RD Instruction 1940-L

Table of Contents

Page 1

PART 1940 - GENERAL

Subpart L - Methodology and Formulas for Allocation of Loan and Grant\
Program Funds

## [Table of Contents]{.underline}

[Sec]{.underline}. [Page]{.underline}

1940.551 Purpose and general policy. 1

1940.552 Definitions. 1

\(a\) Amount available for allocations. 1

\(b\) Basic formula criteria, data source and weight. 1

\(c\) Basic formula allocation. 2

\(d\) Transition formula. 2

\(e\) Base allocation. 2

\(f\) Administrative allocations. 2

\(g\) Reserve. 3

\(h\) Pooling of funds. 3

\(i\) Availability of the allocation. 3

\(j\) Suballocation by the State Director. 3

\(k\) Other documentation. 3

1940.553 - 1940.559 \[Reserved\] 3

1940.560 Guarantee Rural Rental Housing Program. 13

1940.561 - 1940.562 \[Reserved\] 14

1940.563 Section 502 non-subsidized guaranteed Rural

Housing (RH) loans. 14

1940.564 Section 502 subsidized guaranteed Rural Housing (RH)

loans. 14B

1940.565 Section 502 subsidized Rural Housing loans. 15

1940.566 Section 504 Housing Repair loans. 17

1940.567 Section 504 Housing Repair grants. 19

1940.568 Single Family Housing programs appropriations

not allocated by State. 21

(01-09-08) PN 417

RD Instruction 1940-L

Table of Contents

Page 2

[Sec]{.underline}. [Page]{.underline}

1940.569 - 1940.574 \[Reserved\] 21

1940.575 Section 515 Rural Rental Housing (RRH) loans. 23

1940.576 Rental Assistance (RA) for new construction. 24

1940.577 Rental Assistance (RA) for existing projects. 25

1940.578 Housing Preservation Grant (HPG) program. 26

1940.579 Multiple Family Housing appropriations not

allocated by State. 27

\(a\) Section 514 Farm Labor Housing Loans. 27

\(b\) Section 516 Farm Labor Housing Grants. 27

1940.580 - 1940.584 \[Reserved\] 27

1940.585 Community Facility loans. 29

1940.586 - 1940.587 \[Reserved\] 30

1940.588 Business and Industry guaranteed and direct loans. 35

1940.589 Rural Business Enterprise Grants. 37

1940.590 Community and Business Programs appropriations

not allocated by State. 39

1940.591 Community Program Guaranteed loans. 40

1940.592 Community Facilities Grants. 41

1940.593 Rural Business Opportunity Grants. 43

1940.594 - 1940.600 \[Reserved\] 44

Exhibit A Allocation of Program Funds for Current Fiscal Year.

(Available in any Rural Development State Office)

Exhibit B Section 515 Nonprofit Set Aside (NPSA).

Exhibit C Housing in Underserved Areas.

Exhibit D Rural Rental Housing Diversity Demonstration Program

(RRHDDP).

oOo

RD Instruction 1940-L

PART 1940 - GENERAL

Subpart L - Methodology and Formulas for Allocation

of Loan and Grant Program Funds

§1940.551 [Purpose and general policy]{.underline}.

\(a\) The purpose of this subpart is to set forth the methodology and
formulas by which the Under Secretary of Rural Development allocates
program funds to the States. (The term \"State\" means any of the States
of the United States, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or the Western Pacific Areas.) This
subpart is inapplicable to Farm Service Agency, Farm Loan Programs.
(Revised 01-09-08, PN 417.)

\(b\) The formulas in this subpart are used to allocate program loan and
grant funds to State Offices so that the overall mission of the Agency
can be carried out. Considerations used when developing the formulas
include enabling legislation, congressional direction, and
administration policies. Allocation formulas ensure that program
resources are available on an equal basis to all eligible individuals
and organizations.

\(c\) The actual amounts of funds, as computed by the methodology and
formulas contained herein, allocated to a State for a funding period,
are distributed to each State Office by an exhibit to this subpart. The
exhibit is available for review in any Rural Development State Office.
The exhibit also contains clarifications of allocation policies and
provides further guidance to the State Directors on any suballocation
within the State. Rural Development will publish a Notice of
Availability of Rural Housing funds in the Federal Register each year.
(Revised 01-27-92, SPECIAL PN.)

§1940.552 [Definitions]{.underline}.

\(a\) [Amount available for allocations]{.underline}. Funds appropriated
or otherwise made available to the Agency for use in authorized
programs. On occasion, the allocation of funds to States may not be
practical for a particular program due to funding or administrative
constraints. In these cases, funds will be controlled by the National
Office. (Revised 7-12-88, PN 89.)

\(b\) [Basic formula criteria, data source and weight]{.underline}.
Basic formulas are used to calculate a basic State factor as a part of
the methodology for allocating funds to the States. The formulas take a
number of criteria that reflect the funding needs for a particular
program and through a normalization and weighting process for each of
the criteria calculate the basic State factor (SF). The data sources
used for each criteria are believed to be the most current and reliable
information that adequately quantifies the criterion. The weight,
expressed as a percentage, gives a relative value to the importance of
each of the criteria.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DISTRIBUTION: WS Loan and Grant Making

General

## 1

## (Revision 4)

## (7-12-85) SPECIAL PN 

RD Instruction 1940-L

§1940.552 (Con.)

\(c\) [Basic formula allocation]{.underline}. The result of multiplying
the amount available for allocation less the total of any amounts held
in reserve or distributed by base or administrative allocation times the
basic State factor for each State. The basic formula allocation (BFA)
for an individual State is equal to:

BFA = (Amount available for allocation - NO reserve

\- total base and administrative allocations) x SF.

\(d\) [Transition formula]{.underline}. A formula based on a
proportional amount of previous year allocation used to maintain program
continuity by preventing large fluctuations in individual State
allocations. The transition formula limits allocation shifts to any
particular State in the event of changes from year to year of the basic
formula, the basic criteria, or the weights given the criteria. The
transition formula first checks whether the current year\'s basic
formula allocation is within the transition range (+ or - percentage
points of the proportional amount of the previous year\'s BFA).

Transition Range = l.0 + [maximum 20%]{.underline}

100

X [(Amount available for allocation this year]{.underline} X State
previous

(Amount available for allocation previous year) year BFA)

If the current year\'s State BFA is not within this transition range,
the State formula allocation is changed to the amount of the transition
range limit closest to the BFA amount. After having performed this
transition adjustment for each State, the sum of the funds allocated to
all States will differ from the amount of funds available for BFA. This
difference, whether a positive or negative amount, is distributed to all
States receiving a formula allocation by multiplying the difference by
the SF. The end result is the transition formula allocation. The
transition range will not exceed 40% (+ 20%), but when a smaller range
is used it will be stated in the individual program section.

\(e\) [Base allocation]{.underline}. An amount that may be allocated to
each State dependent upon the particular program to provide the
opportunity for funding at least one typical loan or grant in each Rural
Development State, District, or County Office. The amount of the base
allocation may be determined by criteria other than that used in the
basic formula allocation such as Agency historic data.

\(f\) [Administrative allocations]{.underline}. Allocations made by the
Administrator in cases where basic formula criteria information is not
available. This form of allocation may be used when the Administrator
determines the program objectives cannot be adequately met with a
formula allocation.

## 2

## (Revision 4) 

§1940.552 (Cont.) RD Instruction 1940-L

\(g\) [Reserve]{.underline}. An amount retained under the National
Office control for each loan and grant program to provide flexibility in
meeting situations of unexpected or justifiable need occurring during
the fiscal year. The Administrator may make distributions from this
reserve to any State when it is determined necessary to meet a program
need or Agency objective. The Administrator may retain additional
amounts to fund authorized demonstration programs. When such
demonstration programs exist, the information is outlined in Exhibit A
of this subpart (available in any Rural Development State Office).
(Revised 7-12-88, PN 89)

\(h\) [Pooling of funds]{.underline}. A technique used to ensure that
available funds are used in an effective, timely and efficient manner.
At the time of pooling those funds within a State\'s allocation for the
fiscal year of portion of the fiscal year, depending on the type of
pooling, that have not been obligated by the State are placed in the
National Office reserve. The Administrator will establish the pooling
dates for each affected program.

\(1\) Mid-year: This pooling addresses the need to partially
redistribute funds based on use/demand. Mid-year pooling occurs near the
midpoint of the fiscal year.

\(2\) Year-end: This pooling is used to ensure maximum use of program
funds on a national basis. Year-end pooling usually occurs near the
first of August.

\(3\) Emergency: the Administrator may pool funds at any time that it is
determined the conditions upon the initial allocation was based have
changed to such a degree that it is necessary to pool funds in order to
efficiently carry out the Agency mission.

\(i\) [Availability of the allocation]{.underline}. Program funds are
made available to the Agency on a quarterly basis. In the high demand
programs, it is necessary that specific instructions be given to the
State Offices regarding the amount which is available for obligation
during each quarter.

\(j\) [Suballocation by the State Director]{.underline}. Dependent upon
the individual program for which funds are being allocated, the State
Director may be directed or given the option of suballocating the State
allocation to District or County Offices. When suballocating the State
Director may retain a portion of the funds in a State Office reserve to
provide flexibility in situations of unexpected or justified need. When
performing a suballocation the State Director will use the same formula,
criteria and weights as used by the National Office.

\(k\) [Other documentation]{.underline}. Additional instructions given
to field offices regarding allocations.

§§1940.553 - 1940.559 \[Reserved\]

## (Continued on page 13)

## 3

## (Revision 2)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.560 [Guarantee Rural Rental Housing Program.]{.underline}

(Added 12-18-98, SPECIAL PN)

When funding levels are under \$100,000,000, all funds will all be held
in a National Office reserve and made available administratively in
accordance with the Notice of Funding Availability (NOFA) and program
regulations. When program levels are sufficient for a nationwide
program, funds are allocated based upon the following criteria and
weights.

\(a\) [Amount available for allocations.]{.underline} See § 1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight.]{.underline} See\
§ 1940.552(b) of this subpart. Each factor will receive a weight
respectively of 40%, 40% and 20%. The criteria used in the basic formula
are:

\(1\) State's percentage of National rural population,

\(2\) State's percentage of the National number of rural households
between 50 and 115 percent of the area median income, and

\(3\) State's percentage of National average cost per unit.

Data source for the first two of these criterion are based on the latest
census data available. The third criterion is based on the cost per unit
data using the applicable maximum per unit dollar amount limitations
under section 207(c) of the National Housing Act, which can be obtained
from the Department of Housing and Urban Development. The percentage
representing each criterion is multiplied by the weight assigned and
totaled to arrive at a State factor.

13

(Revision 4)

(07-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.560(b)(3) (Con.)

State Factor = (criterion No. 1 x weight of 40%)+

(criterion No. 1 x weight of 40%)+

(criterion No. 1 x weight of 20%)

\(c\) [Basic formula allocation]{.underline}. See § 1940.552(c).

\(d\) [Transition formula.]{.underline} See § 1940.552(d).

\(e\) [Base allocation]{.underline}. See § 1940.552(e). Jurisdictions
receiving administrative allocations do not receive base allocations.

\(f\) [Administrative allocations]{.underline}. See § 1940.552(f).
Jurisdictions receiving formula allocations do not receive
administrative allocations.

\(g\) [Reserve]{.underline}. See § 1940.552(g).

\(h\) [Pooling of funds]{.underline}. See § 1940.552(h).

\(i\) [Availability of the allocation]{.underline}. See § 1940.552(i).

\(j\) [Suballocation by the State Director]{.underline}. See §
1940.552(j).

\(k\) [Other documentation]{.underline}. Not applicable.

§§ 1940.561 - 1940.562 \[Reserved\]

§ 1940.563 [Section 502 non-subsidized guaranteed Rural Housing (RH)
loans]{.underline}. (Added 03-13-91, PN 159.)

\(a\) [Amount available for allocations]{.underline}. See § 1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See\
§ 1940.552(b) of this subpart. The criteria used in the basic formula
are:

\(1\) State\'s percentage of the National number of rural occupied
substandard units,

\(2\) State\'s percentage of the National rural population in places of
less than 2,500 population,

\(3\) State\'s percentage of the national number of rural households
between 80 and 100 percent of the area median income, and

## 14

## (Revision 2) 

RD Instruction 1940-L

§ 1940.563(b) (Con.)

\(4\) State\'s percentage of the national number of rural renter
households paying more than 35 percent of income for rent. Data source
for each of these criteria is based on the latest census data available.
Each criterion is assigned a specific weight according to its relevance
in determining need. The percentage representing each criterion is
multiplied by the weight factor and summed to arrive at a basic State
factor (SF) as follows:

SF = (criterion 1 x weight of 30 %) +

(criterion 2 x weight of 10 %) +

(criterion 3 x weight of 30 %) +

(criterion 4 x weight of 30 %)

\(c\) [Basic formula allocation]{.underline}. See § 1940.552(c) of this
subpart.

\(d\) [Transitional formula]{.underline}. See § 1940.552(d) of this
subpart. The percentage range used for Section 502 guaranteed RH loans
is plus or minus 15.

\(e\) [Base allocation]{.underline}. See § 1940.552(e) of this subpart.
Jurisdictions receiving administrative allocations do not receive base
allocations.

\(f\) [Administrative allocations]{.underline}. See § 1940.552(f) of
this subpart. Jurisdictions receiving formula allocations do not receive
administrative allocations.

\(g\) [Reserve]{.underline}. See § 1940.552(g) of this subpart.

\(h\) [Pooling of funds]{.underline}. See § 1940.552(h) of this subpart.

\(1\) Mid-year: If used in a particular fiscal year, available funds
unobligated as of the pooling date are pooled and redistributed based on
the formula used to allocate funds initially.

\(2\) Year-end: Pooled funds are placed in a National Office reserve and
are available as determined administratively.

\(i\) [Availability of the allocation]{.underline}. See § 1940.552(i) of
this subpart.

\(j\) [Suballocation by the State Director]{.underline}. See §
1940.552(j) of this subpart. Annually, the Administrator will advise
State Director\'s whether or not suballocation within the State Office
jurisdiction will be required for the guaranteed housing program.

\(k\) [Other documentation]{.underline}. Not applicable.

14A

(Revision 1)

(07-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.564 [Section 502 subsidized guaranteed Rural Housing (RH)
loans]{.underline}.\
(Added 03-13-91, PN 159.)

\(a\) [Amount available for allocations]{.underline}. See § 1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See\
§ 1940.552(b) of this subpart. The criteria used in the basic formula
are:

\(1\) State\'s percentage of the National number of rural occupied
substandard units,

\(2\) State\'s percentage of the National rural population in places of
less than 2,500 population,

\(3\) State\'s percentage of the national number of rural households
below 80 percent of the area median income, and

\(4\) State\'s percentage of the national number of rural renter
households paying more than 35 percent of income for rent. Data source
for each of these criteria is based on the latest census data available.
Each criterion is assigned a specific weight according to its relevance
in determining need. The percentage representing each criterion is
multiplied by the weight factor and summed to arrive at a basic State
factor (SF) as follows:

SF = (criterion 1 x weight of 30 %) +

(criterion 2 x weight of 10 %) +

(criterion 3 x weight of 30 %) +

(criterion 4 x weight of 30 %)

\(c\) [Basic formula allocation]{.underline}. See § 1940.552(c) of this
subpart.

\(d\) [Transitional formula]{.underline}. See § 1940.552(d) of this
subpart. The percentage range used for Section 502 guaranteed RH loans
is plus or minus 15.

\(e\) [Base allocation]{.underline}. See § 1940.552(e) of this subpart.
Jurisdictions receiving administrative allocations do not receive base
allocations.

\(f\) [Administrative allocations]{.underline}. See § 1940.552(f) of
this subpart. Jurisdictions receiving formula allocations do not receive
administrative allocations.

\(g\) [Reserve]{.underline}. See § 1940.552(g) of this subpart.

14B

(Revision 1)

RD Instruction 1940-L

§ 1940.564 (Con.)

\(h\) [Pooling of funds]{.underline}. See § 1940.552(h) of this subpart.

\(1\) Mid-year: If used in a particular fiscal year, available funds
unobligated as of the pooling date are pooled and redistributed based on
the formula used to allocate funds initially.

\(2\) Year-end: Pooled funds are placed in a National Office reserve and
are available as determined administratively.

\(i\) [Availability of the allocation]{.underline}. See § 1940.552(i) of
this subpart.

\(j\) [Suballocation by the State Director]{.underline}. See §
1940.552(j) of this subpart. Annually, the Administrator will advise
State Director\'s whether or not suballocation within the State Office
jurisdiction will be required for the guaranteed housing program.

\(k\) [Other documentation]{.underline}. Not applicable.

## 14C

## (Revision 1)

(07-12-85) SPECIAL PN

RD Instruction 1940-L

§1940.565 [Section 502 subsidized Rural Housing loans]{.underline}.

\(a\) [Amount available for allocations]{.underline}. See §1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§1940.552(b) of this subpart. The criteria used in the basic formula
are:

\(1\) State\'s percentage of the National number of rural occupied
substandard units,

\(2\) State\'s percentage of the National rural population,

\(3\) State\'s percentage of the National rural population in places of
less than 2,500 population,

\(4\) State\'s percentage of the National number of rural households
between 50 and 80 percent of the area median income, and

\(5\) State\'s percentage of the National number of rural households
below 50 percent of the area median income.

Data source for each of these criteria is based on the latest census
data available. Each criterion is assigned a specific weight according
to its relevance in determining need. The percentage representing each
criterion is multiplied by the weight factor and summed to arrive at a
basic State factor (SF)

SF=(criterion 1 x weight of 25%)+

(criterion 2 x weight of 10%)+

(criterion 3 x weight of 15%)+

(criterion 4 x weight of 30%)+

(criterion 5 x weight of 20%)

\(c\) [Basic formula allocation]{.underline}. See §1940.552(c) of this
subpart.

\(d\) [Transition formula]{.underline}. See §1940.552(d) of this
subpart. The percentage range used for Section 502 subsidized RH loans
is plus or minus 15.

\(e\) [Base allocation]{.underline}. See §1940.552(e) of this subpart.
Jurisdictions receiving administrative allocations do not receive base
allocations.

\(f\) [Administrative allocations]{.underline}. See §1940.552(f) of this
subpart. Jurisdictions receiving formula allocations do not receive
administrative allocations.

\(g\) [Reserve]{.underline}. See §1940.552(g) of this subpart.

## 15

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§1940.565 (con.)

\(h\) [Pooling of funds]{.underline}. See §1940.552(h) of this subpart.

\(1\) Mid-year: If used in a particular fiscal year, available funds
unobligated as of the pooling date are pooled and redistributed based on
the formula used to allocate funds initially.

\(2\) Year-end: Pooled funds are placed in a National Office reserve and
are available as determined administratively.

\(i\) [Availability of the allocation]{.underline}. See §1940.552(i) of
this subpart.

\(j\) [Suballocation by the State Director]{.underline}. See
§1940.552(j) of this subpart. The State Director will suballocate funds
to the District Offices and may, at his/her option, suballocate to the
County Offices. The State Director will use the same basic formula
criteria, data source and weight for suballocating funds within the
State as used by the National Office in allocating to the States as
described in §1940.565(b) and (c) of this section. The suballocations to
District or County Offices will not be reduced or restricted unless
written approval is received from the National Office in response to a
written request from the State Director. The State Director\'s request
must include the reasons for the requested action (e.g., high housing
inventory and/or high housing delinquency).

\(k\) [Other documentation]{.underline}. The percentage distribution of
funds to the States by income levels is based on prevailing legislation.

## 16

##  

RD Instruction 1940-L

§1940.566 [Section 504 Housing Repair loans]{.underline}.

\(a\) [Amount available for allocations]{.underline}. See §1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§1940.552(b). The criteria used in the basic formula are:

\(1\) State\'s percentage of the National number of rural occupied
substandard units, and

\(2\) State\'s percentage of the National number of rural households
below 50 percent of area median income.

Data source for each of these criteria is based on the latest census
data available. Each criterion is assigned a specific weight according
to its relevance in determining need. The percentage representing each
criterion is multiplied by the weight factor and summed to arrive at a
basic State factor (SF).

SF=(criterion No. 1 x weight of 50%)+

(criterion No. 2 x weight of 50%)

\(c\) [Basic formula allocation]{.underline}. See §1940.552(c) of this
subpart.

\(d\) [Transition formula]{.underline}. See §1940.552(d) of this
subpart. The percentage range used for Section 504 Housing Repair Loans
is plus or minus 15.

\(e\) [Base allocation]{.underline}. Not used.

\(f\) [Administrative allocations]{.underline}. See §1940.552(f) of this
subpart. Jurisdictions receiving formula allocations do not receive
administrative allocations.

\(g\) [Reserve]{.underline}. See §1940.552(g) of this subpart.

\(h\) [Pooling of funds]{.underline}. See §1940.552(h) of this subpart.

\(1\) Mid-year: If used in a particular fiscal year, available funds
unobligated as of the pooling date are pooled and redistributed based on
the formula used to allocate funds initially.

\(2\) Year-end: Pooled funds are placed in a National Office reserve and
are available as determined administratively.

\(i\) [Availability of the allocation]{.underline}. See §1940.552(i) of
this subpart.

## 17

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§1940.566 (con.)

\(j\) [Suballocation by the State Director]{.underline}. See
§1940.552(j) of this subpart. At the option of the State Director,
Section 504 loan funds may be suballocated to the District Offices. When
performing a suballocation, the State Director will use the same basic
formula criteria, data source and weight for suballocating funds within
the State as used by the National Office in allocating to the States as
described in §1940.566(b) and (c) of this section.

\(k\) [Other documentation]{.underline}. Not applicable.

## 18

##  

RD Instruction 1940-L

§1940.567 [Section 504 Housing Repair grants]{.underline}.

\(a\) [Amount available for allocations]{.underline}. See §1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§1940.552(b) of this subpart. The criteria used in the basic formula
are:

\(1\) State\'s percentage of the National number of rural occupied
substandard units,

\(2\) State\'s percentage of the National rural population 62 years and
older, and

\(3\) State\'s percentage of the National number of rural households
below 50 percent of area median income.

Data source for each of these criteria is based on the latest census
data available. Each criterion is assigned a specific weight according
to its relevance in determining need. The percentage representing each
criterion is multiplied by the weight factor and summed to arrive at a
basic State factor (SF).

SF=(criterion No. 1 x weight of 33 1/3%)+

(criterion No. 2 x weight of 33 1/3%)+

(criterion No. 3 x weight of 33 1/3%)

\(c\) [Basic formula allocation]{.underline}. See §1940.552(c) of this
subpart.

\(d\) [Transition formula]{.underline}. See §1940.552(d) of this
subpart. The percentage range used for Section 504 Housing Repair grants
is plus or minus 15.

\(e\) [Base allocation]{.underline}. Not used.

\(f\) [Administrative allocations]{.underline}. See §1940.552(f) of this
subpart. Jurisdictions receiving formula allocations do not receive
administrative allocations.

\(g\) [Reserve]{.underline}. See §1940.552(g) of this subpart.

\(h\) [Pooling of funds]{.underline}. See §1940.552(h) of this subpart.

\(1\) Mid-year: If used in a particular fiscal year, available funds
unobligated as of the pooling date are pooled and redistributed based on
the formula used to allocate funds initially.

\(2\) Year-end: Pooled funds are placed in a National Office reserve and
are available as determined administratively.

## 19

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§1940.567 (con.)

\(i\) [Availability of the allocation]{.underline}. See §1940.552(i) of
this subpart.

\(j\) [Suballocation by the State Director]{.underline}. See
§1940.552(j) of this subpart. At the option of the State Director,
Section 504 grant funds may be suballocated to the District Offices.
When performing a suballocation, the State Director will use the same
basic formula criteria, data source and weight for suballocating funds
within the State as used by the National Office in allocating to the
States as described in §1940.567(b) and (c) of this section.

\(k\) [Other documentation]{.underline}. Not applicable.

## 20

##  

RD Instruction 1940-L

§1940.568 [Single Family Housing programs appropriations not allocated
by State]{.underline}. The following program funds are kept in a
National Office reserve and are available as determined
administratively:

\(a\) [Section 523 Self-Help Technical Assistance Grants]{.underline}.

\(b\) [Section 523 Land Development Fund]{.underline}.

\(c\) [Section 524 Rural Housing Site Loans]{.underline}.

\(d\) [Section 509 Compensation for Construction Defects]{.underline}.

\(e\) [Section 502 Nonsubsidized Funds]{.underline}.

§§1940.569 - 1940.574 Reserved.

## 21

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§1940.575 [Section 515 Rural Rental Housing (RRH) loans]{.underline}.
(Revised 7-12-88, PN 89)

\(a\) [Amount available for allocations]{.underline}. See §1940.552 (a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§1940.552 (b) of this subpart.

The criteria used in the basic formula are:

\(1\) State\'s percentage of National rural population,

\(2\) State\'s percentage of National number of rural occupied
substandard units, and

\(3\) State\'s percentage of National rural families with incomes below
the poverty level.

Data source for each of these criterion is based on the latest census
data available. Each criterion is assigned a specific weight according
to its relevance in determining need. The percentage representing each
criterion is multiplied by the weight assigned and summed to arrive at a
State factor (SF).

SF = (criterion No. 1 x weight of 33 1/3%)+

(criterion No. 2 x weight of 33 1/3%)+

(criterion No. 3 x weight of 33 1/3%)

\(c\) [Basic formula allocation]{.underline}. See §1940.552 (c) of this
subpart.

\(d\) [Transition formula]{.underline}. See §1940.552 (d) of this
subpart.

\(e\) [Base allocation]{.underline}. See §1940.552 (e) of this subpart.
Jurisdictions receiving administrative allocations do not receive base
allocations.

\(f\) [Administrative allocations]{.underline}. See §1940.552 (f) of
this subpart. Jurisdictions receiving formula allocations do not receive
administrative allocations.

\(g\) [Reserve]{.underline}. See §1940.552 (g) of this subpart.

\(h\) [Pooling of funds]{.underline}. See §1940.552 (h) of this subpart.

\(i\) [Availability of the allocation]{.underline}. See §1940.552 (i) of
this subpart.

\(j\) [Suballocation by the State Director]{.underline}. See §1940.552
(j) of this subpart.

\(k\) [Other documentation]{.underline}. Not applicable.

## 23

## (Revision 2)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§1940.576 [Rental Assistance (RA) for new construction]{.underline}.
(Revised 7-12-88, PN 89)

\(a\) [Amount available for allocations]{.underline}. See §1940.552 (a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§1940.575 (b) of this subpart.

\(c\) [Basic formula allocation]{.underline}. See §1940.552 (c) of this
subpart.

\(d\) [Transition formula]{.underline}. See §1940.552 (d) of this
subpart.

\(e\) [Base allocation]{.underline}. See §1940.552 (e) of this subpart.

\(f\) [Administrative allocations]{.underline}. See §1940.552 (f) of
this subpart. Jurisdictions receiving formula allocations do not receive
administrative allocations.

\(g\) [Reserve]{.underline}. See §1940.552 (g) of this subpart.

\(h\) [Pooling of funds]{.underline}. See §1940.552 (h) of this subpart.

\(i\) [Availability of the allocation]{.underline}. See §1940.552 (i) of
this subpart.

\(j\) [Suballocation by the State Director]{.underline}. See §1940.552
(j) of this subpart.

\(k\) [Other documentation]{.underline}. Not applicable.

## 24

## (Revision 2) 

RD Instruction 1940-L

§1940.577 [Rental Assistance (RA) for existing projects]{.underline}.

\(a\) [Amount available for allocations]{.underline}. See §1940.552 (a)
of this subpart. RA appropriated for existing projects will first be
used to replace contracts expiring each fiscal year and for the first
few months of the following fiscal year. This is done to assure
continued RA funding. RA units not needed for replacement purposes will
be used for existing multiple family housing projects experiencing
servicing problems.

\(b\) [Basic formula criteria, data source and weight]{.underline}. No
formula or weighted criteria is used to allocate replacement RA. The
basic allocation for replacement RA will be made based on the following:

\(1\) [Criteria]{.underline}. This allocation is based on the estimated
need to replace RA contracts expiring from the depletion of funds.

\(2\) [Data source]{.underline}. The most accurate and current
information available from Rural Development computerized data sources.

\(c\) [Basic formula allocation]{.underline}. While no formula will be
used, the basic allocation will be made to each State according to the
need determined using the basic criteria.

\(d\) [Transition formula]{.underline}. Not applicable.

\(e\) [Base allocation]{.underline}. Not applicable.

\(f\) [Administrative allocation]{.underline}. Not applicable.

\(g\) [Reserve]{.underline}. See §1940.5522 (g) of this subpart. The
National Office maintains a reserve adequate to compensate for the
differences between actual and projected replacement activity. Units
will be administratively distributed for existing housing to either
satisfy previously unidentified replacement needs or address servicing
situations. Units will be distributed to any State when the
Administrator determines that additional allocations are necessary and
appropriate.

\(h\) [Pooling of funds]{.underline}. See §1940.552 (h) of this subpart.
Units will be pooled at the Administrator\'s discretion.

\(i\) [Obligation of the allocation]{.underline}. See §1940.552 (i) of
this subpart. (Revised 7-12-88, PN 89)

\(j\) [Suballocation by the State Director]{.underline}. See §1940.552
(j) of this subpart.

\(k\) [Other documentation]{.underline}. Not applicable.

## 25

## (Revision 1)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§1940.578 [Housing Preservation Grant (HPG) program]{.underline}.
(Revised 7-12-88, PN 89)

\(a\) [Amount available for allocations]{.underline}. See §1940.552 (a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§1940.575 (b) of this subpart.

\(c\) [Basic formula allocation]{.underline}. See §1940.552 (c) of this
subpart.

\(d\) [Transition formula]{.underline}. See §1940.552 (d) of this
subpart.

\(e\) [Base allocation]{.underline}. See §1940.552 (e) of this subpart.

\(f\) [Administrative allocations]{.underline}. See §1940.552 (f) of
this subpart.

\(g\) [Reserve]{.underline}. See §1940.552 (g) of this subpart.

\(h\) [Pooling of funds]{.underline}. See §1940.552 (h) of this subpart.
Funds may be pooled after all HPG applications have been received and
HPG fund demand by State has been determined. Pooled funds will be
combined with the National Office reserve to fund eligible projects.
Remaining HPG funds will be available for distribution for use under the
Section 504 program.

\(i\) [Availability of the allocation]{.underline}. See §1940.552 (i) of
this subpart.

\(j\) [Suballocation by the State Director]{.underline}. Not applicable.

