RURAL HOUSING SERVICE (RHS), DEPARTMENT OF AGRICULTURE

AUTHORIZATION:

Housing Act of 1949, as amended, Sections 523 and 524, Public Law 89-117; Public Law 89-754, 42 U.S.C. 1490c and d.

OBJECTIVES:

To assist public or private nonprofit organizations interested in providing sites for housing; to acquire and develop land in rural areas to be subdivided as adequate building sites and sold on a cost development basis to families eligible for low and very low income loans, cooperatives, and broadly based nonprofit rural rental housing applicants.

TYPES OF ASSISTANCE:

Direct Loans.

USES AND USE RESTRICTIONS:

For the purchase and development of adequate sites, including necessary equipment which becomes a permanent part of the development; for water and sewer facilities if not avail- able; payment of necessary engineering, legal fees, and closing costs; for needed landscaping and other necessary facilities related to buildings such as walks, parking areas, and driveways. Restrictions: loan limitation of $200,000 without national office approval; loan funds may not be used for refinancing of debts, payment of any fee, or com- mission to any broker, negotiator, or other person for the referral of a prospective applicant or solicitation of a loan; no loan funds will be used to pay operating costs or expenses of administration other than actual cash cost of incidental administrative expenses if funds to pay those expenses are not otherwise available. Repayment of loan is expected within two years.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   A private or public nonprofit organization that will provide the developed sites to qualified borrowers on a cost of development basis in open country and towns of 10,000 population or less and places up to 25,000 population under certain conditions. Applicants from towns of 10,000 to 25,000 population should check with local RD office to determine if agency can serve them. Assistance is available to eligible applicants in States, Puerto Rico, the Virgin Islands, Guam, and the Northern Marianas.

Beneficiary Eligibility:   Sites developed with Section 524 loans must be for housing low and very low income families and may be sold to families, nonprofit organizations, public agencies and cooperatives eligible for assistance under any Section of Title V of the Housing Act of 1949, or under any other law which provides financial assistance. Sites developed with Section 523 loans must be for housing to be built by the self-help method.

Credentials/Documentation:   Applicants must furnish evidence of the following: (1) Market analysis showing need for such services; (2) legal capacity to borrow funds and develop land for sale; (3) a sound budget; and (4) general project description. This program is excluded from coverage under OMB Circular No. A-87.

APPLICATION AND AWARD PROCESS:

Preapplication Coordination:   Environmental impact assessment and environmental impact statements are required for this program. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. This program is excluded from coverage under OMB Circular No. A-102.

Application Procedure:   The application will be in the form of a letter to the Rural Development Manager of the Rural Development (RD). Supporting information and costs should be included as needed. This program is excluded from coverage under Departmental Regulations 3015 and 3016, and OMB Circular No. A-110.

Award Procedure:   After application has been reviewed by the District office, it is given final approval by the State Director. If the request exceeds $200,000, the National office must authorize approval. Following approval, the funds are obligated in the finance office.

Deadlines:   None.

Range of Approval/Disapproval Time:   From 180 to 365 days.

Appeals:   A uniform procedure whereby an organization which is directly or adversely affected by an administrative decision by RHS is found in 7 CFR 3550.4. Applicants may request reconsideration on the basis of pertinent facts concerning his application.

Renewals:   Applicants may reapply at any time provided there is evidence of need for the proposed building sites in the locality.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:   Not applicable.

Length and Time Phasing of Assistance:   Not applicable.

POST ASSISTANCE REQUIREMENTS:

Reports:   RD District office monitors the loan and reports to the State Director should the borrower default in its loan obligations.

Audits:   Not applicable.

Records:   Adequate operating records must be maintained by borrower.

FINANCIAL INFORMATION:

Account Identification:   12-4141-0-3-371; 12-2081-0-1-371.

Obligations:   (Loans) FY 99 $538,000; FY 00 est $5,009,000; and FY 01 est $5,009,000.

Range and Average of Financial Assistance:   (523) $9,380. (524) $12,000.

PROGAM ACCOMPLISHMENTS:

In fiscal year 1999, two loans were made in the 523 program, and three loans were made in the 524 program.

REGULATIONS, GUIDELINES, AND LITERATURE:

RD Instruction 444.8, "Rural Housing Site Loan Policies, Procedures, and Authorizations"; 7 CFR 1822.261-1822.278; PA-1131.

INFORMATION CONTACTS: