial Status Report”, Form SF-269A. All financial, performance, and other reports required as a condition of the grant will also be completed.
(iii) Grantee shall account for any property acquired with technical assistance (TA) grant funds, or otherwise received from FmHA or its successor agency under Public Law 103-354.
(iv) After the grant closeout, FmHA or its successor agency under Public Law 103-354 retains the right to recover any disallowed costs which may be discovered as a result of any audit.
(2) When there is reasonable evidence that Grantee has failed to comply with the terms of this Agreement, the State Director may determine Grantee as “high risk”. A “high risk” Grantee will be supervised to the extent necessary to protect the Government's interest and to help Grantee overcome the deficiencies.
(3) Grant termination will be based on the following:
(i)
(A) Actual TA costs significantly exceeding the amount stipulated in the proposal.
(B) The number of homes being built is significantly less than proposed construction or is not on schedule.
(C) The cost of housing not being appropriate for the self-help program.
(D) Failure of Grantee to only use grant funds for authorized purposes.
(E) Failure of Grantee to submit adequate and timely reports of its operation.
(F) Failure of Grantee to require families to work together in groups by the mutual self-help method in the case of new construction.
(G) Serious or repetitive violation of any of the provisions of any laws administered by FmHA or its successor agency under Public Law 103-354 or any regulation issued under those laws.
(H) Violation of any nondiscrimination or equal opportunity requirement administered by FmHA or its successor agency under Public Law 103-354 in connection with any FmHA or its successor agency under Public Law 103-354 programs.
(I) Failure to establish an accounting system acceptable to FmHA or its successor agency under Public Law 103-354.
(J) Failure to serve very low-income families.
(K) Failure to recruit families from substandard housing.
(ii)
(4) To terminate a grant for cause, FmHA or its successor agency under Public Law 103-354 shall promptly notify Grantee in writing of the determination and the reasons for and the effective date of the whole or partial termination. Grantee will be advised of its appeal rights under 7 CFR part 1900, subpart B.
(f) An extension of this grant agreement may be approved by FmHA or its successor agency under Public Law 103-354 provided, in its opinion, the extension is justified and there is a likelihood that the Grantee can accomplish the goals set out and approved in the application docket during the period of the extension.
(g) Grant funds may not be used to pay obligations incurred before the date of this Agreement. Grantee will not obligate grant funds after the grant termination or completion date.
(h) As requested and in the manner specified by FmHA or its successor agency under Public Law 103-354, the Grantee must make quarterly reports, exhibit C of this subpart (on
(i) Acquisition and disposal of personal equipment and supplies should comply with subpart R of 7 CFR part 3015 and subpart C of 7 CFR part 3016.
(j) Results of the program assisted by grant funds may be published by Grantee without prior review by FmHA or its successor agency under Public Law 103-354, provided that such publications acknowledge the support provided by funds pursuant to the provisions of Title V of the Housing Act of 1949, 42 U.S.C. 1471,
(k) Grantee certifies that no person or organization has been employed or retained to solicit or secure this grant for a commission, percentage, brokerage, or contingent fee.
(l) Grantee shall comply with all civil rights laws and the FmHA or its successor agency under Public Law 103-354 regulations implementing these laws.
(m) In all hiring or employment made possible by or resulting from this grant, Grantee: (1) Will not discriminate against any employee or applicant for employment because of race, religion, color, sex, marital status, national origin, age, or mental or physical handicap, and (2) will take affirmative action to insure that applicants are employed, and that employees are treated during employment without regard to their race, religion, color, sex, marital status, national origin, or mental or physical handicap. This requirement shall apply to, but not be limited to, the following: Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. In the event Grantee signs a contract which would be covered by any Executive Order, law, or regulation prohibiting discrimination, Grantee shall include in the contract the “Equal Employment Clause” as specified by FmHA or its successor agency under Public Law 103-354.
(n) It is understood and agreed by Grantee that any assistance granted under this Agreement will be administered subject to the limitations of Title V of the Housing Act of 1949 as amended, 42 U.S.C. 1471
(o) Grantee will maintain a code or standards of conduct which will govern the performance of its officers, employees, or agents. Grantee's officers, employees, or agents will neither solicit nor accept gratuities, favors, or anything of monetary value from suppliers, contractors, or others doing
(p) Grantee shall not hire or permit to be hired any person in a staff position or as a participant if that person or a member of that person's immediate household is employed in an administrative capacity by the organization, unless waived by the State Director. (For the purpose of this section, the term
(q) Grantee's board members or employees shall not directly pr indirectly participate, for financial gain, in any transactions involving the organization or the participating families. This includes activities such as selling real estate, building material, supplies, and services.
(r) Grantee will retain all financial records, supporting documents, statistical records, and other records pertinent to this agreement for 3 years, and affirms that it is fully aware of the provisions of the Administrative Remedies for False Claims and Statements Act, 31 U.S.C. 3801,
Exhibit B will be used by all Technical Assistance (TA) Grantees obtaining self-help TA grants. This attachment provides the grantee and FmHA or its successor agency under Public Law 103-354 a uniform method of reporting the performance progress of self-help projects. The TA Grantee will prepare an original and 4 copies of the attachment. The TA Grantee will sign the original and 3 copies and forward it to the local FmHA or its successor agency under Public Law 103-354 County Office. The TA Grantee will keep the unsigned copy for its records.
The evaluation report will be completed in accordance with the following:
1. Enter the date the quarter ends either March 31, June 30, September 30, or December 31 and the year.
2. Enter the full name of the TA Grantee organization.
3. Enter the complete mailing address of the TA Grantee organization.
4. Enter the area served by the grant.
5. Enter the date of the initial self-help TA grant agreement.
6. Enter the time of any extension self-help TA grant agreement(s).
7. Insert the number of equivalent units (EU) completed the first/second/third month of the quarter using steps 1, 2, and 3 of exhibit B-3.
8. Insert the number of EU's completed the second month of the quarter by using steps 1, 2, and 3 of exhibit B-3.
9. Insert the number of EU's completed the third month of the quarter by using steps 1, 2, and 3 of exhibit B-3.
10. Add items (7), (8), and (9) to the total from the previous quarterly report to obtain the cumulative total number of EU's. This total is the cumulative total number of EU's for the project.
11. Enter the number of houses planned in the TA Grantee proposal(s).
12. Enter the number of houses completed and occupied since the beginning of the grant.
13. Enter the number of houses that are under construction at the end of this quarter.
14. Enter the number of families in the pre-construction phase.
15. Enter the total number of construction supervisor(s) paid with TA grant funds.
16. Enter the number of employees paid with TA grant funds including those listed in item 15.
17. Insert the average elapsed time needed per house from excavation to final inspection by FmHA or its successor agency under Public Law 103-354 to complete construction of a house. If no self-help homes have been completed by this grantee, use other projects or your best estimate as a guide.
18. Enter the number of months it takes on average to approve or reject a borrower's docket once it's submitted.
19. Enter number and percent of dockets submitted and rejected this quarter.
20. Enter date of exhibit submittal.
21. Insert title of the Grantee or authorized representative.
22. Signature of Grantee or authorized representative.
23. County Supervisor must answer questions concerning market value and loan amount and also should insert comments concerning progress of construction, success of the project and any problems that the organization may have.
24. Insert date of County Supervisor's review.
25. Signature of County Supervisor.
26. District Director representative should insert his/her comments concerning items listed in § 1944.417(b)(1) of 1944-I.
27. Insert date of District Director review.
28. Signature of District Director or representative.
29. Insert State Office comments.
30. Insert date of State Office review.
31. Signature of State Office representative.
A. Equivalent units are used to measure progress at any time during the period of the grant. It is necessary because self-help grantees have several groups of families in various stages of progress during the period of the grant. The following formula has been developed to provide a more accurate method of determining progress.
B. Using the Description of Phase Breakdown as a guide, the project staff selects the total percentage pertinent to the stage the self-help group is in and multiplies that percentage by the number of families (units) in the group. The result is the equivalent number of units completed. No credit may be given for Phase I, if the application is rejected. When this computation has been completed for each group that falls within Phases I-III, the total number of equivalent units is divided into the total grant funds expended to that date. The result is the TA cost per unit at that stage of the program's progress.
C. The definition of pre-construction and construction phases described are follows:
D. The computation of equivalent units and TA costs will be computed as follows:
Exhibit C will be used for recording the following information and construction in this example which starts January 1.
Both the grantee and FmHA or its successor agency under Public Law 103-354 review the FmHA or its successor agency under Public Law 103-354 loan application records to determine the percentage of completion for each family in the pre-construction phase of the program. These are Phases I-III. Total these percentages to find the
Refer to the records of construction progress for families in the construction Phase III. As of that date, the director totals the percentage of completion figures for each family as follows:
Total production in the construction phase is therefore 2.92 EUs as of that date.
Add the pre-construction and construction subtotals together:
This provides the total EUs of production during the first three months of operation. Steps 1, 2, and 3 will be used to complete items 7, 8 and 9 of exhibit B of this subpart.
Compile exhibit B of this subpart in an original and four copies. The exhibit will be signed by the TA Grantee. Submit the original and three copies of the exhibit quarterly to FmHA or its successor agency under Public Law 103-354 County Office on or before January 15, April 15, July 15, and October 15, of each year for the quarters ending March 31, June 30, September 30, and December 31 of each year. The District Director will keep the original and forward two copies to the State Office. The State Office will forward one copy to the National Office. The State Office will prepare information concerning TA grants closed within 30 days of the end of a quarter on the next quarterly report.
This Agreement dated, ____ 19__
The Agreement is amended by providing additional financial assistance in the amount of ____ to be made available by FmHA or its successor agency under Public Law 103-354 to Grantee pursuant to section 523 of Title V of the Housing Act of 1949 for the purpose of assisting in providing a program of technical and supervisory assistance which will aid low-income families in carrying out mutual self-help housing efforts; or
The Agreement is amended by changing the completion date specified in convenant 1 from ____ to ____ and by making the following attachments to this amendment: (List and identify proposal and any other documents pertinent to the grant.)
Agreed to this __ day of __ 19__.
This grant predevelopment agreement dated, __ 19 __, is between ____________
In consideration of financial assistance in the amount of $__ (“Grant Funds”) to be made available by FmHA or its successor agency under Public Law 103-354 to Grantee under section 523 (b)(1)(A) of the Housing Act of 1949 to be used in (specify area to be
Grant funds will be used for authorized purposes as contained in § 1944.410(d) of 7 CFR part 1944, subpart I, as necessary, to develop a complete program for a self-help TA grant. This will include recruitment, screening, loan packaging and related activities for prospective self-help participants.
Agreed to this __ day of __ 19__.
7 CFR part 1944, subpart I provides the specific details of this grant program. The following is a list of some functions of the grant recipients taken from this subpart. With the list are questions we request to be answered by the recipients to reduce the potential for fraud, waste, unauthorized use or mismanagement of these grant funds. We suggest the Board of Directors answer these questions every six months by conducting their own review. Paid staff should not be permitted to complete this evaluation.
What, if any, problems exist that need to be corrected for effective management of the grant project?
The following answers should help your organization in assessing its vulnerability to fraud, waste, and abuse. You should take actions to correct practices that now generate an answer different from the key.
The objective of a Site Option (SO) loan under Section 523(b)(1)(B) of Title V of the Housing Act of 1949 is to enable technical assistance (TA) grantees to establish revolving fund accounts to obtain options on land needed to make sites available to families that will build their own homes by the self-help method. An SO loan will be considered only when sites cannot be made available by other means including a regular Rural Housing Site (RHS) loan.
To be eligible for an SO loan, the applicant must be a TA grantee that is currently operating in a satisfactory manner under a TA grant agreement. If the SO loan applicant
Loans may be made only as necessary to enable eligible applicants to establish revolving accounts with which to obtain options on land that will be needed as building sites by self-help families participating in the TA self-help housing program. Loans will not be made to pay the full purchase price of land but only for the minimum amounts necessary to obtain an option from the seller. The option should be for as long as necessary but in no case should the option be for less than 90 days.
(A) If the amount of an SO loan will exceed $10,000, the prior consent of the National Office shall be obtained before approval.
(B) The amount of the SO loan should not exceed 15 percent of the purchase price of the land expected to be under option at any one time, unless a higher percent is authorized by the State Director when other land in not available or the particular area requires more down payment than elsewhere or similar circumstances exist.
(C) Form FmHA or its successor agency under Public Law 103-354 440-34, “Option to Purchase Real Property,” will be used without modification in all cases for obtaining options under this subpart.
(D) The limitations of § 1822.266(b) (1) and (2) of subpart F of part 1822 of this chapter (FmHA Instruction 444.8, paragraphs VI B (1) and (2)) concerning land purchase will apply to options purchased under this subpart.
(A)
(B)
(1) A shorter repayment period will be established if SO funds will not be needed for the entire TA grant funding period.
(2) If a regular RHS loan is to be processed, the SO loan should be scheduled for repayment when RHS loan funds will be available to purchase the land and repay the amount of SO funds advanced on the option, unless SO loan funds will still be needed to purchase other options. Under no circumstances, however, will the repayment period exceed the applicant's remaining TA grant funding period.
(A)
(1) A copy of the proposed option that shows a legal description of the land, option price, purchase price, and terms of the option. If more than one site is to be purchased, a schedule of the proposed options should be included.
(2) Information to verify that a regular RHS loan cannot be processed in time to secure the option.
(3) Proposed method repayment of the SO loan.
(4) Resolution from the applicant's governing body authorizing the application for an SO loan from FmHA or its successor agency under Public Law 103-354.
(B)
(1) Determine whether the applicant is eligible. If the applicant is not eligible, or the loan cannot be made for other reasons, the application may be rejected by the County Supervisor with the concurrence of the District Director. The reasons for the rejection should be clearly stated and provided, in writing to the applicant. The applicant will have the right to have the decision reviewed following the procedure established in subpart B of part 1900 of this chapter.
(2) Review and verify the accuracy of the information provided.
(3) Make an inspection and a memorandum appraisal of each proposed site “as is.” The appraisal will include a narrative statement as to whether the site has been recently sold, verify that the seller is the owner of the property, and indicate whether the purchase price is acceptable based on the selling price of similar properties in the area.
(4) Indicate whether or not it appears that, considering the location and cost of development, adequate building sites can be provided at reasonable costs.
(5) If the option is for a tract of land on which 5 or more sites are proposed, the County Supervisor will forward to the District Director with recommendations as defined in § 1924.119 of subpart C of part 1924 of this chapter.
(6) If approval is recommended, prepare and have the applicant execute Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request for Obligation of Funds,” for the amount needed. Copies of the form will be distributed as provided in the Forms Manual Insert (FMI).
(7) Forward the SO loan application and the applicant's TA application or TA docket to the State Director. The submission will include the appraisal report and the County Supervisor's comments and recommendations.
The State Director is authorized to approve SO loans developed in accordance with this exhibit. The approval or disapproval of the loan will be handled in the same manner as provided in § 1822.272 of subpart F of part 1822 of this chapter (FmHA Instruction 444.8, paragraph XII). SO loans will be established in Automated Multiple Housing Accounting System (AMAS) using Form FmHA or its successor agency under Public Law 103-354 1944-51, “Multiple Family Housing Obligation Fund Analysis”. The Issue loan/Grant checks transaction will be used to request a check for SO loans.
(A)
(B)
(1) The “kind of loan” block on the note will read “SO loan.”
(2) The note will be modified to show that the only installment on the loan will be the final installment.
(C)
(A) Supervised bank accounts will not be used for SO loans.
(B) Grantee will deposit SO loan funds in a depository institution of its choice. The use of minority institutions is encouraged. Such funds will remain separate from any other account of the grantee and shall be established as an SO revolving account.
(C) Checks drawn on the revolving account will be for the sole purpose of purchasing land options and must be signed by at least two authorized officials of the grantee who have been properly bonded in accordance with § 1944.411 (e) and (g) of this subpart.
(D) Grantees will not expend funds for any options until the site and the option form have been reviewed and approved by the County Supervisor.
(1) SO funds will not be left unused in the revolving account in excess of 60 days.
(2) If the funds are not used for the intended purpose within the 60 days specified above, the unused portion will be refunded on the account.
(E) When funds become available for repayment of the SO loan, such funds will be deposited in the revolving account for the purchase of additional site options if needed. If such funds are not needed to purchase more options, they will be applied on the SO loan.
SO loans will be funded from the self-help housing land development fund.
(a) This subpart sets forth the policies and procedures for making grants under section 525(a) of the Housing Act of 1949, 42 U.S.C. 1490e(a), to provide funds to eligible applicants to conduct programs of technical and supervisory assistance (TSA) for low-income rural residents to obtain and/or maintain occupancy of adequate housing. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to FmHA or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an FmHA or its successor agency under Public Law 103-354 employee. This financial assistance may pay part or all of the cost of developing, conducting, administering, or coordinating effective and comprehensive programs of technical and supervisory assistance which will aid needy low-income individuals and families in benefiting from federal, state, and local programs in rural areas.
(b) The Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 will provide
(a) The policy of the FmHA or its successor agency under Public Law 103-354 is to provide Technical and Supervisory Assistance to eligible applicants to do the following:
(1) Provide homeownership and financial counseling to reduce both the potential for delinquency by loan applicants and the level of payment delinquency by present FmHA or its successor agency under Public Law 103-354 housing loan borrowers; and
(2) Facilitate the delivery of housing programs to serve the most needy low-income families in rural areas of greatest need for housing.
(b) FmHA or its successor agency under Public Law 103-354 intends to fund projects which include counseling and delivery of housing programs.
(c) State Directors are given a strong role in the selection of grantees so this program can complement FmHA or its successor agency under Public Law 103-354's policies of targeting FmHA or its successor agency under Public Law 103-354 resources to areas of greatest need within their States.
(d) FmHA or its successor agency under Public Law 103-354 expects grant recipients to implement a TSA program and not to use TSA funds to prepare housing plans and strategies except as necessary to accomplish the specific objectives of the TSA project.
The objectives of the TSA Grant Program are to assist low-income rural families in obtaining adequate housing to meet their family's needs and/or to provide the necessary guidance to promote their continued occupancy of already adequate housing. These objectives will be accomplished through the establishment or support of housing delivery and counseling projects run by eligible applicants. This program is intended to make use of any available housing program which provides the low-income rural resident access to adquate rental properties or homeownership.
References in this subpart to County, District, State, National and Finance Offices and to County Supervisor, District Director, State Director, and Administrator refer to FmHA or its successor agency under Public Law 103-354 offices and officials and should be read as prefaced by FmHA or its successor agency under Public Law 103-354. Terms used in this subpart have the following meanings:
(a)
(b)
(c)
(d)
(e)
(2) A private nonprofit corporation with local representation from the area being served that is owned and controlled by private persons or interests and is organized and operated by private persons or interests for purposes other than making gains or profits for the corporation and is legally precluded from distributing any gains or profits to its members.
(f)
(g)
(h)
(1) Assisting individual FmHA or its successor agency under Public Law 103-354 borrowers with financial problems to overcome delinquency and/or prevent foreclosure and assisting new low-income applicants to avoid financial problems through:
(i) Financial and budget counseling including advice on debt levels, credit purchases, consumer and cost awareness, debt adjustment procedures, and availablity of other financial counseling services;
(ii) Monitoring payment of taxes and insurance;
(iii) Home maintenance and managment; and
(iv) Other counseling based on the needs of the low-income families.
(2) Contracting and assisting low-income families in need of adequate housing by:
(i) Implementing an organized outreach program using available media and personal contacts;
(ii) Explaining available housing programs and alternatives to increase the awareness of low-income families and to educate the community as to the benefits which can accrue from improved housing;
(iii) Assisting low-income families locate adquate housing;
(iv) Providing construction supervision, training, and guidance to low-income families not involved in mutual self-help projects who are otherwise being assisted by the TSA project;
(v) Organizing local public or private nonprofit groups willing to provide adequate housing for low-income families; and
(vi) Providing assistance to families and organizations in processing housing loan and/or grant applications generated by the TSA program, including developing and packaging such applications for new construction, rehabilitation, or repair to serve low-income families.
(i)
(1) Develop, or assist eligible applicants to develop, multi-housing loan and/or grant applications for new construction, rehabilitation, or repair to serve low-income families.
(2) Market surveys, engineering studies, cost estimates, and feasibility studies related to applications for housing assistance to meet the specific needs of the low-income families assisted under the TSA program.
To be eligible to receive a grant, the applicant must:
(a) Be an organization as defined in § 1944.506(e).
(b) Have the financial, legal, administrative, and operational capacity to assume and carry out the responsibilities imposed by the grant agreement. To meet this requirement of actual capacity, it must either:
(1) Have necessary background and experience with proven ability to perform responsibly in the field of low-income rural housing development and counseling, or other business management or administrative experience which indicates an ability to provide responsible technical and supervisory assistance; or
(2) Be assisted by an organization which has such background experience and ability and which agrees in writing that it will provide, without charge, the assistance the applicant will need to carry out its responsibilities.
(c) Legally obligate itself to administer TSA funds, provide an adequate accounting of the expenditure of such funds, and comply with the grant agreement and FmHA or its successor agency under Public Law 103-354 regulations;
(d) Demonstrate an understanding of the needs of low-income rural families;
(e) Have the ability and willingness to work within established guidelines; and
(f) If the applicant is engaged in or plans to become engaged in any other activities, it must be able to provide sufficient evidence and documentation that it has adequate resources, including financial resources, to carry on any other programs or activities to which it is committed without jeopardizing the success and effectiveness of its TSA project.
FmHA or its successor agency under Public Law 103-354 will deal only with authorized representatives designed by the applicant. The authorized representatives must have no pecuniary interest in any of the following as they would relate in any way to the TSA grant: the award of any engineering, architectural, management, administration, or construction contracts; purchase of the furnishings, fixtures or equipment; or purchase and/or development of land.
FmHA or its successor agency under Public Law 103-354 has designated the District Office as the primary point of contact for all matters relating to the TSA program and as the office responsbile for the administration of approved TSA projects.
(a) The rural area to be covered by the TSA project must be realistically serviceable by the applicant in terms of funding resources, manpower, and distances and generally should be limited to one to four counties within the service area of one District Office.
(b) Consideration of the following items may assist applicants develop TSA projects which meet the needs of low-income families in the proposed TSA service area: present population distribution, projected population growth or decline, the amount of inadequate housing, economic conditions, and trends of the rural areas concerned, and any other factors affecting the quantity and quality of housing currently available or planned for the area. Consideration must also be given to the needs and desires of the community; the financial and social condition of the individuals within the community; the needs of areas with a concentration of low-income minority families and the needs of FmHA or its successor agency under Public Law 103-354 borrowers who are delinquent in their housing loan payments; the availability of supporting services such as water, sewerage, health and educational facilities, transportation, recreational and community facilities, and the types of housing facilities and services presently available or planned to which the low-income families have or will have ready access.
(c) Each TSA applicant should consider the alternatives available to provide needed housing facilities and services for the area. Consideration should also be given to the recommendations and services available from local, state, federal governmental entities, and from private agencies and individuals.
(1) In no case should the TSA project deliberately conflict with or duplicate housing studies, plans, projects, or any other housing related activities in a rural area unless documentation shows these activities do not meet the needs of low-income families.
(2) Each TSA project should be coordinated to the extent possible with any comprehensive or special purpose plans and projects affecting low-income housing in the area.
(3) To the fullest extent possible, TSA projects should be coordinated
(d) TSA applicants must coordinate their proposals with the appropriate County and District Offices to be fully familiar with the needs of those offices and of the low-income families currently served by the County Offices.
Grant funds are to be used for a housing delivery system and counseling program to include a comprehensive program of technical and supervisory assistance as set forth in the grant agreement and any other special conditions as required by FmHA or its successor agency under Public Law 103-354. Uses of grant funds may include, but are not limited to:
(a) The development and implementation of a program of technical and supervisory assistance as defined in § 1944.506 (h) and (i).
(b) Payment of reasonable salaries of professional, technical, and clerical staff actively assisting in the delivery of the TSA project.
(c) Payment of necessary and reasonable office expenses such as office supplies and office rental, office utilities, telephone services, and office equipment rental.
(d) Payment of necessary and reasonable administrative costs such as workers' compensation, liability insurance, audit reports, travel to and attendance at FmHA or its successor agency under Public Law 103-354 approved training sessions, and the employer's share of Social Security and health benefits. Payments to private retirement funds are prohibited unless prior written authorization is obtained from the Administrator.
(e) Payment of reasonable fees for necessary training of grantee personnel. This may include the cost of travel and per diem to attend regional training sessions when authorized by the State Director.
(f) Other reasonable travel and miscellaneous expenses necessary to accomplish the objectives of the specific TSA grant which were anticipated in the individual TSA grant proposal and which have been included as eligible expenses at the time of grant approval.
TSA projects will be funded under one Grant Agreement for two years commencing on the date of execution of the Agreement by the State Director.
(a) Grant funds may not be used for:
(1) Acquisition, construction, repair, or rehabilitation of structures or acquisition of land, vehicles, or equipment.
(2) Replacement of or substitution for any financial support which would be available from any other source.
(3) Duplication of current services in conflict with the requirements of § 1944.514(c).
(4) Hiring personnel to perform construction.
(5) Buying property of any kind from families receiving technical or supervisory assistance from the grantee under the terms of the TSA grant.
(6) Paying for or reimbursing the grantee for any expenses or debts incurred before FmHA or its successor agency under Public Law 103-354 executes the grant agreement.
(7) Paying any debts, expenses, or costs which should be the responsibility of the individual families receiving technical and supervisory assistance.
(8) Any type of political activities.
(9) Other costs including contributions and donations, entertainment, fines and penalties, interest and other financial costs, legislative expenses and any excess of cost from other grant agreements.
(b) Advice and assistance may be obtained from the National Office where ineligible costs are proposed as part of the TSA project or where a proposed cost appears ineligible.
(c) The grantee may not charge fees or accept compensation or gratuities from TSA recipients for the grantee's assistance under this program.
The policies and regulations contained in subpart E of part 1901 of this chapter apply to grants made under this subpart.
The following policies and regulations apply to grants made under this subpart:
(a) The policies and regulations contained in subpart F of part 1901 of this chapter regarding historical and archaeological properties.
(b) The policies and regulations contained in subpart G of part 1940 of this chapter regarding Environmental Assessments.
(a) The Administrator will determine, based on the most current available information (generally that information used to determine the allocation to States of FmHA or its successor agency under Public Law 103-354 housing loan funds), those States with the highest degree of substandard housing and persons in poverty in rural areas eligible to receive FmHA or its successor agency under Public Law 103-354 housing assistance. The Administrator will distribute a portion of the available funds for TSA to these States, leaving the balance available for national competition.
(b) The Administrator will provide annual notice through a published Notice on the distribution of appropriated TSA funds, the number of preapplications to be submitted to the National Office from the State Offices, and the maximum grant amount per project.
(a)
(i) The applicant will provide informational copies of the preapplication to the County Supervisor(s) of the area to be served by the TSA project at the time of submittal to the appropriate District Office.
(ii) If the TSA area encompasses more than one District Office, the preapplication will be filed at the District Office which serves the area in which the grantee will provide the greatest amount of TSA efforts. Additional informational copies of the preapplication will be sent by the applicant to the other affected District Office(s).
(2) All preapplications shall be accompanied by the following information which will be used to determine the applicant's eligibility to undertake a TSA program and to determine whether the applicant might be funded.
(i) A narrative presentation of the applicant's proposed TSA program, including:
(A) The technical and supervisory assistance to be provided;
(B) The time schedule for implementing the program;
(C) The staffing pattern to execute the program and salary range for each position, existing and proposed;
(D) The estimated number of low-income and low-income minority families the applicant will assist in obtaining affordable adequate housing;
(E) The estimated number of FmHA or its successor agency under Public Law 103-354 borrowers who are delinquent or being foreclosed that the applicant will assist in resolving their financial problems relating to their delinquency;
(F) The estimated number of households which will be assisted in obtaining adequate housing in the TSA area through new construction and/or rehabilitation;
(G) Annual estimated budget for each of the two years based on the financial needs to accomplish the objectives outlined in the proposal. The budget
(H) The accounting system to be used;
(I) The method of evaluation proposed to be used by the applicant to determine the effectiveness of its program;
(J) The sources and estimated amounts of other financial resources to be obtained and used by the applicant for both TSA activities and housing development and/or supporting facilities; and
(K) Any other information necessary to explain the manner of delivering the TSA assistance proposed.
(ii) Complete information about the applicant's previous experience and capacity to carry out the objectives of the proposed TSA program;
(iii) Evidence of the applicant's legal existence, including, in the case of a private nonprofit organization, a copy of, or an accurate reference to, the specific provisions of State law under which the applicant is organized; a certified copy of the applicant's Articles of Incorporation and Bylaws or other evidence of corporate existence; certificate of incorporation for other than public bodies; evidence of good standing from the State when the corporation has been in existence one year or more; the names and addresses of the applicant's members, directors, and officers; and, if another organization is a member of the applicant-organization, its name, address, and principal business.
(iv) For a private nonprofit entity, a current financial statement dated and signed by an authorized officer of the entity showing the amounts and specific nature of assets and liabilities together with information on the repayment schedule and status of any debt(s) owed by the applicant. If the applicant is an organization being assisted by another private nonprofit organization, the same type of financial statement should also be provided by that organization.
(v) A brief narrative statement which includes information about the area to be served and the need for improved housing (including both percentage and actual number of both low-income and low-income minority families and substandard housing), the need for the type of technical and supervisory assistance being proposed, the method of evaluation to be use by the applicant in determining the effectiveness of its efforts (as related to paragraph (a)(2)(i) of this section), and any other information necessary to specifically address the selection criteria in § 1944.529.
(vi) A list of other activities the applicant is engaged in and expects to continue and a statement as to any other funding and whether it will have sufficient funds to assure continued operation of the other activities for at least the period of the TSA grant agreement.
(3) An applicant should submit written statements from the county, parish, or township governments of the area affected that the project is beneficial and does not duplicate current activities. If the local governmental units will not provide such statements, the applicant will prepare and include with its preapplication a summary of its analysis of alternatives considered under § 1944.514(c). However, Indian nonprofit organization applicants should obtain the written concurrence of the Tribal governing body in lieu of the concurrence of the county governments.
(4) Sponsored applicants should submit a written commitment for financial and/or technical assistance from their sponsoring entity.
(5) An original and one copy of Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information.”
(b)
(i) Complete any required environmental review procedures as specified in subpart G of part 1940 of this chapter and attach to the application.
(ii) Prepare a review of the project in accordance with subpart F of part 1901 of this chapter and attach it to the preapplication.
(2) All District Directors and County Supervisors receiving informational copies of the preapplication should submit their comments within five working days to the District Director with whom the preapplication if filed.
(3) The original and one copy of the preapplication, together with the District Director's written comments and recommendations, reflecting the criteria used in § 1944.529 and exhibit C of this subpart, will be forwarded to the State Director within ten working days of receipt of the preapplication.
(c)
(i) Make a determination on Form FmHA or its successor agency under Public Law 103-354 1940-21, Form FmHA or its successor agency under Public Law 103-354 1940-22 or Class II Environmental Assessment in accordance with subpart G of part 1940 of this chapter.
(ii) Prepare an historical and archaeological assessment in accordance with § 1901.255 (b) and (c) of subpart F of part 1901 of this chapter.
(2) Within 30 days of the closing date for receipt of preapplications as published in the
(3) Concurrently the State Office will send a copy of the selected applicant's(s') SF 424.1 and relevant documents to the Regional Office of the General Counsel (OGC) requesting a legal determination be made of the applicant's legal existence and authority to conduct the proposed program of technical and supervisory assistance.
(4) The State Office will notify other applicants that their preapplications will not selected and advise them of their appeal rights under subpart B of part 1900 of this chapter.
(d)
(2) Preapplications from States which are not targeted in accordance with § 1944.525 will be reviewed for completeness and compliance with this subpart and then evaluated in accordance with the project selection criteria of § 1944.529. Those preapplications which are selected, and for which funds are available, will be returned to the appropriate State Office with any National Office comments and recommendations. The State Office will be advised to proceed with the issuance of SF 424.1 and to request the applicant to prepare Form AD-623 for submission to the District Office as detailed in § 1944.531.
(3) Those preapplications for which funds are not available will be returned to the appropriate State Office which will notify each applicant and advise the applicant of its appeal rights under subpart B of part 1900 of this chapter.
(4) State Directors will be advised of the National Office's action on their selected preapplication within 30 days of receipt of all preapplications.
Dates governing the review and selection of TSA grant preapplications will be published annually in the
(a) Projects must meet the following criteria:
(1) Provide a program of supervisory assistance as defined in § 1944.506(h), and
(2) Serve areas with a concentration of substandard housing and low-income and low-income minority households.
(b) In addition to the items listed in paragraph (a) of this section, the following criteria will be considered in the selection of grant recipients:
(1) The extent to which the project serves areas with concentrations of FmHA or its successor agency under Public Law 103-354 single family housing loan borrowers who are delinquent in their housing loan payments and/or threatened with foreclosure.
(2) The capability and past performance demonstrated by the applicant in administering its programs.
(3) The effectiveness of the current efforts by the applicant to assist low-income families in obtaining adequate housing.
(4) The extent to which the project will provide or increase the delivery of housing resources to low-income and low-income minority families in the area who are not currently occupying adequate housing.
(5) The services the applicant will provide that are not presently available to assist low-income families in obtaining or maintaining occupancy of adequate housing and the extent of duplication of technical and supervisory assistance activities currently provided for low-income families.
(6) The extent of citizen and local government participation and involvement in the development of the preapplication and project.
(7) The extent of planned coordination with other Federal, State, or local technical and/or supervisory assistance programs.
(8) The extent to which the project will make use of other financial and contributions-in-kind resources for both technical and supervisory assistance and housing development and supporting facilities.
(9) Any comments received in accordance with 7 CFR part 3015 subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities.” See FmHA Instruction 1940-J, available in any FmHA or its successor agency under Public Law 103-354 office.
(10) The extent to which the project will be cost effective, including but not limited to the ratio of personnel to be hired by the applicant to the cost of the project, the cost, both direct and indirect, per person benefiting from the project, and the expected benefits to low-income families from the project.
(11) The extent to which the proposed staff and salary ranges, including qualifications, experience, proposed hiring schedule and availability of any prospective employees, will meet the objectives of the proposed TSA program.
(12) The anticipated capacity of the applicant to implement the proposed time schedule for starting and completing the TSA program and each phase thereof.
(13) The adequacy of the records and practices, including personnel procedures and practices, that will be established and maintained by the applicant during the term of the agreement.
(c) Among the projects proposed by private nonprofit entities, preference will be given to sponsored applicants.
(a) Upon notification that the applicant has been tentatively selected for funding, the State Office will forward to the applicant a signed Form AD-622 and provide SF 424.1 with instructions to the applicant for preparation of an application.
(b) Upon receipt of Form AD-622, the applicant will submit an application in an original and 2 copies on Form SF 424.1, and provide whatever additional information is requested to the District Office within 30 days.
(c) Upon receipt of an application on SF 424.1 by the District Office, a docket shall be assembled which will include the following:
(1) Form SF 424.1 and the information submitted in accordance with § 1944.526(a)(2).
(2) Form AD-622.
(3) Any comments received in accordance with 7 CFR part 3015 subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities.” See FmHA Instruction 1940-J, available in any FmHA or its successor agency under Public Law 103-354 office.
(4) SF 424.1.
(5) OGC legal determination made pursuant to § 1944.526(c)(3).
(6) Grant Agreement.
(7) Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request for Obligation of Funds.”
(8) Form FmHA or its successor agency under Public Law 103-354 400-1, “Equal Opportunity Agreement.”
(9) Form FmHA or its successor agency under Public Law 103-354 400-4, “Assurance Agreement.”
(10) Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information.”
(11) Form FmHA or its successor agency under Public Law 103-354 1940-22, “Environmental Checklist for Categorical Exclusions,” Form FmHA or its successor agency under Public Law 103-354 1940-21, “Environmental Assessment for Class I Actions” or exhibit H, subpart G of part 1940 entitled, Environmental Assessment for Class II Actions.
(12) The historical and archaeological assessment.
(13) The detailed budget for the agreement period based upon the needs outlined in the proposal and the comments and recommendations by FmHA or its successor agency under Public Law 103-354.
Grant approval and announcement will be accomplished under the following procedure. The Administrator may modify this section if necessary to obligate funds in a timely and efficient manner.
(a) The District Office will review the docket to determine whether the application complies with these regulations and is consistent with the information and supporting documents submitted with the preapplication and any comments and recommendations of the State and National Offices.
(b) If major problems occur during the development of the docket, the District Office will call upon the State Office for assistance.
(c) If a grant is recommended, Form FmHA or its successor agency under Public Law 103-354 1940-1 and the Grant Agreement will be prepared by the District Office and forwarded to the applicant for signature as authorized in its authorizing resolution. Exhibit A, Grant Agreement, is a part of these regulations.
(d) When Form FmHA or its successor agency under Public Law 103-354 1940-1 and the Grant Agreement are received from the applicant and signed by the applicant, the docket will be forwarded to the State Director.
(e) Exhibit A to FmHA Instruction 2015-C (available in any FmHA or its successor agency under Public Law 103-354 office) will be prepared and sent to the Director of Information in the National Office.
(f) If the State Director approves the project, the following actions will be taken in the order listed:
(1) The State Director, or the State Director's designee, will telephone the Finance Office Check Request Station requesting that grant funds for a particular project be obligated. Immediately after contacting the Finance Office, the requesting official will furnish the requesting office's security identification code. Failure to furnish the security code will result in the rejection of the request for obligation. After the security code is furnished, the required information from Form FmHA or its successor agency under Public Law 103-354 1940-1 will be furnished to the Finance Office. Upon receipt of the telephone request for obligation of funds, the Finance Office will record all information necessary to process the request for obligation in addition to the date and time of the request.
(2) The individual making the request will record the date and time of the request and sign section 37 of Form FmHA or its successor agency under Public Law 103-354 1940-1.
(i) The Finance Office will notify the State Office by telephone when funds are reserved and of the date of obligation. If funds cannot be reserved for a project, the Finance Office will notify the State Office that funds are not available. The obligation date will be six working days from the date the request for obligation is processed.
(ii) The Finance Office will terminally process telephone obligation requests. Those requests received prior to 2:30 p.m. Central Time will be processed on the date of the request. Those requests received after 2:30 p.m., to the extent possible, will be processed on the day received; however, there may be instances where the obligation will be processed on the next working day.