\(k\) [Other documentation]{.underline}. Funds for the HPG program will
be available for a limited period each fiscal year. Due to the
requirements by law to allocate funds on a formula basis to all States
and to have a competitive selection process for HPG project selection,
Rural Development will announce opening and closing dates for receipt of
HPG applications. After the closing date, Rural Development will review
and evaluate the proposals, adjust State allocations as necessary to
comply with the law and Program demand, and redistribute remaining
unused HPG resources for use under Section 504 (as required by statute).

## 26

## (Revision 1) 

RD Instruction 1940-L

§ 1940.579 [Multiple Family Housing appropriations not allocated by
State]{.underline}. (Revised 06-07-99, SPECIAL PN.)

Funds are not allocated to States. The following program funds are kept
in a National Office reserve and are available as determined
administratively:

\(a\) Section 514 Farm Labor Housing Loans.

\(b\) Section 516 Farm Labor Housing Grants.

§§ 1940.580 - 1940.584 \[Reserved\]

## (Continued on page 29)

## 27

## (Revision 2)

## 

## (07-12-85) SPECIAL PN 

RD Instruction 1940-L

§ 1940.585 [Community Facility loans]{.underline}.

\(a\) [Amount available for allocations]{.underline}. See §1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§1940.552(b) of this subpart. (Revised 10-22-93, SPECIAL PN.)

\(1\) The criteria used in the basic formula are:

\(i\) State\'s percentage of national rural population - 50 percent.

\(ii\) State\'s percentage of national rural population with incomes
below the poverty level - 25 percent.

\(iii\) State\'s percentage of national nonmetropolitan unemployment -
25 percent.

\(2\) Data source for each of these criterion is based on the latest
census data available. Each criterion is assigned a specific weight
according to its relevance in determining need. The percentage
representing each criterion is multiplied by the weight factor and
summed to arrive at a State factor (SF). The SF cannot exceed .05.

SF = (criterion (b)(1)(i) x 50 percent) +

(criterion (b)(1)(ii) x 25 percent) +

(criterion (b)(1)(iii) x 25 percent)

\(c\) [Basic formula allocation]{.underline}. See §1940.552(c) of this
subpart. States receiving administrative allocations do not receive
formula allocations.

\(d\) [Transition formula]{.underline}. See §1940.552(d) of this
subpart. The percentage range for the transition formula equals 30
percent\
(+ 15%).

\(e\) [Base allocation]{.underline}. See §1940.552(e) of this subpart.
States receiving administrative allocations do not receive base
allocations.

\(f\) [Administrative allocation]{.underline}. See §1940.552(f) of this
subpart. States participating in the formula base allocation procedures
do not receive administrative allocations.

## 29

## (Revision 2)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.585 (Con.)

\(g\) [Reserve]{.underline}. See §1940.552(g) of this subpart. States
may request funds by forwarding a completed copy of Guide 26 of Subpart
A of Part 1942 of this chapter (available in any Rural Development
office), to the National Office. Generally, a request for additional
funds will not be honored unless the State has insufficient funds to
obligate the loan requested.

\(h\) [Pooling of funds]{.underline}. See §1940.552(h) of this subpart.
Funds are generally pooled at mid-year and year-end. Pooled funds will
be placed in the National Office reserve and will be made available
administratively.

\(i\) [Availability of the allocation]{.underline}. See §1940.552(i) of
this subpart. The allocation of funds is made available for States to
obligate on an annual basis although the Office of Management and Budget
apportions it to the Agency on a quarterly basis.

\(j\) [Suballocation by the State Director]{.underline}. See
§1940.552(j) of this subpart. State Director has the option to
suballocate to District Offices.

\(k\) [Other documentation]{.underline}. Not applicable.

§§1940.586 - 1940.587 \[Reserved\]

## (Continued on page 35)

## 30

## (Revision 2) 

RD Instruction 1940-L

§ 1940.588 [Business and Industry Guaranteed and Direct
Loans]{.underline}.\
(Revised 04-25-03, SPECIAL PN.)

\(a\) [Amount available for allocations]{.underline}. See § 1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§ 1940.552(b) of this subpart. (Revised 10-22-93, SPECIAL PN.)

\(1\) The criteria used in the basic formula are:

\(i\) State\'s percentage of national rural population - 50 percent.

\(ii\) State\'s percentage of national rural population with incomes
below the poverty level - 25 percent.

\(iii\) State\'s percentage of national nonmetropolitan unemployment -
25 percent.

\(2\) Data source for each of these criterion is based on the latest
census data available. Each criterion is assigned a specific weight
according to its relevance in determining need. The percentage
representing each criterion is multiplied by the weight factor and
summed to arrive at a State factor (SF). The SF cannot exceed .05.

SF = (criterion (b)(1)(i) x 50 percent) +

(criterion (b)(1)(ii) x 25 percent) +

(criterion (b)(1)(iii) x 25 percent)

\(c\) [Basic formula allocation]{.underline}. See § 1940.552(c) of this
subpart.

\(d\) [Transition formula]{.underline}. See § 1940.522(d) of this
subpart. The percentage range for the transition equals 30 percent
([+]{.underline} 15%). (Revised 02-04-04, PN 370.)

\(e\) [Base allocations]{.underline}. See § 1940.552(e) of this subpart.
Jurisdictions receiving administrative allocations do not receive base
allocations.

