RURAL HOUSING SERVICE (RHS), DEPARTMENT OF AGRICULTURE

AUTHORIZATION:

Consolidated Farm and Rural Development Act, as amended, Section 306, Public Law 92-419, 7 U.S.C. 1926.

OBJECTIVES:

To construct, enlarge, extend, or otherwise improve community facilities providing essential services to rural residents.

TYPES OF ASSISTANCE:

Project Grants;  Direct Loans.

USES AND USE RESTRICTIONS:

Community facilities include but are not limited to those providing or supporting overall community development such as child care facilities, food recovery and distribution centers; assisted-living facilities; group homes, mental health clinics, and shelters; and education facilities. Projects comprise, community, social, cultural, transportation, industrial park sites, and fire and rescue services, access ways, and utility extensions. All facilities financed in whole or in part with RHS funds shall be for public use.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   City, county, and State agencies; political and quasi-political subdivisions of States and associations, including corporations, Indian tribes on Federal and State reservations and other federally recognized Indian tribes; and existing private corporations which: (1) are operated on a not-for-profit basis; (2) have or will have the legal authority necessary for constructing, operating, and maintaining the proposed facility or service and for obtaining, giving security for, and repaying the loan; and (3) are unable to finance the proposed project from its own resources or through commercial credit at reasonable rates and terms. Assistance is authorized for eligible applicants in rural areas of the States, Puerto Rico, the Virgin Islands, Guam, American Samoa, the commonwealth of the Northern Mariana Islands, the Marshall Islands, the Republic of Palaw, and the Federated States of Micronesia.

Beneficiary Eligibility:   Farmers, ranchers, rural residents, rural businesses, and other users of such public facilities in eligible applicant areas as set out above.

Credentials/Documentation:   Evidence of legal capacity and financial responsibility of the applicants and the economic feasibility of the project relative to the activity for which assistance is requested. This program is excluded from coverage under OMB Circular No. A-87.

APPLICATION AND AWARD PROCESS:

Preapplication Coordination:   The standard application forms as provided by the Federal agency and required by OMB Circular No. A-102 must be used for this program. An environmental assessment is 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 in applying for assistance if the State has selected the project for review.

Application Procedure:   Preapplication Form SF-424 is filed at the local Rural Development district office from which assistance may be obtained. This program is subject to the provisions of OMB Circular No. A-110.

Award Procedure:   After the preapplication has been reviewed by the Rural Development District Director, it is forwarded to the Rural Development State Office for review and processing instructions. Following review by the State Office, the applicant is notified about eligibility, availability of funds, and if an application should be filed. Upon completion of application processing requirements and approval by the State Office, funds are made available to the Rural Development district office for delivery.

Deadlines:   None.

Range of Approval/Disapproval Time:   From 30 to 90 days.

Appeals:   If an application is rejected, the reasons for rejection are fully stated. The applicant may request a review of the decision from the next higher management level of Rural Development.

Renewals:   Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:   Matching funds are not required but may be used in connection with the funds provided from the applicant or other sources. Funds are allocated to States based upon rural population and number of households below the poverty level. The statistical factor for eligibility is towns or incorporated areas under 20,000 population for direct and guaranteed loans and 20,000 population for grants. The source is "Latest Decennial Census." This program has no statutory formula.

Length and Time Phasing of Assistance:   A time limitation is not specified for the use of RHS loan or grant funds. Funds will be awarded when all RHS requirements are met and the project can be completed on a timely basis. Funds may be advanced on an as needed basis by RHS to cover expenses for a 30-day period.

POST ASSISTANCE REQUIREMENTS:

Reports:   Periodic reports are made to RHS. Each borrower will monitor and report to RHS on actual performance during the construction of each project financed, or to be financed, in whole or in part with RHS loan funds.

Audits:   Periodic audits should be made as part of the recipient's system of financial management and internal control to meet terms and conditions of loans and other agreements. In accordance with the provisions of 7 CFR Part 3052, "Audits of States, Local Governments, and Non-Profit Organizations," 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:   The borrower must maintain adequate records and accounts of the operation of the facility developed.

FINANCIAL INFORMATION:

Account Identification:   12-4155-0-3-452; 12-1951-0-1-452.

Obligations:   (Direct Loans) FY 99 $163,424,000; FY 00 est $185,368,000; and FY 01 est $250,000,000. (Guaranteed Loans) FY 99 $160,817,000; FY 00 est $210,000,000; and FY 01 est $210,000,000. (Grants) FY 99 $7,540,000; FY 00 est $7,488,000; and FY 01 est $9,000,000.

Range and Average of Financial Assistance:   (Direct Loans) $50,000 to $2,500,000 average $447,521. (Guaranteed Loans) $100,000 to $2,500,000; average $905,594. (Grants) $10,000 to $100,000; average $35,189.

PROGAM ACCOMPLISHMENTS:

In fiscal year 1999, 453 direct loans, 118 guaranteed loans, and 245 grants were made. It is estimated that 500 direct loans, 210 guaranteed loans, and 234 grants will be made in fiscal year 2000.

REGULATIONS, GUIDELINES, AND LITERATURE:

7 CFR 1942, subpart A, Community Facilities Loans; 7 CFR 1942, subpart C, Fire and Rescue Loans; 7 CFR 1980, subpart I, Community Facilities Guaranteed Loans; 7 CFR 3570, subpart B, Community Facilities Grants.

INFORMATION CONTACTS:

Regional or Local Office:   Consult your local telephone directory for Rural Development county or district office numbers. If no listing, contact the appropriate Rural Development State Office listed in Appendix IV of the Catalog or on the internet at http:///www.rurdev.gov/recd_map.html.

Headquarters Office:   Deputy Administrator, Community Programs, Rural Housing Service, Department of Agriculture, Washington, DC 20250- 3222. Telephone: (202) 720-1490. Use the same number for FTS.

Web Site Address:   http://www.rurdev.usda.gov.

EXAMPLES OF FUNDED PROJECTS:

Loans were made to: (1) establish rural health clinics in medically undeserved areas; (2) purchase fire fighting equipment for rural areas; (3) construct new municipal buildings; (4) build new schools to serve rural counties; and (5) renovate hospitals to meet current life/safety codes.

CRITERIA FOR SELECTING PROPOSALS: