For Administrative Use Only Missouri RD AN No. 1385 (3550)

December 29, 2001

TO: All Rural Development Managers and

Community Development Managers

/s/

FROM: GREGORY C. BRANUM

State Director

> Rural Development

SUBJECT: Rural Housing Funds -- FY 2002

[PURPOSE/INTENDED OUTCOME]{.underline}:

The purpose of this AN is to provide Missouri Rural Development Areas
with their FY 2002 Rural Housing Allocations and the policy for the use
of these funds as outlined in the December 19, 2001 unnumbered letter
releasing first and second quarter funds.

[COMPARISON WITH PREVIOUS AN]{.underline}: This AN replaces Missouri AN
No. 1369 (3550) dated December 26, 2000.

[IMPLEMENTATION RESPONSIBILITIES]{.underline}:

Our FY 2002 allocations for Rural Housing programs have been received in
the December 19, 2001 unnumbered letter. This represents 70 percent of
FY 2002 allocation with the 40/60 split for very low- and low-income
funds. We are assuming an additional 20% (3^rd^ Quarter money) will be
available around April 1, 2002 and then the final 10% (4^th^ Quarter
money) will be available around July 1, 2002. Each quarter we will
advise you when funds have been received and are ready for obligation.
Here are the amounts of our initial annual allocation for FY 2002:

> 502 Very Low \$6,863,000

502 Low \$10,294,000

504 Loan \$592,000

504 Grant \$632,000

In addition, we will receive some additional funds from National Office
for our Self-Help groups and Rural Home Loan Partnerships.

EXPIRATION DATE: FILING INSTRUCTIONS: Preceding

September 30, 2002 RD Inst. HB-1 3550, Appendix

Details on the GRH Programs funds have not been released yet; however,
Missouri has received almost \$21,000,000 with around \$3,000,000 still
available for use. National Office has assured us there will be plenty
of guaranteed money to keep us in good standing with the approved
lenders during this fiscal year.

State pooling of funds is planned for COB on July 12, 2002. It may
become necessary to pool targeted funds before that date.

# Allocation of funds to each area

Attachment A provides the quarterly allocations to each area. The 502
Very Low and 502 Low Targeted funds must be used based on the same
availability percentage. See Attachment B to determine net increases for
each area (after deducting advances) under Section 502 Direct Very Low
and Low, Targeted, and Section 504 Loan and Grant funds for first and
second quarter. National Office has assured us there will be more 504
Loan money available if we use the present distribution.

# State Office Reserves

E-mail or fax to the State Office Attachment C (to be included on the
Snap Server) for requesting the following from State Office Reserves:

**Participation Loans** - Require at least 30% participation from the
other lender for 502 Low and 25% participation from the other lender for
502 Very Low.

**Subsequent Loans -** State Office will provide up to \$10,000 per
subsequent loan request with the balance coming from area funds. Try to
subordinate for transfers and subsequent repair loans before requesting
these funds.

**502 and 504 Hardships -** Extreme hardship cases only. Area Office
funds MUST to used before submitting hardship requests to the State
Office. National Office hardship funds are not available until further
notice.

## Self-Help Loans - We anticipate receiving 75% match from National Office with the State Office Reserve providing 25%.

# REO

The National Office is making funds available on a first come, first
served basis for program loans for REO. E-mail or fax requests to the
State Office on Attachment C. The requested amount, program type code,
and property address must be properly reflected in FASTeller before CSC
will fund our REO requests. Non-program credit sale funds have been
appropriated for FY 2002; however, they are currently NOT available.