RURAL HOUSING SERVICE (RHS), DEPARTMENT OF AGRICULTURE

AUTHORIZATION:

Housing Act of 1949, as amended, Section 521, Public Laws 90-448 and 93-128, 42 U.S.C. 1490a.

OBJECTIVES:

To reduce the tenant contribution paid by low-income families occupying eligible Rural Rental Housing (RRH), Rural Cooperative Housing (RCH), and Farm Labor Housing (LH) projects financed by the Rural Housing Service (RHS) through its Sections 515, 514 and 516 loans and grants.

TYPES OF ASSISTANCE:

Direct Payments for Specified Use.

USES AND USE RESTRICTIONS:

Rental assistance may be used to reduce the rents paid by low-income senior citizens or families and domestic farm laborers and families whose rents exceed 30 percent of an adjusted annual income which does not exceed the limit established for the State as indicated in 7 CFR Exhibit C to Part 1944, Subpart A (RD Instruction 1944-A, Exhibit C). Tenants who may be eligible must occupy units in eligible RRH, RCH and LH projects financed by RHS.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   To be eligible to participate in the rental assistance program, borrowers must have an eligible project. All projects must convert to Interest Credit Plan II before they are eligible, except direct RRH and insured RRH loans approved prior to August 1, 1968, and LH loans and grants. For a borrower to have an eligible project, the loan must be an RRH insured or direct loan made to a broad-based nonprofit organization, or State or local agency or; an RRH insured loan made to an individual or organization who has or will agree to operate the housing on a limited profit basis as defined in 7 CFR 1944.215(l) or; an RCH insured or direct loan or; an LH loan, or an LH loan and grant combination made to a broad-based nonprofit organization or nonprofit organization of farm workers or a State or local public agency. New construction and/or rehabilitation projects, utilizing the Section 8 program from HUD will not be considered eligible projects, although it may be used for eligible families in existing projects utilizing Section 8 for part of the units.

Beneficiary Eligibility:   Any very low and low-income family, handicapped or senior citizen that is unable to pay the approved rental rate for an eligible RHS rental assistance unit within 30 percent of their adjusted monthly income and whose adjusted income does not exceed the limit established for the State as indicated in Exhibit C to Part 1944, Subpart A (7 CFR).

Credentials/Documentation:   The applicant must be the owner or plan to become an owner of an eligible RHS RRH,RCH, or LH project operating on a limited profit or nonprofit basis. This program is excluded from coverage under 7 CFR 3015 or 3016.

APPLICATION AND AWARD PROCESS:

Preapplication Coordination:   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 7 CFR 3015 or 3016.

Application Procedure:   Eligible borrowers will initiate the processing by submitting Form RD 1944-25, "Request for Rental Assistance". Applications shall then be reviewed under the procedure set forth in Exhibit E of RD Instruction 1930-C. This program is excluded from coverage under 7 CFR 3015 or 3016.

Award Procedure:   After the application has been reviewed by the Rural Development Manager, it is given final approval by the State Director. The State Director will determine the number of rental assistance units to be given from the total of units that were allocated to the State. Projects may be eligible for rental assistance for up to 100 percent of the number of units in the project.

Deadlines:   None.

Range of Approval/Disapproval Time:   From 30 to 90 days from the time Form RD 1944-25, "Request for Rental Assistance" is filed.

Appeals:   Applicant may request reconsideration on the basis of pertinent facts concerning the application under the provisions of RD Instruction 1900-B.

Renewals:   Rental assistance contracts for new as well as existing projects may be renewed for an additional 5 years at the end of the original contract subject to the availability of funds.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:   The statistical factors used for fund allocation are: 1. State percentage of RHS rural population and the source is "1990 Census" updated by ESCS; 2. State percentage of RHS rural housing units lacking plumbing and/or overcrowded and the source is "1990 Census"; and 3. State percentage of persons in poverty living in RHS rural areas and the source is "1990 Census."

Length and Time Phasing of Assistance:   Rental assistance contracts shall be for 5 years.

POST ASSISTANCE REQUIREMENTS:

Reports:   The borrower must initially submit Form RD 1944-8, "Tenant Certification," for each tenant. Subsequent tenant certifications must be obtained annually and submitted to the Rural Development Manager. Quarterly progress reports are to be made to the Rural Development Rural Development Manager during the first year of successful operation and each quarter thereafter until discontinued by the District Director. An annual report will also be necessary.

Audits:   Borrowers not covered by OMB Circular No. A-133, are required to provide audits annually with 25 or more units per project. Audits are conducted by a certified public accountant selected by the borrower. This program is also subject to audit by the USDA Office of Inspector General. In accordance with the provisions of 7 CFR Part 3052, which implement OMB Circular No. A-133 (Revised, June 24, 1997), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that receive financial assistance of $300,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $300,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 7 CFR 3052.

Records:   Adequate operating records must be maintained by borrower.

FINANCIAL INFORMATION:

Account Identification:   12-0137-0-1-604; 12-2002-0-1-604.

Obligations:   FY 99 $583,397,000; FY 00 est $640,000,000; and FY 01 est $680,000,000.

Range and Average of Financial Assistance:   No data on this subject are available at this time.

PROGAM ACCOMPLISHMENTS:

In fiscal year 1999, 38,311 families were assisted; in fiscal years 2000 and in 2001, the estimates are 41,800 and 42,800, respectively.

REGULATIONS, GUIDELINES, AND LITERATURE:

RD Instruction 1944-E "Rural Rental Housing Loan Policies, Procedures, and Authorizations"; 7 CFR 1822. Rental Assistance Program Fact Sheet, PA 1210 (dated September 1988). RD Instruction 930-C; "Management and Supervision of Multiple Family Housing Borrowers and Grant Recipients."

INFORMATION CONTACTS: