Farm Labor Housing Loans and Grants (10.405)
Program
10.405 Farm Labor Housing Loans and Grants
Federal Agency
RURAL HOUSING SERVICE (RHS), DEPARTMENT OF AGRICULTURE
Authorization
Housing Act of 1949, as amended, Sections 514 and 516, Public Laws 89-117 and 89-754, 42 U.S.C 1484 and 1486.
Program Number
10.405
Last Known Status
Active
Objectives
To provide decent, safe, and sanitary low-rent housing and related facilities for domestic farm laborers.
Types of Assistance
Project Grants; Guaranteed/Insured Loans.
Uses and Use Restrictions
The loans and grants may be used for construction, repair, or purchase of year-round or seasonal housing; acquiring the necessary land and making improvements on land for housing; and developing related support facilities including central cooking and dining facilities, small infirmaries, laundry facilities, day care centers, other essential equipment and facilities or recreation areas. Funds may also be used to pay certain fees and interest incidental to the project. Restrictions on the use of funds are: The housing must be of a practical type and must be constructed in an economical manner and not of elaborate material or extravagant design. Housing financed with labor housing loan or grant funds must be occupied by domestic farm laborers and their families.
Eligibility Requirements
Applicant Eligibility
Loans are available to farmers, family farm partnership, family farm corporation, or an association of farmers. Loans and grants are available to States, Puerto Rico, the U.S. Virgin Islands, political subdivisions of States, broad-based public or private nonprofit organizations, federally recognized Indian Tribes and non- profit corporations of farm workers. Grants are available to eligible applicants only when there is a pressing need and when it is doubtful that such facilities could be provided unless grant assistance is available.
Beneficiary Eligibility
A domestic farm laborer is any person who receives a substantial portion of his/her income as a laborer on a farm in the United States and is either (1) a citizen of the United States, or (2) has been legally admitted for permanent residency.
Credentials/Documentation
The applicant must furnish factual evidence of the following: (a) The number of domestic farm laborers currently being used in the area; (b) the kind of labor performed; (c) the future need for domestic farm labor in the area; (d) the kind, condition, and adequacy of housing presently used for such labor; (e) ownership of presently occupied housing; (f) ability of workers to pay necessary rent; and (g) with the exception of State and local public agencies, be unable to provide housing from its own resources or credit on terms and conditions that would enable the applicant to provide labor housing. Costs will be determined in accordance with 7 CFR 3015 or 3016 for State and local governments.
Application and Award Process
Preapplication Coordination
Not applicable. This program is excluded from coverage under E.O. 12372.
Application Procedure
For FY 01 the Section 515 Program will be awarded through a Notice of Funding Available (NOFA) announced in the Federal Register December 26, 2000. The NOFA application period is 4 months from the date of the announcement. The NOFA deadline is April 25, 2001. Funds available for off-farm new construction and acquisition and rehabilitation are as follows: Section 514 Loan $23,533,000; Section 516 Grant $10,000,000; Rental Assistance (RA) and Operating Assistance (only for migrant workers) will be available for all new construction funds. Other Distribution of Funding: Loans: On-Farm-$2,000,000; Administrator's Reserve-$3,000,532; Grants: Technical Assistant Grants-$1,500,000; Administrator's Reserve-$3,500,000.
Award Procedure
Applications will be scored on the following factors: (1) 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, computed as a percentage of the RHS total development cost. A minimum of ten percent leveraged assistance is less than ten percent and the proposal includes donated land, two points will be awarded for the donated land, (0 to 20 points); (2) Seasonal, temporary, migrant housing. (5 points for up to and including 50 percent of the units; 10 points for 51 percent or more); For FY 2001, National Office initiative will be based on the presence of and extent to which a tenant services plan exists that clearly outlines services that will be provided to the residents of the proposed project. Two points will be awarded for each resident service included in the tenant services plan up to a maximum of 10 points,(0 to 10 points). Application selection process: (1) States will review and score the applications and submit a list of applications in rank and point score order to the National Office; (2) the National Office will rank applications on a nation-wide basis and will advise States of the results.
Deadlines
April 25, 2001.
Range of Approval/Disapproval Time
Appeals
A person or organization who is directly and adversely affected by an administrative decision by Rural Development should follow the procedures found in 7 CFR Part 1900, Subpart B of "Rural Development Administrative Appeal Procedures."
Renewals
Not applicable; although, applicants may apply under subsequent funding cycles.
Assistance Considerations
Formula and Matching Requirements
In case of a grant, 10 percent or more of the total development cost must be obtained from other sources. This may include funds made available through the power to levy taxes, assessments or charges, or from other credit sources including an Rural Development Labor Housing loan under Section 514.
Length and Time Phasing of Assistance
Loans are usually made for 33 years at 1 percent interest. Grants may cover up to 90 percent of development cost. The balance may be (and usually is) a Section 514 loan. RHS rental assistance (RA) subsidy can be used to limit tenant payments to 30 percent of their income. RA can be used as an operating subsidy for projects or units with Section 516 funding that serve migrants. It is RHS policy to attempt to use less than a 90 percent grant when RA is utilized.
Post Assistance Requirements
Reports
Monthly progress reports are to be made to the Rural Development District/State Offices during the first year of operation or until requirement is waived by Rural Development.
Audits
For borrowers not covered under OMB Circular No. A-133, annual audits are required from borrowers with 25 or more units in one or more projects. 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 tenant, and accounting records must be maintained by borrower.
Program Accomplishments
During fiscal year 2001, 818 new units were built and 696 units were rehabilitated or developed as multiple family type housing and on-farm individual type housing units.
Financial Information
Account Identification
(Grants) 12-2004-0-1-604; (Loans) 12-4141-0-3-371; 12-2081-0-4-371.
Obligations
(Loans) FY 02 $25,001,000; FY 03 est $28,522,532; and FY 04 est $28,522,532; (Grants) FY 02 $16,491,000; FY 03 est $15,000,000; and FY 04 est $15,000,000. Notice of Funding Available (NOFA) Published in the Federal Register: December 26, 2000.
Range and Average of Financial Assistance
Initial Grants $135,000 to $2,300,000. Average: $1,104,120. Initial Loans to individuals $20,000 to $200,000. Average: $34,500. Initial Loans to organizations $165,000 to $670,000. Average: $292,753.
Regulations, Guidelines and Literature
7 CFR 1940.579 (a) and (b); Subpart D of 1944, Chapter XVIII; RD Instruction 1944-D, "Building a Better Future for Farmworkers," (PA1669) revised August, 2000.
Related Programs
10.410, Very Low to Moderate Income Housing Loans; 10.415, Rural Rental Housing Loans; 10.427, Rural Rental Assistance Payments.
Information Contacts
Regional or Local Office
Consult your local telephone directory for Rural Development Area Office number. If no listing, contact appropriate Rural Development State Office listed in Appendix IV of the Catalog or on the internet at http://www.rurdev.usda.gov/recd_map.html.
Headquarters Office
Multi-Family Housing Processing Division, Rural Housing Service, Department of Agriculture, Washington, DC 20250. Telephone: (202) 720-1604. Use the same number for FTS.
Web Site Address
Examples of Funded Projects
Examples of funded projects are the projects sponsored by the Homestead Housing Authority in Homestead, Florida, or The Boulder County Housing Authority, Boulder, Colorado.
Criteria for Selecting Proposals
A clearly defined need must exist to provide housing for domestic farm workers.