(iii) The Finance Office will mail Form FmHA or its successor agency under Public Law 103-354 440-57, “Acknowledgement of Obligated Funds/Check Request,” to the State Director, confirming the reservation of funds with the obligation date inserted as required by Item 9 on the Forms Manual Insert (FMI) for Form FmHA or its successor agency under Public Law 103-354 440-57.
(iv) Form FmHA or its successor agency under Public Law 103-354 1940-1 will not be mailed to the Finance Office.
(3) The State Director will notify the Director of Information in the National Office with a recommendation that the project announcement be released.
(4) An executed form FmHA or its successor agency under Public Law 103-354 1940-1 will be sent to the applicant along with an executed copy of the Grant Agreement and scope of work on or before the date funds are obligated.
(i) The actual date of applicant notification will be entered on the original of Form FmHA or its successor agency under Public Law 103-354 1940-1 and the original of the form will be included as a permanent part of the file.
(ii) Standard Form 270, “Request for Advance or Reimbursement,” will be sent to the applicant for completion and returned to FmHA or its successor agency under Public Law 103-354.
(5) If it is determined that a project will not be funded or if major changes in the scope of the project are made after release of the approval announcement, the State Director will notify the Administrator and the Director, Legislative Affairs and Public Information Staff (LAPIS) by telephone or electronic mail, giving the reasons for such action. The Director, LAPIS, will inform all parties who were notified by the project announcement if the project will not be funded or of major changes in the project using the procedure similar to the announcement process. Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation,” will not be submitted to the Finance Office until five working days after notifying the Administrator and the Director, LAPIS.
(6) Upon receipt from the grantee of a properly completed SF-270, Form FmHA or its successor agency under Public Law 103-354 440-57 will be completed and the check request will be called to the Finance Office Check Request Station in accordance with the FMI for Form FmHA or its successor agency under Public Law 103-354 440-57.
(a) The District Director will prepare Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation,” in an original and two copies (three copies if the technical and supervisory assistance (TSA) check has been received in the District Office from the Disbursing Office). Form FmHA or its successor agency under Public Law 103-354 1940-10 will be sent to the State Director (original and two copies with the check if the Treasury check is being canceled) with the reasons for requesting cancellation.
(b) If the State Director approves the request for cancellation, he/she will forward the original request for cancellation (original and one copy of Form FmHA or its successor agency under Public Law 103-354 1940-10 with the check if the Treasury check is being canceled) to the Finance Office. If the TSA check is received in the District Office, the District Director will return it to the Finance Office with an original and one copy of Form FmHA or its successor agency under Public Law 103-354 1940-10.
(c) The District Director will notify the applicant of the cancellation and, unless the applicant requested the cancellation, its right to appeal in accordance with the FmHA or its successor agency under Public Law 103-354 Appeal Procedure contained in subpart B of part 1900 of this chapter.
Closing is the process by which FmHA or its successor agency under Public Law 103-354 determines that applicable administrative actions have been completed and the Grant Agreement is signed. The Grant Agreement (Exhibit A) will be executed by the State Director at the time the Form FmHA or its successor agency under Public Law 103-354 1940-1 and Grant Agreement is sent to the Grantee in accordance with § 1944.533 (f)(4). An executed original of the Grant Agreement shall be sent to the District Director and one copy to the grantee.
(a) All requests extending the original grant agreement or revising the TSA program must be in writing. Such requests will be processed through the District Director. Any such requests will be processed in accordance with the processing procedure specified in § 1944.526 (b) and (c) of this subpart. The State Office will respond to the applicant within 30 days of receipt of the request in the State Office.
(b) An extension of a grant beyond the two year term may be granted by the State Director when:
(1) There are grant funds remaining and the grantee requests an extension at the end of the grant period,
(2) The grantee has demonstrated its ability to conduct a comprehensive program of technical and supervisory assistance in accordance with the terms of its grant agreement and in a manner satisfactory to FmHA or its successor agency under Public Law 103-354,
(3) The grantee is likely to complete the goals outlined in the initial proposal,
(4) There is an unmet need to continue the delivery of the technical and supervisory assistance being provided by the grantee, and
(5) The District Director recommends continuation of the grant until the grantee has expended all of the remaining grant funds.
(c) Upon approval of the extension, the State Director will authorize the District Director to amend the ending date of the grant agreement and revise the budgets, if necessary, on behalf of the Government.
(d) If the grant agreement must be revised and amended other than by extension, including any changes in the scope and objectives of the TSA program, the grantee will submit a revised budget and TSA program together with any information necessary to justify
(e) The State Office will advise the National Office of all requests to extend or modify the original grant agreement. Prior concurrence of the National Office is not required unless the State Director so desires, in which case the State Director will advise the applicant that the request has been forwarded to the National Office for concurrence. The State Director's recommendation will accompany such requests.
(f) Exhibit D to this subpart shall be executed upon approval of an extension of the grant period, or significant change in either the project budget or the objectives of the approved technical and supervisory activities.
(g) If extension or modification is not approved, the State Office will notify the applicant in writing of the decision and advise the applicant of the appeal procedures under subpart B of part 1900 of this chapter.
(a) The initial TSA check may cover the applicant's needs for the first calendar month. If the first calendar month is a partial month, the check will cover the needs for the partial month and the next whole month.
(b) The initial advance of TSA grant funds may not be requested simultaneously with the request for obligation of TSA grant funds. The initial advance must be requested on Form FmHA or its successor agency under Public Law 103-354 440-57 in accordance with the FMI after it has been received from the Finance Office indicating that funds have been obligated.
(c) All advances will be requested only after receipt of Standard Form 270 from the grantee. The amount requested must be in accordance with the detailed budget, including amendments, as approved by FmHA or its successor agency under Public Law 103-354. Standard Form 270 will not be submitted more frequently than once every 30 days. In no case will additional funds be advanced if the grantee fails to submit required reports or is in violation of the grant agreement.
(a) Standard Form 269, “Financial Status Report,” and a project performance report will be required of all grantees on a quarterly basis. All grantees shall submit an original and two copies of these reports to the District Director. The project performance reports will be submitted not later than January 15, April 15, July 15, and October 15 of each year.
(b) As part of the grantee's preapplication submission required by § 1944.526(a)(2)(i), the grantee established the objectives of its TSA program including the estimated number of low-income families to be assisted by the TSA program and established its method of evaluation to determine the effectiveness of its program. The project performance report should relate the activities during the report period to the project's objectives and analyze the effectiveness of the program. Accordingly, the report should include, but need not be limited to the following:
(1) A comparison of actual accomplishments to the objectives established for that period, including:
(i) The number of low-income families assisted in improving their housing conditions or in obtaining affordable adequate housing.
(ii) The number of FmHA or its successor agency under Public Law 103-354 borrowers who were delinquent or being foreclosed who were assisted in resolving their financial problems.
(iii) The number of households assisted in obtaining adequate housing by the TSA program through new construction and/or rehabilitation.
(2) Reasons why, if established objectives are not met.
(3) Problems, delays, or adverse conditions which will materially affect attainment of the TSA grant objectives, prevent the meeting of time schedules or objectives, or preclude the attainment of project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or contemplated and any Federal assistance needed to resolve the situation.
(4) Objectives established for the next reporting period, sufficiently detailed to identify the type of assistance to be provided, the number and type of families to be assisted, etc.
(c) These reports will be reviewed by the District Director to determine satisfactory progress. The District Director will work with the grantee to resolve any problems. The District Director will forward the original and one copy of the reports with any comments and recommendations to the State Director within ten working days of receipt.
(d) The State Director will review the reports, comments, and recommendations forwarded by the District Director within five working days of receipt.
(1) If the reports indicate satisfactory progress, the State Director will forward the original to the National Office with any comments or suggestions and return the remaining copy to the grantee through the District Director with a copy of the comments or recommendations.
(2) If the reports indicate unsatisfactory progress, the State Director will recommend appropriate action to resolve the indicated problem(s). The State Director has the discretion to not authorize further advances where the progress of the project is unsatisfactory. The State Director will notify the grantee through the District Director of a decision not to authorize further advances and advise the grantee of its appeal rights under subpart B of part 1900 of this chapter.
(3) A copy of the memorandum returning the unsatisfactory reports will be forwarded to the National Office together with the State Director's decision, comments and recommendations, if appropriate.
(e) The grantee will complete a final Standard Form 269 and a final performance report upon termination or expiration of the grant agreement.
Each grant will be monitored by FmHA or its successor agency under Public Law 103-354 to ensure that the grantee is complying with the terms of the grant and that the TSA project activity is completed as approved. Ordinarily, this will involve a review of quarterly and final reports by FmHA or its successor agency under Public Law 103-354 and review by the appropriate District Director.
An additional grant may be made to an applicant that has previously received a TSA grant and has achieved or nearly achieved the goals established for the previous grant by submitting a new proposal for TSA funds. The additional grant application will be processed as if it were an initial application. Upon approval, a new grant agreement will be required and the grant will be coded as an initial grant on Form FmHA or its successor agency under Public Law 103-354 440-1.
The District Director will see that each TSA grantee receives management assistance to help achieve a successful program.
(a) TSA employees who will be contacting and assisting families will receive training in packaging single family housing and Rural Rental Housing loans when, or very shortly after, they are hired so that they can work effectively.
(b) TSA employees who will provide counseling, outreach, and other technical and supervisory assistance will receive training on FmHA or its successor agency under Public Law 103-354 policies, procedures, and requirements appropriate to their positions and the type of assistance the grantee will provide at the outset of the grant.
(c) Training will be provided by FmHA or its successor agency under Public Law 103-354 employees and/or outside sources approved by FmHA or its successor agency under Public Law 103-354 when the technical and supervisory assistance involves rural housing programs other than FmHA or its successor agency under Public Law 103-354 programs. Appropriate training of TSA employees should be anticipated during the planning stages of the grant
(d) The District Director, in cooperation with the appropriate County Supervisor(s), should coordinate the management assistance given to the TSA grantee in a manner which is timely and effective. This will require periodic meetings with the grantee to discuss problems being encountered and offer assistance in solving these problems; to discuss the budget, the effectiveness of the grant, and any other unusual circumstances affecting delivery of the proposed TSA services; to keep the grantee aware of procedural and policy changes, availability of funds, etc.; and to discuss any other matters affecting the availability of housing opportunities for low-income families.
(e) The District Director will advise the grantee of the options available to bring the delinquent borrowers' accounts current and advise the grantee that the appropriate County Supervisor retains all approval authority for any resolution of the delinquent accounts and all other authority currently available to remedy delinquent accounts.
(a) Subsequent to execution of the TSA grant agreement, the County Supervisor(s) serving the TSA project area will contact the delinquent FmHA or its successor agency under Public Law 103-354 single family housing borrowers who appear to be in need of supervisory assistance as defined in § 1944.506(h)(1). Such contact will indicate the availability of the counseling services of the grantee and solicit the borrower's participation in the program. Exhibit E should be used in contacting and/or discussing counseling with the borrowers.
(b) Upon indication of the borrower's willingness to participate in the program by his or her signature on exhibit E or similar letter or statement, the County Supervisor will make available to the grantee (at no cost) the borrower's FmHA or its successor agency under Public Law 103-354 loan history including the following information:
(1) Name, address, and telephone number;
(2) Status of the account including the amount of the loan, the repayment schedule, and the amount of the delinquency; and
(3) Other information needed for counseling purposes which may be provided in accordance with FmHA Instruction 2018-F.
(a) Grant evaluation will be an ongoing activity performed by both the grantee and FmHA or its successor agency under Public Law 103-354. The grantee will perform self-evaluations by preparing periodic project performance reports in accordance with § 1944.541. FmHA or its successor agency under Public Law 103-354 will also review all reports prepared and submitted by the grantee in accordance with the grant agreement and this part.
(b) Within forty-five (45) days after the grant ending date, the grantee will complete closeout procedures as specified in the grant agreement.
(c) The grant can also be terminated before the grant ending date for the causes specified in the grant agreement. No further grant funds will be disbursed when grant suspension or termination procedures have been initiated in accordance with the grant agreement.
This Agreement dated _____ is between ____________ (name), ____________ (address), (Grantee) and the United States of America acting through the Farmers Home Administration (Grantor or FmHA) or its successor agency under Public Law 103-354. The Grantor agrees to grant to Grantee a sum not to exceed $____ subject to the terms and conditions established by the Grantor:
1.
2.
3.
4.
5.
Grantor and grantee agree:
1. This agreement shall be effective when executed by both parties.
2. The TSA activities approved by FmHA or its successor agency under Public Law 103-354 shall commence not later than ______, and shall be completed by ______, unless earlier terminated under paragraph B 18 below, or extended.
3. Grantee shall carry out the TSA activities described in the application docket which is made a part of this Agreement. Grantee will be bound by the conditions set forth in the docket and the further conditions set forth in this Agreement. If any of the conditions in the docket are inconsistent with those in the Agreement, the latter will govern. A change of any conditions must be in writing and must be signed by an authorized representative of FmHA or its successor agency under Public Law 103-354.
4. Grantee shall use grant funds only for the purpose and activities specified in FmHA or its successor agency under Public Law 103-354 regulations and in the application docket approved by FmHA or its successor agency under Public Law 103-354 including the approved budget. Any uses not provided for in the approved budget must be approved in writing by FmHA or its successor agency under Public Law 103-354 in advance.
5. If the Grantee is a private nonprofit corporation, expenses charged for travel or per diem will not exceed the rates paid FmHA or its successor agency under Public Law 103-354 employees for similar expenses. If the Grantee is a public body, the rates will be those that are allowable under the customary practice in the government of which the grantee is a part; if none are customary, the FmHA or its successor agency under Public Law 103-354 rates will be the maximum allowed.
6. Grant funds will not be used for any of the following:
(a) To pay obligations incurred before the effective date of this Agreement.
(b) To pay obligations incurred after the grant termination or ending date.
(c) Entertainment purposes.
(d) To pay for capital assets, the purchase of real estate or vehicles, improvement or renovation of space, or repair or maintenance of privately owned vehicles.
(e) Any other purpose specified in 7 CFR 1944.520.
7. Grant funds shall not be used to replace any financial support previously provided or assured from any other source.
8. Disbursal of grants will be governed as follows:
(a) In accordance with Treasury Circular 1075 (fourth revision) part 205, chapter II of title 31 of the Code of Federal Regulations, grant funds will be provided by FmHA or its successor agency under Public Law 103-354 as cash advances on an as needed basis not to exceed one advance every 30 days. The advance will be made by direct Treasury check to the Grantee. The financial management system of the recipient organization shall provide for effective control over and accountability for all Federal funds as stated in OMB Circular A-102 (42 FR 45828, September 12, 1977) for State and local governments and OMB Circular A-110 (41 FR 32016, July 30, 1976) for nonprofit organizations.
(b) Cash advances to the Grantee shall be limited to the minimum amounts needed and shall be timed to be in accord only with the actual, immediate cash requirements of the
(c) Grant funds should be promptly refunded to the FmHA or its successor agency under Public Law 103-354 and redrawn when needed if the funds are erroneously drawn in excess of immediate disbursement needs. The only exceptions to the requirement for prompt refunding are when the funds involved:
(i) Will be disbursed by the recipient organization within seven calendar days from the date of the Treasury check, or
(ii) Are less than $10,000 and will be disbursed within 30 calendar days from the date of the Treasury check.
(d) Grantee shall provide satisfactory evidence to FmHA or its successor agency under Public Law 103-354 that all officers of the Grantee organization authorized to receive and/or disburse Federal funds are covered by satisfactory fidelity bonds sufficient to protect the Grantor's interests.
(e) Grant funds will be placed in the Grantee's bank account(s) until disbursed.
9. the Grantee will submit Performance and Financial reports as indicated below to the appropriate FmHA or its successor agency under Public Law 103-354 District Office:
(a) As needed, but not more frequently than once every 30 days, an original and 2 copies of Standard Form 270, “Request for Advance or Reimbursement.”
(b) Quarterly, (not later than January 15, April 15, July 15, and October 15 of each year) an original and 2 copies of Standard Form 269, “Financial Status Report,” and a Project Performance report in accordance with § 1944.541 of this subpart.
(c) Within forty-five (45) days after the termination or expiration of the grant agreement, an original and 2 copies of Standard Form 269, and a final Project Performance report which will include a summary of the project's accomplishments, problems, and planned future activities of the Grantee for TSA. Final reports may serve as the last quarterly report.
(d) FmHA or its successor agency under Public Law 103-354 may require performance reports more frequently if it deems necessary.
10. In accordance with FMC 74-4, Attachment B, compensation for employees will be considered reasonable to the extent that such compensation is consistent with that paid for similar work in other activities of the State or local government.
11. If the grant exceeds $100,000, transfers among direct cost budget categories totaling more than 5 percent of the total budget must have prior written approval by the appropriate District Director.
12. Results of the program assisted by grant funds may be published by the grantee without prior review by FmHA or its successor agency under Public Law 103-354, provided that such publications acknowledge the support provided by funds pursuant to the provisions of Title V of the Housing Act of 1949 and that five copies of each such publication are furnished to the District Director.
13. Grantee certifies that no person or organization has been employed or retained to solicit or secure this grant for a commission, percentage, brokerage, or contingent fee.
14. No person in the United States shall, on the grounds of race, creed, color, sex, marital status, age, national origin, or mental or physical handicap, be excluded from participating in, be denied the proceeds of, or be subject to discrimination in connection with the use of grant funds. Grantee will comply with pertinent nondiscrimination regulations of FmHA or its successor agency under Public Law 103-354.
15. In all hiring or employment made possible by or resulting from this grant, Grantee: (a) Will not discriminate against any employee or applicant for employment because of race, creed, color, sex, marital status, national origin, age, or mental or physical handicap, and (b) will take affirmative action to insure that employees are treated during employment without regard to their race, creed, color, sex, marital status, national origin, age, or mental or physical handicap. This requirement shall apply to, but not be limited to, the following: Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. In the event Grantee signs a contract related to this grant which would be covered by any Executive Order, law, or regulation prohibiting discrimination, Grantee shall include in the contract the “Equal Employment Clause” as specified by FmHA or its successor agency under Public Law 103-354.
16. The grantee accepts responsibility for accomplishing the TSA program as submitted and included in the application docket. The Grantee shall also:
(a) Endeavor to coordinate and provide liaison with State and local housing organizations, where they exist.
(b) Provide continuing information to FmHA or its successor agency under Public Law 103-354 on the status of Grantee programs, projects, related activities, and problems.
(c) The Grantee shall inform the Grantor as soon as the following types of conditions become known:
(i) Problems, delays, or adverse conditions which materially affect the ability to attain program objectives, prevent the meeting of time schedules or goals, or preclude the attainment of project work units by established time periods. This disclosure shall be accompanied by a statement of the action
(ii) Favorable developments or events which enable meeting time schedules and goals sooner than anticipated or producing more work units than originally projected.
17. Grant closeout and termination procedures will be as follows:
(a) Promptly after the date of completion or a decision to terminate a grant, grant closeout actions are to be taken to allow the orderly discontinuation of Grantee activity.
(i) The grantee shall immediately refund to FmHA or its successor agency under Public Law 103-354 any uncommitted balance of grant funds.
(ii) The Grantee will furnish to FmHA or its successor agency under Public Law 103-354 within 45 days after the date of completion of the grant a Standard Form 269 and all financial, performance, and other reports required as a condition of the grant.
(iii) The Grantee shall account for any property acquired with TSA grant funds, or otherwise received from FmHA or its successor agency under Public Law 103-354.
(iv) After the grant closeout, FmHA or its successor agency under Public Law 103-354 retains the right to recover any disallowed costs which may be discovered as a result of an audit.
(b) When there is reasonable evidence that the Grantee has failed to comply with the terms of this Agreement, the State Director can, on reasonable notice, terminate the grant pursuant to paragraph (c) below and withhold further payments or prohibit the Grantee from further obligating grant funds. FmHA or its successor agency under Public Law 103-354 may allow all necessary and proper costs which the Grantee could not reasonably avoid.
(c) Grant termination will be based on the following:
(i)
(A) Failure to make satisfactory progress in attaining grant objectives.
(B) Failure of Grantee to use grant funds only for authorized purposes.
(C) Failure of Grantee to submit adequate and timely reports of its operation.
(D) Violation of any of the provisions of any laws administered by FmHA or its successor agency under Public Law 103-354 or any regulation issued thereunder.
(E) Violation of any nondiscrimination or equal opportunity requirement administered by FmHA or its successor agency under Public Law 103-354 in connection with any FmHA or its successor agency under Public Law 103-354 programs.
(F) Failure to maintain an accounting system acceptable to FmHA or its successor agency under Public Law 103-354.
(ii)
(d) Procedure for termination of grant for cause. FmHA or its successor agency under Public Law 103-354 shall notify the Grantee in writing of the determination and the reasons for and the effective date of the whole or partial termination in accordance with 7 CFR 1900.53.
18. Extension and/or revision of this grant agreement may be approved by FmHA or its successor agency under Public Law 103-354 provided, in its opinion, the extention and/or revision is justified and there is a likelihood that the Grantee can accomplish the goals set out and approved in the application docket during the period of the extension and/or revision as specified in 7 CFR 1944.538.
1. To comply with property management standards for expendable and nonexpendable personal property established by Attachment N of OMB Circular A-102 or Attachment N of OMB Circular A-110 for State and local governments or nonprofit organizations respectively.
(a) Right to transfer title. For items of nonexpendable personal property having a unit acquisition cost of $1,000 or more, FmHA or its successor agency under Public Law 103-354 may reserve the right to transfer title to the Federal Government or to a third party named by the Federal Government
(i) The property shall be appropriately identified in the grant or otherwise made known to the Grantee in writing.
(ii) FmHA or its successor agency under Public Law 103-354 shall issue disposition instructions within 120 calendar days after the end of the Federal support of the project for which it was acquired. If FmHA or its successor agency under Public Law 103-354 fails to issue disposition instructions within the 120 calendar day period, the Grantee shall apply the standards of paragraph 1(c) below.
(iii) When FmHA or its successor agency under Public Law 103-354 exercises its right to take title, the personal property shall be subject to the provisions for federally owned nonexpendable property discussed in paragraph 1(a)(iv) below.
(iv) When title is transferred either to the Federal Government or to a third party and the Grantee is instructed to ship the property elsewhere, the Grantee shall be reimbursed by the benefitting Federal agency with an amount which is computed by applying the percentage of the Grantee participation in the cost of the original grant project or program to the current fair market value of the property, plus any reasonable shipping or interim storage costs incurred.
(b) Use of other tangible nonexpendable property for which the Grantee has title.
(i) The Grantee shall use the property in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When it is no longer needed for the original project or program, the Grantee shall use the property in connection with its other federally sponsored activities, in the following order of priority:
(A) Activities sponsored by FmHA or its successor agency under Public Law 103-354.
(B) Activities sponsored by other Federal agencies.
(ii) Shared use. During the time that nonexpendable personal property is held for use on the project or program for which it was acquired, the Grantee shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the property was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by FmHA or its successor agency under Public Law 103-354; second preference shall be given to projects or programs sponsored by other Federal agencies. If the property is owned by the Federal Government, use on other activities not sponsored by the Federal Government shall be permissible if authorized by FmHA or its successor agency under Public Law 103-354. User charges should be considered if appropriate.
(c) Disposition of other nonexpendable property. When the Grantee no longer needs the property, the property may be used for other activities in accordance with the following standards:
(i) Nonexpendable property with a unit acquisition cost of less than $1,000. The Grantee may use the property for other activities without reimbursement to the Federal Government or sell the property and retain the proceeds.
(ii) Nonexpendable personal property with a unit acquisition cost of $1,000 or more. The Grantee may retain the property for other use provided that compensation is made to FmHA or its successor agency under Public Law 103-354 or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the property. If the Grantee has no need for the property and the property has further use value, the Grantee shall request disposition instructions from the original Grantor agency. FmHA or its successor agency under Public Law 103-354 shall determine whether the property can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the property shall be reported, in accordance with the guidelines of the Federal Property Management Regulations (FPMR) to the General Services Administration by FmHA or its successor agency under Public Law 103-354 to determine whether a requirement for the property exists in other Federal agencies. FmHA or its successor agency under Public Law 103-354 shall issue instructions to the Grantee no later than 120 days after the Grantee request and the following procedures shall govern:
(A) If so instructed or if disposition instructions are not issued within 120 calendar days after the Grantee's request, the Grantee shall sell the property and reimburse FmHA or its successor agency under Public Law 103-354 an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the Grantee shall be permitted to deduct and retain from the Federal shares $100 or ten percent of the proceeds, whichever is greater, for the Grantee's selling and handling expenses.
(B) If the Grantee is instructed to dispose of the property other than as described in paragraph 1(a)(iv) above, the Grantee shall be reimbursed by FmHA or its successor agency under Public Law 103-354 for such costs incurred in its disposition.
(C) The Grantee's property management standards for nonexpendable personal property shall include the following procedural requirements:
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2. To provide a financial management system which will include:
(a) Accurate, current, and complete disclosure of the financial results of each grant. Financial reporting will be on an accrual basis.
(b) Records which identify adequately the source and application of funds for grant-supported activities. Those records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.
(c) Effective control over and accountability for all funds, property, and other assets. Grantee shall adequately safeguard all such assets and shall assure that they are solely for authorized purposes.
(d) Accounting records supported by source documentation.
3. To retain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of at least three years after the submission of the final Project Performance report pursuant to paragraph B(9)(c) of this agreement except in the following situations:
(a) If any litigation, claim, or audit is commenced before the expiration of the three year period, the records shall be retained until all litigations, claims, or audit findings involving the records have been resolved.
(b) Records for nonexpandable property acquired with Federal funds shall be retained for three years after final disposition.
(c) When records are transferred to or maintained by FmHA or its successor agency under Public Law 103-354, the three year retention requirement is not applicable.
Microfilm copies may be substituted in lieu of original records. The Grantor and the Comptroller General of the United States, or any of their duly auhthorized representatives, shall have access to any books, documents, papers, and records of the Grantee which are pertinent to the specific grant program for the purpose of making audits, examinations, excerpts, and transcripts.
4. To provide information as requested by the Grantor concerning the Grantee's actions in soliciting citizen participation in the application process, including published notice of public meetings, actual public meetings held, and content of written comments received.
5. Not encumber, transfer, or dispose of the property or any part thereof, furnished by the Grantor or acquired wholly or in part with Grantor funds without the written consent of the Grantor except as provided in part C 1.
6. To provide Grantor with such periodic reports of Grantee operations as may be required by authorized representatives of the Grantor.
7. To execute Form FmHA or its successor agency under Public Law 103-354 400-1, “Equal Opportunity Agreement,” and to execute any other agreements required by Grantor to implement the civil rights requirements.
8. To include in all contracts in excess of $100,000 a provision for compliance with all applicable standards, orders, or regulations issued purusant to the Federal Clean Air Act as amended. Violations shall be reported to the Grantor and the Regional Office of the Environmental Protection Agency.
9. That, upon any default under its representations or agreements set forth in this instrument, Grantee, at the option and demand of Grantor, will, to the extent legally permissible, repay to the Grantor forthwith the grant funds received with interest at the rate of five percentum per annum from the date of the default. The provisions of this Grant Agreement may be enforced by Grantor, at its option and without regard to prior waivers by it of previous defaults of Grantee, by judicial proceedings to require specific performance of the terms of this Grant Agreement or by such other proceedings in law or equity, in either Federal or State Courts, as may be deemed necessary by Grantor to assure compliance with the provisions of this Grant Agreement and the laws and regulations under which this grant is made.
10. That no member of Congress shall be admitted to any share or part of this Grant or any benefit that may arise therefrom; but this provision shall not be construed to bar as a contractor under the Grant a publicly held corporation whose ownership might include a member of Congress.
11. That all nonconfidential information resulting from its activities shall be made available to the general public on an equal basis.
12. That the purpose for which this grant is made may complement, but shall not duplicate programs for which monies have been received, are committed, or are applied for from other sources, public and private.
13. That the Grantee shall relinquish any and all copyrights and/or privileges to the materials developed under this grant, such material being the sole property of the Federal Government. In the event anything developed under this grant is published in whole or in part, the material shall contain notice and be identified by language to the following effect: “The material is the result of tax-supported research and as such is not copyrightable. It may be freely reprinted with the customary crediting of the source.”
14. That the Grantee shall abide by the policies promulgated in OMB Circular A-102, Attachment O, or OMB Circular A-110, Attachment O, which provides standards for use by Grantees in establishing procedures for the procurement of supplies, equipment, and other services with Federal grant funds.
15. That it is understood and agreed that any assistance granted under this Agreement will be administered subject to the limitations of Title V of the Housing Act of 1949 as amended, 42 USC 1471 et. seq., and related regulations, and that rights granted to FmHA or its successor agency under Public Law 103-354 herein or elsewhere may be exercised by it in its sole discretion to carry out the purposes of the assistance, and protect FmHA or its successor agency under Public Law 103-354's financial interest.
16. Standard of Conduct. No employee, officer or agent of Grantee shall participate in the selection, award or administration of a contract in which Federal funds are used where, to the knowledge of such employee, officer or agent, the employee, officer or agent or such person's immediate family members, partners or any organization in which such person or such person's immediate family award or administration of the contract, or (2) when such person is negotiating or has any arrangement concerning future employment. The recipient's officers, employees or agents shall neither solicit nor accept gratuities, favors or anything of monetary value from landlords or developers of rental or ownership housing projects in which the persons receiving TSA assistance may be placed as a result of such assistance.
1. That it may assist Grantee, within available appropriations, with such technical and management assistance as needed in planning the project and coordinating the plan with local officials, comprehensive plans, and any State or area plans for improving housing for low-income families in the area in which the project is located.
2. That at its sole discretion, Grantor may at any time give any consent, deferment, subordination, release, satisfaction, or termination of any or all of Grantee's grant obligations, with or without valuable consideration, upon such terms and conditions as Grantor may determine to be (a) advisable to further the purposes of the grant or to protect Grantor's financial interests therein, and (b) consistent with the statutory purposes of the grant and the limitations of the statutory authority under which it is made and Grantor's regulations.
This Agreement is subject to current Grantor regulations and any future regulations not inconsistent with the express terms hereof. Grantee on ____, 19_, has caused this Agreement to be executed by its duly authorized ____ and attested and its corporate seal affixed by its duly authorized ____.
(Title)
(Title)
(Title)
A. The State Office will maintain for distribution to potential applicants, upon request, a supply of pre-application packets consisting of:
1. SF 424.1.
2. Form FmHA or its successor agency under Public Law 103-354 400-1, “Equal Opportunity Agreement.”
3. Form FmHA or its successor agency under Public Law 103-354 400-4, “Assurance Agreement.”
4. Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information.”
5. Subpart K of part 1944 of this chapter.
B. The State Office should inform all potential applicants, at the time they pick up forms, that:
1. The pre-application must be submitted to the District Office serving the area in which the applicant proposes to operate the Technical and Supervisory Assistance (TSA) program.
2. The State Office will refer all requests for assistance in completing the pre-application to the appropriate District Office.
C. Beyond the responsibilities of the State Office in the selection of grantees and the administration of the program, and as stated in § 1944.502 of this subpart, the TSA program provides an opportunity for the State Director to give priority to applicants serving the rural areas of greatest need as well as use the program cooperatively with other Federal and State agencies in addressing the housing needs of the residents of a proposed TSA service area. Therefore, the State Office should be prepared, before receipt of pre-applications, to advise the District Directors, potential applicants and other Federal and State agencies which part(s) of the State has the greatest need for the TSA program. The State Director should identify target areas in a similar manner to the process used by the Administrator pursuant to § 1944.525 of this subpart. Proposals which are clearly inappropriate and do not meet the basic priorities of § 1944.529 (a) of this subpart should not be encouraged due to the complexity of the pre-application submission.
D. In addition to the instructions of § 1944.526 of this subpart, the State Office should follow the procedures outlined below:
1. Review pre-applications for completeness and adequacy and make assessments required by § 1944.526(c)(1) of this subpart.
2. Request clarifications from the District Office if necessary.
3. Evaluate the proposals in light of § 1944.529 of this subpart and select the proposal(s) which best meets the priorities established under the project selection criteria in § 1944.529 (a), (b) and (c) of this subpart.
4. The State Office must provide written comments to be attached to the pre-application(s) justifying the selection(s) and addressing the items in § 1944.529 of this subpart.
5. The State Office will forward the original SF 424.1 and accompanying documents of the selected pre-application(s) as quickly as possible to the National Office, Attention: Special Authorities Division, Multi-Family Housing. In no case should the State Office forward their selected TSA pre-application(s) later than thirty (30) days after the closing date for receipt of pre-applications.
6. Preapplications not selected by the State Office will be returned to the applicants through the appropriate District Offices with notice of appeal rights.
7. In accordance with § 1944.525 of this subpart, State Offices will be advised of the number of pre-applications to be submitted from each state to the National Office.
E. Sections 1944.531 and 1944.533 of this subpart detail the responsibilities of the State Office after tentative selection or concurrence of the TSA grantees by the National Office. Those preapplicants not selected will be promptly notified and their pre-application returned with notice of appeal rights. Form AD-622, “Notice of Preapplication Review Action,” will be mailed from the State Office to the applicants. District Offices will receive a copy from the State Office.
F. After execution of the grant agreement, the State Office will work closely with the District Office and the grantee to obtain additional resources from other Federal and State agencies to meet the needs of the TSA service area. The State Office should closely
A. The District Office will maintain for distribution to potential applicants, upon request, a supply of pre-application packets consisting of:
1. SF 424.1.
2. Form FmHA or its successor agency under Public Law 103-354 400-1, “Equal Opportunity Agreement.”
3. Form FmHA or its successor agency under Public Law 103-354 400-4, “Assurance Agreement.”
4. Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information.”
5. Subpart K of part 1944 of this chapter.
B. District Directors will provide any necessary assistance in completing pre-application forms.
C. All applicants will submit pre-applications to District Offices. Upon receipt of the pre-application the District Director will review it to ensure that the pre-application is complete and make assessments required by § 1944.526(b)(1) of this subpart.
D. The District Director will provide written comments to be attached to the pre-application. These comments will, at a minimum, address the following items:
1. Whether the area to be covered by the project is a “rural area” as defined by FmHA or its successor agency under Public Law 103-354 regulations.
2. The District Director's knowledge of the applicant's past history.
3. The need for the proposed activity, and its relationship to the targeting strategies for the District.
4. Appropriateness and applicability of this proposal for FmHA or its successor agency under Public Law 103-354 implementation funds.
5. Extent of citizen involvement in development of pre-application, particularly the involvement of minority and/or low-income groups.
6. All other criteria specified in § 1944.529 of this subpart.
7. The comments and recommendations of the County Supervisors for the proposed TSA service area.
E. The District Director will forward the original and one copy of the pre-application and accompanying documents along with the comments and a summary recommendation to the State Director within ten (10) working days of receipt of the pre-application.
F. Those applicants invited to submit applications will submit their applications to the District Office with two copies. The District Office will retain the original for the docket and forward one copy to the appropriate State Office after making sufficient copies to forward one copy to each of the appropriate County Offices.
G. The District Director, upon receipt of the application, will prepare a docket in accordance with § 1944.531 of this subpart. The procedures for approval and project servicing are detailed in this subpart.
This Amendment to Agreement dated ______ 19_ between
Said Agreement is amended by changing the ending date specified in paragraph 2 of part B of the Agreement from ______ to ____ and/or by making the following changes noted in the attachments hereto: (List and identify proposal and any other documents pertinent to the grant which are attached to the Amendment.)
Agreed to this __ day of ______ 19_.
This is to advise you that (name of TSA grantee) is available to provide independent counseling services to Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 borrowers in need of financial management assistance. These services may assist you in resolving your present delinquency in your housing loan.
This organization is prepared to provide financial and budget counseling at no charge to you. Their counseling services include advice on debt levels and credit purchases, consumer and cost awareness, debt adjustment procedures, and other financial information and services.
You are urged to take advantage of this program. However, your participation is voluntary and does not relieve you of any of your loan obligations to FmHA or its successor agency under Public Law 103-354 or limit the remedies FmHA or its successor agency under Public Law 103-354 has to bring your loan current or recover the loan in full. Any plan altering your repayment schedule in any way must be approved by this office. However, it is our intention to work with you and the counseling organization in every way we can to resolve your delinquency.
If you want to participate in this program, please sign the attached copy of this letter and return it to this office. At that time we will advise (name of TSA grantee) that you are interested in their services and provide them with the information they need to contact you. Only information available to the general public will be released.
We are sure you agree that it is in your interest to make every effort to bring your account current. We look forward to your return of the attached copy of this letter.
I desire to participate in the counseling program with (name of TSA grantee).
The purpose of this subpart is to set forth uniform requirements for grievance and appeals procedures in all Rural Rental Housing (RRH), Rural Cooperative Housing (RCH), and Labor Housing (LH) projects financed by the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 under sections 514, 515, and 516 of the Housing Act of 1949. The objective of this subpart is to ensure the fair treatment of persons residing in multiple family projects while providing for an equitable manner by which borrowers can operate, maintain, and safeguard housing projects. The right to appeal under this subpart will also extend to persons who seek admission to the projects.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
This subpart does not apply to:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(a)
(1) Failure to maintain the premises in such manner that provides decent, safe, and sanitary housing.
(2) Violation of lease covenants and rules.
(3) Modification of lease.
(4) Rule changes.
(5) Rent changes not authorized by FmHA or its successor agency under Public Law 103-354 according to exhibit C of subpart C of part 1930 of this chapter.
(6) Failure to maintain the premises according to State and local laws, statutes, or ordinances in effect at the date of final construction unless new or amended laws and ordinances are made retroactive to, or prior to, the date of final construction.
(7) Denials of RA.
(b)
(a)
(b)
(c)
(a)
(1) The reasons for the grievance or contest of the borrower's proposed action, and
(2) The action or relief sought.
(b)
(c)
(1) Standing panelist(s) of the tenants would be elected by a majority of the tenants. Either two alternates could be elected or three panelists of the tenants could be elected with equal status. The tenant, in this latter case, would designate one of the three tenant panelists to participate in the hearing. All tenants would be notified of the time, date, and purpose of the meeting to elect permanent hearing panelists at least two weeks before the appointed date. The notice must be conspiculously posted in the rental office and in each apartment building or structure. The meeting must be held at a place which is convenient and accessible to the tenants.
(2) Standing borrower panelist(s) selected by the borrower. One or two alternates may also be designated.
(3) A standing mutual panelist, to serve as the chair, selected by the other two persons or groups, including alternates, in which case each “group” gets one vote.
(4) All standing hearing panel members serve one year and may be re-elected. They must be willing to render their services without compensation.
(5) A panel for a hearing shall consist of 3 members, one tenant panelist, one borrower panelist and the chair.
(d)
(e)
(f)
(g)
(a) Subject to paragraph (b) of this section, the hearing will be an informal proceeding before a hearing officer or hearing panel at which evidence may be received without regard to whether that evidence could be used in judicial proceedings.
(b) The hearing must be structured so as to provide the basic safeguards for both the borrower and the tenant, which must include:
(1) The right of both parties to be represented by counsel or another person(s) chosen as their representative.
(2) The right of the applicant/tenant to a private hearing unless a public hearing is requested.
(3) The right of the applicant/tenant to present oral or written evidence and arguments in support of their grievance or appeal and to refute the evidence of all witnesses on whose testimony or information the borrower relies.
(4) The right of the borrower to present oral or written evidence and arguments in support of the decision, to refute evidence relied upon by the applicant/tenant, and to confront and cross-examine all witnesses on whose testimony or information the tenant relies.
(5) A decision based solely and exclusively upon the facts presented at the hearing.
(c) At the hearing the applicant/tenant must present evidence that he/she is entitled to the relief sought, and thereafter, the borrower shall present evidence showing the basis of its action or failure to act against that which the grievance or appeal is directed.
(d) The hearing officer or hearing panel shall require that the borrower, the applicant/tenant, counsel and other participants or spectators conduct themselves in an orderly manner. Failure to comply with the directions of the hearing officer or hearing panel to obtain order may result in exclusion from the proceedings, or in a decision adverse to the interests of the disorderly party and granting or denial of the relief sought, as appropriate.
(e) If the applicant/tenant (or his/her representative) fails to appear at a scheduled hearing, the hearing officer or hearing panel may make a determination to postpone the hearing for not to exceed five business days or may make a determination that the party has waived his or her right to a hearing under this subpart. Both the applicant/tenant and the borrower shall be notified of the determination of the hearing officer or hearing panel.
(a) The hearing officer or hearing panel shall prepare a written decision, together with the reasons therefor, within 10 calendar days after the hearing. The written decision must be specific as to the facts presented which were the basis upon which the decision was rendered. Copies of the decision must be sent to the borrower, the applicant/tenant, and the FmHA or its successor agency under Public Law 103-354 District Director.
(b) The decision of the hearing officer or hearing panel shall be binding upon the parties to the hearing unless the parties to the hearing are notified within 10 calendar days by the District Director that the decision violates FmHA or its successor agency under Public Law 103-354 regulations. The notification of the District Director will specify the FmHA or its successor agency under Public Law 103-354 regulation that the decision violates. The hearing officer or hearing panel shall amend the decision to comply with the regulation(s) within 10 days of receipt of the notice. (However, the decision of the hearing officer or hearing panel does not preclude either party's right thereafter to seek judicial relief through the courts.)
(c) Upon receipt of written notification from the District Director that the decision is in compliance with FmHA or its successor agency under Public Law 103-354 regulations, the decision is binding upon the borrower and tenant, and the borrower and tenant shall take the necessary action, or refrain from any actions, necessary to carry out the decision.
(a) The District Director shall assure that a copy of this subpart is sent to each borrower with a requirement that the regulations be permanently posted in a conspicuous place for the information of tenants, such as the rental offices, laundry areas, activities rooms, or other places where it will be noticed by tenants. The District Director shall also require that the borrower maintain copies of this subpart at all times for inspection by the tenants and FmHA or its successor agency under Public Law 103-354 upon request. The District Director shall assure that where there is a concentration of non-English-speaking individuals, the regulation is made available in both English and the non-English concentration language.
(b) The District Director shall encourage the borrower and applicant/tenant to resolve grievances and appeals through informal discussion; however, upon receipt of a summary of informal discussion as required by § 1944.555(c) of this subpart, the District Director shall immediately review the summary to ascertain that the applicant/tenant has received a copy of the summary and a copy of the proceedings to obtain a hearing, if matters could not be resolved through informal discussion.
The collections of information requirements contained in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575-0046.
I hereby acknowledge receipt of a copy of this summary and have been advised of my rights to use the attached procedures to obtain a hearing if I so choose.
The following procedures may be used to obtain a hearing if you are not satisfied with the decision made as a result of our discussion on (date) ______.
1.
2.
(a) As you probably already know, a Standing Hearing Panel is available to conduct the hearing.
(b) We need to meet soon after your request for a hearing is received to select a hearing officer/hearing panel.
3.
4.
5.
(a) The hearing will be an informal proceeding before a hearing officer or hearing panel at which both parties will have an opportunity to present their sides of the dispute.
(b) Both parties may be represented by legal counsel or another person of one's choice.
(c) You have a right to a private hearing, unless you request a public hearing.
(d) Both parties have the right to present evidence, arguments, and witnesses to support their sides of the dispute, to refute evidence relied upon by the other party, and to confront and cross-examine all witnesses.
(e) A decision will be based solely and exclusively upon the facts presented at the hearing.
(a) This subpart sets forth the policies and procedures for making grants under section 533 of the Housing Act of 1949, 42 U.S.C. 1490(m), to provide funds to eligible applicants (hereafter also referred to as grantee(s)) to conduct housing preservation programs benefiting very low- and low-income rural residents. Program funds cover part or all of the grantee's cost of providing loans, grants, interest reduction payments or other assistance to eligible homeowners, owners of single or multiple unit rental properties or for the benefit of owners (as occupants) of consumer cooperative housing projects (hereafter also referred to as co-ops). Such assistance will be used to reduce the cost of repair and rehabilitation, to remove or correct health or safety hazards, to comply with applicable development standards or codes, or to make needed repairs to improve the general living conditions of the resident(s), including improved accessibility by handicapped persons. Such assistance will be used to reduce the cost of repair and rehabilitation, to remove or correct health or safety hazards, to comply with applicable development standards or codes, or to make needed repairs to improve the general living conditions of the residents, including improved accessibility by persons with a disability. Individual housing that is owner occupied may qualify for replacement housing when it is determined by the grantee that the housing is not economically feasible for repair or rehabilitation.
(b) The Rural Housing Service (RHS) will provide Housing Preservation Grant (HPG) assistance to grantees who are responsible for providing assistance to eligible persons without discrimination because of race, color, religion, sex, national origin, age, familial status, or disability.
(c) The pre-application must only address a proposal to finance repairs and rehabilitation activities to individual housing or rental properties or co-ops.
(d) Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to RHS employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an RHS employee.
(a) The policy of RHS is to provide HPG's to grantees to operate a program which finances repair and rehabilitation activities to individual housing, rental properties, or co-ops for very low- and low-income persons. Individual housing that is owner occupied may qualify for replacement housing when it is determined by the grantee that the housing is not economically feasible for repair or rehabilitation. Grantees are expected to:
(1) Coordinate and leverage funding for repair and rehabilitation activities, as well as replacement housing, with housing and community development organizations or activities operating in the same geographic area; and
(2) Focus the program on rural areas and smaller communities so that it serves very low and low-income persons.
(b) RHS intends to permit grantees considerable latitude in program design and administration. The forms or types of assistance must provide the greatest long-term benefit to the greatest number of persons residing in individual housing, rental properties, or co-ops needing repair and rehabilitation or replacement of individual housing.
(c) Repairs and rehabilitation or replacement activities affecting properties on or eligible for listing on the National Register of Historic Places will be accomplished in a manner that supports national historic preservation objectives as specified in § 1944.673.
The objective of the HPG program is to repair or rehabilitate individual housing, rental properties, or co-ops owned and/or occupied by very low- and low-income rural persons. Grantees will provide eligible homeowners, owners of rental properties, and owners of co-ops with financial assistance through loans, grants, interest reduction payments or other comparable financial assistance for necessary repairs and rehabilitation. Further, individual housing that is owner occupied may qualify for replacement housing when it is determined by the grantee that the housing is not economically feasible for repair or rehabilitation, except as specified in § 1944.659.
(a) For purposes of this subpart, exhibit A of FmHA Instruction 1940-M (available in any Agency office) requires all Rural Development applicants; for an HPG to sign and submit with their pre-application, Form AD-1047, “Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions,” which basically states that the applicant has not been debarred or suspended from Government assistance. Further, all grantees after receiving a HPG must obtain a signed certification (Form AD-1048, “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Covered Transactions”) from all persons or entities (excluding homeowner recipients) that the grantee does business with as a result of the HPG. Grantees are responsible for informing these persons or entities of the provisions of exhibit A of FmHA Instruction 1940-M (available in any Agency office) and of maintaining Form AD-1048 in the grantee's office.
(b) Grantees must also be made aware of the Drug-free Workplace Act of 1988 requirements found in exhibit A of FmHA Instruction 1940-M (available in any Agency office). For this subpart,
References in this subpart to District, State, National and Finance Offices, and to District Director, State Director, and Administrator refer to Rural Development offices and officials and should be read as prefaced by Rural Development. Terms used in this subpart have the following meanings:
(1) Is a corporation organized as a consumer cooperative;
(2) Will operate the housing on a nonprofit basis solely for the benefit of the occupants; and
(3) Is legally precluded from distributing, for a minimum period of 5 years from the date of HPG assistance from the grantee, any gains or profits from operation of the co-op. For this purpose, any patronage refunds to occupants of the co-op would not be considered gains or profits. A co-op may accept non-members as well as members for occupancy in the project.
(1) A State, commonwealth, trust territory, other political subdivision, or public nonprofit corporation authorized to receive and administer HPG funds;
(2) An American Indian tribe, band, group, nation, including Alaskan Indians, Aleuts, Eskimos and any Alaskan Native Village, of the United States which is considered an eligible recipient under the Indian Self-Determination and Education Assistance Act (Public Law (Pub. L.) 93-638) or under the State and Local Fiscal Assistance Act of 1972 (Pub. L. 92-512);
(3) A private nonprofit corporation that is owned and controlled by private persons or interests for purposes other
(4) A consortium of units of government and/or private nonprofit organizations which is otherwise eligible to receive and administer HPG funds and which meets the following conditions:
(i) Be comprised of units of government and/or private nonprofit corporations that are close together, located in the same state, and serve areas eligible for FmHA or its successor agency under Public Law 103-354 housing assistance; and
(ii) Have executed an agreement among its members designating one participating unit of government or private nonprofit corporation as the applicant or designating a legal entity (such as a Council of Governments) to be the applicant.
All applicants must comply with FmHA Instruction 1940-Q (available in any FmHA or its successor agency under Public Law 103-354 office) which prohibits applicants of Federal grants from using appropriated funds for lobbying the Federal Government in connection with a specific grant.
(a) To be eligible to receive a grant, the applicant must:
(1) Be an organization as defined in § 1944.656 of this subpart;
(2) Have the necessary background and experience on the part of its staff or governing body with proven ability to perform responsibility in the field of low-income rural housing development, repair and rehabilitation, or have other business management or administrative experience which indicates an ability to operate a program providing repair and rehabilitation financial assistance as well as for replacement housing;
(3) Legally obligate itself to administer HPG funds, provide an adequate accounting of the expenditure of such funds in compliance with the terms of this regulation, the grant agreement, and 7 CFR parts 3015 or 3016 (available
(4) If the applicant is engaged in or plans to become engaged in any other activities, provide sufficient evidence and documentation that they have adequate resources, including financial resources, to carry on any other programs or activities to which they are committed without jeopardizing the success and effectiveness of the HPG project.
(b) An applicant will
Replacement housing applies only to existing, individual owner occupied housing. Replacement housing does
(a) The HPG grantee:
(1) Shall document the total costs for all repairs and rehabilitation of the existing housing; and
(2) Shall document the basis for the determination that the costs for all repairs and rehabilitation for the existing housing are not economically feasible.
(b) The individual homeowner:
(1) Must meet all requirements of § 1944.661;
(2) Must lack the income and repayment ability to replace their existing home without the assistance of the HPG grantee;
(3) Must have been determined by the HPG grantee and RHS to be unable to afford a loan under section 502 for replacement housing; and
(4) Must be able to afford the replacement housing on terms set forth by the HPG grantee.
(c) The existing home:
(1) Must be demolished as part of the process of providing replacement housing. It will be determined by the grantee and individual homeowner when is the best time for demolition; and
(2) May not be sold to make way for the replacement housing.
(d) The replacement housing:
(1) May be either new housing or a dwelling brought onto the site of the existing housing;
(2) May use no more than $15,000 in HPG funds;
(3) Must meet all applicable requirements of 7 CFR 3550.57; and
(4) May not be sold within 5 years of completion of the project.
(e) Any moneys received by the homeowner from selling salvaged material after demolishing the existing home must be used towards the replacement housing.
(a) FmHA or its successor agency under Public Law 103-354 will deal only with authorized representatives designated by the HPG applicant.
(b) The State Director will designate either the State Office and/or the District Office as the processing office and/or the servicing office for the HPG program. The State Director's selection may be based on staffing, total program size, number of pre-applications anticipated, type of applicants, or similar criteria. The State Director must publish this designation each year at the time the
The individual homeowners assisted must have income that meets the very low- or low-income definitions, be the owner of an individual dwelling at least 1 year prior to the time of assistance, and be the intended occupant of the dwelling subsequent to the time of assistance. The dwelling must be located in a rural area and be in need of housing preservation assistance. Each homeowner is required to submit evidence of income and ownership for retention in the grantee's files.
(a)
(b)
(1) Full marketable title.
(2) An undivided or divided interest in the property to be repaired, rehabilitated, or replaced when not all of the owners are occupying the property. HPG assistance may be made in such cases when:
(i) The occupant has been living in the house for at least 1 year prior to the date of requesting assistance;
(ii) The grantee has no reason to believe the occupant's position of owner/occupant will be jeopardized as a result of the improvements to be made with HPG funds; and
(iii) In the case of a loan, and to the extent possible, the co-owner(s) should also sign the security instrument.
(3) A leasehold interest in the property to be repaired, rehabilitated, or replaced. When the potential HPG recipient's “ownership” interest in the property is based on a leasehold interest, the lease must be in writing and a copy must be included in the grantee's file. The unexpired portion of the lease must not be less than 5 years and must permit the recipient to make modifications to the structure without increasing the recipient's lease cost.
(4) A life estate, with the right of present possession, control, and beneficial use of the property.
(5) Land assignments may be accepted as evidence of ownership only for American Indians living on a reservation, when historically the permits have been used by the tribe and have had the comparable effect of a life estate.
(c)
(1) Any legal instrument, whether or not recorded, which is commonly considered evidence of ownership.
(2) Evidence that the person(s) receiving assistance from the HPG grantee is listed as the owner of the property by the local taxing authority and is responsible for any real estate taxes.
(3) Affidavits by others in the community that the person(s) receiving assistance from the HPG grantee has occupied the property as the apparent owner for a period of not less than 10 years, and is generally believed to be the owner.
(a)
(1) Full marketable title.
(2) An undivided or divided interest in the property to be repaired or rehabilitated.
(3) A leasehold interest in the property to be repaired or rehabilitated. Ownership interest in the property is
(4) Land assignments may be accepted as evidence of ownership only for American Indians living on a reservation, when historically the permits have been used by the tribe and have had the comparable effect of a life estate.
(b)
(1) The tenant must have income that meets the very low- or low-income definition.
(2) The tenant must be the intended occupant of the unit, but is not required to have resided previously in the dwelling.
(3) Any owner(s) who receives assistance from an HPG grantee or a member of the immediate family of the owner(s), who also resides in the unit within the dwelling to be repaired or rehabilitated is eligible to have their unit repaired or rehabilitated, if they are income eligible and meet all other requirements.
(c)
HPG assistance may be provided by a grantee with respect to rental properties or co-ops only if the following conditions are met by the rental property owner(s) or by the co-op during a minimum 5 year restrictive period beginning on the date agreed upon in the agreement between the grantee and the rental property owner (or co-op). The HPG grantee is responsible for preparing, executing, and monitoring for compliance, the ownership agreement with the owner(s) of the rental property or the co-op. The rental property owner(s) or the co-ops are required to enter into an ownership agreement with the grantee to assure compliance with the requirements of this section.
(a)
(1) The owner(s) agrees to make the units repaired or rehabilitated available for occupancy to very low- or low-income persons for a period of not less than 5 years, such restrictive period beginning on the date agreed upon in the agreement between the grantee and the rental property owner(s) or co-op.
(2) The owner(s) agrees to pass on to the tenants any reduction in the debt service payments resulting from the HPG assistance provided by the HPG grantee to the owner(s).
(3) The owner(s) of rental properties agrees not to convert the units to condominium ownership. In the case of co-ops, the owner(s) agrees not to convert the dwelling(s) to condominium ownership or any form of cooperative ownership not eligible under this section. This paragraph (a)(3) is subject to the restrictive period noted in paragraph (a)(1) of this section.
(4) The owner(s) agrees not to refuse to rent a unit to any person solely because the person is receiving or is eligible to receive assistance under any Federal, State, or local housing assistance program.
(5) The owner(s) agrees that the units repaired or rehabilitated will be occupied or available for occupancy by persons of very low- or low-income.
(6) The owner(s) agrees to enter into and abide by written leases with the tenants and that such leases shall provide that the tenants may be evicted only for good cause.
(7) The owner(s) agrees that, in the event the owner(s) or the owner's successors in interest fail to carry out the requirements of this section during the applicable period, they shall make a payment to FmHA or its successor agency under Public Law 103-354 in an amount that equals the total amount of assistance provided by the grantee plus interest thereon (without compounding) for each year and any fraction thereof that the assistance was outstanding. The interest rate shall be that as determined by FmHA
(8) The owner(s) agrees that, notwithstanding any other provisions of law, the HPG assistance provided to the owner(s) shall constitute a debt which is payable in the case of any failure of this section and shall be secured by a security instrument provided by the owner(s) or co-op to the grantee, that provides for FmHA or its successor agency under Public Law 103-354 to take such action upon incapacity or dissolution of the grantee.
(9) The owner(s) agrees and certifies that the assistance is being made available in conformity with Public Law 88-352, the “Civil Rights Act of 1964,” and Public Law 90-284, the “Civil Rights Act of 1968.”
(b)
(1) That HPG funds used for loans, grants, or interest reduction payments providing repair or rehabilitation assistance to owners of rental properties or co-ops are not in excess of 75 percent of the total cost of all repairs and rehabilitation activities eligible for HPG assistance.
(2) That the owner(s) is not repairing and/or rehabilitating any unit unless it meets the requirements of § 1944.662 (b)(3) of this subpart.
(3) That rental property units being repaired and/or rehabilitated and occupied by owners or members of the owner's immediate family meet all other requirements of this subpart.
(4) That, for multi-units not considered eligible as a result of paragraph (b)(2) or (b)(3) of this section, the grantee and owner(s) shall agree on a method, if any is needed, of determining the prorata share of repairs and rehabilitation activities to the dwelling, based on a percentage of the ineligible units to the total dwelling.
(a) Grantees are responsible for providing loans, grants, or other comparable assistance to homeowners, owners of rental properties or co-ops for housing preservation or for replacement housing as described in §1944.656.
(b) HPG funds used for loans, grants, or interest reduction payments to provide rental repair and/or rehabilitation assistance to owners of rental properties or co-ops shall not exceed the requirement noted in § 1944.663(b)(1) of this subpart.
(c) Authorized housing preservation assistance includes, but is not limited to, cost of labor and materials for:
(1) Installation and/or repair of sanitary water and waste disposal systems, together with related plumbing and fixtures, which will meet local health department requirements;
(2) Energy conservation measures such as:
(i) Insulation; and
(ii) Combination screen-storm windows and doors;
(3) Repair or replacement of the heating system including the installation of alternative systems such as woodburning stoves or space heaters, when appropriate and if local codes permit;
(4) Electrical wiring;
(5) Repair of, or provision for, structural supports and foundations;
(6) Repair or replacement of the roof;
(7) Replacement of severely deteriorated siding, porches or stoops;
(8) Alterations of the unit's interior or exterior to provide greater accessibility for any handicapped person;
(9) For properties listed on or eligible for the National Register of Historic Places, activities associated with conforming repair and rehabilitation activities to the standards and/or design comments resulting from the consultation process contained in § 1944.673 of this subpart;
(10) Necessary repairs to manufactured housing provided:
(i) For homeowners only, the recipient owns the home and the site on which the home is situated and the homeowner has occupied that home on that site for at least 1 year prior to receiving HPG assistance; and
(ii) For homeowners, owners of single- or multiple-unit rental properties, and co-ops, the manufactured housing is on a permanent foundation or will be put on a permanent foundation with HPG funds. Advice on the requirements for a permanent foundation is available from FmHA or its successor agency under Public Law 103-354. Guidance may be found in § 1944.223(e) of subpart E of this part and in exhibit J of subpart A of part 1924 of this chapter;
(11) Additions to any dwelling (conventional or manufactured) only when it is clearly necessary to alleviate overcrowding or to remove health hazards to the occupants; or
(12) Relocation costs either permanent or temporary for assistance to rental properties or co-ops, as noted in § 1944.667 of this subpart.
(d) Authorized replacement housing assistance includes, but is not limited to:
(1) Building a dwelling and providing related facilities for use by the individual homeowner as a permanent resident;
(2) Providing a safe and sanitary water and waste disposal system, together with related plumbing and fixtures, which will meet local health department requirements;
(3) Providing minimum site preparation and other on-site improvement including grading, foundation plantings, and minimal landscaping, and other on-site improvements required by local jurisdictions;
(4) Providing special design features or equipment when necessary because of physical handicap or disability of the HPG recipient or member of the household;
(5) Purchasing and installing approved energy saving measures and approved furnaces and space heaters which use a type of fuel that is commonly used, and is economical and dependably available;
(6) Providing storm cellars and similar protective structures, if typical for the area;
(7) Paying real estate taxes which are due and payable on the existing dwelling or site at the time of closing, if this amount is not a substantial part of the HPG assistance. (HPG assistance may not be made available if the real estate taxes which are due and payable are not paid at the time assistance is granted.);
(8) Providing living area for the HPG recipient and all members of the household as required in 7 CFR 3550.54(c);
(9) Moving a dwelling onto the site of the demolished, previously existing housing and meeting all HPG housing preservation requirements for repair and rehabilitation;
(10) Providing funds for demolishing the existing housing; and
(11) Any other cost that is reasonable and justifiable directly related to replacement activities.
(e) HPG funds may be used for payment of incidental expenses directly related to accomplishing authorized activities such as fees for connection of utilities (water, sewer, gas, electric), credit reports, surveys, title clearance, loan closing, inspections, and architectural or other technical services. All fees will be in accordance with local prevailing rates and so documented.
(f) HPG funds may be used where they do not contribute to the health, safety and well being of the occupant or do not materially contribute to the structural integrity or long-term preservation of the unit. The percentage of the funds to be used for such purposes must not exceed 20 percent of the total funding for the unit(s) and/or dwelling, and such work must be combined with improvements listed as eligible under paragraph (c) of this section. These improvements may include, but are not limited to the following:
(1) Painting;
(2) Paneling;
(3) Floor covering, including carpeting;
(4) Improving clothes closets or shelving;
(5) Improving kitchen cabinets;
(6) Air conditioning; or
(7) Landscape plantings.
(g) Under the following conditions, HPG funds may be used to reimburse the grantee for authorized housing preservation or replacement housing activities performed by employees of the grantee where the grantee acts as a construction contractor and furnishes construction services:
(1) The grantee must demonstrate that such work performed by the grantee results in cost savings in terms of time and labor over cost for such work prevailing in the area;
(2) The grantee has established a process for third party review of all performance by a local government, building inspector or other independent party;
(3) The grantee has established or makes available a process that provides for consumer protection to the individual homeowner, owner of a rental property, or co-op assisted; and
(4) The grantee's accounting system provides a clear delineation between administrative costs and construction contractor (non-administrative) costs.
(h) HPG funds may
(1) Assist in the construction or completion of an addition (excluding paragraph (c)(11) of this section) or a new dwelling. This paragraph does not apply to replacement housing.
(2) Refinance any debt or obligation of the grantee, the individual homeowner, owners of a rental property, or co-ops other than obligations incurred for eligible items covered by this section entered into after the date of agreement with the HPG grantee.
(3) Repair or rehabilitate as well as replace any property located in the Coastal Barrier Resources System.
Grantees are responsible for supervising all rehabilitation and repair work, as well as replacement housing financed with HPG assistance. After all HPG work has been completed, a final inspection must be done by a disinterested third party, such as local building and code enforcement officials. If there are no such officials serving the area where HPG activities will be undertaken, or if the grantee would also normally make such inspections, the grantee must use qualified contract or fee inspectors.
Grant funds are to be used primarily for housing repair and rehabilitation activities. Use of grant funds for direct and indirect administrative costs is a secondary purpose and must not exceed 20 percent of the HPG funds awarded to the grantee.
(a) Administrative expenses may include:
(1) payment of reasonable salaries or contracts for professional, technical, and clerical staff actively assisting in the delivery of the HPG project.
(2) Payment of necessary and reasonable office expenses such as office rental, supplies, utilities, telephone services, and equipment. (Any item of nonexpendable personal property having a unit value of $1,000 or more, acquired with HPG funds, will be specifically identified to FmHA or its successor agency under Public Law 103-354 in writing.)
(3) Payment of necessary and reasonable administrative costs such as workers' compensation, liability insurance, and the employer's share of Social Security and health benefits. Payments to private retirement funds are permitted if the grantee already has such a fund established and ongoing.
(4) Payment of reasonable fees for necessary training of grantee personnel.
(5) Payment of necessary and reasonable costs for an audit upon expiration of the grant agreement.
(6) Other reasonable travel and miscellaneous expenses necessary to accomplish the objectives of the specific HPG grant which were anticipated in the individual HPG grant proposal and which have been approved as eligible expenses at the time of grant approval.
(b) HPG administrative funds may
(1) Preparing housing development plans and strategies except as necessary to accomplish the specific objectives of the HPG project.
(2) Substitution of any financial support previously provided or currently available from any other source.
(3) Reimbursing personnel to perform construction related to housing preservation assistance. (Non-administrative funds may be used if construction is for
(4) Buying property of any kind from persons receiving assistance from the grantee under the terms of the HPG agreement.
(5) Paying for or reimbursing the grantee for any expense or debts incurred before FmHA or its successor agency under Public Law 103-354 executes the grant agreement.
(6) Paying any debts, expenses, or costs which should be the responsibility of the individual homeowner, owner, tenant or household member of a rental property, or owner (member) or non-member of a co-op receiving HPG assistance outside the costs of repair and rehabilitation as well as for replacement housing (individual homeowners only).
(7) Any type of political activities prohibited by the Office of Management and Budget (OMB) Circular A-122.
(8) Other costs including contributions and donations, entertainment, fines and penalties, interest and other financial costs unrelated to the HPG assistance to be provided, legislative expenses, and any excess of cost from other grant agreements.
(9) Paying added salaries for employees paid by other sources, i.e., public agencies who pay employees to handle grants.
(c) Advice concerning ineligible costs may be obtained from FmHA or its successor agency under Public Law 103-354 as part of the HPG pre-application review or when a proposed cost appears ineligible.
(d) The grantee may not charge fees or accept any compensation or gratuities from HPG recipients for the grantee's technical or administrative services under this program. Where the grantee performs as a construction contractor, the grantee may be paid such compensation directly related to construction services provided and limited to authorized housing preservation activities.
(e) The policies, guidelines and requirements of 7 CFR parts 3015 and 3016 apply to the acceptance and use of HPG funds.
(a)
(1) The period of relocation (if any);
(2) The name(s) of the party (or parties) who shall bear the cost of temporarily relocating; and
(3) The name(s) of the party (or parties) who shall bear the cost of permanent relocation; and
(4) If paragraphs (a) (2) or (3) of this section is the grantee, the maximum amount of temporary or permanent relocation costs proposed to be allowed.
(b)
HPG projects may be funded under the terms of a grant agreement for a period of up to 2 years commencing on the date of execution of the grant agreement by the FmHA or its successor agency under Public Law 103-354 approval official. Term of the project will be based upon HPG resources available for the proposed project and the accomplishability of the applicant's proposal within 1 or 2 years. Applicants requesting a 2 year term may
(a) Project income during the grant period from loans made to homeowners, owners of rental properties, and co-ops is governed by 7 CFR parts 3015 and 3016. All income during the grant period, including amounts recovered by the grantee due to breach of agreements between the grantee and the HPG recipient, must be used under (and in accordance with) the requirements of the HPG program.
(b) Grantees are encouraged to establish a program which reuses income from loans after the grant period for continuing repair and rehabilitation activities, as well as for individual housing replaced.
The policies and regulations contained in subpart E of part 1901 of this chapter apply to grantees under this subpart.
(a)
(1) Failing to provide any person in connection with a residential real estate-related transaction, information regarding the availability of loans, grants, or other financial assistance, or providing information that is inaccurate or different from that provided others; and
(2) The term
(b)
(1) Community contacts to community organizations, community leaders, including minority leaders, by name, race, and date contacted;
(2) Copies of all advertising in local newspapers, and through other media. Any advertising must reach the entire service area. FmHA or its successor agency under Public Law 103-354 encourages the use of minority-owned radio stations and other types of media, if available, in the service area. The grantee's file shall also include the name of the media used, and the percentage of its patronage by race/national origin; and
(3) Copies of any other advertising or other printed material, including the application form used. The application form shall include the nondiscrimination slogan: “This is an equal opportunity program. Discrimination is prohibited by Federal Law.”
(c)
Subpart G of part 1940 of this chapter will be followed regarding environmental requirements. The following is additional information on how to approach HPG projects under those requirements:
(a) The approval of an HPG grant for the repair, rehabilitation, or replacement of dwellings shall be a Class I action. As part of their preapplication materials, applicants shall submit Form RD 1940-20, “Request for Environmental Information,” for the geographical areas proposed to be served by the program. The applicant shall refer to exhibit F-1 of this subpart (available in any Rural Development State or District Office) when completing Form RD 1940-20. Further guidance on completing this form is available from the Agency office servicing the program.
(b) The use of HPG funds by the grantee to repair, rehabilitate, or replace on the same site, specific dwellings is generally exempt from an RHS environmental review. However, if such dwellings are located in a floodplain, wetland, or the proposed work is not concurred in by the Advisory Council on Historic Preservation under the requirements of §1944.673, an RHS environmental review is required. Dwellings within the Coastal Barrier Resources System are not eligible for HPG assistance. Applicants must include in their preapplication a process for identifying dwellings that may receive housing preservation or replacement housing assistance that will require an environmental assessment. This may be accomplished through use of exhibit F-2 of this subpart (available in any Rural Development State or District Office) or another process supplying similar information acceptable to RHS.
(c) If a specific dwelling is not located in a floodplain, wetland, or the proposed work is concurred in by the Advisory Council on Historic Preservation under the requirements of § 1944.673 of this subpart, no environmental review is required by FmHA or its successor agency under Public Law 103-354. The grantee only needs to indicate its review and compliance with this subpart, indicating such in each recipient's file in accordance with paragraph (e) of this section.
(d) When a dwelling requiring an environmental assessment is proposed for HPG assistance, the grantee will immediately contact the RHS office designated to service the HPG grant. Prior to approval of HPG assistance to the recipient by the grantee, RHS will prepare the environmental assessment in accordance with part 1940, subpart G, of this chapter with the assistance of the grantee, as necessary. Paragraph VIII of exhibit C of this subpart (available in any Rural Development State or District Office) provides further guidance in this area.
(e) If FmHA or its successor agency under Public Law 103-354 is required to make an environmental assessment, the grantee will be provided with a copy of the assessment which will be made part of the recipient's file. The grantee must also include in each recipient's file:
(1) Documentation on how the process for historic preservation review under § 1944.673 of this subpart has been complied with, including all relevant reviews and correspondence; and
(2) Determination as to whether the unit is located in a 100-year floodplain or a wetland.
(3)
(f) Proposed use of funds by an applicant to use monies for additions under
(g) Grantees must contact FmHA or its successor agency under Public Law 103-354 prior to actual usage of funds by the grantees under § 1944.664 (c)(11) of this subpart. FmHA or its successor agency under Public Law 103-354 must complete the appropriate level of environmental review in accordance with subpart G of part 1940 of this chapter.
(a) FmHA or its successor agency under Public Law 103-354 has entered into a Programmatic Memorandum of Agreement (PMOA) with the National Conference of State Historic Preservation Officers (SHPO) and the Advisory Council on Historic Preservation in order to implement the specific requirements regarding historic preservation contained in section 533 of the Housing Act of 1949, 42 U.S.C. 1490(m) of the enabling legislation. The PMOA, with attachments, can be found in FmHA Instruction 2000-FF (available in any FmHA or its successor agency under Public Law 103-354 office). A copy of the PMOA will be provided to each applicant for a HPG as part of the pre-application package specified in paragraph II of exhibit C of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office).
(b) Each applicant for an HPG grant will provide, as part of its preapplication documentation submitted to RHS, a description of its proposed process for assisting very low-and low-income persons owning historic properties needing rehabilitation, repair, or replacement. “Historic properties” are defined as properties that are listed or eligible for listing on the National Register of Historic Places. Each HPG proposal shall comply with the provisions of Stipulation I, A-G of the PMOA (RD Instruction 2000-FF), available in any Rural Development State or District Office. Should RHS be required to assume responsibility for compliance with 36 CFR part 800 in accordance with Stipulation III of the PMOA, the grantee will assist RHS in preparing an environmental assessment. RHS will work with the grantee to develop alternative actions or mitigation measures, as appropriate.
(c) Such assumption of responsibility by FmHA or its successor agency under Public Law 103-354 on a particular property shall not preclude the grantee from carrying out the requirements of 36 CFR part 800 on other properties as though it were a Federal agency, but no work may be commenced on any unit or dwelling in controversy until and unless so advised by FmHA or its successor agency under Public Law 103-354.
(a) In preparing its statement of activities, the applicant is responsible for consulting with leaders from the county, parish and/or township governments of the area where HPG activities will take place for the purpose of assuring that the proposed HPO program is beneficial and does not duplicate current activities. American Indian nonprofit organization applicants should obtain the written concurrence of the tribal governing body in lieu of consulting with the county governments when the program is operated only on tribal land.
(b) The applicant must also make its statement of activities available to the public for comment. The applicant must announce the availability of its statement of activities for review in a newspaper of general circulation in the project area and allow at least 15 days for public comment. The start of this 15-day period must occur no later than 16 days prior to the last day for acceptance of pre-applications by FmHA or its successor agency under Public Law 103-354.
(c) The HPG program is subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. Under FmHA Instruction 1940-J (available in any FmHA or its successor agency under Public Law 103-354 office) prospective applicants for HPG grants
The allocation and distribution of HPG funds is found in § 1940.578 of subpart L of part 1940 of this chapter.
(a) All applicants will file an original and two copies of Standard Form (SF) 424.1, “Application For Federal Assistance (For Nonconstruction),” and supporting information with the appropriate FmHA or its successor agency under Public Law 103-354 office. A pre-application package, including SF-424.1, is available in any FmHA or its successor agency under Public Law 103-354 Office.
(b) All pre-applications shall be accompanied by the following information which FmHA or its successor agency under Public Law 103-354 will use to determine the applicant's eligibility to undertake the HPG program and to evaluate the pre-application under the project selection criteria of § 1944.679 of this subpart.
(1) A statement of activities proposed by the applicant for its HPG program as appropriate to the type of assistance the applicant is proposing, including:
(i) A complete discussion of the type of and conditions for financial assistance for housing preservation, including whether the request for assistance is for a homeowner assistance program, a rental property assistance program, or a co-op assistance program;
(ii) The process for selecting recipients for HPG assistance, determining housing preservation needs of the dwelling, performing the necessary work, and monitoring/inspecting work performed;
(iii) A description of the process for identifying potential environmental impacts in accordance with § 1944.672 of this subpart, and the provisions for compliance with Stipulation I, A-G of the PMOA (FmHA Instruction 2000-FF available in any FmHA or its successor agency under Public Law 103-354 office) in accordance with § 1944.673 (b) of this subpart. With the exception of Stipulation I, D of the PMOA, this may be accomplished by adoption of exhibit F-2 of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office), or another process supplying similar information acceptable to FmHA or its successor agency under Public Law 103-354;
(iv) The development standard(s) the applicant will use for the housing preservation work; and, if not the FmHA or its successor agency under Public Law 103-354 development standards for existing dwellings, the evidence of its acceptance by the jurisdiction where the grant will be implemented;
(v) The time schedule for completing the program;
(vi) The staffing required to complete the program;
(vii) The estimated number of very low- and low-income minority and nonminority persons the grantee will assist with HPG funds; and, if a rental property or co-op assistance program, the number of units and the term of restrictive covenants on their use for very low- and low-income;
(viii) The geographical area(s) to be served by the HPG program;
(ix) The annual estimated budget for the program period based on the financial needs to accomplish the objectives outlined in the proposal. The budget should include proposed direct and indirect administrative costs, such as personnel, fringe benefits, travel, equipment, supplies, contracts, and other cost categories, detailing those costs for which the grantee proposes to use the HPG grant separately from non-HPG resources, if any. The applicant budget should also include a
(x) A copy of an indirect cost proposal as required in 7 CFR parts 3015 and 3016, when the applicant has another source of federal funding in addition to the FmHA or its successor agency under Public Law 103-354 HPG program;
(xi) A brief description of the accounting system to be used;
(xii) The method of evaluation to be used by the applicant to determine the effectiveness of its program which encompasses the requirements for quarterly reports to FmHA or its successor agency under Public Law 103-354 in accordance with § 1944.683(b) of this subpart and the monitoring plan for rental properties and co-ops (when applicable) according to § 1944.689 of this subpart;
(xiii) The source and estimated amount of other financial resources to be obtained and used by the applicant for both HPG activities and housing development and/or supporting activities;
(xiv) The use of program income, if any, and the tracking system used for monitoring same;
(xv) The applicant's plan for disposition of any security instruments held by them as a result of its HPG activities in the event of its loss of legal status;
(xvi) Any other information necessary to explain the proposed HPG program; and
(xvii) The outreach efforts outlined in § 1944.671(b) of this subpart.
(2) Complete information about the applicant's experience and capacity to carry out the objectives of the proposed HPG program.
(3) Evidence of the applicant's legal existence, including, in the case of a private nonprofit organization, a copy of, or an accurate reference to, the specific provisions of State law under which the applicant is organized; a certified copy of the applicant's Articles of Incorporation and Bylaws or other evidence of corporate existence; certificate of incorporation for other than public bodies; evidence of good standing from the State when the corporation has been in existence 1 year or more; and, the names and addresses of the applicant's members, directors and officers. If other organizations are members of the applicant-organization, or the applicant is a consortium, pre-applications should be accompanied by the names, addresses, and principal purpose of the other organizations. If the applicant is a consortium, documentation showing compliance with § 1944.656 of this subpart will also be included.
(4) For a private nonprofit entity, the most recent audited statement and a current financial statement dated and signed by an authorized officer of the entity showing the amounts and specific nature of assets and liabilities together with information on the repayment schedule and status of any debt(s) owed by the applicant. If the applicant is an organization being assisted by another private nonprofit organization, the same type of financial statement should also be provided by that organization.
(5) A brief narrative statement which includes information about the area to be served and the need for improved housing (including both percentage and actual number of both low-income and low-income minority households and substandard housing), the need for the type of housing preservation assistance being proposed, the anticipated use of HPG resources for historic properties, the method of evaluation to be used by the applicant in determining the effectiveness of its efforts (according to paragraph (b)(1)(xii) of this section).
(6) A statement containing the component for alleviating overcrowding as defined by § 1944.656 of this subpart.
(7) A list of other activities the applicant is engaged in and expects to continue, a statement as to any other funding, and whether it will have sufficient funds to assure continued operation of the other activities for at least the period of the HPG grant agreement.
(8) Any other information necessary that specifically addresses the selection criteria in § 1944.679 of this subpart.
(c) The applicant must submit an original and one copy of Form FmHA or its successor agency under Public Law 103-354 1940-20 prepared in accordance with exhibit F-1 of this subpart
(d) The applicant must submit a description of its process for:
(1) Identifying and rehabilitating properties that are listed on or eligible for listing on the National Register of Historic Places.
(2) Identifying properties that are located in a floodplain or wetland.
(3) Identifying properties located within the Coastal Barrier Resources System.
(4) Coordinating with other public and private organizations and programs that provide assistance in the rehabilitation of historic properties (Stipulation I, D, of the PMOA, FmHA Instruction 2000-FF, available in any FmHA or its successor agency under Public Law 103-354 office).
(5) Paragraphs (d) (1), (2), and (3) of this section may be accomplished by adoption of exhibit F-2 of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office), or another process supplying similar information acceptable to FmHA or its successor agency under Public Law 103-354.
(e) The applicant must submit evidence of SHPO concurrence in the proposal, or in the event of nonconcurrence, a copy of SHPO's comments together with evidence that the applicant has sought the Advisory Council on Historic Preservation's advice as to how the disagreement might be resolved, and a copy of any advice provided by the Council.
(f) The applicant must submit written statements and related correspondence reflecting compliance with § 1944.674 (a) and (c) of this subpart regarding consultation with local government leaders in the preparation of its program and the consultation with local and state government pursuant to the provisions of Executive Order 12372.
(g) The applicant is to make its statement of activities available to the public for comment prior to submission to FmHA or its successor agency under Public Law 103-354 pursuant to § 1944.674(b) of this subpart. The application must contain a description of how the comments (if any were received) were addressed.
(h) The applicant must submit an original and one copy of Form FmHA or its successor agency under Public Law 103-354 400-1, “Equal Opportunity Agreement,” and Form FmHA or its successor agency under Public Law 103-354 400-4, “Assurance Agreement,” in accordance with § 1944.674(c) of this subpart.
Dates governing the invitation and review of HPG pre-applications will be published annually in the
(a) Applicants must meet all of the following threshold criteria:
(1) Provide a financially feasible program of housing preservation assistance.
(2) Serve eligible rural areas with a concentration of substandard housing for households with very low- and low-income;
(3) Be an eligible applicant entity as defined in § 1944.658 of this subpart;
(4) Meet the requirements of consultation and public comment in accordance with § 1944.674 of this subpart; and
(5) Submit a complete pre-application as outlined in § 1944.676 of this subpart.
(b) For applicants meeting all of the requirements listed in paragraph (a) of this section, FmHA or its successor agency under Public Law 103-354 will use the weighted criteria in this paragraph (b) in the selection of grant recipients. Each pre-application and its accompanying statement of activities will be evaluated and, based solely on the information contained in the pre-application, the applicant's proposal
(1) Points are awarded based on the percentage of very low-income persons that the applicant proposes to assist, using the following scale:
(i) More than 80%: 20 points.
(ii) 61% to 80%: 15 points.
(iii) 41% to 60%: 10 points.
(iv) 20% to 40%: 5 points.
(v) Less than 20%: 0 points.
(2) The applicant's proposal may be expected to result in the following percentage of HPG fund use (excluding administrative costs) to total cost of unit preservation. This percentage reflects maximum repair or rehabilitation with the least possible HPG funds due to leveraging, innovative financial assistance, owner's contribution or other specified approaches. Points are awarded based on the following percentage of HPG funds (excluding administrative costs) to total funds:
(i) 50% or less: 20 points.
(ii) 51% to 65%: 15 points.
(iii) 66% to 80%: 10 points.
(iv) 81% to 95%: 5 points.
(v) 96% to 100%: 0 points.
(3) The applicant has demonstrated its administrative capacity in assisting very low- and low-income persons to obtain adequate housing based on the following:
(i) The organization or a member of its staff has 2 or more years experience successfully managing and operating a rehabilitation or weatherization type program, including FmHA or its successor agency under Public Law 103-354's HPG program: 10 points.
(ii) The organization or a member of its staff has 2 or more years experience successfully managing and operating a program assisting very low- and low-income persons obtain housing assistance: 10 points.
(iii) If the organization has administered grant programs, there are no outstanding or unresolved audit or investigative findings which might impair carrying out the proposal: 10 points.
(4) The proposed program will be undertaken entirely in rural areas outside MSAs identified by FmHA or its successor agency under Public Law 103-354 as having populations below 10,000
(5) The program will use less than 20 percent of HPG funds for administration purposes:
(i) More than 20%: Not Eligible.
(ii) 20%: 0 points.
(iii) 19%: 1 point.
(iv) 18%: 2 points.
(v) 17%: 3 points.
(vi) 16% 4 points.
(vii) 15% or less: 5 points.
(6) The proposed program contains a component for alleviating overcrowding as defined in § 1944.656 of this subpart: 5 points.
(c) In the event more than one pre-application receives the same amount of points, those pre-applications will then be ranked based on the actual percentage figure used for determining the points under paragraph (b)(1) of this section. Further, in the event that pre-applications are still tied, then those pre-applications still tied will be ranked based on the percentage figures used (low to high) in paragraph (b)(2) of this section. Further, for applications where assistance to rental properties or co-ops is proposed, those still tied will be further ranked based on the number of years the units are available for occupancy under the program (a minimum of 5 years is required). For this part, ranking will be based from most to least number of years. Finally, if there is still a tie, then a “lottery” System will be used.
After all pre-applications have been reviewed under the selection criteria and if more than one pre-application has met the criteria of § 1944.679(a) of this subpart, the State Director or approval official may not approve more than 50 percent of the State's allocation to a single entity.
Applicants selected by FmHA or its successor agency under Public Law 103-354 will be advised to submit a full application in an original and two copies of SF 424.1, and are to include any condition or amendments that must be incorporated into the statement of activities prior to submitting a full application. Instructions on submission and timing will be provided by FmHA or its successor agency under Public Law 103-354.
The FmHA or its successor agency under Public Law 103-354 offices processing HPG pre-applications/applications will review the pre-applications and applications submitted. Further review and actions will be taken by FmHA or its successor agency under Public Law 103-354 personnel in accordance with exhibit C of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office). Exhibit G of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office) will be used by the State Office to notify the National Office of pre-applications received, eligibility, ranking, number of proposed units, amount requested by applicants, and amount recommended by State Office. Preapplications determined not eligible and/or not meeting the selection criteria will be notified in the manner prescribed in exhibit C of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office). In addition, FmHA or its successor agency under Public Law 103-354 will document its findings and advise the applicant of its review rights or appeal rights (if applicable) under subpart B of part 1900 of this chapter. Applications determined not eligible will be handled in the same manner. The pre-applications or applications determined incomplete will be notified in the manner prescribed in exhibit C of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office) and will not be given appeal rights. The State Director is authorized to approve an HPG in accordance with this subpart and subpart A of part 1901 of this chapter. The State Director may delegate this authority in writing to designated State Office personnel and District Directors. Further:
(a) Grant approval is the process by which FmHA or its successor agency under Public Law 103-354 determines that all applicable administrative and legal conditions for making a grant have been met, the grant agreement is signed, and funds have been obligated for the HPG project. If acceptable, the approval official will inform the applicant of approval, having the applicant sign Form FmHA or its successor agency under Public Law 103-354 1940-1, “Request for Obligation of Funds,” and exhibit A of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office). The applicant will be sent a copy of the executed grant agreement and Form FmHA or its successor agency under Public Law 103-354 1940-1. Should any conditions be attached to the grant agreement that must be satisfied prior to the applicant receiving any HPG funds, the grant agreement and the conditions will be returned to the applicant for acceptance and acknowledgement on the grant agreement prior to execution by the approval official.
(b) The application may be disapproved before execution of the grant agreement if the applicant is no longer eligible, the proposal is no longer feasible, or the applicant requests cancellation of its project. Except when the applicant requests cancellation, FmHA or its successor agency under Public Law 103-354 will document its findings and advise the applicant of its appeal rights under subpart B of part 1900 of this chapter.
(c) With the executed grant agreement and Form FmHA or its successor agency under Public Law 103-354 1940-1, FmHA or its successor agency under Public Law 103-354 will send the approved applicant (now the “grantee”) copies of SF-270, “Request for Advance or Reimbursement”. The grantee must submit an original and two copies of SF-270 to the FmHA or its successor agency under Public Law 103-354 office servicing the project. In addition, the grantee must submit SF-272, “Federal Cash Transactions Report,” each time
(d) If the grantee fails to submit required reports pursuant to § 1944.683 of this subpart or is in violation of the grant agreement, FmHA or its successor agency under Public Law 103-354 may suspend HPG reimbursements and advances or terminate the grant in accordance with § 1944.688 of this subpart and the grant agreement.
(a) SF-269, “Financial Status Report,” is required of all grantees on a quarterly basis. Grantees shall submit an original and two copies of the report to the designated FmHA or its successor agency under Public Law 103-354 servicing office. When preparing the Financial Status Report, the total program outlays (Item 10, g, of SF-269) should be less any rebates, refunds, or other discounts. Reports must be submitted no later than 15 days after the end of each calendar quarter.
(b) Quarterly performance reports shall be submitted by grantees with SF-269, in an original and two copies (see exhibit E-1 or this subpart which is available in any FmHA or its successor agency under Public Law 103-354 office.) The quarterly report should relate the activities during the report period to the project's objectives and analyze the effectiveness of the program. As part of the grantee's pre-application submission, as required by § 1944.676(b) of this subpart, the grantee establishes its objectives for the HPG program, including its method of evaluation to determine its effectiveness. Accordingly, the report must include, but need not be limited to, the following:
(1) Use of HPG funds for administration and housing preservation activities.
(2) The following specific information for each unit or dwelling assisted:
(i) Name(s), address, and income(s) of each homeowner assisted or the name and address of the owner(s) or co-op for each rental property (single or multi-unit) or co-op assisted;
(ii) Total cost of repair/rehabilitation, a list of major repairs made, amount financed by HPG, and amount financed from which other sources;
(iii) Type of assistance provided (interest subsidy, loan, grant, etc.); and
(iv) Results of implementing the environmental process contained in § 1944.672 of this subpart and the historic preservation process contained in § 1944.673 of this subpart.
(3) The use of HPG and any other funds for replacement housing.
(4) A comparison of actual accomplishments to the objectives set for that period, including:
(i) The number of very low- and low-income, minority and nonminority persons assisted in obtaining adequate housing by the HPG program through repair and rehabilitation as well as for replacement housing; and
(ii) The average cost of assistance provided to each household.
(5) Reasons why, if established objectives are not met.
(6) Problems, delays, or adverse conditions which will materially affect attainment of the HPG grant objectives, prevent the meeting of time schedules or objectives, or preclude the attainment of program work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or contemplated and any Federal or other assistance needed to relieve the situation.
(7) Objectives established for the next reporting period, sufficiently detailed to identify the type of assistance to be provided, the number and type of households to be assisted, etc.
(8) A certification that the final building inspection reports for each rehabilitation or repair work financed as well as for replacement housing with HPG funds for that quarter is on file.
(c) The grantee should be prepared to meet with the FmHA or its successor agency under Public Law 103-354 office servicing the project to discuss its
(d) If the reports are not submitted in a timely manner or if the reports indicate that the grantee has made unsatisfactory progress or the grantee is not meeting its established objectives, the FmHA or its successor agency under Public Law 103-354 official servicing the grant will recommend to the State Director appropriate action to resolve the indicated problem(s). If appropriate corrective action is not taken by the grantee, the State Director has the discretion to not authorize further advances by suspending the project in accordance with § 1944.688 of this subpart and the grant agreement.
(a) All requests extending the original grant agreement or modifying the HPG program's statement of activities must be in writing. Such requests will be processed through the designated FmHA or its successor agency under Public Law 103-354 office servicing the project. The approval official will respond to the applicant within 30 days of receipt of the request.
(b) A grantee may request an extension of the grant agreement prior to the end of the project term specified in the grant agreement if the grantee anticipates that there will be grant funds remaining and the grantee has demonstrated its ability to conduct its program in a manner satisfactory to FmHA or its successor agency under Public Law 103-354. The approval official may approve an extension when:
(1) The grantee is likely to complete or exceed the goals outlined in the approved statement of activities; and
(2) The FmHA or its successor agency under Public Law 103-354 office responsible for servicing the grant recommends continuation of the grant until the grantee has expended all of the remaining grant funds.
(c) Modifications to the statement of activities, such as revising the processes the grantee follows in operating the HPG program, may be approved by the approval official when the modifications are for eligible purposes in accordance with §§ 1944.664 and 1944.666 of this subpart, meet any applicable review and process requirements of this subpart, and the program will continue to serve the geographic area originally approved. The grantee will submit its proposed revisions together with the necessary supporting information to FmHA or its successor agency under Public Law 103-354 prior to modifying its operation from the approved statement of activities.
(d) Exhibit B of this subpart (available in any FmHA or its successor agency under Public Law 103-354 office) will be used for all extensions on and modifications to the grant agreement.
An additional HPG grant may be made when the grantee has achieved or nearly achieved the goals established for the previous or existing grant. The grantee must file a pre-application for the current fiscal year which will be processed and compared under the project selection criteria to others submitted at that time.
(a) Grant evaluation will be an on-going activity performed by both the grantee and FmHA or its successor agency under Public Law 103-354. The grantee will perform self-evaluations by preparing quarterly performance reports in accordance with § 1944.683 of this subpart. FmHA or its successor agency under Public Law 103-354 will also review all reports prepared and submitted by the grantee in accordance with the grant agreement and this subpart.
(b) The grant can be suspended or terminated before the grant ending date for the causes specified in the grant agreement. No further grant funds will be advanced when grant suspension or termination procedures have been initiated in accordance with the grant agreement. Grantees may be reimbursed for eligible costs incurred prior to the effective date of the suspension or termination. Grantees are
(c) Grantees will have the opportunity to appeal a suspension or termination under FmHA or its successor agency under Public Law 103-354's appeal procedures under subpart B of part 1900 of this chapter.
(d) The grantee will complete the closeout procedures as specified in the grant agreement.
(e) The grantee will have an audit performed upon termination or completion of the project in accordance with 7 CFR parts 3015 and 3016, as applicable. As part of its final report, the grantee will address and resolve all audit findings.
(a) The grantee is required to perform long-term monitoring on any housing preservation program involving rental properties and co-ops. This monitoring shall be at least on an annual basis and shall consist of, at a minimum, the following:
(1) All requirements noted in § 1944.663 of this subpart;
(2) All requirements of the “ownership agreement” executed between the grantee and the rental property owner or co-op; and
(3) All requirements noted in 7 CFR parts 3015 and 3016 during the effective period of the grant agreement.
(b) The grantee is required to make available to FmHA or its successor agency under Public Law 103-354 any such information as requested by FmHA or its successor agency under Public Law 103-354 concerning the above. The grantee shall submit to the FmHA or its successor agency under Public Law 103-354 servicing office an annual report every year while the ownership agreement is in effect. This report shall be submitted within 15 days after the anniversary date or end of the grant agreement. At a minimum, the report will consist of a statement that the grantee is in compliance with this subpart.
(c) All files pertaining to such rental property owner or co-op shall be kept separate and shall be maintained for a period of 3 years after the termination date of the ownership agreement.
The Administrator of FmHA or its successor agency under Public Law 103-354 may, in individual cases, make an exception to any requirements of this subpart not required by the authorizing statute if the Administrator finds that application of such requirement would adversely affect the interest of the Government, or adversely affect the accomplishment of the purposes of the HPG program, or result in undue hardship by applying the requirement. The Administrator or the Assistant Administrator for Housing may exercise this exception authority at the request of the State Director. The request must be supported by information demonstrating the adverse impact, citing the particular requirement involved, recommending proper alternative course(s) of action, and outlining how the adverse impact could be mitigated. Exception to any requirement may also be initiated by the Assistant Administrator for Housing.
According to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for the information collection in this subpart is 0575-0115.
This Agreement dated ___ is between ___ (name), ___ (address), (grantee), organized and operating under ___ (authorizing State statute), and the United States of
In consideration of said grant by FmHA or its successor agency under Public Law 103-354 to the Grantee, to be made pursuant to section 533 of the Housing Act of 1949, Housing Preservation Grant (HPG) program, the grantee will provide such a program in accordance with the terms of this Agreement and applicable FmHA or its successor agency under Public Law 103-354 regulations.
1.
2.
3.
4. “Grant closeout” is the process by which the grant operation is concluded at the expiration of the grant period or following a decision to terminate the grant.
5. “Termination” of the grant means the cancellation of Federal assistance, in whole or in part, at any time before the date of completion.
FmHA or its successor agency under Public Law 103-354 and grantee agree:
1. All grant activities shall be limited to those authorized in subpart N of 7 CFR part 1944.
2. This Agreement shall be effective when executed by both parties.
3. The HPG activities approved by FmHA or its successor agency under Public Law 103-354 shall commence and be completed by the date indicated above, unless earlier terminated under paragraph B 18 below or extended.
4. Grantee shall carry out the HPG activities and processes as described in the approved Statement of Activities which is made a part of this Agreement. Grantee will be bound by the activities and processes set forth in the Statement of Activities and the further conditions set forth in this Agreement. If the Statement of Activities is inconsistent with the Agreement, the latter will govern. A change of any activities and processes must be in writing and must be signed by the FmHA or its successor agency under Public Law 103-354 State Director or his or her delegated representative.
5. Grantee shall use grant funds only for the purpose and activities approved by FmHA or its successor agency under Public Law 103-354 in the HPG budget. Any uses not provided for in the approved budget must be approved in writing by FmHA or its successor agency under Public Law 103-354 in advance.
6. If the Grantee is a private nonprofit corporation, expenses charged for travel or per diem will not exceed the rates paid FmHA or its successor agency under Public Law 103-354 employees for similar purposes. If the grantee is a public body, the rates will be those that are allowable under the customary practice in the government of which the grantee is a part; if none are customary, the FmHA or its successor agency under Public Law 103-354 rates will be the maximum allowed.
7. Grant funds will not be used for any of the following:
(a) To pay obligations incurred before the effective date of this Agreement.
(b) To pay obligations incurred after the grant termination or ending date.
(c) Entertainment purposes.
(d) To pay for capital assets, the purchase of real estate or vehicles, improvement or renovation of grantee's office space, or repair or maintenance of privately owned vehicles.
(e) Any other purpose specified in §§ 1944.664(f) and 1944.666(b) of this subpart.
(f) Administrative expenses exceeding 20% HPG grant funds.
8. Grant funds shall not be used to substitute for any financial support previously provided and currently available or assured from any other source.
9. Disbursal of grants will be governed as follows:
(a) In accordance with Treasury Circular 1075 (fourth revision) part 205, chapter II of title 31 of the Code of Federal Regulations, grant funds will be provided by FmHA or its successor agency under Public Law 103-354 as cash advances on an as needed basis not to exceed one advance every 30 days. The advance will be made by direct Treasury check to the grantee. The financial management system of the recipient organization shall provide for effective control over and accountability for all Federal funds as stated to OMB Circular A-102 (42 FR 45828, September 12, 1977) for State and local governments and OMB Circular A-110 (41 FR 32016, July 30, 1976) for nonprofit organizations.
(b) Cash advances to the grantee shall be limited to the minimum amounts needed and shall be timed to be in accord only with the actual, immediate cash requirements of the Grantee in carrying out the purpose of the planned project. The timing and amount of cash advances shall be as close as administratively feasible to the actual disbursements by the grantee for direct program costs (as identified in the grantee's Statement of Activity and budget and fund use plan) and proportionate share of any allowable indirect costs.
(c) Grant funds should be promptly refunded to the FmHA or its successor agency under Public Law 103-354 and redrawn when needed if the funds are erroneously drawn in excess of immediate disbursement needs. The only exceptions to the requirement for prompt refunding are when the funds involved:
(i) Will be disbursed by the recipient organization within seven calendar days from the date of the Treasury check, or
(ii) Are less than $10,000 and will be disbursed within 30 calendar days from the date of the Treasury check.
(d) Grantee shall provide satisfactory evidence to FmHA or its successor agency under Public Law 103-354 that all officers of the Grantee organization authorized to receive and/or disburse Federal funds are covered by satisfactory fidelity bonds sufficient to protect FmHA or its successor agency under Public Law 103-354's interests.
10. The grantee will submit performance and financial reports as indicated below to the appropriate FmHA or its successor agency under Public Law 103-354 office.
(a) As needed, but not more frequently than once every 30 calendar days, an original and 2 copies of SF-270, “Request for Advance or Reimbursement.”
(b) Quarterly (not later than February 15, May 15, August 15, and November 15 of each year), an original and 2 copies of SF-269, “Financial Status Report,” and a quarterly performance report in accordance with § 1944.683 of this subpart.
(c) Within ninety (90) days after the termination or expiration of the Grant Agreement, an original and 2 copies of SF-269, and a final performance report which will include a summary of the project's accomplishments, problems, and planned future activities of the grantee for HPG. Final reports may serve as the last quarterly report.
(d) FmHA or its successor agency under Public Law 103-354 may require performance reports more frequently if deemed necessary.
11. In accordance with FMC Circular 74-4, Attachment B, compensation for employees will be considered reasonable to the extent that such compensation is consistent with that paid for similar work in other activities of the State or local government.
12. If the grant exceeds $100,000, cumulative transfers among direct cost budget categories totaling more than 5 percent of the total budget must have prior written approval by FmHA or its successor agency under Public Law 103-354.
13. Results of the program assisted by grant funds may be published by the grantee without prior review by FmHA or its successor agency under Public Law 103-354, provided that such publications acknowledge the support provided by funds pursuant to the provisions of Title V of the Housing Act of 1949, as amended, and that five copies of each such publications are furnished to FmHA or its successor agency under Public Law 103-354.
14. Grantee certifies that no person or organization has been employed or retained to solicit or secure this grant for a commission, percentage, brokerage, or contingent fee.
15. No person in the United States shall, on the grounds of race, creed, color, sex, marital status, age, national origin, or mental or physical handicap, be excluded from participating in, be denied the proceeds of, or be subject to discrimination in connection with the use of grant funds. Grantee will comply with the nondiscrimination regulations of FmHA or its successor agency under Public Law 103-354 contained in subpart E of part 1901 of this chapter.
16. In all hiring or employment made possible by or resulting from this grant, the grantee: (a) Will not discriminate against any employee or applicant for employment
17. The grantee accepts responsibility for accomplishing the HPG program as submitted and included in the Statement of Activities. The grantee shall also:
(a) Endeavor to coordinate and provide liaison with State and local housing organizations, where they exist.
(b) Provide continuing information to FmHA or its successor agency under Public Law 103-354 on the status of grantee HPG programs, projects, related activities, and problems.
(c) The grantee shall inform FmHA or its successor agency under Public Law 103-354 as soon as the following types of conditions become known:
(i) Problems, delays, or adverse conditions which materially affect the ability to attain program objectives, prevent the meeting of time schedules or goals, or preclude the attainment of project work units by established time periods. This disclosure shall be accompanied by a statement of the action taken or contemplated, new time schedules required and any FmHA or its successor agency under Public Law 103-354 assistance needed to resolve the situation.
(ii) Favorable developments or events which enable meeting time schedules and goals sooner than anticipated or producing more work units than originally projected.
18. Grant closeout and termination procedures will be as follows:
(a) Promptly after the date of completion or a decision to terminate a grant, grant closeout actions are to be taken to allow the orderly discontinuation of grantee activity.
(i) The grantee shall immediately refund to FmHA or its successor agency under Public Law 103-354 any uncommitted balance of grant funds.
(ii) The grantee will furnish to FmHA or its successor agency under Public Law 103-354 within 90 calendar days after the date of completion of the grant an SF-269 and all financial, performance, and other reports required as a condition of the grant, including an audit report.
(iii) The grantee shall account for any property acquired with HPG grant funds, or otherwise received from FmHA or its successor agency under Public Law 103-354.
(iv) After the grant closeout, FmHA or its successor agency under Public Law 103-354 retains the right to recover any disallowed costs which may be discovered as a result of an audit.
(b) When there is reasonable evidence that the grantee has failed to comply with the terms of this Agreement, the State Director can, on reasonable notice, suspend the grant pending corrective action or terminate the grant pursuant to paragraph (c) below. In such instances, FmHA or its successor agency under Public Law 103-354 may reimburse the grantee for eligible costs incurred prior to the effective date of the suspension or termination and may allow all necessary and proper costs which the grantee could not reasonably avoid. FmHA or its successor agency under Public Law 103-354 will withhold further advances and grantees are prohibited from further obligating grant funds, pending corrective action.
(c) Grant termination will be based on the following:
(i)
(A) Failure to make reasonable and satisfactory progress in attaining grant objectives.
(B) Failure of grantee to use grant funds only for authorized purposes.
(C) Failure of grantee to submit adequate and timely reports of its operation.
(D) Violation of any of the provisions of any laws administered by FmHA or its successor agency under Public Law 103-354 or any regulation issued thereunder.
(E) Violation of any nondiscrimination or equal opportunity requirement administered by FmHA or its successor agency under Public Law 103-354 in connection with any FmHA or its successor agency under Public Law 103-354 programs.
(F) Failure to maintain an accounting system acceptable to FmHA or its successor agency under Public Law 103-354.
(ii)
(d) FmHA or its successor agency under Public Law 103-354 shall notify the grantee in writing of the determination and the reasons for and the effective date of the suspension or termination. Except for termination convenience, grantees have the opportunity to appeal a suspension or termination under FmHA or its successor agency under Public Law 103-354's appeal procedure, subpart B of part 1900 of this chapter.
19. Upon any default under its representatives or agreements set forth in this instrument, the grantee, at the option and demand of FmHA or its successor agency under Public Law 103-354, will, to the extent legally permissible, repay to FmHA or its successor agency under Public Law 103-354 forthwith the grant funds received with interest at the rate of five per centum per annum from the date of the default. The provisions of this Grant Agreement may be enforced by FmHA or its successor agency under Public Law 103-354, at its option and without regard to prior waivers by it or previous defaults of the grantee, by judicial proceedings to require specific performance of the terms of this Grant Agreement or by such other proceedings in law or equity, in either Federal or State Courts, as may be deemed necessary by FmHA or its successor agency under Public Law 103-354 to assure compliance with the provisions of this Grant Agreement and the laws and regulations under which this grant is made.
20. Extension of this Grant Agreement and/or modifications of the Statement of Activities may be approved by FmHA or its successor agency under Public Law 103-354 provided, in its opinion, the extension and/or modification is justified and there is a likelihood that the grantee can accomplish the goals set out and approved in the Statement of Activities during the period of the extension and/or modifications as specified in § 1944.684 of this subpart.
1. To comply with property management standards for expendable and nonexpendable personal property established by Attachment N of OMB Circular A-102 or Attachment N of OMB Circular A-110 for State and local governments or nonprofit organizations respectively.
(a) Right to transfer title. For items of nonexpendable personal property having a unit acquisition cost of $1,000 or more, FmHA or its successor agency under Public Law 103-354 may reserve the right to transfer title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such reservation shall be subject to the following standards:
(i) The property shall be appropriately identified in the grant or otherwise made known to the grantee in writing.
(ii) FmHA or its successor agency under Public Law 103-354 shall issue disposition instructions within 120 calendar days after the end of the Federal support of the project for which it was acquired. If FmHA or its successor agency under Public Law 103-354 fails to issue disposition instructions within the 120 calendar day period, the grantee shall apply the standards of paragraph 1(c) below.
(iii) When FmHA or its successor agency under Public Law 103-354 exercises its right to take title, the personal property shall be subject to the provisions for federally owned nonexpendable property discussed in paragraph 1(a)(iv) below.
(iv) When title is transferred either to the Federal Government or to a third party and the grantee is instructed to ship the property elsewhere, the grantee shall be reimbursed by the benefitting Federal agency with an amount which is computed by applying the percentage of the grantee participation in the cost of the original grant project or program to the current fair market value of the property, plus any reasonable shipping or interim storage costs incurred.
(b) Use of other tangible nonexpendable property for which the grantee has title.
(i) The grantee shall use the property in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When it is no longer needed for the original project or program, the grantee shall use the property in connection with its other federally sponsored activities, in the following order of priority:
(A) Activities sponsored by FmHA or its successor agency under Public Law 103-354.
(B) Activities sponsored by other Federal agencies.
(ii) Shared use. During the time that nonexpendable personal property is held for use on the project or program for which it was
(c) Disposition of other nonexpendable property. When the grantee no longer needs the property, the property may be used for other activities in accordance with the following standards:
(i) Nonexpendable property with a unit acquisition cost of less than $1,000. The grantee may use the property for other activities without reimbursement to the Federal Government or sell the property and retain the proceeds.
(ii) Nonexpendable personal property with a unit acquisition cost of $1,000 or more. The grantee may retain the property for other use provided that compensation is made to FmHA or its successor agency under Public Law 103-354 or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the property. If the grantee has no need for the property and the property has further use value, the grantee shall request disposition instructions from the original Grantor agency. FmHA or its successor agency under Public Law 103-354 shall determine whether the property can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the property shall be reported, in accordance with the guidelines of the Federal Property Management Regulations (FPMR) to the General Services Administration by FmHA or its successor agency under Public Law 103-354 to determine whether a requirement for the property exists in other Federal agencies. FmHA or its successor agency under Public Law 103-354 shall issue instructions to the grantee no later than 120 calendar days after the grantee request and the following procedures shall govern:
(A) If so instructed or if disposition instructions are not issued within 120 calendar days after the grantee's request, the grantee shall sell the property and reimburse FmHA or its successor agency under Public Law 103-354 an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the grantee shall be permitted to deduct and retain from the Federal shares $100 or ten percent of the proceeds, whichever is greater, for the grantee's selling and handling expenses.
(B) If the grantee is instructed to dispose of the property other than as described in paragraph 1(a)(iv) above, the grantee shall be reimbursed by FmHA or its successor agency under Public Law 103-354 for such costs incurred in its disposition.
(C) The grantee's property management standards for nonexpendable personal property shall include the following procedural requirements:
(
(
(
(
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2. To provide a financial management system which will include:
(a) Accurate, current, and complete disclosure of the financial results of each grant. Financial reporting will be on an accrual basis.
(b) Records which identify adequately the source and application of funds for grant-supported activities. Those records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.
(c) Effecting control over and accountability for all funds, property, and other assets. Grantee shall adequately safeguard all such assets and shall assure that they are solely for authorized purposes.
(d) Accounting records supported by source documentation.
3. To retain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of at least three years after the submission of the final Project Performance report pursuant to part B (10)(c) of this Agreement except in the following situations:
(a) If any litigation, claim, audit, or investigation is commenced before the expiration of the three year period, the records shall be retained until all litigations, claims, audit or investigation findings involving the records have been resolved.
(b) Records for nonexpendable property acquired by FmHA or its successor agency under Public Law 103-354, the three year retention requirement is not applicable.
(c) When records are transferred to or maintained by FmHA or its successor agency under Public Law 103-354, the three year retention requirement is not applicable.
Microfilm copies may be substituted in lieu of original records. FmHA or its successor agency under Public Law 103-354 and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the grantee which are pertinent to the specific grant program for the purpose of making audits, examinations, excerpts, and transcripts.
4. To provide information as requested by FmHA or its successor agency under Public Law 103-354 concerning the grantee's actions in soliciting citizen participation in the application process, including published notice of public meetings, actual public meetings held, and content of written comments received.
5. Not to encumber, transfer, or dispose of the property or any part thereof, furnished by FmHA or its successor agency under Public Law 103-354 or acquired wholly or in part with HPG funds without the written consent of FmHA or its successor agency under Public Law 103-354 except as provided in part C 1 of this Agreement.
6. To provide FmHA or its successor agency under Public Law 103-354 with such periodic reports of grantee operations as may be required by authorized representatives of FmHA or its successor agency under Public Law 103-354.
7. To execute Form FmHA or its successor agency under Public Law 103-354 400-1, and to execute any other agreements required by FmHA or its successor agency under Public Law 103-354 to implement the civil rights requirements.
8. To include in all contracts in excess of $100,000 a provision for compliance with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act, 42 U.S.C. 1875C-9 as amended. Violations shall be reported to FmHA or its successor agency under Public Law 103-354 and the Regional Office of the Environmental Protection Agency.
9. That no member of Congress shall be admitted to any share or part of this grant or any benefit that may arise therefrom, but this provision shall not be construed to bar as a contractor under the grant a publicly held corporation whose ownership might include a member of Congress.
10. That all nonconfidential information resulting from its activities shall be made available to the general public on an equal basis.
11. That the purpose for which this grant is made may complement, but shall not duplicate programs for which monies have been received, are committed, or are applied for from other sources, public and private.
12. That the grantee shall relinquish any and all copyrights and/or privileges to the materials developed under this grant, such material being the sole property of the Federal Government. In the event anything developed under this grant is published in whole or in part, the material shall contain
13. That the grantee shall abide by the policies promulgated in OMB Circular A-102, Attachment O, or OMB Circular A-110, Attachment O, as applicable, which provides standards for use by Grantees in establishing procedures for the procurement of supplies, equipment, and other services with Federal grant funds.
14. That it is understood and agreed that any assistance granted under this Agreement will be administered subject to the limitations of Title V of the Housing Act of 1949 as amended, 42 U.S.C. 1471 et seq., and related regulations, and that all rights granted to FmHA or its successor agency under Public Law 103-354 herein or elsewhere may be exercised by it in its sole discretion to carry out the purposes of the assistance, and project FmHA or its successor agency under Public Law 103-354's financial interest.
15. That it will adopt a Standard of Conduct that provides that, if an employee, officer, or agent of the grantee, or such person's immediate family members conducts business with the grantee, the grantee must not:
(a) Participate in the selection, award, or administration of a contract to such persons for which Federal funds are used;
(b) Knowingly permit the award or administration of the contract to be delivered to such persons or other immediate family members or to any entity (i.e., partnerships, corporation, etc.) in which such persons or their immediate family members have an ownership interest; or
(c) Permit such person to solicit or accept gratuities, favors or anything of monetary value from landlords or developers of rental or ownership housing projects or any other person receiving HPG assistance.
1. That it may assist grantee, within available appropriations, with such technical and management assistance as needed in coordinating the Statement of Activities with local officials, comprehensive plans, and any State or area plans for improving housing for very low- and low-income households in the area in which the project is located.
2. That at its sole discretion, FmHA or its successor agency under Public Law 103-354 may at any time give any consent, deferment, subordination, release, satisfaction, or termination of any or all of grantee's grant obligations, with or without valuable consideration, upon such terms and conditions as Grantor may determine to be (a) advisable to further the purposes of the grant or to protect FmHA or its successor agency under Public Law 103-354's financial interests therein, and (b) consistent with the statutory purposes of the grant and the limitations of the statutory authority under which it is made and FmHA or its successor agency under Public Law 103-354 regulations.
This Agreement is subject to current FmHA or its successor agency under Public Law 103-354 regulations and any future regulations not inconsistent with the express terms hereof. Grantee has caused this Agreement to be executed by its duly authorized ___, properly attested to and its corporate seal affixed by its duly authorized ___.
Attest:
Grantee:
United States Of America Farmers Home Administration or its successor agency under Public Law 103-354:
Date of Execution of Grant Agreement by FmHA or its successor agency under Public Law 103-354:
Attached Statement of Activities Is Made Part of This Agreement.
This Amendment between ___ herein called “Grantee,” and the United States of America acting through the Farmers Home Administration, Department of Agriculture, herein called “FmHA,” or its successor agency under Public Law 103-354 hereby amends the Housing Preservation Grant Agreement executed by said parties on ___, 19_, hereinafter called the “Agreement.”
Said Agreement is amended by extending the Agreement to ___, 19_, and/or by making the following changes noted in the attachments hereto: (List and identify proposal and any other documents pertinent to the grant which are attached to the Amendment.)
Grantee has caused this Agreement to be executed by its duly authorized ___, properly attested to and its corporate seal affixed by its duly authorized ___.
Attest:
Grantee:
United States Of America Farmers Home Administration or its successor agency under Public Law 103-354.
Date of Execution of Amendment to Grant Agreement by FmHA or its successor agency under Public Law 103-354: ___.
Application received on ___.
State ___District Office ___.
If answer to any of the above is “no”, application is rejected and applicant so notified.
Selection Criteria:
Select the appropriate rating:
1. Points awarded based on the percentage of very-low income homeowners or families the applicant proposes to assist, using the following scale ___:
(a) More than 80%: 20 points.
(b) 61% to 80%: 15 points.
(c) 41% to 60%: 10 points.
(d) 20% to 40%: 5 points.
(e) Less than 20%: 0 points.
2. Points awarded based on the applicant's percentage of use of HPG funds to total cost of unit preservation. This percentage reflects maximum rehabilitation with the least possible HPG funds due to leveraging, innovative financial assistance, or other specified approaches. Points are based on the following percentage of HPG funds to total funds ___:
(a) 50% or less: 20 points.
(b) 51% to 65%: 15 points.
(c) 66% to 80%: 10 points.
(d) 81% to 95%: 5 points.
(e) 96% to 100%: 0 points.
3. The applicant has demonstrated its administrative capacity in assisting very low- and low-income families obtain adequate housing based on the following:
(a) The organization or a member of its staff has two or more years experience successfully managing and operating a rehabilitation or weatherization type program ___:
Yes—10 points.
No—0 points.
(b) The organization or a member of its staff has two or more years experience successfully managing and operating a program assisting very low- and low-income families obtain housing assistance ___:
Yes—10 points.
No—0 points.
(c) If the organization has administered grant programs, there are no outstanding or unresolved audit or investigative findings which might impair carrying out the proposal ___:
No findings: 10 points.
Outstanding findings: 0 points.
4. The proposed program will be undertaken
Non-MSA area below 10,000 pop.: 10 points.
MSA area below 5,000 pop.: 10 points.
Neither: 0 points.
5. The program will use less than 20 percent of HPG funds for administration___:
Less than 20%: 5 points.
20%: 0 points.
6. The proposed program contains a component for alleviating overcrowding ___:
Has component: 5 points.
No component: 0 points.
7. The applicant is an existing grantee and meets the conditions of § 1944.686 of this subpart for additional points ___:
Meets conditions: 10 points.
Doesn't meet conditions: 0 points.
Total Points ___:
Ranking of This Applicant ____
Report Period: From: ___ To: ___
I. General Information on Use of HPG Funds During Period:
A. Use of Administrative Funds:
B. Use of Program Funds:
II. Description of recipients provided assistance during report period: (Attach breakdown for each HPG recipient on separate page including name, address, income, size, race, housing preservation activities, and type of assistance received):
III. Description of types of housing preservation provided:
IV. Objectives for next period:
V. Project summary:
VI. Narrative:
A. Significant accomplishments.
B. Problem areas.
C. Proposed changes/assistance needed, etc.
D. Status of implementing environmental and historic preservation requirements. Include number of historic properties assisted.
5 U.S.C. 301; 7 U.S.C. 1989; and 42 U.S.C. 1980.
This subpart describes and explains the types of incidents which can result in an area being determined a disaster area, thereby making qualified farmers in such areas eligible for Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 Emergency (EM) loans. With respect to natural disasters, it sets forth the responsibility of the Secretary of Agriculture; the factors used in making a natural disaster determination; the relationship between FmHA or its successor agency under Public Law 103-354 and the Federal Emergency Management Agency (FEMA); the method for establishing and using Emergency Loan Support Teams (ELST) and Emergency Loan Assessment Teams (ELAT); the training of FmHA or its successor agency under Public Law 103-354 personnel; and disaster related public information functions. The natural disaster determinations/notifications made under this subpart do not apply to any program other than the FmHA or its successor agency under Public Law 103-354 EM loan program. FmHA or its successor agency under Public Law 103-354's policy is to make EM loans to any otherwise qualified applicant without regard to race, color, religion, sex, national origin, marital status, age, or physical/mental handicap (provided the applicant can execute a legal contract) as provided by law.
The following abbreviations are used in this subpart.
(a) ASCS—Agricultural Stabilization and Conservation Service.
(b) DAR—Damage Assessment Report.
(c) ELAT—Emergency Loan Assessment Team.
(d) ELST—Emergency Loan Support Team.
(e) EM—Emergency.
(f) EOH—USDA Emergency Operations Handbook.
(g) FAC—Food and Agriculture Council.
(h) FCIC—Federal Crop Insurance Corporation.
(i) FCO—Federal Coordinating Officer.
(j) FEMA—Federal Emergency Management Agency.
(k) FmHA—Farmers Home Administration or its successor agency under Public Law 103-354.
(l) LFAC—Local Food and Agriculture Council.
(m) NASS—State Statistical Office of the USDA National Agricultural Statistics Service.
(n) OMB—Office of Management and Budget.
(o) SBA—Small Business Administration.
(p) SFAC—USDA State Food and Agriculture Council.
(q) USDA—United States Department of Agriculture.
The following definitions are applicable to this subpart:
(a)
(b)
(1)
(2)
(c)
(1)
(2)
(3)
(i) Unusual and adverse weather conditions or natural phenomena include such things as:
(A) A major single natural occurrence or event such as a blizzard, cyclone, earthquake, hurricane or tornado.
(B) A single storm, or series of storms, accompanied by severe hail, excessive rain, heavy snow, ice and/or high wind.
(C) An electrical storm.
(D) A severe weather pattern over a period of time which, due to excessive rainfall, unusual lack of rainfall, or periods of high or low temperatures, causes flooding, substantial water damage, drought or freezing, or which results in the spreading and flourishing of insects or pests, or in plant or animal diseases spreading into epidemic proportions, or prevents the control of fire, however caused.
(ii) Severe
(iii) Severe
(A) The Secretary determines that there has been a reduction countywide of at least 30 percent of the normal year's dollar value of all crops, including hay and pasture, and the crops could not be replanted or replaced with a substitute crop, or
(B) The Secretary determines that there has been a 30 percent loss countywide in the normal year's dollar value of a single enterprise (as defined in § 1945.154(a) of subpart D of part 1945 of this chapter); or
(C) The Secretary, after exercising discretion, determines that, although the conditions set forth in § 1945.6(c)(3)(iii)(A) and (B) of this subpart have not been met, the unusual
(4)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
There is a USDA FAC established by the Secretary to serve every State and every County in the United States. The FACs are responsible for reporting the occurrence of and assessing the damage
(a)
(b)
(c)
(a)
(b)
(c)
(1) When physical losses only occur, the FmHA or its successor agency under Public Law 103-354 County Supervisor will report to the State Director who will advise the Administrator that there has been a potential natural disaster with physical property losses to one or more farmers. This report must be made to the Administrator within 3 months from the last day of the disaster incidence period. Upon receiving the report, the Administrator will decide whether a natural disaster has occurred. If it has, the Administrator will make EM loans available to any otherwise qualified applicant who has suffered qualifying physical losses. Availability of EM loans assistance under this Administrator action shall be limited to physical losses only. Notices that EM loans are available will identify the county in which the unusual and adverse weather condition, or natural phenomenon has occurred and also each contiguous county.
(2) When physical and/or production losses occur, the FmHA or its successor agency under Public Law 103-354 County Supervisor will report to the LFAC chairperson, as specified in the EOH, all substantial physical property loss, damage or injury and severe production losses that have occurred in the County Office area. The County Supervisor will assist the LFAC in preparing the 24-hour report required in paragraph (c)(3) of this section. If the LFAC has not completed its 24 hour report within two workdays after the occurrence of a potential natural disaster, the County Supervisor will report to the State Director of Form FmHA or its successor agency under Public Law 103-354 1945-27, “Report of Natural Disaster.” In urgent situations, the report may be made by telephone, followed by the LFAC report or Form FmHA or its successor agency under Public Law 103-354 1945-27. Either of these reports will be based on information obtained from personal knowledge and from farmers, agricultural and community leaders, and from any other personally contacted reliable source(s). The County
(3) The LFAC will report the potential natural disaster, in accordance with the EOH, to:
(i) The SFAC, Vice Chairperson; and
(ii) Appropriate County Government representative(s).
(4) The SFAC will provide copies of the LFAC report to:
(i) The USDA Washington Offices of ASCS, FmHA or its successor agency under Public Law 103-354 and Office of Intergovernmental Affairs; and
(ii) The State Governor's Emergency Coordinator and the State Department of Agriculture.
(5) The FmHA or its successor agency under Public Law 103-354 State Director will inform the National Office of each potential natural disaster as soon as possible and forward to the National Office a copy of the LFAC report or Form FmHA or its successor agency under Public Law 103-354 1945-27, with any attachments, and supplemented with the State Director's comments and recommendations. The State Director must include a statement as to the number of farmers, ranchers, and aquaculture operators affected by the potential natural disaster. In urgent situations, the State Director will report to the National Office, Emergency Designation Staff, by telephone, and immediately thereafter send a written report to the National Office, Emergency Designation Staff. The State Director will continually notify the SFAC Vice Chairperson, Emergency Programs, of any additional information received concerning the potential natural disaster.
(6) When inquiries are received from persons affected by a potential natural disaster, they will be provided the following information:
(i) By the County Office:
(A) The kind of assistance that will be available if the President declares a major disaster or emergency, or if the Secretary determines that a natural disaster has occurred.
(B) Whether or not physical property loss EM loans are available.
(C) That applications for EM loans may be filed for future processing if such loans are made available, or may be filed at a later date after the necessary determinations have been made.
(D) Whether regular FmHA or its successor agency under Public Law 103-354 farm loan assistance is available.
(ii) State Office, or the National Office, will furnish the same information as the County Office, or will refer the person to the appropriate County Office.
(7) When inquiries are received from a Governor, a County Governing Body or Indian Tribal Council concerning a potential natural disaster, they will be informed of the procedure for making EM loans available.
(8) The actions required in paragraph (b) of this section will be taken even if the Governor of a State has requested the President to declare a county(ies) a major disaster or Presidential emergency area.
EM loans will be made available to applicants having qualifying severe physical and/or production losses within a county named by FEMA as eligible for Federal assistance under a major disaster or emergency declaration by the President; or under a natural disaster determination by the Secretary of Agriculture, pursuant to § 1945.6(c)(3)(iii) of this subpart; and to applicants having qualifying severe physical property losses when, prior to action by the President or the Secretary, the FmHA or its successor agency under Public Law 103-354 Administrator has determined (pursuant to § 1945.6(c)(3)(ii) of this subpart) that such losses have occurred as a result of a natural disaster. Any determination made by the Secretary or the Administrator, pursuant to this subpart may be revised or reversed upon the receipt of new facts which establish that a change is warranted. FmHA or its successor agency under Public Law 103-354's policy is to make loans to any otherwise qualified applicant. When a county has been designated/declared a disaster area where eligible farmers may qualify for EM loans due to a disaster(s) occurring on or after May 31,
(a)
(1) The National Office will immediately:
(i) Notify the State Director and the Director, Finance Office by telephone and confirm by electronic message. The notification will contain:
(A) The date of the declaration;
(B) The name(s) of the county(ies) determined eligible for Federal disaster assistance;
(C) The type of disaster;
(D) The incidence period for the disaster;
(E) The termination date for accepting applications; and
(F) The disaster declaration number [Examples: Major Disasters, M491; or Presidential Emergency, E061].
(ii) Take the actions required by § 1945.21(a)(1) of this subpart.
(2) The State Director will immediately:
(i) Notify the appropriate County Supervisor(s) to make EM loans available in the declared counties, and confirm this notification by a State supplement containing information listed in paragraphs (a)(1)(i) (A) through (F) of this section.
(ii) Notify the SFAC Vice Chairperson, Emergency Programs, in writing; and
(iii) Prepare the public announcements deemed appropriate to inform the farm community, and coordinate the issuance of such announcements with FEMA's Public Information Officer.
(3) The County Supervisor will immediately upon receiving notification that the county(ies) has been declared a disaster area:
(i) Notify the Chairperson LFAC in writing;
(ii) Make such public announcements as seem appropriate to adequately inform the local farm community;
(iii) Arrange and conduct meetings with local agricultural lenders and agricultural leaders within 10 working days after the disaster declaration date to explain the purpose and the assistance available under the EM loan program; and
(iv) Be available to help staff the FEMA disaster assistance centers, when requested to do so.
(b)
(1) Upon receipt of the Governor's or Indian Tribal Council's request through the Secretary's Office, the FmHA or its successor agency under Public Law 103-354 National Office will immediately take the following actions:
(i) Notify the State Director by telephone of the Governor's request.
(ii) Obtain an immediate report from the State Director on whether there have been severe physical property losses within each of the counties requested by the Governor or Indian Tribal Council.
(iii) Obtain a report from the State Director on production losses.
(2) The State Director will immediately:
(i) Notify the SFAC Vice Chairperson, Emergency Programs, that a DAR is needed, unless the Governor has already made such request to the SFAC Vice Chairperson, in accordance with the EOH for the requested county(ies); and
(ii) Advise the National Office on whether qualifying physical property losses have occurred.
(iii) Review each DAR, as soon as it is available, and forward it to the National Office with written comments on the extent of probable qualifying production losses, and other factors which are recommended for consideration by the Secretary in making determinations under § 1945.6(c)(3) of this subpart. The State Director will also submit to the National Office a list of all agricultural commodities produced in the State, giving the average yearly prices for each commodity for the three years immediately preceding the disaster year; the county average yields for each commodity for the five years immediately preceding the disaster year; and any additional supportive information. Yields and prices data will be used to establish the normal year's production and will be obtained from the USDA National Agricultural Statistics Service (NASS) by the State Director. In cases where crops produced and/or prices are not available from NASS, the information will be obtained from other reliable sources.
(iv) Upon receipt of the Administrator's request for a survey in connection with a request by the Secretary for information needed concerning § 1945.6(c)(3)(iii)(C), expeditiously gather and compile the information requested and submit it to the Administrator with a recommendation. The survey will be conducted in a manner jointly agreed upon by the Administrator and the State Director.
(3) The National Office will:
(i) Immediately use the State Director's report and accompanying price and yield information to analyze and verify losses reported in the DAR(s), along with any other information and comments provided by the State Director.
(ii) Promptly forward a written report to the Secretary, along with supporting information, for use by the Secretary in making a decision on the requested natural disaster determination.
(4) The Secretary will review the results of the survey and determine whether a natural disaster has occurred.
(i) When the Secretary determines that a natural disaster has occurred:
(A) The Administrator will be directed to make EM loans available in the county(ies) named by the Secretary, as provided by law.
(B) The Administrator will notify the State Director, by electronic message, of the Secretary's decision. Such notice
(C) The National Office will immediately pursue the same course of action as described in paragraph (a)(1) of this section, except the disaster determination number will be coded S and three numbers (Example S141).
(D) The State Director will immediately pursue the same course of action as described in paragraph (a)(2) of this section.
(E) The County Supervisor will immediately pursue the same course of action as described in paragraph (a)(3) of this section.
(ii) When the Secretary determines that the conditions in § 1945.6(c)(3)(iii) (A) or (B) of this subpart have
(A) Request the Administrator to provide additional information for consideration through an actual survey of farmers and lending institutions in the county(ies) requested to be determined a natural disaster area.
(B) The Administrator will instruct the State Director to conduct the survey focusing on such factors as:
(
(
(
(
(
(
(
(iii) If the Secretary finds that the conditions of § 1945.6(c)(3)(iii) (A) or (B) of this subpart have
(c)
(1) The Administrator, upon notifying the State Director that EM physical loss loans are to be made available, will issue the following:
(i) The Administrator's notification number (Example: N181);
(ii) The incidence period for the natural disaster; and
(iii) The termination date for accepting applications.
(2) The State Director upon receiving written notification by electronic message from the Administrator will notify:
(i) Appropriate County Supervisor(s) to commence processing EM loan applications in appropriate county(ies).
(ii) The SFAC Vice Chairperson, Emergency Programs; and
(iii) The news media with appropriate announcements.
(3) The Administrator will notify the Office of the Secretary of Agriculture of any action taken concerning
(4) Upon notification from the State Director that EM loans are available in a county, the County Supervisor will pursue the course of action described in § 1945.20(a)(3) of this subpart.
(d)
(1) When the Administrator has made physical loss loans available pursuant to § 1945.6(c)(3)(ii), and the Secretary later makes production loss loans available pursuant to § 1945.6(c)(3)(iii) on the basis of the same unusual and adverse weather condition or natural phenomenon, such physical and production losses will be considered to be caused by a single natural disaster. Any physical loss loans made pursuant to the Administrator's earlier notification will be included in the maximum amount available to an applicant as prescribed in § 1945.163(e) of subpart D of part 1945 of this chapter.
(2) When a series of unusual and adverse weather conditions or natural phenomena occur in a county within the same crop year, and it is not possible for the Secretary to assess the damages in order to determine whether the conditions in § 1945.6(c)(3)(iii) have been met until the end of such series or the crop year, a determination that a natural disaster has occurred shall be considered for both physical property and production losses to be due to a single natural disaster. Any physical loss loans made pursuant to the Administrator's earlier notification will be included in the maximum amount available to an applicant as prescribed in § 1945.163(e) of subpart D of part 1945 of this chapter.
(e)
(1) The County Supervisor will advise the State Director of the conditions for which an extension is requested.
(2) The State Director will make a recommendation to the Administrator on whether an extension should be granted; and
(3) The Administrator will, if the request is granted:
(i) Amend the initial notification/determination (using the same number) by establishing a new incidence period and termination date; and
(ii) Notify the State Director by electronic message.
(f)
After EM loans are made available under § 1945.20 of this subpart, the following actions will be taken immediately:
(a)
(1) Submit weekly reports to the following, informing them of the past week's disaster actions taken by FmHA or its successor agency under Public Law 103-354. If no actions are taken in any particular week, negative reports will be made:
(i) The Secretary of Agriculture or the Secretary's designee;
(ii) The Director of the FmHA or its successor agency under Public Law 103-354 Finance Office;
(iii) The FEMA;
(iv) The SBA Central Office;
(v) The ASCS National Office;
(vi) The FCIC National Office;
(vii) The OMB;
(viii) The National Oceanic and Atmospheric Administration; and
(ix) The Office of Governmental and Public Affairs.
(2) The weekly reports will contain the following information:
(i) The date of the declaration/determination/notification;
(ii) The name(s) of any county(ies) in which EM loans are available;
(iii) The nature of the damages and losses; and
(iv) The termination data for accepting EM loan applications.
(b)
(i) Name(s) of any county(ies) in which EM loans are available;
(ii) Date of the declaration/determination/notification;
(iii) Disaster number;
(iv) Type of disaster;
(v) Incidence period; and
(vi) Termination date for accepting applications.
(2) Notify the State ASCS Executive Director of the authority to make EM loans. Promptly have a meeting to review and implement the provisions of the Memorandum of Understanding between ASCS and FmHA or its successor agency under Public Law 103-354 on Disaster Assistance, exhibit A of FmHA Instruction 2000-JJ (available in any FmHA or its successor agency under Public Law 103-354 office). Arrive at a mutual understanding as to how ASCS disaster program benefits are to be handled in conjunction with the processing of FmHA or its successor agency under Public Law 103-354 EM actual loss loans, so that duplication of benefits for the same losses are not received by disaster victims;
(3) Contact the FCIC Field Operations Office Director to review the
(4) Make appropriate public announcements, including notices in Indian Tribal Council(s) news media. However, if the declaration was by the President, under § 1945.20(a) of this subpart, news releases should be cleared with the FEMA; and
(5) If the FEMA notifies the State Director that an agreement between the State and Federal Government (FEMA) has been made to provide 408 grants in a major disaster area to those suffering damages and losses to housing and personal property, who
(i) The State Director will notify the appropriate County Supervisor(s) of the address and phone number of the nearest FEMA office in the Supervisor's area; and
(ii) At the close of business each week, the County Supervisor(s) will forward to the State Director a list of applicants claiming physical losses who do not qualify for EM loan assistance, with the reason(s) they do not qualify; and
(iii) The State Director will immediately summarize the information received from the County Supervisors and forward a report to FEMA.
(c)
(2) Notify the County Governing Body, Indian Tribal Council(s), and make appropriate public announcements including notices in Indian Tribal Council(s') news media; and
(3) Explain the assistance available under the EM program to agricultural lenders and leaders in the area including Indian agricultural lenders and leaders.
(a)
(b)
(2) If the FEMA makes a request for information from FmHA or its successor agency under Public Law 103-354 on losses and damages caused by an unusual and adverse weather condition or natural phenomenon, the FEMA representative will be advised to contact the SFAC Vice Chairperson. The EOH provides that the SFAC will request the LFAC to prepare the DAR. State Directors and County Supervisors should cooperate with the SFAC Vice Chairpersons and LFAC Chairpersons in preparing the DARs.
(c)
(1) The SFAC will be responsible for:
(i) Selecting qualified USDA employees to represent USDA at each center, after consulting with other council members in making the selection. FmHA or its successor agency under Public Law 103-354 State Directors will cooperate with the SFAC in seeing that centers are properly staffed.
(ii) Orienting the selected employees on all current USDA disaster programs. FmHA or its successor agency under Public Law 103-354 State Directors will cooperate in this orientation to ensure that the USDA representatives at the center(s) are familiarized with the FmHA or its successor agency under Public Law 103-354 EM loan program and other FmHA or its successor agency under Public Law 103-354 loan programs that could be of assistance to the disaster victims; and
(iii) Informing the FEMA that USDA representatives are available to help at each of the disaster application centers.
(2) The FmHA or its successor agency under Public Law 103-354 State Director will be responsible for pursuing the following policy in working with the FEMA and the FCO by:
(i) Authorizing receipt of EM loan applications in the counties named by the FEMA. However, no EM loans can be approved until the National Office has given such notification as prescribed in § 1945.20(a)(1) of this subpart;
(ii) Attending or delegating a representative to attend any meeting(s) called by the FCO to discuss Federal assistance under the disaster declaration; and
(iii) Advising the FCO to contact the SFAC Vice Chairperson, if a request is made by the FCO for FmHA or its successor agency under Public Law 103-354 employees to help staff the FEMA's Disaster Application Centers; and
(iv) Advising the FCO that FmHA or its successor agency under Public Law 103-354's “Report of Emergency Loans Made Pertaining to Disasters” will be provided quarterly to FEMA's National Office by the FmHA or its successor agency under Public Law 103-354 National Office.
(a)
(b)
(1) For all counties named by FEMA under a major disaster or Presidential emergency declaration, the FmHA or its successor agency under Public Law 103-354 County Offices will notify the appropriate SBA Disaster Area Office of all EM loan applications received each week, for damage or loss of farm dwellings and/or loss of household contents. Notice will be given by forwarding to SBA a photocopy of the applicant's completed Form FmHA or its successor agency under Public Law 103-354 410-1, “Application for FmHA or its successor agency under Public Law 103-354 Services.” Block 22 of the form should indicate the purpose for which the loan was requested.
(2) For each application referred to in paragraph (b)(1) of this section, FmHA or its successor agency under Public Law 103-354 County Offices will send a copy of each final action taken with
(3) A farm applicant may elect to obtain SBA financing for physical damage or loss to the dwelling and household contents, and separate financing from FmHA or its successor agency under Public Law 103-354 to cover damages or losses to the farming operation. Accordingly, applicants who elect to receive SBA physical disaster loans for dwelling and/or household content losses may also file for FmHA or its successor agency under Public Law 103-354 EM loan assistance in disaster areas declared by the President or the Secretary of Agriculture or FmHA or its successor agency under Public Law 103-354 Administrator. An EM loan will
(c)
(1) Named by the FEMA under a major disaster or emergency declaration by the President; for physical loss and/or economic injury disaster loans.
(2) Declared by the SBA Administrator for physical loss and economic injury disaster loans.
(3) Designated by the Secretary of Agriculture for Agri-dependent businesses.
(d)
(a)
(b)
(c)
(d)
Exhibit A of FmHA Instruction 2000-JJ (a copy of which is available in any FmHA or its successor agency under
(a)
(b)
(1) State Directors shall use the ELSTs formed in their State(s) and all other FmHA or its successor agency under Public Law 103-354 personnel within their State(s), as the need arises, in making EM loans. If additional help is needed beyond that available in the State, including the use of overtime, temporary personnel, and/or private contractors, the State Director shall advise the National Office of these needs and request outside assistance.
(2) Upon request from a State Director, the Assistant Administrator, Farmer Programs, will consider detailing ELSTs from other States to assist in the making of EM loans.
(3) State ELSTs will consist of a team leader and team members, selected by the State Director.
(i) The State ELST can include Farmer Programs Specialists, County and Assistant County Supervisors, Program Review Assistants, County Office Assistants, and County Office Clerks.
(ii) So that no one person or County Office unit bears an unfair burden, State team members will be changed from time to time.
(iii) Team members will provide training in EM loan making and EM loan servicing to all County Office employees.
(iv) District Directors are responsible for notifying the State Director of any need to change a team member within their district.
(4) State ELSTs will be trained as follows:
(i) The National Office will hold training meetings or workshops for ELST leaders as needed; and
(ii) State ELST leaders will be responsible for training and keeping the State team and all other State personnel currently informed on all phases of EM loans.
(5) State Directors will issue a State supplement establishing an ELST for the State(s) under their jurisdiction. This supplement will name the team leader and all members. A copy of this supplement will be sent to the National Office, Attention: Director, Emergency Designation Staff.
(c)
(1) National Office team leaders will be used as follows:
(i) Training of FmHA or its successor agency under Public Law 103-354 field personnel, other USDA personnel, and temporary personnel in the making of EM loans:
(ii) Assisting State Directors in the organization and expediting of assistance to eligible disaster victims; and
(iii) Leading ELSTs in areas with an unusually large volume of EM loan applications.
(2) Upon request from a State Director, the Assistant Administrator,
The State Director will deploy ELATs on a continuing basis to the designated areas to monitor EM loan processing activities in order to minimize loan errors, especially in loss calculations and eligibility determinations. Such teams will be composed of State Office Farmer Programs staff members, District Directors or Assistant District Directors, Office Management Assistants/Program Review Assistants, and auditors from the Office of Inspector General, if they desire to participate. The team leader will keep the State Director informed by telephone and by submission of weekly written reports, setting forth the problems discovered and the corrective actions taken or to be taken. The State Director will keep all County and District Offices in the designated area of the State informed of the common problems found by the team and require appropriate corrective action to be taken by the County Office. Such actions will be monitored by the District Director and reported to the State Director when corrective measures have been completed. State Directors will monitor the handling of this quality control measure and will forward a copy of the ELAT team leader's report to the Administrator, Attention: Emergency Designation Staff.
(a)
(b)
(c)
(d)
(e)
(1) Number of sessions.
(2) Categories, by number, of personnel attending each session.
(3) Estimated cost per session.
A good public information program is a must in disaster areas. This program should inform farmers and the general public when and where EM loans are available. Also, the information will state the EM loan objectives, eligibility requirements, and type of assistance available. Public information functions will be performed according
(a)
(b)
The objective of EM loans is to provide financial assistance to cover actual losses sustained by eligible farmers, so that they can return to normal farming operations after sustaining substantial losses as a result of a declared/designated disaster. EM loans are made to assist eligible disaster farm victims rehabilitate and resume their normal operations. This objective will be accomplished through the extension of credit and such supervisory assistance as is determined necessary to achieve the objectives of the loan and protect the Government's interest. Supervisory assistance will be given in accordance with the provisions of subpart B of part 1924 of this chapter. The borrower has the responsibility of achieving the objectives of the loan. The borrower accomplishes this by repaying the loan according to the planned repayment schedule, maintaining Agency or its successor agency under Public Law 103-354 security, using loan funds for planned purposes only and following a plan of operation agreed upon with Agency or its successor agency under Public Law 103-354.
Exhibit D of this subpart, which deals with loans made to operators of citrus groves, modifies some of the provisions contained in this subpart.
(a)
(1) Meets the loan eligibility requirements for EM loan assistance in accordance with § 1945.162 of this subpart.
(2) Has not operated a farm or ranch, or who has operated a farm or ranch for not more than 10 years. This requirement applies to
(3) Will materially and substantially participate in the operation of the farm or ranch.
(i) In the case of a loan made to an individual, individually or with the immediate family, material and substantial participation requires that the individual provide substantial day-to-day labor and management of the farm or ranch, consistent with the practices in the county or State where the farm is located.
(ii) In the case of a loan made to an entity, all members must materially and substantially participate in the operation of the farm or ranch. Material and substantial participation requires that the individual provides some amount of the management, or labor and management necessary for day-to-day activities, such that if the individual did not provide these inputs, operation of the farm or ranch would be seriously impaired.
(4) Agrees to participate in any loan assessment, borrower training, and financial management programs required by FmHA or its successor agency under Public Law 103-354 regulations.
(5) Does not own real farm or ranch property or who, directly or through interests in family farm entities owns real farm or ranch property, the aggregate acreage of which does not exceed 15 percent of the average farm or ranch acreage of the farms or ranches in the county where the property is located. If the farm is located in more than one county, the average farm acreage of the county where the applicant's residence is located will be used in the calculation. If the applicant's residence is not located on the farm or if the applicant is an entity, the average farm acreage of the county where the major portion of the farm is located will be used. The average county farm or ranch acreage will be determined from the most recent Census of Agriculture developed by the U.S. Department of Commerce, Bureau of the Census. State Directors will publish State supplements containing the average farm or ranch acreage by county.
(6) Demonstrates that the available resources of the applicant and spouse (if any) are not sufficient to enable the applicant to enter or continue farming or ranching on a viable scale.
(7) In the case of an entity:
(i) All the members are related by blood or marriage.
(ii) All the stockholders in a corporation are qualified beginning farmers or ranchers.
(1)
(i) Individual cash crops, i.e., wheat is an individual crop, corn is an individual crop, and soybeans is an individual crop.
(ii) Individual vegetable crops, i.e., carrots is an individual crop, tomatoes is an individual crop, and radishes is an individual crop.
(iii) Individual fruit crops, i.e., apples is an individual crop, oranges is an individual crop, and grapefruit is an individual crop.
(iv) Individual nut crops, i.e., walnuts is an individual crop, almonds is an individual crop, and pecans is an individual crop.
(v) Individual feed crops, i.e., alfalfa is an individual feed crop, and corn is an individual feed crop when fed to an applicant's own livestock. A livestock enterprise must be a basic part of the farming operation in order for the feed crops to be considered as a basic enterprise in determining eligibility based on production losses to feed crops.
(vi) Beef operations;
(vii) Dairy operations;
(viii) Hog operations;
(ix) Poultry operations;
(x) Any aquaculture operation; and
(xi) Any other operations (i.e., trees grown for timber).
(2)
(1) Be recognized as a partnership by the laws of the State(s) in which the entity will operate a family farm;
(2) Be authorized to own real and/or personal property;
(3) Be able to incur debts in its own name.
For both physical and production losses, the termination date is 8 months from the date of the disaster declaration/determination/notification.
(b)
(a)
(b)
(a)
(b)
(1)
(2)
(i) For applicants whose total EM loan(s) request is for $100,000 or less, the following actions will be taken:
(A) Applicants will be required to apply for the credit needed from their normal lender(s) and, if their normal lender(s) is located outside the local community, from at least one agricultural lender in the local community, to determine whether such lender(s) will provide the credit. Form(s) FmHA 1940-38 must be completed by all lending sources contacted, unless an exception is made under the provisions of paragraph (b)(2)(i)(C) of this section. Only when the applicant is not able to obtain a loan, from one or more of the lending sources contacted, will the applicant be considered for an EM loan. If the County Supervisor believes it necessary, the action required in paragraph (b)(2)(ii) of this section will be taken.
(B) When the County Supervisor receives letters or other written evidence, including Form FmHA or its successor agency under Public Law 103-354 1940-38, from a lender(s) indicating that the applicant is unable to obtain satisfactory credit from that source(s), such correspondence will be included in the loan docket.
(C) If it appears from a review of the application that it would be unduly burdensome for the applicant to obtain written declinations of credit from other lenders, the County Supervisor may make an exception to this requirement, provided the County Supervisor is familiar enough with other lenders' farm loan programs to determine that no possibility exists for the applicant to obtain the credit needed from those lenders. When this conclusion is reached, the basis for it will be recorded in the running case record, and further checks will not be necessary. However, when this exception is used, the applicant's normal lender(s)
(ii) For applicants whose total EM loan(s) request is for more than $100,000, the following actions will be taken:
(A) Applicants will be required to apply at not fewer than three conventional lending sources, including the Production Credit Association or Federal Land Bank, as appropriate, in the local community. In addition, when an applicant has a net worth of $1 million or more and produces evidence that the necessary credit cannot be obtained in the local community, the applicant will be required to contact at least two other lending sources outside the local area. One or more of those lenders contacted must be the applicant's normal lender(s).
(B) Form FmHA or its successor agency under Public Law 103-354 1940-38 must be completed by all lending sources contacted, returned to the County Office and handled in accordance with paragraph (b)(2)(i)(B) of this section.
(C) When the County Supervisor receives Form FmHA or its successor agency under Public Law 103-354 1940-38 indicating that the applicant is unable to obtain satisfactory credit, the forms will be placed in the loan docket. However, such evidence will not preclude the County Supervisor from contacting other farm lenders in the area and making an independent determination
(a)
(1) Applications for initial EM loans for each disaster will be received only in areas where EM loans are made available in accordance with subpart A of part 1945 of this chapter, and must be postmarked or received in the County Office before the specified 8-month termination date has passed.
(2) An applicant conducting a family farming operation in different counties or locations will be considered for only one application, and will file that application in the county in which the farm headquarters is located, unless determined otherwise by the State Director. When the operation is located in more than one State, the State Directors involved will consult and determine which State will process the application and service the loan(s).
(3) Applications may be received and processed from FmHA or its successor agency under Public Law 103-354 EM loan borrowers or SBA disaster housing loan borrowers for that portion of the maximum EM loan originally authorized, but not requested initially from FmHA or its successor agency under Public Law 103-354 or SBA, provided the application is
(4) Applicants who are determined to be
(b)
(c)
(d)
In accordance with the Food Security Act of 1985 (Pub. L. 99-198) after December 23, 1985, if an individual or any member, stockholder, partner, or joint operator of an entity is convicted under Federal or State law of planting, cultivating, growing, producing, harvesting or storing a controlled substance (see 21 CFR part 1308, which is exhibit C to subpart A of part 1941 of this chapter and is available in any FmHA or its successor agency under Public Law 103-354 office, for the definition of
(a)
(b)
(c)
(2) More than a 50 percent interest in the cooperative, corporation, partnership or joint operation must be owned by United States citizens (see § 1945.154(a) of this subpart for the definition of
(d)
(1) An estate or trust; a corporation with over 50 percent of the ownership held by an estate, trust, another corporation, a partnership or a joint operation; a partnership or joint operation with over 50 percent of the ownership held by an estate, trust, corporation, another partnership or another joint operation.
(2) Integrated livestock, poultry, and fish processors who operate primarily and directly as commercial businesses through contracts or business arrangements with farmers. However, a grower under contract with an integrator or processor is considered an established farmer even though the applicant operates through a contract arrangement with an integrated processor, provided the operation is not managed by an outside full-time hired manager or management service. Farmers operating through contract may be considered for EM loans for physical losses and production losses. However, eligibility for and the amount of their production losses will be determined from the applicant's share of the agricultural production as set forth the contract.
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(1) If the members, stockholders, partners or joint operators holding a majority interest
(2) If the members, stockholders, partners or joint operators holding a majority interest
(3) If an entity applicant has an operator interest in any other farming operation, that farming operation must be no larger than a family farm.
(m)
(1) The applicant must meet all FmHA or its successor agency under Public Law 103-354 eligibility requirements at the time of loan closing.
(2) The applicant must
(3) In the case of an entity applicant, all of the individuals who have an interest in the entity must have had an ownership interest (or an interest in which a security interest could be obtained) in the farming operation at the time of the disaster and/or must be heirs of those who had an ownership interest (or an interest in which a security interest could be obtained) in the farming operation at the time of the disaster. Heirs must have been participating in the operation at the time the disaster occurred and must be engaged in the farming operation at the time of loan approval.
(4) In the case of an individual applicant, that person must have had an ownership interest (or an interest in which a security interest could be obtained) in the operation at the time of the disaster and/or must be an heir of those who had an ownership interest (or an interest in which a security interest could be obtained) in the operation at the time of the disaster. An heir has to have been participating in the operation at the time the disaster occurred and has to be engaged in the farming operation at the time of loan approval.
(5) To determine the amount of an actual loss loan an applicant may receive, first calculate the actual loss suffered by the operation(s) as it existed at the time of the disaster, in accordance with § 1945.163 of this subpart. Then look at the individual applicant
(n)
Disaster losses will be reported by applicants on Form FmHA 1945-22,“Certification of Disaster Losses,” which states the physical and production losses suffered as a result of the declared/designated disaster. The applicant will report, on Form FmHA 1945-22, total acres and actual yields for
(a)
(i)
(ii)
(iii)
(iv)
(2) FmHA or its successor agency under Public Law 103-354 loan official(s) will complete Form FmHA 1945-26, “Calculation of Actual Losses.”
(i) In calculating production losses, the same established unit prices will be used for the disaster year and the normal year in computing the dollar value of each enterprise. Unit prices will be established in accordance with paragraph (a)(2)(iv) of this section. In the production loss calculation, those crop production yields and production per animal unit records authorized in paragraphs (a)(1)(i), (ii) and (iii) of this section will be used.
(ii) [Reserved]
(iii) When the applicant's disaster loss is due to a reduction in
In this example the farmer would not be eligible for an EM loss loan since the farmer suffered only a 24 percent loss.
The calculations used for a quantity reduction due to quality losses must be documented on Form FmHA 1945-26 or on an attachment to that form.
(iv) The gross dollar value of production losses will be computed for all crops and all livestock enterprises that suffered losses due to the disaster, by calculating the value of the disaster
(v) In determining eligibility, the amount of actual production loss will be calculated for the single enterprise, which is a basic part of the farming operation (see § 1945.154(a) of this subpart), by subtracting any costs not incurred as explained in paragraphs (a)(2)(xii) and (a)(2)(xiv) of this section from the gross dollar amount of production losses for that enterprise as determined in paragraph (a)(2)(iv) of this section.
(vi) Actual losses for tobacco, peanuts and other crops grown under acreage and/or poundage control will not be calculated differently than any other crop; i.e., the calculations must not include the dollar value of carry over surplus poundage from previous year's(s') production or underproduced pounds to be sold or produced in future years. The value of underproduced poundage allotments and quotas must not be subtracted from the loss. Production from all “controlled” crop acres planted in the disaster year, including acreage above the producer's allotments and quotas, will be considered even though the carry-over crop is not eligible for price supports until the next marketing year.
(vii) Actual losses for spring and fall annual crops of the same species will be treated as two separate crop losses and listed separately on Forms FmHA 1945-22 and 1945-26. The crop(s) not affected by the disaster will be considered as having produced a normal year's yield.
(viii) The dollar value of the actual production loss for the single enterprise which is a basic part of the farming operation as designated by the applicant in Item F, Form FmHA 1945-22, will be divided by the previously calculated normal year's gross income for that enterprise. The result should be rounded to the nearest whole number. To illustrate, if the calculation shows a 29.49 percent production loss, round it down to 29 percent. If the calculation shows a 29.50 percent loss round it up
(ix) Once eligibility is established, based on production losses, the total production loss sustained by the applicant, directly attributable to the disaster, is computed by adding the gross dollar amount of production losses of all single enterprises, whether or not they constitute a basic part of the farming operation, and subtracting from this total all financial assistance verified as having been received or to be received through any disaster relief program, and all compensation for disaster losses provided by any source for those enterprises.
(x) The maximum EM loan for production losses is limited to
(xi) Production losses to hayland, pasture and rangeland used for grazing livestock owned by the applicant must be based on the production from only those acres which are utilized in the disaster year. Losses may be calculated by one of three methods when approved by the State Director. The State Director will decide which one of the following three methods will be used throughout the State to calculate losses to pasture and rangeland; and issue a State supplement to this subpart, setting forth the method(s) to be used Statewide.
(A)
(
(
(
(B)
(
(
(
(C)
(
(
(
(xii) When a crop cannot be planted, an applicant may treat the loss either as a production loss or as a physical loss (see paragraph (b) of this section). When a crop cannot be planted and the applicant chooses to treat the loss as a production loss, the loss will be calculated as set out in this paragraph as follows: Add all income that is derived from the enterprise to the variable costs which were not incurred because of the disaster. (The cost figures will be derived from current crop enterprise budgets prepared by State Agricultural Extension Service economists, based on normal farming conditions in the area.) Subtract this figure from the value of the normal year's production. The resulting figure is the gross dollar amount of production loss.
(xiii) When a crop can be only partially planted due to a disaster
(xiv) When a crop is planted and completely destroyed by a disaster, a yield of “zero” may be shown on Form FmHA 1945-22 for the disaster year, but only if no part of the crop could be harvested and no substitute crop could be planted and harvested. When figuring the actual dollar amount of production losses, subtract the normal costs of harvesting and marketing which were not incurred for crops that were completely destroyed by a disaster. If a substitute crop is planted and harvested during the same crop year, a yield of “zero” should be shown for the original crop, and the actual yield for the substitute crop on Form FmHA 1945-22. On Form FmHA 1945-26, the dollar value of the substitute crop must be added to the dollar value of the disaster year's production and income.
(xv) Losses to feed crops will be established by determining the normal year's gross dollar value of those crops and substracting the disaster year's gross dollar value of feed crops. The difference establishes the disaster year's gross dollar loss for feed crops. The gross dollar value of feed crops produced is derived by multiplying the number of feed crop acres by the yield per acre by the unit price.
(xvi) When an applicant elects to sell feeder livestock at an earlier date than usual rather than purchase feed to replace that which was lost as a result of the disaster, that is a management decision; and the difference between what the sale weight would have been if the livestock had been fed for the normal period and the disaster year's lighter, premature sale weight may
(xvii) Calculation of production losses to livestock enterprises may be based either on loss of production in feed crops, including pasture, to be fed to the applicant's own livestock;
The predisaster value of the cows was $600 per head. The rancher received 35 cents per pound for the cull cows, which had an average weight of 1100 pounds.
Additionally, the rancher's calf crop was only 70 calves with an average weight of 240 pounds in the disaster year (DY). Therefore, the rancher would have sustained a physical loss on the cow herd (see § 1945.163(b)(6)(i)(B) and a production loss on the calf crop.
The established price for calves is 60 cents per pound.
The rancher's normal year's (NY) calf crop was 85 percent. Since the rancher reduced the breeding herd by 50 cows, an adjustment must be made to determine the calf losses. The reduced herd size is now 150 cows.
Additionally, an EM loan may be made based on the physical loss of 50 cows. (See example in § 1945.163(b)(6)(i)(B).
(xviii) Any claims of production losses from the applicant will be verified by FmHA or its successor agency under Public Law 103-354 when the applicant's claim(s) appears to be unreasonable.
(xix) Claims of production losses for orchard crops (fruits or nuts) will be considered only for the crop loss directly attributable to the qualifying disaster and determined in accordance with paragraph (a)(2) of this section.
(xx) When an applicant's farming operation(s) is conducted in a designated county(ies) and nondesignated county(ies), eligibility will be established based on losses to a single enterprise as explained in paragraph (a)(2)(v) of this section, which constitutes a basic part of the total farming operation, without regard to whether the single enterprise is located in the designated county. The disaster year's actual yields, both in the designated and nondesignated county(ies) only, will be used to determine losses. Costs not incurred (if applicable) will be subtracted as explained in paragraphs (a)(2)(xii) and (a)(2)(xiv) of this section. The amount of the production loss loan, however, will be limited to the production loss sustained in the designated county(ies) only minus any compensatory payments received or to be received for that portion of the farming operation located in the designated county(ies).
(xxi) The County Supervisor will assign normal yields to all unplanted acreage covered by a Payment in Kind (PIK) contract, when calculating crop production losses on Form FmHA 1945-26.
(b)
(2) The claimed value of all physical losses due to disaster damage or destruction must be supported by written estimates for the necessary repair or replacement requested.
(3) Physical loss loan funds can be used to pay for only contracted or hired labor and materials and supplies purchased. Labor, machinery, equipment, and materials contributed by the applicant or borrower will not be chargeable to the cost of necessary repair and replacement.
(4) Damage to or destruction of nonessential buildings, structures or other items will not be repaired or replaced with EM physical loss loan funds. Any insurance compensation received or to be received for such losses will be considered as compensation for losses to essential farm buildings, structures and other items which need to be repaired or replaced.
(5) The maximum physical loss loan(s) will be determined by subtracting all financial assistance provided through any disaster relief program and all compensation for disaster losses provided by any source from the value of all actual physical losses caused by the disaster.
(6) The physical loss for the following items equals the market value at the time of the disaster for items lost, damaged or destroyed by or as a result of the disaster:
(i) Livestock.
(A) Death of an animal(s) caused by the disaster.
(B) Disaster related damage to an animal's(s') health, which has impaired or reduced its normal production capability and its market value. This includes forced reductions of foundation breeding stock caused by the disaster. Physical losses, under these conditions, would be calculated by establishing a dollar value per head, or unit, at the time the disaster occurred, and deducting the reduced dollar value received from the disaster-caused sale of the animals. The difference in the two values would be considered a physical loss.
(ii) Livestock products on hand or stored.
(iii) Harvested crops on hand or stored.
(iv) Supplies on hand.
(v) Essential machinery and equipment.
(7) The actual physical loss for farm dwellings and essential household contents to be used by the operator and existing labor is the amount required to repair or replace the dwelling and/or household contents with a dwelling and/or contents of like standards, size and quality of that being replaced which will meet all applicable code requirements, and which will provide permanent, adequate, decent, safe, sanitary and modest living quarters.
(8) The actual physical loss for farm service buildings and farm real estate other than buildings is the amount required to repair the property or replace it with a building or property of like standards, size, quality and capacity of that being replaced which will meet all applicable code requirements and which will adequately meet the needs of the farming operation.
(9) The actual physical loss for income-producing trees (fruit or nuts) is the cost of removing the damaged or destroyed trees, cleaning debris and preparing the land for replanting, plus the cost of suitable replacement trees and other expenses necessary to reestablish income-producing trees. Losses will not be determined by establishing a value for the trees destroyed or damaged. Any salvage value will be deducted from the loss. The applicant may choose to replace the damaged or destroyed trees with a different enterprise and may use actual loss loan funds for that purpose. (See exhibit D of this subpart for physical loss loans to citrus growers.)
(10) The actual physical loss to trees (grown for timber) will be determined by establishing the value of trees, at the time of the disaster, less any salvage value. This estimate of value must be determined by a recognized forester who will cruise the timber and establish the value of the destroyed and damaged trees. The applicant may choose to replace the damaged tree enterprise with a different enterprise and use the actual loss loan funds for that purpose. Those applicants whose major farming enterprises are other than tree farming, but who have a wood lot that has been damaged, will have their tree losses considered as physical losses in the same manner as set forth for tree farms.
(11) The actual physical loss to growing crops or pasture is the cost of
(12) When a crop cannot be planted during the disaster year due to the disaster and the applicant chooses to treat the loss as a physical loss, the actual physical loss is limited to the cost of land preparation, other expenses incurred to the date of the disaster for crops that could not be planted, and a pro rata share of the total operation's fixed costs such as rent, taxes, and insurance. The applicant must provide an itemized list of all the claimed expenses incurred in the disaster year for those enterprises for which disaster losses are claimed. This list must be signed by the applicant. The amount of an EM loan cannot exceed the total itemized expenses listed by the applicant.
(13) EM loans will not be made to flood and mudslide victims to repair or replace damaged or destroyed farm dwellings or farm service buildings and their contents in areas where “National Flood Insurance” is available, except as authorized in § 1945.173(b) of this subpart.
(14) When an applicant has
(c)
(2) The claimed value of all household losses due to disaster damage or destruction must be supported by written estimates for the necessary repair or replacement.
(3) Labor, equipment, and materials contributed by the applicant or borrower will not be chargeable to the cost of necessary household repairs and replacements.
(4) Damage to or destruction of non-essential household items will not be replaced or repaired with EM loan funds. Any insurance compensation received or to be received for such losses will be considered as compensation for those losses.
(5) The maximum EM loan(s) for repair or replacement of personal household contents is $20,000.
(6) The EM loan(s) will be determined by subtracting all insurance claims and other compensation received or to be received for household losses from the cost of repairs or replacement value of the essential household items.
(d)
(e)
(a)
(2) EM loan funds may be used for those purposes described in paragraphs (b) and (c) of this section.
(b)
(1) Any Farm Ownership loan purpose (see subpart A of part 1943 of this chapter);
(2) Replace land and/or water resources that cannot be restored due to the disaster;
(3) Establish a new site for farm dwellings and service buildings so that the applicant can relocate outside of a flood or mudslide prone area;
(4) Replace land necessary to restore an effective operation which was liquidated as a result of the disaster before an EM loan could be made.
(c)
(1) Any Operating Loan purpose (see subpart A of part 1941 of this chapter);
(2) Purchase and repair of essential household contents, and pay essential family living expenses. Entity operations are not eligible for loan funds to be used for these purposes.
(3) Pay reasonable expenses customarily paid when obtaining, planning and closing a loan made for operating purposes, e.g., fees for legal, architectural and other technical services, which are required to be paid by the applicant, and which cannot be paid by the applicant from other resources. It is not intended that this paragraph be interpreted to include fees charged applicants by agricultural management consultants and other professionals for preparation of EM loan dockets, including farm and home plans and other Agency or its successor agency under Public Law 103-354 forms used in processing such loans.
(a) EM loan funds cannot be used for physical loss purposes unless that physical property lost was covered by general hazard insurance at the time that the damage caused by the natural disaster occurred. The level of coverage in effect at the time of the disaster must have been the tax or cost depreciated value, whichever is less. Chattel property must have been covered at the tax or cost depreciated value, whichever is less, when such insurance was readily available and the benefit of the coverage (the lesser of the property's tax or cost depreciated value) was greater than the cost of the insurance..
(b) Applicants must comply with the CAT insurance requirement no later than loan closing by either:
(1) Obtaining at least the CAT level of coverage, if available, for each crop of economic significance as defined by the Federal Crop Insurance Corporation, or,
(2) By waiving eligibility for emergency crop loss assistance in connection with the uninsured crop. FSA EM loan assistance is not considered emergency crop loss assistance for the purpose of the crop insurance waiver on the uninsured crop.
(c)
(d)
(1) Any new or changed crop or livestock system is proven for the area; and
(2) The applicant has the knowledge and ability to manage the changed operation; and
(3) Substantial new or additional capital investment is not required.
EM applicants who operate family farms (as defined in § 1941.4 of subpart A of part 1941 of this chapter) may, if eligible, receive regular FmHA or its successor agency under Public Law 103-354 farm ownership (FO), and/or operating (OL) loans simultaneously with their initial (EM) loan to help finance their farming operations. If a borrower expands the farming operation beyond a family size farm after receiving an EM loan, no further EM loan assistance will be given even though the borrower may suffer qualifying losses under a new declared/designated/authorized disaster.
(e)
(f)
(1) The circumstances causing the need to refinance were beyond the borrower's control.
(2) Refinancing is in the best interest of the Government.
(g)
(h) [Reserved]
(i)
(j)
(a)
(b)
(1)
(i) Normally, loans will be scheduled for payment in a period not to exceed 7 years. However, loans may be scheduled for a longer repayment period if the FmHA or its successor agency under Public Law 103-354 approval official determines that the needs of the applicant justify a longer term, and the loans can be secured for the longer term. Such longer period may be approved as warranted, but cannot exceed 20 years. This longer repayment period will be used only when the farm and home plan projections indicate the applicant would be unable to repay the loan in a shorter period, taking into consideration rescheduling possibilities. The reasons that a term longer than 7 years is given must be documented in the County Office case file.
(ii) Loans made for production expenses under § 1945.166(c) of this subpart, or for payment of bills incurred for such purposes for the operating or crop year being financed, will be scheduled for repayment when the principal income from the year's operations is normally received,
(iii) Loans made to purchase or produce feed for productive livestock or livestock to be fed for the market, or to pay bills incurred for such purposes for the crop year being financed, will be scheduled for repayment when the principal income from the sale of such livestock or livestock products is planned to be received,
(iv) When conditions warrant, installments may vary in amount. However, there must be at least a partial interest payment scheduled annually. Also, the final installment will not be larger than the amount which can be expected to be refinanced by other agricultural lenders or be repaid within a rescheduled period of 15 years. The applicant must be advised before the loan is closed that FmHA or its successor agency under Public Law 103-354 will review each case at the end of the initial loan term to determine if rescheduling is warranted, and that there is no obligation for FmHA or its successor agency under Public Law 103-354 to continue with the borrower after the expiration of the initial loan term.
(2)
(c)
(d)
Each EM loan will be secured by chattels, real estate, and/or other security and nonessential assets in accordance with this section. The same collateral may be used to secure two or more loans made, direct or guaranteed, to the same borrower. Thus, a junior lien on property serving as collateral for a guaranteed loan(s) is acceptable. In cases when a loan is being made in conjunction with a servicing action, the security requirements as stated in subpart S of part 1951 of this chapter will prevail.
(a)
(1)
(i) A first lien on all property or products acquired, produced, or refinanced with loan funds;
(ii) If the security for the loan under paragraph (a)(1)(i) of this section is not at least equal to 150 percent of the loan amount, the best lien obtainable will be taken on other chattel security owned by the applicant, if available, up to the point that security for the loan at least equals 150 percent of the loan amount.
(A) When there are several alternatives available (cattle, machinery), any one of which will meet the security requirements of this section, the approval official generally has the discretion to select the best alternative for obtaining security.
(B) When alternatives exist and the applicant has a preference as to the property to be taken for security, however, the approval official will honor the preference so long as the requirements of paragraphs (a)(1)(i) and (ii) of this section are met.
(iii) To comply with the 150 percent requirement, security values will be established as follows:
(A)
(B) The specific livestock and/or equipment to be taken as security, along with the value of the security, will be documented in the case file. This information will be obtained from values established in accordance with § 1945.175 (c) of this subpart.
(2)
(3)
(ii) Other available property that cannot be converted to cash without jeopardizing the applicant's farm operation or imposing substantial financial penalty on the applicant will be taken as security when the property owned by the applicant does not provide primary security. Examples of such security include, but are not limited to, cash surrender value of life insurance, securities, patents and copyrights, and membership or stock in cooperatives and associations.
(b)
(1)
(ii) Security will also include assignments of leases or leasehold interests which have mortgageable value, water rights, easements, rights of way, mineral rights, and royalties.
(iii) A first lien is required on real estate, when available. Loans may be secured by a junior lien on real estate provided:
(A) Prior lien instruments do not contain provisions for future advances (except for taxes, insurance, and other costs needed to protect the security, or reasonable foreclosure costs), cancellation, summary forfeiture, or other clauses that may jeopardize the Government's interest or the applicant's ability to pay the loan unless any such undesirable provision is waived, modified, or subordinated insofar as the Government is concerned.
(B) Agreements are obtained from prior lienholders to give notice of foreclosure to FmHA or its successor agency under Public Law 103-354 whenever State law or other arrangements do not require such a notice. Any agreements needed will be obtained as provided in subpart B of part 1927 of this chapter, except as modified by the “Memorandum of Understanding-FCA-FmHA or its successor agency under Public Law 103-354,” FmHA Instruction 2000-R (available in any FmHA or its successor agency under Public Law 103-354 office).
(2)
(i) A first lien will be taken on equipment or fixtures purchased or refinanced with loan funds whenever such property cannot be included in the real estate lien and the best lien obtainable on all real estate does not provide primary security for the loan.
(ii) Chattel security will be obtained when the best lien obtainable on all real estate does not provide primary security for the loan.
(iii) The same collateral may be used to secure two or more loans made, direct or guaranteed, to the same borrower. Therefore, junior liens on chattels may be taken when there is enough equity in the property. However, when possible, a first lien on selected chattel items should be obtained.
(iv) Chattel security liens will be obtained and kept effective, as provided in subpart A of part 1962 of this chapter.
(3)
(ii) Other property may be taken as security when the real estate owned and to be acquired by the applicant does not provide primary security. Examples of such security include but are not limited to cash surrender value of life insurance, securities, patents and copyrights, and membership or stock in cooperatives and associations.
(c)
(d)
(1) A lien will not be taken on property that could have significant environmental problems/costs (e.g., known or suspected underground storage tanks or hazardous wastes, contingent liabilities, wetlands, endangered species, historic properties). Guidance is provided in part II, item H of exhibit A of FmHA Instruction 1922-E (available in any FmHA or its successor agency under Public Law 103-354 office) as to the action to be taken when the appraiser indicates that the property is subject to any hazards, detriments or limiting conditions.
(2) A lien will not be taken on property that cannot be made subject to a valid lien.
(3) A lien will not be taken on the applicant's personal residence and appurtenances, when the residence is located on a separate parcel and the farm tract being financed, refinanced, improved, or otherwise used for collateral provides primary security for the loan(s).
(4) A lien will not be taken on subsistence livestock; cash or special cash collateral accounts to be used for the farming operation or for necessary family living expenses; all types of retirement accounts; personal vehicles necessary for family living and farm operating purposes; household goods; and small tools and small equipment, such as hand tools, power lawn mowers, and other similar items not needed for security purposes.
(5) When title to a livestock or crop enterprise is held by a contractor under a written contract or the enterprise is to be managed by the applicant under a share lease agreement, an assignment of all or part of the applicant's share of the income will be taken. A form approved by OGC will be used to obtain the assignment.
(6) A lien will not be taken on marginal land, including timber, when a softwood timber (ST) loan is secured by such land.
(7) When a loan is made for real estate purposes, a lien will not be taken
(8) Chattel security liens will be obtained and kept effective as notice to third parties as provided in subpart B of part 1941 and subpart A of part 1962 of this chapter.
(e)
(1)
(2)
(3)
(f)
(2) Guarantors of applicants will:
(i) In the case of personal guarantees, provide current financial statements (not over 30 days old at time of filing), signed by the guarantors and disclosing community or homestead property.
(ii) In the case of corporate guarantees, provide current financial statements (not over 30 days old at time of filing), certified by an officer of the corporation.
(3) When security is taken under paragraph (f) of this section, chattel security will be serviced in accordance with subpart A of part 1962 of this chapter. Real estate security will be serviced in accordance with subpart A of part 1965 of this chapter.
(g)
(1) A portion or all of the security has depreciated in value
(2) The available security, together with the approval official's confidence in the applicant's repayment ability, is adequate to secure the loan. When considering “repayment ability” as a form of security, the reserve or margin between the balance available for debt repayment shown on the farm and home plan, and the principal and interest scheduled for payment is the “repayment ability” collateral which may be considered in loan making actions when this plan is developed for the typical year. The “typical year” plan must show that the portion of the loan secured by “repayment ability” will be paid back in a reasonable period of time, i.e., the loan balance will be reduced to a fully secured loan within 3 years.
(h)
(1) The applicant must be able to provide a mortgageable interest in the real estate.
(2) The applicant and the seller must agree in writing that any insurance proceeds received for real estate losses will be used only to replace or repair the damaged real estate improvements which are essential to the farming operation; or used for other essential real estate improvements; or paid on the
(3) If a satisfactory contract for sale cannot be negotiated or the seller refuses to enter into the agreement described in paragraph (h)(2) of this section, the applicant will make every effort to refinance the existing purchase contract. If the applicant cannot obtain refinancing from another source, EM loan funds may be considered to pay off the contract.
(4) If the conditions set out in paragraphs (h)(1), (2), and (3) of this section exist and an EM loan is approved, it can be closed provided the FmHA or its successor agency under Public Law 103-354 escrow agent or approved attorney certifies on Form 1927-10, “Final Title Opinion,” or in separate writing that:
(i) The purchase contract is not subject to summary cancellation on default and does not contain any other provisions which might jeopardize either the Government's security position or the borrower's ability to repay the loan.
(ii) The seller has agreed, in writing, to give FmHA or its successor agency under Public Law 103-354 notice of any breach by the purchaser, and has also agreed to give FmHA or its successor agency under Public Law 103-354 the option to rectify the condition(s) which amounts to a breach within thirty days. The thirty days begin to run on the day FmHA or its successor agency under Public Law 103-354 receives written notice of the breach.
(i)
(j)
(k)
(l) Crop insurance. If crop insurance is obtained, an assignment of indemnity is required. When payment of the insurance premium is not required until after harvest, crops may be released to make the payment. If a loss claim is paid to the borrower, the premium will be first deducted by the insurance carrier before making security releases.
(m)
(n)-(o) [Reserved]
(p)
(i) An assignment can be obtained on the stock; and
(ii) An agreement is obtained which provides that:
(A) The value of the stock at the time the FLB loan is satisfied will be applied on the FLB loan as long as any FmHA or its successor agency under Public Law 103-354 loan is outstanding, or
(B) The stock refund check is made payable to the borrower and FmHA or its successor agency under Public Law 103-354.
(iii) The total of the stock value and the recommended market value of real estate is indicated on the real estate appraisal.
(2) An assignment of all or part of the applicant's share of income is required when title to a livestock or crop enterprise is held by a contractor under a written contract or when the enterprise is to be managed by the applicant under a share lease or share agreement. The contract, share lease or share agreement will be described specifically as “Contract Rights” or “Contract Rights in Livestock or Crops,” (or as “Accounts” or “Accounts in Livestock or Crops,” if required by a State supplement) and so forth, in paragraph 1. (b) of Form FmHA or its successor agency under Public Law 103-354 440-25, “Financing Statement”. A form approved by OGC will be used to obtain the assignment.
(a)
(b)
(1) In identified special flood or mudslide prone areas as designated by FEMA, the following policies are applicable for EM loans being made to finance buildings or fixtures and furnishings contained therein.
(i) If flood or mudslide insurance is available and an applicant has not taken such insurance and has suffered flood or mudslide losses, an EM loan may be made only if flood or mudslide insurance is purchased before the EM loan is closed.
(ii) If flood or mudslide insurance is available and an applicant previously received and still is indebted for an EM loan, Rural Housing Disaster (RHD), or SBA disaster loan; and a condition of the loan required the obtaining of flood insurance but the applicant allowed the insurance to lapse; and the applicant had new flood or mudslide losses, the applicant will be considered to be in default on the loan agreement and dealt with accordingly.
(iii) If flood and mudslide insurance is available and an applicant had previously received an EM, RHD, or SBA disaster loan; and a condition of the loan required obtaining flood or mudslide insurance and the applicant paid the loan in full and let the insurance lapse; the applicant will be handled in accordance with paragraph (b)(1)(i) of this section.
(iv) In those areas that have been designated by FEMA as special flood or mudslide hazard areas and flood or mudslide insurance is not available or has been withdrawn by FEMA, an applicant can receive an EM loan provided the farm buildings, including the dwelling, are relocated outside the 100-year flood area.
(v) EM loans to repair or replace farm buildings, including dwellings, must meet the requirements of § 1806.25 (a) or (b) of subpart B of part 1806 of this chapter (paragraph V A or B of FmHA Instruction 426.2) as applicable, or be relocated outside the 100-year flood area.
(2) When land development or improvements such as dikes, terraces, fences, and intake structures are planned to be located in special flood or mudslide prone areas, EM loan funds may be used subject to the following:
(i) The Corps of Engineers or the SCS will be consulted concerning:
(A) Likelihood of flooding.
(B) Probability of flooding damage.
(C) Recommendations on special design and specifications needed to minimize flood and mudslide hazards.
(ii) Agency or its successor agency under Public Law 103-354 representatives will evaluate the proposal and record the decision in the loan docket in accordance with the requirements of subpart G of part 1940 of this chapter.
(c)
(1) Funds used to finance nonfarm enterprises and recreation enterprises. Applicants will sign Form FmHA or its successor agency under Public Law 103-354 400-4, “Assurance Agreement,” in these cases.
(2) Any development financed by FmHA or its successor agency under Public Law 103-354 that will be performed by a contract or subcontract of more than $10,000.
(d)
(e)
(f)
(1) Any part of the loan is used to purchase all or part of the land to be mortgaged, and
(2) The loan is secured by a first lien on the property where a dwelling is located.
(g)
(h)
(2) State Directors and Farmer Program Staff members will consult with SCS, U.S. Geological Survey, State Geologist or Engineer, or any board having official functions relating to water use or farm drainage requirements and restrictions for water and drainage development. State supplements will be issued to provide guidelines which:
(i) State all requirements to be met, including the acquisition of water rights.
(ii) Define areas where development of ground water for irrigation is not recommended.
(iii) Define areas where land drainage is restricted.
(3) Applicants will comply with all local laws and regulations, and obtain any special licenses or permits needed for nonfarm, recreation, specialized or aquaculture farming enterprises.
(a)
(b)
(2) Development work will be planned and completed in accordance with subpart A of part 1924 of this chapter. Also, the provisions of subpart E of part 1901 of this chapter will be met in connection with EM loans involving recreational enterprises and the construction of buildings.
(c)
(i) Other real estate appraisals completed by other State-certified general appraisers may be used providing such appraisals meet the ethics, competency, departure provisions, etc., and sections I and II of the Uniform Standards of Professional Appraisal Practices, and contain a mineral rights appraisal as set out in paragraph (c)(1)(ii) of this section. Prior to acceptance, the appraisal must have an acceptable desk review (technical) completed by an FmHA or its successor agency under Public Law 103-354 designated review appraiser.
(ii) The rights to mining products, gravel, oil, gas, coal, or other minerals will be considered a portion of the security and will be specifically included as a part of the appraised value of the real estate securing the loans using Form FmHA or its successor agency under Public Law 103-354 1922-11, “Appraisal for Mineral Rights” or other format that contains the same information.
(iii) When FLB stock is to be used in establishing the recommended market value (RMV) of the real estate being appraised, see § 1945.169 (p)(1) of this subpart.
(iv) Real estate appraisals are not required when real estate is taken as additional security, as defined in § 1945.154 (a) of this subpart. However, the County Supervisor will document in the running record the estimated market value of the additional security and the basis for the estimate.
(2) The appraised value of assets securing EM loans is established as of the day before the beginning of the incidence period of the qualifying disaster.
(3) Chattel appraisals will be completed on Form FmHA 1945-15, “Value Determination Worksheet (EM loans only),” when chattels are taken as security. The property which will serve as security will be described in sufficient detail so it can be identified. Sources such as livestock market reports and publications reflecting values of farm machinery and equipment will be used as appropriate. Chattels not owned by the applicant, and nonfarm chattel property offered as security (such as planes, house trailers, boats, etc.) will be appraised at the present market value only. Chattels that the applicant did not own on the date set forth in paragraph (c)(2) of this section will be appraised at the present market value.
(a)
(1)-(3) [Reserved]
(4) To prevent the duplication of benefits, FmHA and SBA have agreed to coordinate their respective EM and disaster loan program activities.
(i)-(ii) [Reserved]
(iii) Applicants who receive SBA physical loss loans for losses to dwellings and/or household contents may
(b)
(1) The Agency has certified, in writing, that the applicant is eligible.
(2) The applicant has satisfactory tenure arrangements on the farm(s) to be operated.
(3) The proposed farm and home operations of the applicant are reasonably sound, the purposes are authorized, and the EM loan is needed.
(4) The proposed loan shows a positive cash flow based upon a realistic farm and home plan.
(5) The security requirements can be met.
(6) The certifications required of the applicant have been made and are a part of the loan docket.
(7) The loan meets all other Agency requirements.
(8) The applicant has access to any additional financing needed to continue the farming operation. In making this determination, consideration will be given to whether the applicant qualifies for OL, FO and SW loan assistance, or for a loan from other creditors with or without Agency subordination.
Loan funds must be provided by the County Office to the applicant(s) within 15 days after loan approval, unless the conditions prescribed in § 1910.6(d) of subpart A of part 1910 of this chapter are applicable. If a longer period is agreed upon by the applicant(s), the same will be documented in the case file by the County Supervisor.
(a)
(b)
(1) Complete and distribute Form FmHA or its successor agency under Public Law 103-354 1940-10.
(2) When necessary, obtain a substitute promissory note reflecting the revised total of the loan and the revised repayment schedule. When it is not necessary to obtain a substitute promissory note, the County Supervisor will show on Form FmHA or its successor agency under Public Law 103-354 440-57, “Acknowledgement of Obligated Funds/Check Request,” the revised amount of the loan and the revised repayment schedule.
(c)
See § 1941.63 of subpart B of part 1941 of this chapter for regulations concerning lien searches covering chattels.
(a)
(i) For EM loans over $25,000, title clearance is required when real estate is taken as primary security, as defined in § 1945.154(a) of this subpart.
(ii) For EM loans of $25,000 or less, and loans for which real estate is taken as primary security, as defined in § 1945.154(a) of this subpart, a certification of ownership and verification of equity in real estate is required. Certification of ownership may be in the form of a notarized affidavit which is signed by the applicant, names the record owner of the real estate in question and lists the balances due on all known debts against the real estate. Whenever the County Supervisor is uncertain of the record owner or debts against the real estate security, a title search will be required.
(2)
(i) FmHA or its successor agency under Public Law 103-354 real estate mortgage or deed of trust Firm FmHA 1927-1 (state), “Real Estate Mortgage or Deed of Trust for ___,” will be used in all cases where real estate is taken as security.
(ii) Promissory note(s) will be prepared and completed at the time of loan closing in accordance with the FMI. If insured Rural Housing (RH) funds are advanced simultaneously with EM funds the RH loan will be evidenced by a separate note on the proper form as provided in subpart A of part 1944 of this chapter. However, all notes will be described on the same security instrument(s). When a loan is closed between December 1 and January 1, the first installment will be collected at the time of loan closing.
(iii) When subsequent loans are made, a new security instrument is required only when the existing instruments do not cover all required security or do not secure the subsequent loan.
(iv) A subsequent loan for any authorized purposes may be made without taking new security instruments when the existing security instruments cover all the property required to serve as security for the subsequent loan, the State law and the language of the existing security instruments will permit the future loan advance to be secured by the existing security instruments, and the existing security instruments will provide the same lien priority for the subsequent loan as for the initial loan. A new security instrument will be taken if any one of these requirements is not met.
(3)
(i) The following language, or similar language which in the opinion of the OGC is legally adequate, will be inserted just before the legal description of the real estate:
All Borrower's rights, title, and interest in and to the leasehold estate for a term of _____ years beginning on _____, 19__, created and established by a certain lease dated _____, 19__, executed by _____, as lessor(s), recorded on _____, 19__, in Book _____, Page _____ of the _____ Records of said County and State, and any renewals and extensions thereof, and all Borrower's right, title, and interest in and to said Lease, covering the following real estate:
(ii) An additional covenant will be inserted in the mortgage to read as follows:
Borrowers will pay when due all rents and any and all other charges required by said Lease, will comply with all other requirements of said Lease, and will not surrender or relinquish, without the Government's written consent, any of the Borrower's right,
(iii) A copy of the lease will be made part of the loan docket.
(4)
(i) When the original security instrument is returned by the recording official, it will be retained in the borrower's case folder. When the original is retained by the recording official, a conformed copy, showing the date and place of recordation and the book and page number, will be prepared and filed in the borrower's case folder. A conformed copy of the security instrument will be sent to a prior lienholder if a substantial interest is held by that lienholder, or if it is required by a working agreement provision with that lienholder.
(ii) The original deed of conveyance, if any, and a copy of the security instrument will be delivered to the borrower.
(5)
(6)
(7)
(8)
(b)
(c)
(a)
(1) The loan, as changed, is within the respective loan approval official's authority.
(2) Such a change is for an authorized purpose and within applicable limitations.
(3) Such a change will not adversely affect either the feasibility of the operation or the Government's interest.
(4) Such a change is approved in advance of the loan funds being used for the new purpose(s).
(b)
(c)
Loans will be serviced under subpart A of part 1962 and subpart A of part 1965 of this chapter.
The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575-0090. Public reporting burden for this collection of information is estimated to vary from 10 minutes to -1 hour per response, with an average of .58 hours per response including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Department of Agriculture, Clearance Officer, OIRM, Room 404-W, Washington, DC 20250; and to the Office of Management and Budget, Paperwork Reduction Project (OMB #0575-0090), Washington, DC 20503.
I.
A. Authority. The authorizations contained in this exhibit provide the criteria to be used in (1) determining the feasibility of a request for an EM loan to rehabilitate and/or reestablish a citrus grove(s) and (2) establishing the dollar amount of physical losses to be compensated in a single EM loan and disbursed in future advances over a period of up to 5 years.
B. Policy. It is the policy of FmHA or its successor agency under Public Law 103-354 to make EM physical loss loans to citrus growers under this exhibit, provided their citrus groves can be reestablished or rehabilitated with the EM funds advanced over a period not to exceed 5 years. If additional funds are needed and a longer recovery period is required, the applicant must plan at the outset to obtain the additional financing needed from either his/her own cash flow resources or from another lender(s), since FmHA or its successor agency under Public Law 103-354 has no authority to provide any subsequent EM physical loss loans based on the same disaster.
II.
III.
A.
B.
C. Building new buildings, repairing existing buildings and improving chattels are
IV.
A. Project, at the outset, realistic annual plans of operation for the total farming operation, showing positive cash flows. These plans will be prepared by the County Supervisor and the applicant/borrower for each year of the adjustment period, until the citrus grove(s), as projected, is brought into profitable production.
B. Provide verification of income from other farming enterprises and/or dependable off-farm income in sufficient amount to cover all family living expenses and all farm operating expenses not related to the rehabilitation or reestablishment of the citrus grove(s) to be financed by FmHA or its successor agency under Public Law 103-354.
C. Limit their request for an EM physical loss loan to the actual physical losses sustained, which will not exceed the value of the established grove (trees and land), as appraised on the day before the disaster occurred, or one year and one day before the disaster designation was requested by a State Governor or an FmHA or its successor agency under Public Law 103-354 State Director, whichever date has the higher value,
V.
A. Operating purposes. Payment of:
(1) Hired labor, not including operator's own labor.
(2) Actual cost of pruning trees and top grafting.
(3) Purchase of fertilizer, herbicides and fungicides.
(4) Actual cost of land preparation and cultivation.
(5) Machinery and equipment maintenance, repair and replacement, as needed to sustain the citrus enterprise only.
(6) Actual cost of fuel associated with the citrus enterprise. (For operation of machinery, irrigation systems, frost protection, etc.).
(7) Accrued interest on outstanding citrus operation debt.
(8) Real estate taxes and real property insurance premiums.
(9) Miscellaneous operating costs associated with the citrus enterprise.
B. Real Estate purposes. Payment of:
(1) Hired labor, not including operator's own labor.
(2) Removal of destroyed trees and debris.
(3) Land preparation.
(4) Purchase and planting of replacement trees.
(5) Secured and unsecured debts incurred during the disaster year as related to the citrus enterprise.
(6) Miscellaneous expenses directly related to long term improvement of the citrus grove(s) rehabilitation and reestablishment.
VI.
A. Family living expenses.
B. Operating or real estate expenses not directly related to the rehabilitation and/or reestablishment of the citrus grove(s) damaged or destroyed by the declared/designated disaster.
VII.
VIII.
IX.
A. A first lien on the citrus crop being brought into production;
B. The best lien obtainable on real estate on which the citrus is to be grown, having sufficient collateral equity to fully secure the EM loan, based on the per acre appraised value of the citrus grove(s) as established on the day before the disaster occurred, or one year and one day before the disaster designation was requested by a State Governor or an FmHA or its successor agency under Public Law 103-354 State Director, whichever date has the higher value;
C. The best lien obtainable on all other assets owned by the applicant/borrower, when an individual proprietorship. When the applicant/borrower is an entity, all assets owned by the entity and the individual(s) as a member, partner or stockholder of the entity will be taken as collateral; and
D. Full personal liability of all principal members, partners or stockholders of the borrower entity.
X.
A. That postponement of loan repayment is needed to accomplish projections of positive cash flows for each year of postponement; and as necessary, repayment of the loan, except for at least an annual partial payment(s) of interest, will be postponed for up to 5 annual installments with a graduated schedule of annual installments after the adjustment period; and a maximum repayment term, as justified by realistic income and expense projections, but not in excess of 30 years from the date of promissory note, will be given.
B. That multiple future advances of loan funds are scheduled over the period of years needed to bring the citrus grove(s) into profitable production, but not in excess of 5 years.
C. That annual plans of operation and accompanying cash flow statements are scheduled for review and revision annually to reflect current circumstances, and a determination made and documented by the FmHA or its successor agency under Public Law 103-354 servicing official that recovery of the citrus operation is still feasible, before
D. That the projected annual plans show the initial and all future EM advances will be fully secured by equity in the farm real estate to be rehabilitated or reestablished, and which will serve as collateral for the EM loan, using the “as improved” appraised value.
XI.
XII.
7 U.S.C. 1989; 5 U.S.C. 301; 7 CFR 2.23; 7 CFR 2.70.
(a) This subpart provides procedures for administration of the agricultural loan mediation program whereby a State may be certified by the Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 as a qualifying State for purposes of FmHA or its successor agency under Public Law 103-354 and other USDA agencies' participation in the program. Such certification is also necessary for a State to receive Federal matching grant funds to be used for the operation and administration of the State's agricultural loan mediation program.
(b) FmHA or its successor agency under Public Law 103-354 will participate in mediations conducted pursuant to a State's agricultural loan mediation program under the same terms and conditions applicable to agricultural creditors generally, and will cooperate in good faith in such mediations by complying with requests for information and analysis, and in presenting and exploring debt restructuring proposals, wherever feasible, when that State is and remains a qualifying State as defined in § 1946.2(b) of this subpart.
(a)
(b)
(a) No later than August 1, of each year, the Governor of a State or Head of a State agency designated by the Governor of a State must submit a written request to the FmHA or its successor agency under Public Law 103-354 if the State wishes to be certified as a qualifying State for the purposes of FmHA or its successor agency under Public Law 103-354 participation in the State's program and for the State to receive a matching grant to be used for the operation and administration of the program within the State during the fiscal year commencing October 1 of that same year. The request must include:
(1) A description of the State's agricultural loan mediation program.
(2) Documentary information to support the request and a certification by the Governor or Head of a State agency designated by the Governor that the State's agricultural loan mediation program:
(i) Provides for mediation services to be provided to producers, and their creditors, that, if decisions are reached, result in mediated, mutually
(ii) Is authorized or administered by an agency of the State government or by the Governor of the State;
(iii) Provides for the training of mediators;
(iv) Provides that the mediation session shall be confidential; and
(v) Ensures that all lenders and borrowers of agricultural loans receive adequate notification of the mediation program.
(b) If the State is a qualifying State at the time the written request is made, the written request need only describe the changes to the program since the previous year's request together with such documentary support as may be necessary concerning such changes, as well as a certification that the remaining elements of the program remain as described in the previous application.
(c) The request for certification should be mailed to:
(d) If a matching grant is requested in accordance with § 1946.4 of this subpart, the request for certification also must include the information required by § 1946.4 (e)(2) of this subpart.
(e) Within 15 days from receipt of the request for certification, the Administrator will notify the State Governor or Head of a State agency designated by the governor whether or not the State is certified as a qualifying State as defined in § 1946.2(b) of this subpart, or, if additional information or clarification is needed to make the determination, the Administrator will advise the State Governor or Head of a State agency of the additional information or clarification needed. Upon receipt of the additional information or clarification requested, the Administrator will respond within 15 days from the date of receipt.
(a)
(b)
(c)
(d)
(e)
(1) Have an Agricultural Loan Mediation Program that has been certified by the Administrator in accordance with § 1946.3 of this subpart, which certification has not been withdrawn in accordance with § 1946.5 (c) of this subpart.
(2) Provide detailed estimates of the costs of operating and administering
(f)
(i) Salaries of professional, technical, and clerical staffs;
(ii) Payment of necessary, reasonable office expenses such as office rental, office utilities, and office equipment rental;
(iii) Purchase of office supplies;
(iv) Payment of administrative costs, such as workers' compensation, liability insurance, employer's share of social security, and travel that is necessary to provide mediation services;
(v) Training for mediators; and
(vi) Secretary systems necessary to assure confidentiality of mediation sessions.
(2) Grant funds may not be used for:
(i) The purchase of capital assets, real estate, or vehicles or repair and maintenance of privately-owned property;
(ii) Political activities; and
(iii) Routine administrative activities not allowable under OMB Cost Principles.
(g)
(2) A State requesting a matching grant will submit to the Administrator:
(i) Standard Form 424, “Federal Assistance.” The application form can be obtained from any FmHA or its successor agency under Public Law 103-354 office.
(ii) The information prescribed in paragraph (e)(2) of this section.
(h)
(i)
(2) In the case of a grant reduction, termination or withdrawal of certification, in accordance with § 1946.5 (c) of this subpart, or major changes in the scope of the State's Agricultural Loan Mediation Program, the Administrator, or designee, will execute Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation,” to stop further disbursement of funds under the Grant Agreement.
(j)
(2) Qualifying States receiving matching grants must provide to the FmHA or its successor agency under Public Law 103-354 State Office by September 30 an annual report on:
(i) The effectiveness of the State's Agricultural Loan Mediation Program;
(ii) Recommendations for improving the delivery of mediation services to producers; and
(iii) The savings to the State as a result of having an Agricultural Loan Mediation Program.
(3) FmHA or its successor agency under Public Law 103-354 State Offices will include any comments or recommendations regarding the State's Agricultural Loan Mediation Program and mail the information to the Administrator no later than November 1.
(a)
(b)
(c)
The provisions of 7 CFR 1901 subpart E, “Civil Rights Compliance Requirements,” 7 CFR part 15, “Nondiscrimination in Federally-Assisted Programs of the Department of Agriculture-Effectuation of title VI of the Civil Rights Act of 1964,” 7 CFR part 15b, “Nondiscrimination on the Basis of Handicap in Programs and Activities Receiving or Benefitting from Federal Financial Assistance,” and 45 CFR part 90, “Nondiscrimination on the Basis of Age in Programs or Activities Receiving Federal Financial Assistance,” apply to activities financed by grants made under this subpart.
Environmental requirements are not applicable to this subpart.
The Administrator hereby delegates the authority for processing applications and administering grants under this subpart to the Assistant to the Assistant Administrator, Farmer Programs.
The collection of information requirements in this regulation have been approved by the Office of Management and Budget and assigned OMB control number 0575-0125. In accordance with 5 CFR part 1320, summarized below is the annualized public reporting burden for this regulation:
5 U.S.C. 301, 7 U.S.C. 1932 note.
Sec. 601, Pub. L. 95-620, delegation of authority by the Sec. of Agri., 7 CFR 2.23; delegation of authority by the Asst. Sec. for Rural Development, 7 CFR 2.70.
This subpart sets forth policies and procedures for designation, approval of designation, and making grants for assistance to areas impacted by increased coal and uranium production, processing, or transportation. The Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 will fully consider all A-95 clearing-house review comments and recommendations in selecting applications for funding. Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to FmHA or its successor agency under Public Law 103-354 employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter. Applicants for this assistance are required to identify any known relationship or association with an FmHA or its successor agency under Public Law 103-354 employee.
The objective of the program is to help areas impacted by coal or uranium development activities by providing assistance for the development of growth management and housing plans and in developing and acquiring sites for housing and public facilities and services.
(a)
(b)
(c)
(d)
(1) Production includes the mining of coal or uranium and all mine site operations connected with such mining operations and processing activities. This includes construction activities on mine sites relating to mining, production, and processing.
(2) Processing includes all operations performed on coal or uranium including construction of processing plants. However, processing does not include conversion into electrical energy.
(3) Transportation which directly relates to the production and processing of coal or uranium including transportation networks in the county of origin of the coal or uranium and counties of processing of coal and uranium. This includes transportation depots along transportation networks that are used primarily for the transfer of coal or uranium for domestic consumption. This also includes unit train rolling stock construction and repair facilities.
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(s)
(t)
(u)
(v)
(w)
(x)
(y)
Organizations eligible for grants include local governments, councils of local government, and State governments that have the leval authority necessary to undertake the proposed project.
(a) Grants will be awarded from appropriate funds specifically allocated for this program.
(b) Grants made for growth management and housing planning may equal but will not exceed 10 percent of the total amount of funds appropriated for and allocated to this program.
(a) FmHA or its successor agency under Public Law 103-354 will make grants for assistance to approved designated areas in accordance with criteria contained in this subpart by providing assistance to fill gaps in growth management and housing planning, and to provide supplementary support for acquisition and development of sites for housing and public facilities and services by States, local governments, and councils of local government.
(b) Efforts will be made to provide comprehensive assistance to approved designated areas through the coordination power of the Secretary of Agriculture by utilizing existing plans, State and local programs, and other Federal programs to the maximum extent possible. Particular attention will be given to the utilization of existing FmHA or its successor agency under Public Law 103-354 authorities under other FmHA or its successor agency under Public Law 103-354 programs in conjunction with this subpart for providing assistance to approved designated areas in accordance with the Governor's approved State Investment Strategy for Energy Impacted Areas.
(c) Where existing plans are unsuitable or nonexistent, and other assistance programs are inadequate or unavailable on a timely basis, FmHA or its successor agency under Public Law 103-354 will provide assistance under this subpart to States, councils of local governments, and local governments for the modification, updating, and/or development of growth management and/or housing plans to deal with problems resulting from coal or uranium development within approved designated areas according to the criteria contained in this subpart.
(d) Where needed, FmHA or its successor agency under Public Law 103-354 will provide assistance for the development of sites and/or the acquisition of sites for housing and public facilities and services within approved designated areas according to the criteria contained in this subpart. Such assistance for site development and acquisition will be made in accordance with FmHA or its successor agency under Public Law 103-354 approved plans and State Investment Strategies for Energy Impacted Areas in accordance with the criteria contained in the subpart.
(e) At the request of the Governor of the appropriate State, FmHA or its successor agency under Public Law 103-354 will take action to acquire real property directly for sites for housing
(f) At the request of the Governor of the appropriate State, where neither the State nor local government has power to do so for this purpose, FmHA or its successor agency under Public Law 103-354 may take action through condemnation to acquire real property for sites necessary for housing, public facilities, or services.
Grant Funds may be used for:
(a) The preparation of growth management and/or housing plans (or aspects thereof) for which financial resources are not available for approved designated areas as set forth in the grant agreement, including but limited to:
(1) One hundred percent of the total cost of developing growth management and/or housing plans.
(2) One hundred percent of the cost of developing aspects of growth management plans and/or housing plans including but not limited to:
(i) Sewer plans;
(ii) Water plans;
(iii) Recreation plans;
(iv) Transportation plans;
(v) Education plans; and
(vi) Subdivision plans.
(3) Payment of salaries of professional, technical, and clerical staff to carry out growth management and housing planning and evaluation;
(4) Payment of necessary reasonable office expenses such as office rental, office utilities, and office equipment rental;
(5) Purchase of office supplies;
(6) Payment of necessary reasonable administrative posts, such as workmen's compensation, liability insurance, and employer's share of social security and travel; and
(7) Payment of costs to undertake tests, make appraisals, and arrange for engineering/architectural services necessary for the planning activity.
(b) Up to 75 percent of the actual cost of developing or acquiring sites for housing, public facilities, or services for which financial resources are otherwise not available as set forth in the grant agreement, including but not limited to:
(1) Necessary grading and leveling;
(2) Sewer and water connections;
(3) Necessary water and sewer lines to housing and public facilities sites;
(4) Access roads to housing and public facilities sites;
(5) Restoring previously mined sites;
(6) Necessary engineering reports in connection with site development;
(7) Payment of costs to undertake tests, make appraisals, and engineering/architectural services necessary for the site development and/or site acquisition;
(8) Necessary legal fees involved in the transfer of the real property.
(a) Growth management and housing planning grant funds may not be used for:
(1) Acquisition, construction, repair, or rehabilitation of existing housing and public facilities;
(2) Replacement of, or substitution for, any financial support previously provided or assured from any other source which would result in a reduction of current efforts on the part of the applicant;
(3) Duplication of current services;
(4) Routine administrative activities not allowed under Federal Management Circular FMC 74-4, “Cost Principles Applicable to Grants and Contracts with State and Local Governments;”
(5) Planning for areas other than approved designated areas;
(6) Planning other than growth management and housing planning; or
(7) Political activities.
(b) Grant funds for site development may not be used for:
(1) Construction, repair, or rehabilitation of housing and public facilities;
(2) Replacement of, or substitution for, any financial support previously provided or assured from any other source which would result in a reduction of effort on the part of the applicant;
(3) Administrative expenses not allowed under FMC 74-4;
(4) Purposes for which funding exists under other State or Federal programs
(5) Duplication of current services; or
(6) Political activities.
The FmHA or its successor agency under Public Law 103-354 State Director is responsible for implementing the authorities contained in this subpart and may issue State supplements redelegating these authorities to appropriate FmHA or its successor agency under Public Law 103-354 employees.
FmHA or its successor agency under Public Law 103-354 State Directors will obtain National Office clearance for all State supplements and guides in accordance with paragraph VIII of FmHA Instruction 021.2, (available in any FmHA or its successor agency under Public Law 103-354 office).
(a)
(b)
(a) The policies and regulations contained in subpart G of part 1940 of this chapter apply to grants made and other actions under this program.
(b) Subsequent to an energy impact area designation by the Governor and establishment of priorities, the FmHA or its successor agency under Public Law 103-354 State Director, in consultation with the Governor, shall define the geographic boundaries or otherwise delineate the areas which will be studied for environmental impacts.
(c) Boundaries shall define the area within which the environmental impacts of the proposed action can be reasonably studied. Proper delineation of impact areas will avoid duplication of effort by using one assessment or impact statement to study a broad area rather than numerous overlapping documents prepared for smaller projects.
The policies and regulations contained in part 1901, subpart F, of this chapter apply to this program.
The policies and regulations contained in part 1901, subpart E, of this chapter apply to grants made under this program.
The policies and regulations contained in title 7, subtitle A, part 21 of the Code of Federal Regulations (Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970) will apply to site development and acquisition grants and other actions under this program.
(a) Local governments may request the Governor of the State in which they are located to designate an area served by them as an energy impacted area.
(b) The Governor will define the geographic area of a designated area consistent with the nature of the impact and the socio-economic integration of the area.
(c) The Governor may designate an area as an energy impacted area based on the criteria contained in this subpart.
(a) An area designated by the Governor must have the following characteristics:
(1) During the most recent calendar year, the eligible employment in coal or uranium development activities within the area has increased by eight percent or more from the preceding year, or such employment (as projected by generally acceptable estimates) will increase by eight percent (of the eligible employment in the year of the designation) or more per year during each of the next three calendar years.
(2) Because of increased employment in coal or uranium development activities, a shortage of housing, inadequate public facilities, or services exists or will exist in the area. Such shortages or inadequacies may be demonstrated by: Housing shortage statistics; higher occupancy rates of substandard houses than has historically occurred within the area; an increase (for which data or projected data is available) in eligible employment from the year of the designation of at least 100 workers and one-half of one percent of the designated area's population; or data showing that available public facilities and services in the area are below generally accepted standards due to the increased demand resulting from coal and uranium development activities.
(3) Available State and local financial resources are inadequate to meet the public need for housing or public facilities and services at present or in the next three years. In making this determination the Governor should consider the following:
(i) State revenue increases resulting from coal and uranium development activity based on existing tax laws;
(ii) Federal funds transferred to the State for impact assistance;
(iii) Local revenue increases resulting from coal or uranium development activities based on existing tax laws;
(iv) Other federal financial assistance to which the area may have access;
(v) All other available State and local sources of funding;
(vi) The time during which the resources will be available;
(vii) Existing laws committing increases in State and local revenues and Federal transfers to purposes other than impact assistance; and
(viii) The estimated cost of development based on the best available informed judgment.
(b) Designations submitted to the Secretary of Energy for approval must have the following attached:
(1) A list of all counties and parts of counties covered by the designation;
(2) If the area is smaller than a county, a map showing the boundary of the area and the approximate location of all eligible employment facilities in the area and nearby;
(3) A written justification for the inclusion of an area if the area is smaller than a county;
(4) The level of eligible employment within the designated area for each of the two most recent calendar years. This data should be obtained from a single source for the entire State, if possible; special surveys may be used when the Governor determines that these more accurately reflect employment conditions within the designated area, or in cases where data from other sources for the most recent calendar year is unavailable at the time of designation. Reference should be made to the data sources used if it is a Federal source; if a non-Federal sources is used, a copy of the source and a brief description of the procedures used for justification should be included. If projections of eligible employment are to be considered, projections of such employment for the next three years must be attached; identification of data sources and methodology used in developing those projections and a copy of any survey data used should be included.
(c) In areas where the impacted area covers counties or parts of counties located in more than one State, the Governors of the affected States may jointly designate such area and submit the designation to the Secretary of Energy for approval.
(d) After examining these factors and determining that the area meets the criteria of (a) above, the Governor may so certify in a letter bearing his or her signature and submit the letter of certification with all data and estimates upon which the designation is based to the Secretary of Energy for approval.
(e) Each designation submitted should have the name and phone number of a contact person in the Governor's designating office.
(f) An original and one copy of the designation should be submitted to the
(g) Two copies of all designations submitted for approval shall be submitted to the appropriate FmHA or its successor agency under Public Law 103-354 State Director. The FmHA or its successor agency under Public Law 103-354 State Director shall forward one copy to the Office of Area Development Assistance in the FmHA or its successor agency under Public Law 103-354 National Office.
(h) The Governor should designate all areas expected to be considered in fiscal year 1979 allocations of funds before July 1, 1979.
Upon receipt of a request for approval of a designation made under this section, the Secretary of Energy shall:
(a) Determine to the best of his ability the consistency of the supporting data submitted along with the designation by the Governor;
(b) Confer with FmHA or its successor agency under Public Law 103-354 on approval;
(c) Notify the Governor and the Administrator of FmHA or its successor agency under Public Law 103-354 of action taken on each designation within 30 calendar days of the receipt of a request for approval;
(d) Consult with the Governor before the disapproval of any designation; and
(e) Publish a description in the
Any person regularly engaged in any coal or uranium development activity within an area designated and approved in accordance with this subpart, shall prepare and transmit a report to the Secretary of Energy, Department of Energy, Mail Stop 8G-031, Forrestal Building, Washington, DC 20585 within 90 days after a written request to such person by the Governor of the State in which such area is located.
(a) The report shall contain:
(1) Projected levels of employment in coal or uranium development activities within the approved designated area for the next three calendar years;
(2) The projected number of new jobs to be created in coal or uranium development activities by the person within the approved designated area in each of the following three calendar years;
(3) Current or planned actions of the person in relation to the provision of housing or public facilities for such person's employees in the next three calendar years;
(4) Contracts in force whereby the person intends to provide funds to State government, local governments, and public or private nonprofit organizations for the provision of housing or public facilities for such person's employees; and
(5) The projected quantity of coal or uranium to be produced, processed, or transported by the person in each of the next three years.
(b) The Governor requesting the report will notify the Secretary of Energy of persons from whom reports have been requested.
(c) The Secretary of Energy shall provide a copy of these reports to the Secretary of Agriculture, the appropriate Governor, and the appropriate county or local officials, and make it available for public inspection and copying in the public reading room of the Department of Energy, Room GA152, Forrestal Building, Washington, DC 20585.
(a) Existing plans for growth management and housing may be used to meet the planning requirements of this subpart.
(b) A reasonable effort should be made to modify existing plans for use in meeting the planning requirements of this section.
(c) The Governor shall be responsible for the coordination of planning within a State.
(d) The planning process developed with assistance under this section
(e) Planning processes developed with assistance under this section should have the maximum possible citizen involvement in the development of plans.
(f) Governors should give full consideration to local and substate priorities in the development of the State Investment Strategy for Energy Impacted Areas.
(g) Plans developed with assistance under this section should be fully coordinated with other Federal, State, substate, and local planning activities affected by the project.
(h) Planning conducted by the State include effective management activities for coordinated development of approved designated areas through the plan implementation stage.
(a) Applicants may submit a preapplication for a planning grant upon designation of the area as an energy impacted area by the Governor. FmHA or its successor agency under Public Law 103-354 will not take final action on the preapplication until the designation has been approved by the Secretary of Energy.
(b) Intergovernmental consultation should be carried out in accordance with 7 CFR part 3015 subpart V, “Intergovernmental Review of Department of Agriculture office.”
(c) Applicants shall file an original and one copy of SF 424.1, “Application for Federal Assistance (For Non-construction),” with the appropriate FmHA or its successor agency under Public Law 103-354 office. A copy should also be filed with the Governor's office of the appropriate State. This form is available in all FmHA or its successor agency under Public Law 103-354 offices. Local governments and councils of local governments shall submit preapplications to the appropriate FmHA or its successor agency under Public Law 103-354 District Office. State governments shall apply to the appropriate FmHA or its successor agency under Public Law 103-354 State Office. The FmHA or its successor agency under Public Law 103-354 District Office will forward the preapplication with written comments within 10 working days to the appropriate State Office.
(d) All preapplications shall be accompanied by:
(1) Evidence of applicant's legal existence;
(2) Evidence of applicant's authority to prepare growth management and/or housing plans;
(3) A statement declaring that the planning neither duplicates nor conflicts with current activities;
(4) An original and one copy of Forms FmHA 400-1, “Equal Opportunity Agreement,” and Form FmHA or its successor agency under Public Law 103-354 400-4, “Assurance Agreement;” and
(5) A statement regarding other financial resources available to the area for this planning.
(e) District and State FmHA or its successor agency under Public Law 103-354 Offices receiving preapplications will:
(1) Determine if the area to be covered by this project is an “approved designated area” as defined in this subpart;
(2) Comply with the environmental requirements set forth in this subpart; and
(3) Prepare a Historic Preservation Assessment in accordance with part 1901, subpart F, of this chapter.
(f) District FmHA or its successor agency under Public Law 103-354 Offices receiving preapplications will also provide written comments reflecting planning grant selection criteria listed in this subpart.
(g) The FmHA or its successor agency under Public Law 103-354 District Office will forward the original of the preapplication and accompanying documents including those described in paragraphs (e)(1) through (e)(3) and (f) of this section to the appropriate FmHA or its successor agency under Public Law 103-354 State Director within 10 working days of receipt of the preapplication.
(h) Upon receipt of a preapplication, the FmHA or its successor agency under Public Law 103-354 State Office will:
(1) Review and evaluate the preapplication and accompanying documents;
(2) Consult with the Governor of the appropriate State concerning the Governor's priorities and recommended funding level for the project; and
(3) Respond to the applicant within 30 days of the date of receipt of the preapplication using Form AD-622, “Notice of Preapplication Review Action,” indicating the action taken on the preapplication.
(i) Upon notification that the applicant is eligible to compete with other applicants for funding, a SF 424.1 may be submitted to the FmHA or its successor agency under Public Law 103-354 State Office by all applicants.
(j) The FmHA or its successor agency under Public Law 103-354 State Office will send evidence of the applicant's legal existence and authority to the USDA Regional Office of General Counsel (OGC) and request that a legal determination be made of the applicant's legal existence and authority to prepare growth management and/or housing plans in those cases where an application (SF 424.1) is requested.
(k) Upon receipt of an application on SF 424.1 by the FmHA or its successor agency under Public Law 103-354 State Office, a docket will be prepared which will include the following:
(1) Form SF 424.1;
(2) Form AD-622;
(3) Any comments received in accordance with 7 CFR part 3015 subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities”. See FmHA Instruction 1940-J, available in any FmHA or its successor agency under Public Law 103-354 office.
(4) SF 424.1;
(5) Evidence of the applicant's legal existence and authority to prepare growth management and/or housing plans;
(6) OGC legal determinations;
(7) Grant agreement and scope of work;
(8) Form FmHA or its successor agency under Public Law 103-354 440-1, “Request for Obligation of Funds;”
(9) Form FmHA or its successor agency under Public Law 103-354 400-1;
(10) Form FmHA or its successor agency under Public Law 103-354 400-4;
(11) Historic Preservation Assessment;
(12) District, where appropriate, and State FmHA or its successor agency under Public Law 103-354 written comments, assessments, and analysis of the proposed projects in accordance with the grant selection criteria; and
(13) All certificates and statements accompanying the pre-application and/or application.
The following criteria will be used in the selection of planning grant recipients:
(a) Planning assistance which could be used for the purpose of the proposed planning process is not available from other sources on a timely basis (Mandatory);
(b) The increase in the number of new employees and the percentage of increase in employment in coal and/or uranium development activities in the year of designation within the approved designated area (years projected will be averaged and treated equally);
(c) The need for planning in relation to the financial resources available for such planning;
(d) The planning priorities and recommended funding level of the Governor(s) of the appropriate State(s);
(e) The appropriateness of the proposed planning activity for meeting the planning needs of the area, including but not limited to the building of planning capacity and the local priority for the project;
(f) The inadequacy of existing plans for mitigating the effects of coal and/or uranium development activities; and
(g) The nature of comments and recommendation received in accordance with 7 CFR part 3015 subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities” (See FmHA Instruction 1940-J, available in any FmHA or its successor agency under Public Law 103-354 office.
(a) The State Investment Strategy for Energy Impacted Areas should be a dynamic document updated as each plan or group of plans is submitted to FmHA or its successor agency under Public Law 103-354 for approval.
(b) The Governor shall consult with the FmHA or its successor agency under Public Law 103-354 State Director when developing or updating a State Investment Strategy for Energy Impacted Areas.
(c) The State Investment Strategy for Energy Impacted Areas will include but is not limited to:
(1) A list of projects in order of priority;
(2) The Governor's recommended level of and method of funding for each project through completion of the project identified in the plans submitted and incorporated into the State Investment Strategy for Energy Impacted Areas;
(3) Methods of coordinating assistance with other State and Federal development programs;
(4) The differential between available financial resources and the cost of needed site development and acquisition for housing and public facilities and services within the area covered by the State Investment Strategy for Energy Impacted Areas;
(5) References to plan and page number of plan on which each priority project is described.
(d) The State Investment Strategy for Energy Impacted Areas having projects expected to be funded in FY 1979 should be submitted to the FmHA or its successor agency under Public Law 103-354 State Director of the appropriate State before July 15, 1979. A copy should also be forwarded to the Administrator, FmHA or its successor agency under Public Law 103-354.
(a) Any plan submitted for FmHA or its successor agency under Public Law 103-354 approval, whether it is a plan developed with assistance under this section, an existing plan, or a modified plan, should contain:
(1) The present level of coal or uranium production, processing, or transportation within the approved designated area covered by the plan;
(2) The anticipated level of coal or uranium production, processing, or transportation in each of the next three calendar years within the area covered by the plan;
(3) A brief description of the socio-economic impacts that have occurred during the two most recent calendar years in the approved designated area covered by the plan;
(4) A brief description of the socio-economic impacts that are expected to occur in the approved designated area covered by the plan within each of the next three calendar years;
(5) The anticipated number of new employees expected to be hired in coal or uranium development activities in each of the next three years within the approved designated area covered by the plan;
(6) Available financial resources and federal programs that may be applied to meeting the needs of the approved designated area including but not limited to the following:
(i) The expected amount of State assistance and State expenditures in the approved designated area covered by the plan which will be used for impact assistance in the next three years;
(ii) The amount of tax revenues expected to accrue to local governments serving the approved designated area covered by the plan in each of the next three years due to increased economic activities which have occurred since the year prior to designation or are expected to occur as a result of coal and uranium development activity;
(iii) Sources and amount of assistance State and local governments are now receiving or are expected to receive from persons for the provision of housing and public facility and services; and
(iv) Existing budget surplus at the State and local level.
(7) The specific needs of the area covered by the plan as to the number of housing units now needed and the number that are expected to be needed in each of the next three years, and/or the number and type of public facilities
(8) The type and quantity of real property now needed or expected to be needed in the next three years for the construction of public facilities and/or housing and/or in the provisions of public services;
(9) Proposed method of acquisition for each site to be acquired by the State or local governments; and
(10) An estimate of assistance that will be necessary under this section and/or other FmHA or its successor agency under Public Law 103-354 or Federal programs for the development of the site.
(b) All plans meeting the criteria in paragraph (a) of this section should be forwarded to the Governor of the appropriate State or States for possible incorporation into the State Investment Strategy for Energy Impacted Areas.
(c) Appropriate growth management and/or housing plans received by the Governor under this section may be submitted to the appropriate FmHA or its successor agency under Public Law 103-354 State Office by the Governor.
(d) The Governor shall submit a copy of the State Investment Strategy for Energy Impacted Areas along with all plans the Governor is submitting to FmHA or its successor agency under Public Law 103-354 for approval.
(e) During fiscal year 1979 the Governor may submit existing plans to FmHA or its successor agency under Public Law 103-354 for qualified approval in which some sections under paragraph (a) above are incomplete, provided that planning is presently being done to fill these gaps, or application for a planning grant has been submitted or is to be submitted to cover the cost of the needed planning. These plans must be resubmitted for final approval on or before December 31, 1980. No requested grant will be approved for land acquisition or site development unless the request is cited in the FmHA or its successor agency under Public Law 103-354-approved comprehensive growth management plan for the designated area in which the project is located.
(f) The FmHA or its successor agency under Public Law 103-354 State Director shall review all plans and the State Investment Strategy for Energy Impacted Areas and provide comments on the following:
(1) Appropriateness of FmHA or its successor agency under Public Law 103-354 assistance under this section as called for in the plans;
(2) Appropriateness of FmHA or its successor agency under Public Law 103-354 assistance under other programs as called for in the plans;
(3) Appropriateness of the State Investment Strategy for Energy Impacted Areas;
(4) Other Federal programs which could be used instead of, or in addition to, assistance under this section; and
(5) Recommended action.
(g) The FmHA or its successor agency under Public Law 103-354 State Director shall submit all plans received from the Governor, the State Investment Strategy Energy Impacted Areas, and any comments to the FmHA or its successor agency under Public Law 103-354 National Office for approval within 10 days of the submission of plans and the State Investment Strategies for Energy Impacted Areas to the State Director.
(h) The FmHA or its successor agency under Public Law 103-354 National Office shall review all plans and State Investment Strategy for Energy Impacted Areas received and approve or return them for modification within 30 days of their receipt in the FmHA or its successor agency under Public Law 103-354 National Office.
(i) The FmHA or its successor agency under Public Law 103-354 National Office shall notify the appropriate State Director of all plans that have been approved by the Administrator.
(j) Upon approval of the plans and State Investment Strategies for Energy Impacted Areas by the Administrator, FmHA or its successor agency under Public Law 103-354, the FmHA or its successor agency under Public Law 103-354 State Director may exercise the authority of the Secretary of Agriculture under Section 603 of the Rural Development Act of 1972 to convene a meeting of the appropriate representatives of all Federal and State agencies which are requested to supply development funds by the State Investment
(k) The FmHA or its successor agency under Public Law 103-354 State Office shall notify the Governor and the appropriate District Directors of all plans approved by the Administrator, FmHA or its successor agency under Public Law 103-354.
(l) Modifications to approved plans shall be approved by the Administrator of FmHA or its successor agency under Public Law 103-354 following the above procedure.
(m) The Governor's modification to the State Investment Strategy for Energy Impacted Areas may be approved by the FmHA or its successor agency under Public Law 103-354 State Director provided the modification is consistent with FmHA or its successor agency under Public Law 103-354 approved plans.
Site development work will be done in accordance with § 1942.18 of FmHA Instruction 1942-A.
(a) For those projects for which Federal funding is sought in excess of $100,000 the applicant shall file SF 424.2, “Application for Federal Assistance (For Construction)” with the appropriate FmHA or its successor agency under Public Law 103-354 office. For those projects for which Federal funding is sought for less than $100,000, the applicant shall file SF 424.2 with the appropriate FmHA or its successor agency under Public Law 103-354 office. A copy should also be filed with the Governor's office of the appropriate State.
(b) The FmHA or its successor agency under Public Law 103-354 office receiving a SF 424.2 shall reply to the applicant with-in 45 calendar days regarding the applicant's eligibility to compete for funding under this program using Form AD-622. (FmHA or its successor agency under Public Law 103-354 District offices will send each preapplication to the FmHA or its successor agency under Public Law 103-354 State Offices for review before replying to the applicant. FmHA or its successor agency under Public Law 103-354 District offices will send a copy of Form AD-622 to the FmHA or its successor agency under Public Law 103-354 State Office at the time the AD-622 is sent to the applicant.)
(c) Intergovernmental consultation should be carried out in accordance with 7 CFR part 3015 subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities”. See FmHA Instruction 1940-J, available in any FmHA or its successor agency under Public Law 103-354 office.
(d) Applicants shall file an original and one copy of SF 424.2, with the appropriate FmHA or its successor agency under Public Law 103-354 office. Local governments and councils of local government shall submit applications to the FmHA or its successor agency under Public Law 103-354 District Office and State governments to the FmHA or its successor agency under Public Law 103-354 State Office. Applications shall include:
(1) Evidence of applicant's legal existence and authority to undertake the proposed project;
(2) Evidence of ownership of or lease on a site to be developed or “Options to Purchase Real Property,” Form FmHA or its successor agency under Public Law 103-354 440-34, (Lease on a site for a public facility will be in accordance with FmHA Instruction 1942-A and lease on a site for housing will be in accordance with part 1944, subpart A);
(3) Description of project and relationship to approved growth management and housing plan. Applicant must cite pages and section of the approved plan;
(4) A plat of the area including elevations;
(5) Preliminary plans and specifications on proposed development which will contain an estimate of the projected cost of site development prepared by independent qualified appraisers or architects/engineers;
(6) The amount of Federal grant needed;
(7) The amount and source of applicant's financial contribution to the project;
(8) An original and one copy of Form FmHA or its successor agency under Public Law 103-354 1940-20;
(9) An original and one copy of Forms FmHA or its successor agency under Public Law 103-354 400-1 and Form FmHA or its successor agency under Public Law 103-354 400-4;
(10) Evidence that the land is stable if the land has been previously mined (include relevant data on soil and analysis);
(11) Assurance that the requirements set forth in title 7, subtitle A, part 21 of the Code of Federal Regulations (Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970) have been met.
(12) Specific concurrence of the Governor if the proposed applicant is neither a council of local governments nor a general purpose political subdivision of a State;
(e) District and State FmHA or its successor agency under Public Law 103-354 Offices receiving applications shall:
(1) Determine if the project is in accordance with a FmHA or its successor agency under Public Law 103-354 approved growth management and/or housing plan covering the approved designated area;
(2) Comply with environmental requirements set forth in subpart G of part 1940 of this chapter;
(3) Prepare a Historic Preservation Assessment in accordance with part 1901, subpart F, of this chapter;
(4) Determine site stability if the land has been previously mined; and
(f) District FmHA or its successor agency under Public Law 103-354 Offices receiving applications shall also provide written comments reflecting site development and acquisition grant selection criteria (§ 1948.86) listed in this subpart.
(g) The FmHA or its successor agency under Public Law 103-354 District Office shall forward the original of the application and accompanying documents including those required in paragraph (e) of this section to the FmHA or its successor agency under Public Law 103-354 State Director within 10 working days of receipt of the application.
(h) Upon receipt of an application, the FmHA or its successor agency under Public Law 103-354 State Office shall:
(1) Review and evaluate the application and accompanying documents;
(2) Determine that the project is a part of and consistent with the State Investment Strategy for Energy Impacted Areas;
(3) Send a copy of the applicant's evidence of legal existence and authority to the USDA Regional OGC for review;
(4) If applicant is local government(s), consult with the Governor on funding recommendation of the project; and
(5) Respond to the applicant within 30 days of the date of receipt of the application.
(i) Upon receipt of an application by the FmHA or its successor agency under Public Law 103-354 State Office, a docket shall be prepared which shall include the following:
(1) Application SF 424.2 and enclosures;
(2) Any comments received in accordance with 7 CFR part 3015 subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities”. See FmHA Instruction 1940-J, available in any FmHA or its successor agency under Public Law 103-354 office.
(3) Evidence of ownership or lease of site to be developed;
(4) Evidence of applicant's legal existence and authority;
(5) OGC legal determination;
(6) Preliminary plans and specifications concerning the proposed development;
(7) Grant agreement and scope of work;
(8) An estimate of projected cost of site development prepared by independent qualified appraisers or engineers/architects;
(9) A topographical map of the area;
(10) Form FmHA or its successor agency under Public Law 103-354 440-1;
(11) Form FmHA or its successor agency under Public Law 103-354 400-1;
(12) Form FmHA or its successor agency under Public Law 103-354 400;
(13) Form FmHA or its successor agency under Public Law 103-354 1940-20, if required by subpart G of part 1940 of this chapter;
(14) A copy of the appropriate FmHA or its successor agency under Public Law 103-354 environmental review required by subpart G of part 1940 of this chapter;
(15) Historic Preservation Assessment;
(16) A copy of the State Investment for Energy Areas; and
(17) District, where appropriate, and State FmHA or its successor agency under Public Law 103-354 written comments, assessments and analysis of the proposed project in accordance with the grant selection criteria.
The following criteria will be considered in the selection of site development and/or acquisition grant recipients:
(a)
(1) The area is covered by a FmHA or its successor agency under Public Law 103-354 approved plan;
(2) The FmHA or its successor agency under Public Law 103-354 approved plan specifically calls for the site development and/or acquisition;
(3) Other Federal funds that the community could receive for the proj-ect are inadequate or not available, and no State or local funds for site development are available to permit development on a timely basis;
(4) The site is to be developed and/or acquired and is to be used for housing, public facilities, or services;
(5) The applicant has title to the site, lease on site, or an option on the site and funds to purchase the site, or is applying for site acquisition funds;
(6) The site will comply with Executive Orders 11988, “Flood Plain Management” and 11990, “Protection of Wetlands;”
(7) An appraisal of the fair market value of the site must have been completed;
(8) Priority has been given in the selection of site to unoccupied or previously mined land;
(9) Class I or Class II farm land was included in the site only if other suitable land was not available;
(10) The land is stable if previously mined; and
(11) Assurance that the requirements set forth in title 7, subtitle A, part 21 of the Code of Federal Regulations (Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970) have been met.
(b)
(1) Priority assigned and recommended funding level by the Governor in the State Investment Strategy for Energy Impacted Areas;
(2) The increase in the number of new employees and the percentage of increase in employment in coal and/or uranium development activities in the year of designation within the approved designated area (years projected will be averaged and treated equally);
(3) The severity of need for housing, public facilities, services that has resulted from coal or uranium development activities in relation to available financial resources within the approved designated area covered by the plan calling for the project;
(4) Local priority for the project;
(5) The amount of effort by State and local government to meet the needs of the area covered by the application as called for in the State Investment Strategy for Energy Impacted Areas in relation to available financial resources;
(6) An assessment of the environmental impacts of the project; and
(7) The nature of comments and -recommendations of A-95 clearing- house(s).
(a) FmHA or its successor agency under Public Law 103-354 may take action to acquire real property directly
(b) All requests for direct land acquisition should be submitted to the FmHA or its successor agency under Public Law 103-354 State Director. The following conditions must be met prior to the submission of a request for direct acquisition by FmHA or its successor agency under Public Law 103-354:
(1) The State or local government serving the area must lack power to condemn land of this type for this purpose and must supply an opinion by the State Attorney General that this authority is lacking;
(2) The real property is to be used as a site for needed housing, public facilities, or services;
(3) The site acquisition is called for in a FmHA or its successor agency under Public Law 103-354 approved plan;
(4) The site is specifically identified by a FmHA or its successor agency under Public Law 103-354 approved plan;
(5) State and local governments have been unable to obtain the real property for a price which does not substantially exceed its fair market value; and suitable alternate sites are not available;
(6) The land is not Indian Trust land;
(7) The land is not U.S. Forest Service land; and
(8) There is legal authority to undertake the proposed project.
(c) FmHA or its successor agency under Public Law 103-354 may acquire Federal real property not prohibited in paragraphs (b) (6) and (7) of this section for purposes contained in this subpart. Farm land (Class I and II) will not be considered unless there is no other suitable land available.
(d) If the State Director determines that no other suitable real property exists that can be obtained at a price which does not substantially exceed its fair market value, and if the appropriate State or local government lacks condemnation authority as evidenced by opinion from the Attorney General, and there is authority to undertake the proposed project, then the State Director shall follow the procedures set out in title 7, subtitle A, part 21 of the Code of Federal Regulations (Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970) and immediately open negotiations to directly acquire the real property through purchase or trade.
(e) The FmHA or its successor agency under Public Law 103-354 State Director may acquire real property by purchase to trade for other real property when FmHA or its successor agency under Public Law 103-354 has been requested to acquire real property by the Governor of the State in which the real property is located.
(f) The Governor shall submit, with this request, a commitment from the State to acquire real property, together with a plan of compensation to FmHA or its successor agency under Public Law 103-354 and evidence of the State's legal authority to enter into this agreement with FmHA or its successor agency under Public Law 103-354 to accept the real property and repay FmHA or its successor agency under Public Law 103-354 for the fair market value of the real property for the intended purpose.
(g) Real property acquired by FmHA or its successor agency under Public Law 103-354 shall be transferred to the State requesting by a quitclaim deed for a price equal to the fair market value in accordance with the terms of a transfer agreement.
(h) After obtaining title to the real property and prior to transfer to the State, the property shall be managed by FmHA or its successor agency under Public Law 103-354 in accordance with part 1955, subpart B of this chapter.
(i) The State Director shall inform the Governor that FmHA or its successor agency under Public Law 103-354 real property acquisition is not likely to occur by purchase or trade if negotiations have failed to produce acceptable results within 90 days of the request for FmHA or its successor agency under Public Law 103-354 acquisition of real property.
(a) If FmHA or its successor agency under Public Law 103-354 attempts to acquire real property at the request of a Governor through purchase or trade and is unable to do so, FmHA or its successor agency under Public Law 103-354 may take action to condemn the real property by the following procedures:
(1) A request for condemnation shall be submitted by the FmHA or its successor agency under Public Law 103-354 State Director to the Administrator, FmHA or its successor agency under Public Law 103-354, Washington, DC 20250 at the request of the Governor of the appropriate State. A copy of the Governor's request for FmHA or its successor agency under Public Law 103-354 real property condemnation and the State Attorney General's opinion that State and local government condemnation authority is lacking shall be attached to the FmHA or its successor agency under Public Law 103-354 State Director's request.
(2) The Administrator shall forward all requests for Federal condemnation to the OGC, USDA with a recommendation for action.
(3) The Administrator, FmHA or its successor agency under Public Law 103-354 shall inform the Governor of any action on the request for condemnation.
(4) Real property condemned by FmHA or its successor agency under Public Law 103-354 shall be transferred to the requesting State by a quitclaim Deed for a price equal to the fair market value of the real property in accordance with terms of a negotiated real property transfer agreement.
(5) After obtaining title to real property and prior to transfer to the State, the property shall be managed by FmHA or its successor agency under Public Law 103-354 in accordance with part 1955, subpart B of this chapter.
(b) FmHA or its successor agency under Public Law 103-354 may not condemn Indian Trust Land or U.S. Forest Service Land.
(a) Transfers of real property acquired by FmHA or its successor agency under Public Law 103-354.
(1) A request for FmHA or its successor agency under Public Law 103-354 acquisition of real property by a Governor of a State constitutes an agreement by that State to receive said real property and to reimburse FmHA or its successor agency under Public Law 103-354 for the fair market value of said real property for the intended use.
(2) Terms and conditions, including reimbursement terms, for real property transfers shall be set forth in a Real Property Transfer Agreement between the Administrator, FmHA or its successor agency under Public Law 103-354 and the appropriate Governor. These terms and conditions will be agreed upon by FmHA or its successor agency under Public Law 103-354 and the State prior to FmHA or its successor agency under Public Law 103-354 attempting to acquire the property. These agreements shall be prepared after consulting with OGC, and forwarded for prior approval by the FmHA or its successor agency under Public Law 103-354 National Office.
(3) All funds from real property transfers received by FmHA or its successor agency under Public Law 103-354 shall be deposited in the U.S. Treasury.
(b) Transfer of real property acquired and/or developed with grant funds from a grant made under this subpart to a person.
(1) Real property acquired and/or developed under this subpart may be transferred to a person for the purposes of construction of privately-owned housing.
(2) All transfers of real property to a person must be approved by the FmHA or its successor agency under Public Law 103-354 State Director of the appropriate State.
(3) Transfer of real property by a recipient of assistance under this subpart to a person must be by contract which: acknowledges the use of funds provided under this subpart to acquire or develop the site; specifies the date of performance prior to delivery of the deed; provides for FmHA or its successor
(4) Proceeds derived from the sale of land acquired or developed through the use of a grant provided under this subpart must be divided between the grantee and FmHA or its successor agency under Public Law 103-354 on a pro rata basis. A grantee may not recover its costs from sale proceeds to the exclusion of FmHA or its successor agency under Public Law 103-354. The amount to be returned to FmHA or its successor agency under Public Law 103-354 is to be computed by applying the percentage of FmHA or its successor agency under Public Law 103-354 grant participation in the total cost of the project to the proceeds from the sale. Funds will be transmitted to the Finance Office in accordance with FmHA Instruction 1951-B, § 1951.58(k), available in FmHA or its successor agency under Public Law 103-354 offices.
(5) All funds received by FmHA or its successor agency under Public Law 103-354 from real property transfers shall be deposited in the U.S. Treasury.
Inspections will be made by the FmHA or its successor agency under Public Law 103-354 State Engineer or other employee designated by the FmHA or its successor agency under Public Law 103-354 State Director to ascertain whether site development is proceeding in accordance with plans and specifications. Such inspections are solely for the benefit of the Government and not for the benefit of the Grantee or any other person.
(a) The FmHA or its successor agency under Public Law 103-354 State Office shall review the docket to determine whether the proposed grant complies with this subpart and that funds are available.
(b) The FmHA or its successor agency under Public Law 103-354 State Director shall be the approving officer on all grants made under this subpart.
(c) If at any time prior to grant approval it is decided that favorable action will not be taken on a preapplication or application, the FmHA or its successor agency under Public Law 103-354 State Director will notify the applicant in writing of the reasons why the request was not favorably considered. The notification to the applicant will state that a review of this decision by FmHA or its successor agency under Public Law 103-354 may be requested by the applicant in accordance with FmHA Instruction 1900-B.
(d) If a grant is recommended, Form FmHA or its successor agency under Public Law 103-354 440-1 and the proposed grant agreement and scope of work will be prepared and forwarded to the applicant for signature.
(e) When Form FmHA or its successor agency under Public Law 103-354 440-1 and the grant agreement and scope of work are received by the applicant, the applicant will sign these documents and forward them to the State Director.
(f) Exhibit A to FmHA Instruction 2015-C (available in any FmHA or its successor agency under Public Law 103-354 Office) will be prepared by the State Director and sent to the Director of Information, Farmers Home Administration or its successor agency under Public Law 103-354.
(g) If the State Director approves the project, the following actions will be taken in the order listed:
(1) The State Director, or a designee, will telephone the Finance Office requesting that grant funds for a particular project be obligated. Immediately after contacting the Finance Office, the requesting official shall furnish the requesting office's security identification code. Failure to furnish the security code will result in the rejection of the request of obligation. After the security code is furnished, the required information from Form
(2) The individual making the request shall record the date and time of the request.
(3) The Finance Office will notify the FmHA or its successor agency under Public Law 103-354 State Office by telephone when funds are reserved and the date the funds will be obligated. If funds cannot be reserved for a project, the Finance Office will notify the FmHA or its successor agency under Public Law 103-354 State Office that funds are not available. The obligation date will be six working days from the date the request for obligation is processed.
(4) The Finance Office will send Form FmHA or its successor agency under Public Law 103-354 440-57, “Acknowledgement of Obligated Funds/Check Request,” to the FmHA or its successor agency under Public Law 103-354 State Director, informing the State Director of the reservation of funds with the obligation date inserted as required by Item 9 on the Forms Manual Insert (FMI) for Form FmHA or its successor agency under Public Law 103-354 440-57.
(5) Form FmHA or its successor agency under Public Law 103-354 440-1 will not be mailed to the Finance Office.
(6) A copy of Form FmHA or its successor agency under Public Law 103-354 440-1 will be sent the FmHA or its successor agency under Public Law 103-354 National Office.
(7) The State Director shall notify the Director of Information in the FmHA or its successor agency under Public Law 103-354 National Office with a recommendation that the project announcement be released.
(8) An executed copy of Form FmHA or its successor agency under Public Law 103-354 440-1 shall be sent to the applicant along with an executed copy of the grant agreement and scope of work on or before the date funds are obligated.
(9) The actual date of applicant notification will be entered on the original of Form FmHA or its successor agency under Public Law 103-354 440-1 and the original of the form will be included as a permanent part of the file.
(10) For planning grants, Standard Form 270, “Request for Advance or Reimbursement,” will be sent to the applicant for completion and return to FmHA or its successor agency under Public Law 103-354. For site acquisition and site development grants, Standard Form 271, “Outlay Report and Request for Reimbursement for Construction Programs,” will be sent to the applicant for completion and returned to FmHA or its successor agency under Public Law 103-354.
(11) If it is determined that a project will not be funded or if major changes in the scope of the project are made after release of the approval announcement, the FmHA or its successor agency under Public Law 103-354 State Director will notify the Director, Legislative Affairs and Public Information Staff (LAPIS) by telephone or electronic mail giving the reasons for such action. The Director, LAPIS, will inform all parties who were notified by the project announcement that the project will not be funded or of major changes in the project using a procedure similar to the announcement process. Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation,” will not be submitted to the Finance Office until five working days after notifying the Director, LAPIS.
Any grantee or applicant for FmHA or its successor agency under Public Law 103-354 assistance under this subpart who has been directly and adversely affected by an administrative decision by FmHA or its successor
(a) For planning grants, SF-270 shall be submitted by grantees on an as-needed basis but not more frequently that once every 30 days. SF-269, “Financial Status Report,” and a project performance activity report will be required of all grantees on a quarterly basis. SF-269 and a final project performance report will also be required. These final reports may serve as the last quarterly reports. Grantees shall constantly monitor performance to ensure that time schedules are being met, projected work by time periods is being accomplished, and other performance objectives are being achieved. All grantees except States should submit an original of each report and one copy to the appropriate FmHA or its successor agency under Public Law 103-354 District Office. When the grantee is a State, an original should be submitted to the appropriate FmHA or its successor agency under Public Law 103-354 State Office. The project performance reports shall include, but need not be limited to the following:
(1) A comparison of actual accomplishments to the objectives established for that period;
(2) Reasons why established objectives were not met;
(3) Problems, delays, or adverse conditions which will materially affect attainment of planned project objectives, prevent the meeting of time schedules or objectives, or preclude the attainment of project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or contemplated and any Federal assistance needed to resolve the situation; and
(4) Objectives established for the next reporting period.
(b) For site development and land acquisition grants, grantees shall submit Form SF-271 for payment of site development costs. Multiple advances will be made in accordance with FmHA Instruction 402.1 (available in any FmHA or its successor agency under Public Law 103-354 office) and will be made as needed to cover required disbursements for not less than 30 day periods. Advances will be requested for the next 30 day period by the grantee on Form SF-272, “Report of Federal Cash Transactions.” Each payment estimate must be approved by the grantee. A final Form SF-272 will be submitted to FmHA or its successor agency under Public Law 103-354 to include the final advance not later than 90 days after the final advance.
Each grant will be monitored by FmHA or its successor agency under Public Law 103-354 to ensure that the Grantee is complying with the terms of the grant and that the project activities are completed as approved. This will involve on-site visits to the project area and review of quarterly and final reports by FmHA or its successor agency under Public Law 103-354.
(a) Audit requirements for Site Development and Acquisition Grants will be made in accordance with FmHA Instruction 1942-G.
(b) Audits for planning grants made in accordance with State statutes or regulatory agencies will be acceptable provided they are prepared in sufficient detail to permit FmHA or its successor agency under Public Law 103-354 to determine that grant funds have been used in compliance with the proposal, any applicable laws and regulations, and the grant agreement. A copy of the audit shall be submitted to the State Director as soon as possible but in no case later than 90 days following the period covered by the grant.
Grant closing and fund disbursement will be accomplished in accordance with FmHA Instruction 1942-G.
The following Grant Agreements are a part of this regulation.
(a) Exhibit A of this subpart is a Grant Agreement for Growth Management and Housing Planning Grants for approved Designated Energy Impacted Areas.
(b) Exhibit B of this subpart is a Grant Agreement for Site Development and/or Site Acquisition for Housing and/or Public Facilities and/or Services.
This Agreement is between
1. This agreement shall be effective when executed by both parties.
2. The scope of work set out below shall be completed prior to_______.
3. (a) Use of grant funds for travel which is determined as being necessary to the program for which the grant is established may be subject to the travel policies of the Grantee institution if they are uniformly applied regardless of the source of funds in determining the amounts and types of reimbursable travel expenses of Grantee staff and consultants. Where the Grantee institution does not have such specific policies uniformly applied, the Federal Travel Regulations shall apply in determining the amount charged to the grant. Grantee may purchase furniture and office equipment only if specifically approved in the scope of work. Approval will be given only when Grantee demonstrates that purchase is necessary and would result in less cost to the Government in providing Federal-share funds or to the Grantee in providing its contributions. Commercial purchase under these circumstances will be approved only after consideration of Federal supply sources.
(b) Expenses and Purchases Excluded:
(i) In no event shall the Grantee expend or request reimbursement from Federal-share funds for obligations entered into or for costs incurred or accrued prior to the effective date of this grant.
(ii) Funds budgeted under this grant may not be used for entertainment expenses.
(iii) Funds budgeted under this grant may not be used to pay for capital assets, the purchase of real estate or vehicles, improvement and renovation of space, and repair and maintenance of privately-owned vehicles.
(c) Grant funds shall not be used to replace any financial support previously provided or assured from any other source. The Grantee agrees that the general level of expenditure by the Grantee for the benefit of program area and/or program covered by this agreement shall be maintained and not reduced as a result of the Federal share funds received under this grant.
4. (a) In accordance with Treasury Circular 1075, grant funds will be disbursed by the FmHA or its successor agency under Public Law 103-354 as cash advances on an as-needed basis not to exceed one advance every 30 days. The financial management system of the recipient organization shall provide for effective control over and accountability for all Federal funds as stated in OMB Circular A-102 revised for State and local governments.
(b) Cash advances to the Grantee shall be limited to the minimum amounts needed and shall be timed to be in accord only with the actual, immediate cash requirements of the Grantee in carrying out the purpose of the planning project.
(c) The timing and amount of cash advances shall be as close as is administratively feasible to the actual disbursements by the recipient organization for direct program costs.
(d) Federal funds should be promptly refunded to the FmHA or its successor agency under Public Law 103-354 and redrawn when needed if the funds are erroneously drawn in excess of immediate disbursement needs. The only exceptions to the requirement for prompt refunding are when the funds involved:
(i) Will be disbursed by the recipient organization within seven calendar days, or
(ii) Are less than $10,000 and will be disbursed within 30 calendar days.
(e) Grantee shall provide satisfactory evidence to FmHA or its successor agency
(f) Grant funds will be placed in a bank account(s). If for any reason grant funds are invested, income earned on such investment shall be identified as interest income on grant funds and forwarded to the Finance Office, FmHA or its successor agency under Public Law 103-354, St. Louis, Missouri, unless the Grantee is a State. “State” includes instrumentalities of a State but not political subdivisions of a State. A State Grantee is not accountable for interest earned on grant funds.
5. The Grantee will submit Performance and Financial reports as indicated below:
(a) As needed, but not more frequently than once every 30 days, an original and 2 copies of Standard Form 270, “Request for Advance or Reimbursement;”
(b) Quarterly, an original and 2 copies of Standard Form 269, “Financial Status Report,” and a Project Performance report according to the schedule below:
PeriodDate due
(c) Final, an original and 2 copies of Standard Form 269, “Financial Status Report,” and a Project Performance report according to the schedule below:
PeriodDate due
Final reports may serve as the last quarterly reports.
(d) The Project Performance reports shall include but need not be limited to the following:
(i) A comparison of actual accomplishment to the objectives established for that period;
(ii) Reasons why established objectives were not met;
(iii) Problems, delays, or adverse conditions which will materially affect attainment of planned project objectives, prevent the meeting of time schedules or objectives, or preclude the attainment of project work elements during established time periods. This disclosure shall be accompanied by a Statement of the action taken or comtemplated and any Federal assistance needed to resolve the situation; and
(iv) Objectives established for the next reporting period.
(e) All Grantees except States shall submit an original of each report and one copy to the appropriate FmHA or its successor agency under Public Law 103-354 District Office. A State Grantee shall submit original reports to the appropriate FmHA or its successor agency under Public Law 103-354 State Office.
(f) The plan(s) developed under this grant shall be submitted to the appropriate Governor for incorporation into the State Investment Strategy for Energy Impacted Areas. The Governor will submit the plan and the State Investment Strategy to the appropriate FmHA or its successor agency under Public Law 103-354 State Office(s). The FmHA or its successor agency under Public Law 103-354 State Office will forward the plan and State Investment Strategy to the FmHA or its successor agency under Public Law 103-354 National Office for approval of the plan.
6. The Budget covered by this agreement is:
(a) In accordance with FMC 74-4, Attachment B, compensation for employees will be considered reasonable to the extent that such compensation is consistent with that paid for similar work in other activities of the State or local government.
(b) In accordance with OMB Circular A-102, Attachment K, transfers among direct cost budget categories of more than 5 percent of the total budget must have prior written approval by the State Director, Farmers Home Administration or its successor agency under Public Law 103-354.
7. (a) The scope of work is described in the attached exhibit 1. The Grantee accepts responsibility for establishing a development
(i) Develop a growth management and housing plan for assistance to approved designated area(s) impacted by increased coal or uranium production.
(ii) Contribute to development of a State Investment Strategy for Energy Impacted Areas.
(iii) Endeavor to coordinate and provide liaison with State development organizations, where they exist.
(iv) Provide continuing information to FmHA or its successor agency under Public Law 103-354 on the status of Grantee programs, projects, related activities, and problems.
(b) The Grantee shall inform the Grantor as soon as the following types of conditions become known:
(i) Problems, delays, or adverse conditions which materially affect the ability to attain program objectives, prevent the meeting of time schedules or goals, or preclude the attainment of project work units by established time periods. This disclosure shall be accompanied by a statement of the action taken or contemplated, and any Grantor assistance needed to resolve the situation.
(ii) Favorable developments or events which enable meeting time schedules and goals sooner than anticipated or producing more work units than originally projected.
1. To comply with property management standards established by Attachment N of OMB Circular A-102 for expendable and nonexpendable personal property
(a) Right to transfer title. For items of nonexpendable personal property having a unit acquisition cost of $1,000 or more, FmHA or its successor agency under Public Law 103-354 may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such reservation shall be subject to the following standards:
(1) The property shall be appropriately identified in the grant or otherwise made known to the Grantee in writing.
(2) FmHA or its successor agency under Public Law 103-354 shall issue disposition instructions within 120 calendar days after the end of the Federal support of the project for which it was acquired. If FmHA or its successor agency under Public Law 103-354 fails to issue disposition instructions within the 120 calendar day period, the Grantee shall apply the standards of paragraph (4) below.
(3) When FmHA or its successor agency under Public Law 103-354 exercises its right to take title, the personal property shall be subject to the provisions for federally owned nonexpendable property discussed in paragraph (4), below.
(4) When title is transferred either to the Federal Government or to a third party and the Grantee is instructed to ship the property elsewhere, the Grantee shall be reimbursed by the benefiting Federal agency with an amount which is computed by applying the percentage of the Grantee participation in the cost of the original grant project or program to the current fair market value of the property, plus any reasonable shipping or interim storage costs incurred.
(b) Use of other nontangible expendable property for which the Grantee has title.
(1) The Grantee shall use the property in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When it is no longer needed for the original project or program, the Grantee shall use the property in connection with its other Federally sponsored activities, in the following order of priority:
(a) Activities sponsored by FmHA or its successor agency under Public Law 103-354.
(b) Activities sponsored by other Federal agencies.
(2) Shared use. During the time that nonexpendable personal property is held for use on the project or program for which it was acquired, the Grantee shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the property was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by FmHA or its successor agency under Public Law 103-354; second preference shall be given to projects or programs sponsored by other Federal agencies. If the property is owned by
(c) Disposition of other nonexpendable property. When the Grantee no longer needs the property as provided in 1(a)(4) above, the property may be used for other activities in accordance with the following standards:
(1) Nonexpendable property with a unit acquisition cost of less than $1,000. The Grantee may use the property for other activities without reimbursement to the Federal Government or sell the property and retain the proceeds.
(2) Nonexpendable personal property with a unit acquisition cost of $1,000 or more. The Grantee may retain the property for other use provided that compensation is made to FmHA or its successor agency under Public Law 103-354 or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the property. If the Grantee has no need for the property and the property has further use value, the Grantee shall request disposition instructions from the original Grantor agency.
FmHA or its successor agency under Public Law 103-354 shall determine whether the property can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the property shall be reported, in accordance with the guidelines of the Federal Property Management Regulations (FPMR), to the General Services Administration by FmHA or its successor agency under Public Law 103-354 to determine whether a requirement for the property exists in other Federal agencies. FmHA or its successor agency under Public Law 103-354 shall issue instructions to the Grantee no later than 120 days after the Grantee request and the following procedures shall govern:
(a) If so instructed or if disposition instructions are not issued within 120 calendar days after the Grantee's request, the Grantee shall sell the property and reimburse FmHA or its successor agency under Public Law 103-354 an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the Grantee shall be permitted to deduct and retain from the Federal share $100 or ten percent of the proceeds, whichever is greater, for the Grantee's selling and handling expenses.
(b) If the Grantee is instructed to dispose of the property other than as described in (1)(a)(4) above, the Grantee shall be reimbursed by FmHA or its successor agency under Public Law 103-354 for such costs incurred in its disposition.
(c) Property management standards for nonexpendable property. The Grantee's property management standards for nonexpendable personal property shall include the following procedural requirements:
(1) Property records shall be maintained accurately and shall include:
(a) A description of the property.
(b) Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification number.
(c) Sources of the property including grant or other agreement number.
(d) Whether title vests in the Grantee or the Federal Government.
(e) Acquisition date (or date received, if the property was furnished by the Federal Government) and cost.
(f) Percentage (at the end of the budget year) of Federal participation in the cost of the project or program for which the property was acquired. (Not applicable to property furnished by the Federal Government.)
(g) Location, use and condition of the property and the date the information was reported.
(h) Unit acquisition cost.
(i) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a Grantee compensates the Federal agency for its share.
(2) Property owned by the Federal Government must be marked to indicate Federal ownership.
(3) A physical inventory of property shall be taken and the results reconciled with the property records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the difference. The Grantee shall, in connection with the inventory, verify the existence, current utilization, and continued need for the property.
(4) A control system shall be in effect to insure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft of nonexpendable property shall be investigated and fully documented; if the property was owned by the Federal Government, the Grantee shall promptly notify FmHA or its successor agency under Public Law 103-354.
(5) Adequate maintenance procedures shall be implemented to keep the property in good condition.
(6) Where the Grantee is authorized or required to sell the property, proper sales procedures shall be established which would provide for competition to the extent practicable and result in the highest possible return.
(7) Expendable personal property shall vest in the Grantee upon acquisition. If there is a
2. To provide Financial Management Systems which will include:
(a) Accurate, current, and complete disclosure of the financial results of each grant. Financial Reporting will be on an accrual basis.
(b) Records which identify adequately the source and application of funds for grant-supported activities. Those records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.
(c) Effective control over and accountability for all funds, property, and other assets. Grantee shall adequately safeguard all such assets and shall assure that they are used solely for authorized purposes.
(d) Accounting records supported by source documentation.
(e) Provide an audit report prepared in sufficient detail to allow Grantor to determine that funds have been used in compliance with the proposal any applicable laws and regulations and this agreement.
3. To retain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of at least three years after closing except that the records shall be retained beyond the three-year period if audit findings have not been resolved. Microfilm copies may be substituted in lieu of original records. The Grantor and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and rec-ords of the Grantee which are pertinent to the specific grant program for the purpose of making audit, examination, excerpts, and transcripts.
4. To provide information as requested by the Grantor to determine the need for and complete any necessary Environmental Impact Statements.
5. To provide information as requested by the Grantor concerning the Grantee's actions in soliciting citizen participation in the application process, including published notice of public meetings, actual public meetings held, and content of written comments received.
6. To account for and to return to Grantor interest earned on grant funds pending their disbursement for program purposes unless the Grantee is a State. See part A 4(f) above.
7. Not to encumber, transfer, or dispose of the property or any part thereof, furnished by the Grantor or acquired wholly or in part with Grantor funds without the written consent of the Grantor except as provided in part B 1.
8. To provide Grantor such periodic reports as it may require of Grantee operations by designated representative of the Grantor.
9. To execute Form FmHA or its successor agency under Public Law 103-354 400-1, “Equal Opportunity Agreement,” and to execute any other agreements required by Grantor to implement the civil rights requirements.
10. To include in all contracts in excess of $100,000 a provision for compliance with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act of 1970. Violations shall be reported to the Grantor and the Regional Office of the Environmental Protection Agency.
11. That, upon any default under its representations or agreements set forth in this instrument, Grantee, at the option and demand of Grantor, will, to the extent legally permissible, repay to the Grantor forthwith the original principal amount of the grant stated herein above, with interest at the rate of five per centum per annum from the date of the default. The provisions of this Grant Agreement may be enforced by Grantor, at its option and without regard to prior waivers by it of previous defaults of Grantee, by judicial proceedings to require specific performance of the terms of this Grant Agreement or by such other proceedings in law or equity, in either Federal or State courts, as may be deemed necessary by Grantor to assure compliance with the provisions of this Grant Agreement and the laws and regulations under which this grant is made.
12. That no member of Congress shall be admitted to any share or part of this grant or any benefit that may arise therefrom; but this provision shall not be construed to bar as a contractor under the grant a publicly held corporation whose ownership might include a member of Congress.
13. That all non-confidential information resulting from its activities shall be made available to the general public on an equal basis.
14. That the purpose and scope of work for which this grant is made shall not duplicate programs for which monies have been received, are committed, or are applied for from other sources, public and private.
15. That the Grantee shall relinquish any and all copyrights and/or privileges to the materials developed under this grant, such material being the sole property of the Federal Government. In the event anything developed under this grant is published in whole or in part, the material shall contain
16. That the Grantee shall abide by the policies promulgated in OMB Circular A-102, Attachment O, which provides standards for use by Grantees in establishing procedures for the procurement of supplies, equipment, and other services with Federal grant funds.
17. To the following termination provisions:
(a) Termination for cause: The Grantor agency may terminate any grant in whole, or in part, at any time before the date of completion, whenever it is determined that the Grantee has failed to comply with the conditions of the grant. The Grantor agency shall promptly notify the Grantee in writing of the determination and the reasons for the termination, together with the effective date.
(b) Termination for convenience. The Grantor agency or Grantee may terminate grants in whole, or in part, when both parties agree that the continuation of the proj-ect would not produce beneficial results commensurate with the further expenditure of funds. The two parties shall agree upon the termination conditions, including the effective date and, in the case of partial terminations, the portion to be terminated. The Grantee shall not incur new obligations for the terminated portion after the effective date, and shall cancel as many outstanding obligations as possible. The Grantor agency shall allow full credit to the Grantee for the Federal share of the noncancelable obligations, properly incurred by the Grantee prior to termination.
1. That it will assist Grantee, within available appropriations, with such technical assistance as Grantor deems appropriate in planning the project and coordinating the plan with local official comprehensive plans and with any State or area plans for the area in which the project is located.
2. That at its sole discretion, Grantor may at any time give any consent, deferment, subordination, release, satisfaction, or termination of any or all of Grantee's grant obligations, with or without valuable consideration, upon such terms and conditions as Grantor may determine to be (a) advisable to further the purposes of the grant or to protect Grantor's financial interest therein, and (b) consistent with both the statutory purposes of the grant and the limitations of the statutory authority under which it is made.
This agreement is subject to current Grantor regulations and any future regulations not inconsistent with the express terms hereof.
Grantee on ___________, 19__, has caused this agreement to be executed by its duly authorized ___________ and attested and its corporate seal affixed by its duly authorized ___________.
This agreement dated ______, 19_, between __________________ a public body corporate organized and operating under ____________ (Authorizing State Statute)
Herein called “Grantee,” and the United States of America acting through the Farmers Home Administration or its successor agency under Public Law 103-354, Department of Agriculture, herein called “Grantor,” Witnesseth:
Grantee has determined to undertake a project for site acquisition and/or site -development as follows: _______________ (herein called project) to serve the approved designated energy impacted area under its jurisdiction at an estimated cost of $_____, and has duly authorized the undertaking of such project;
Grantee is able to finance not more than $_____ of the site acquisition and/or site development costs through revenues, charges, taxes or assessments, or funds otherwise available to Grantee. Said sum has been committed to and by Grantee for such project acquisition and/or site development costs.
The Grantor agrees to grant to Grantee a sum not to exceed $_____ subject to the terms and conditions established by the
In consideration of said grant by Grantor to Grantee, to be made pursuant to Section 601 of the Powerplant and Industrial Fuel Use Act of 1978 (Pub. L. 95-620) for the purpose only of defraying a part of the acquisition and/or site development costs, as defined by applicable Farmers Home Administration or its successor agency under Public Law 103-354 regulations:
1. Cause said project to be completed within the total sums available to it, including said grant, in accordance with the proj-ect plans and specifications and any necessary modifications thereof prepared by Grantee and approved by Grantor.
2. Permit periodic inspection of the proj-ect by a representative of Grantor.
3. Make the housing or public facility or services available to all persons in Grantee's servce area without regard to race, color, national origin, religion, sex, marital status, age, physical or mental handicap.
4. Use the real property including land and land improvements for authorized purposes of the grant as long as needed.
a. The Grantee shall obtain approval of the Grantor before using the real property for other purposes when the Grantee determines that the property is no longer for the original purposes.
b. When the real property is no longer needed as provided above, return all real property furnished or purchased wholly with Federal grant funds to the Grantor. In the case of property purchased in part with Federal grant funds, the Grantee may be permitted to take title to the Federal interest therein upon compensating the Federal Government for its fair share of the property. The Federal share of the property shall be the amount computed by applying the percentage of the Federal Participation in the total cost of the grant program for which the property was acquired to the current fair market value of the property.
5. Not use grant funds to replace any financial support previously provided or assured from any other source. The Grantee agrees that the general level of expenditure by the Grantee for the benefit of program area and/or program covered by this agreement shall be maintained and not reduced as a result of the Federal share funds received under this grant.
6. Not use grant funds to pay for construction costs of housing or public facilities.
This Grant Agreement covers the following described real property (use continuation sheets as necessary).
7. Abide by the following conditions pertaining to nonexpendable personal property which is furnished by the Grantor or acquired wholly or in part with Grant Funds.
a. The Grantee shall retain such property as long as there is a need for the property to accomplish the purpose of the grant. When there is no longer a need for the property to accomplish the purpose of the grant, the Grantee shall use the property in connection with other Federal grants it has received in the following order of priority.
(1) Other grant of the Grantor needing the property.
(2) Grants of other Federal agencies needing the property.
b. When the Grantee no longer has need for the property in any of its Federal grant programs, the property may be used for its own official activities in accordance with the following standards:
(1) Nonexpendable property with an acquisition cost of less than $500 and used four years or more. The Grantee may use the property for its own official activities without reimbursement to the Federal Government or sell the property and retain the proceeds.
(2) All other nonexpendable property. The Grantee may retain the property for its own use provided that a fair compensation is made to the Grantor. The amount of compensation shall be computed by applying the percentage of the Grantor participation in the grant program to the current fair market value of the property as determined by the Grantor.
c. If the Grantee has no need for the property, disposition shall be made as follows:
(1) Nonexpendable property with an acquisition cost of $1,000 or less. Except for that property which meets the criteria of b(1) above, the Grantee shall sell the property and reimburse the Grantor an amount which is computed in accordance with (3) below.
(2) Nonexpendable property with an acquisition cost of over $1,000. The Grantee shall request disposition instructions from Grantor.
(3) If disposition instructions are not issued within 120 days after reporting, the Grantee shall sell the property and reimburse the Grantor an amount which is computed by applying the percentage of the Grantor participation in the grant program to the sales proceeds. Further, the Grantee shall be permitted to retain $100 or ten percent of the proceeds, whichever is greater, for the Grantee's selling and handling expenses.
d. The Grantee's property management standards for nonexpendable personal property shall also include:
(1) Property records which accurately provide for: a description of the property; manufacturer's serial number or other identification number; acquisition date and cost; sources of the property; and ultimate disposition data including sales price or the method used to determine current fair market value if the Grantee reimburses the Grantor for its share.
(2) A physical inventory of property shall be taken and the result reconciled with the property records at least once every two years to verify the existence, current utilization, and continued need for the property.
(3) A control system shall be in effect to insure adequate safeguards to prevent loss, damage, or theft to the property shall be investigated and fully documented.
(4) Adequate maintenance procedures shall be implemented to keep the property in good condition.
(5) Proper sales procedures shall be established for unneeded property which would provide for competition to the extent practicable and result in the highest possible return.
8. Provide Financial Management Systems which will include:
(a) Accurate, current, and complete disclosure of the financial results of each grant. Financial Reporting will be on an accrual basis.
(b) Records which identify adequately the source and application of funds for grant-supporting activities. Those records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.
(c) Effective control over and accountability for all funds, property and other assets. Grantees shall adequately safeguard all such assets and shall assure that they are used solely for authorized purposes.
(d) Accounting records supported by source documentation.
9. Retain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of at least three years after grant closing except that the records shall be retained beyond the three-year period if audit findings have not been resolved. Microfilm copies may be substituted in lieu of original records. The Grantor and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the Grantee governments which are pertinent to the specific grant program for the purpose of making audit, examination, excerpts and transcripts.
10. Provide information as requested by the Grantor to determine the need for and complete any necessary Environmental Impact Statements.
11. Provide an audit report prepared in sufficient detail to allow the Grantor to determine that funds have been used in compliance with the proposal, any applicable laws and regulations and this agreement.
12. Agree to account for and to return to Grantor interest earned on grant funds pending their disbursement for program purposes when the Grantee is a unit of local government. States and agencies of instrumentalities of states shall not be held accountable for interest earned on grant funds pending their disbursement.
13. Not encumber, transfer, or dispose of the property or any part thereof, furnished by the Grantor or acquired wholly or in part with Grantor funds without the written consent of the Grantor except as provided in item 5 above.
14. Provide Grantor with such periodic reports as it may require and permit periodic inspection of its operations by a designated representative of the Grantor.
15. Execute Form FHA 400-1, “Equal Opportunity Agreement,” Form FHA 400-4, “Nondiscrimination Agreement,” and any other agreements required by Grantor to implement the civil rights requirements. If any such form has been executed by Grantee as a result of a loan being made to Grantee by Grantor contemporaneously with the making of this grant, another form of the same type need not be executed in connection with this grant.
16. Include in all contracts for construction or repair a provision for compliance with the Copeland “Anti-Kick Back” Act (18 USC 874) as supplemented in Department of Labor regulations (29 CFR, part 3). The Grantee shall report all suspected or reported violations to the Grantor.
17. In Contracts in excess of $2,000 and in other contracts in excess of $2,500 which involve the employment of mechanics or laborers, to include a provision for compliance with sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 USC 327-330) as supplemented by Department of Labor regulations (29 CFR, part 5).
18. Include in all contracts in excess of $2,500 a provision for compliance with applicable regulations and standards of the Cost of Living Council in establishing wages and prices. Grantee shall report any violations of such regulation and standards to the Grantor and the local Internal Revenue Service field office.
19. Include in all contracts in excess of $100,000 a provision for compliance with all applicable standards, orders, or regulations issued pursuant to the Clear Air Act of 1970. Violations shall be reported to the Grantor
20. Upon any default under its representations or agreements set forth in this instrument, Grantee, at the option and the demand of Grantor, will, to the extent legally permissible, repay to Grantor forthwith the original principal amount of the grant stated hereinabove, with interest at the rate of five per centum per annum from the date of the default. The provisions of this Grant Agreement may be enforced by Grantor at its option and without regard to prior waivers by it of previous defaults of Grantee, by judicial proceedings to require specific performance of the terms of this Grant Agreement or by such other proceedings in law or equity, in either Federal or State courts, as may be deemed necessary by Grantor to assure compliance with the provisions of this Grant Agreement and the laws and regulations under which this grant is made.
21. That no member of Congress shall be admitted to any share or part of this grant or any benefit that may arise therefrom; but this provision shall not be construed to bar as a contractor under the grant a publicly held corporation whose ownership might include a member of Congress.
22. That all non-confidential information resulting from its activities shall be made available to the general public on an equal basis.
23. That the purpose and scope of work for which this grant is made shall not duplicate programs for which monies have been received are committed, or are applied for from other sources, public and private.
24. That Grantee shall relinquish any and all copyrights and/or privileges to the materials developed under this grant, such material being the sole property of the Federal Government. In the event anything developed under this grant is published in whole or in part, the material shall contain notice and be identified by language to the following effect: “The material is the result of tax-supported research and as such is not copyrightable. It may be freely reprinted with the customary crediting of the source.”
25. That the Grantee shall abide by the policies promulgated in OMB Circular A-95, Attachment O, which provides standards for use by Grantees in establishing procedures for the procurement of supplies, equipment, and other services with Federal grant funds.
26. To the following termination provisions:
(a) Termination for cause: The Grantor agency may terminate any grant in whole, or in part, at any time before the date of completion, whenever it is determined that the Grantee has failed to comply with the conditions of the grant. The Grantor agency shall promptly notify the Grantee in writing of the determination and the reasons for the termination, together with the effective date.
(b) Termination for convenience. The Grantor agency or Grantee may terminate grants in whole, or in part, when both parties agree that the continuation of the proj-ect would not produce beneficial results commensurate with the further expenditure of funds. The two parties shall agree upon the termination conditions, including the effective date and, in the case of partial terminations, the portion to be terminated. The Grantee shall not incur new obligations for the terminated portion after the effective date, and shall cancel as many outstanding obligations as possible. The Grantor agency shall allow full credit to the Grantee for the Federal share of the noncancelable obligations, properly incurred by the Grantee prior to termination.
1. Assist Grantee, within available appropriations, with such technical assistance as Grantor deems appropriate in planning the project and coordinating the plan with local official comprehensive plans and with any State or area plans for the area in which the project is located.
2. In its sole discretion, Grantor may at any time give any consent, deferment, subordination, release, satisfaction, or termination of any or all of Grantee's grant obligations, with or without valuable consideration, upon such terms and conditions as Grantor may determine to be (a) advisable to further the purposes of the grant or to protect Grantor's financial interest therein, and (b) consistent with both the statutory purposes of the grant and the limitations of the statutory authority under which it is made.
A list of CFR titles, subtitles, chapters, subchapters and parts and an alphabetical list of agencies publishing in the CFR are included in the CFR Index and Finding Aids volume to the Code of Federal Regulations which is published separately and revised annually.
Table of CFR Titles and Chapters
Alphabetical List of Agencies Appearing in the CFR
List of CFR Sections Affected
All changes in this volume of the Code of Federal Regulations which were made by documents published in the
For the period before January 1, 1986, see the “List of CFR Sections Affected, 1949-1963, 1964-1972, and 1973-1985,” published in seven separate volumes.