\(f\) [Administrative allocations]{.underline}. See § 1940.552(f) of
this subpart. Jurisdictions receiving formula allocations do not receive
initial administrative allocations.

## 35

## (Revision 3)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.588 (Con.)

\(g\) [Reserve]{.underline}. See § 1940.552(g). States may request
reserve funds from the B&I reserve when all of the state allocation has
been obligated or will be obligated to the project for which the request
is made.\
(Revised 04-25-03, SPECIAL PN.)

\(h\) [Pooling of funds]{.underline}. See § 1940.552(h). Funds are
pooled near fiscal year-end. Pooled funds will be placed in a reserve
and made available on a priority basis to all States. (Revised 04-25-03,
SPECIAL PN.)

\(i\) [Availability of the allocation]{.underline}. See § 1940.552(i) of
this subpart. There is a 6-day waiting period from the time project
funds are reserved to the time they are obligated.

\(j\) [Suballocation by the State Director]{.underline}. Suballocation
by the State Director is authorized for this program. (Revised 04-25-03,
SPECIAL PN.)

## 36

## (Revision 3) 

RD Instruction 1940-L

§ 1940.589 [Rural Business Enterprise Grants]{.underline}. (Revised
08-20-92,\
SPECIAL PN.)

\(a\) [Amount available for allocations]{.underline}. See § 1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source and weight]{.underline}. See
§ 1940.552(b) of this subpart. (Revised 10-22-93, SPECIAL PN.)

\(1\) The criteria used in the basic formula are:

\(i\) State\'s percentage of national rural population - 50 percent.

\(ii\) State's percentage of national rural population with incomes
below the poverty level -- 25 percent.\
(Revised 04-25-03, SPECIAL PN.)

\(iii\) State\'s percentage of national nonmetropolitan unemployment -
25 percent.

\(2\) Data source for each of these criterion is based on the latest
census data available. Each criterion is assigned a specific weight
according to its relevance in determining need. The percentage
representing each criterion is multiplied by the weight factor and
summed to arrive at a State factor (SF). The SF cannot exceed .05.

SF = (criterion (b)(1)(i) x 50 percent) +

(criterion (b)(1)(ii) x 25 percent) +

(criterion (b)(1)(iii) x 25 percent)

\(c\) [Basic formula allocation]{.underline}. See § 1940.552(c) of this
subpart.

\(d\) [Transition formula]{.underline}. See § 1940.522(d) of this
subpart. The percentage range for the transition equals 30 percent
([+]{.underline} 15%). Revised 02-04-04, PN 370.)

\(e\) [Base allocation]{.underline}. See § 1940.552(e) of this subpart.

\(f\) [Administrative allocation]{.underline}. Not used.

\(g\) [Reserve]{.underline}. See § 1940.552(g). States may request funds
by written request to the National Office. Generally, a request for
additional funds will not be honored unless the State has insufficient
funds to obligate from the State\'s allocation. The National Office may
also consider requests to provide funds from the National Reserve for
projects that will operate in multiple states. (Revised 04-25-03,
SPECIAL PN.)

## 37

## (Revision 8)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.589 (Con.)

\(h\) [Pooling of funds]{.underline}. See § 1940.552(h). Funds are
pooled near fiscal year-end. Pooled funds will be placed in the National
Office reserve and will be made available administratively. (Revised
04-25-03,\
SPECIAL PN.)

\(i\) [Availability of the allocation]{.underline}. See § 1940.552(i) of
this subpart. The allocation of funds is made available for States to
obligate on an annual basis although the Office of Management and Budget
apportions it to the Agency on a quarterly basis.

\(j\) [Suballocation by the State Director]{.underline}. See §
1940.552(j) of this subpart. State Director has the option to
suballocate to District Offices.

## 38

## (Revision 7) 

RD Instruction 1940-L

§ 1940.590 [Community and Business Programs appropriations not allocated
by State]{.underline}. (Revised and renumbered 7-12-88, PN 89.)

\(a\) [Watershed Protection Loans, Resource Conservation and Development
Loans, and Flood Protection Loans]{.underline}. State allocations will
not be made for these type loans. Instead, obligating documents may be
submitted to the Finance Office when a loan is approved. Only States
that are authorized to process P.L. 534 loans may submit obligating
documents to the Finance Office for that type loan. Resource
Conservation and Development (RC&D) loan funds will be used in
preference to community facility funds in designated RC&D areas for loan
purposes included in Subpart A of Part 1942 of this chapter.

\(b\) [Indian Land Acquisition]{.underline}. Control of funds will be
retained in the National Office and allocated on an individual case
basis. Requests for funds will be made to the Director, Community
Facilities Division, when it is determined the loan can be approved.

\(c\) [Nonprofit National Corporation Guaranteed Loans and
Grants]{.underline}. Control of funds will be retained in the National
Office. These funds are not available for obligation by States.

\(d\) [Rural Development Loan Fund Relending Program]{.underline}.
Control of funds will be retained in the National Office. These funds
are not available for obligation by States.

\(e\) [Technical Assistance and Training Grants]{.underline}. Control of
funds will be retained in the National Office and allocated on a project
case basis. These funds are not available for obligation by States.

\(f\) [Emergency Community Water Assistance Grants]{.underline}. Control
of funds will be retained in the National Office and allocated on a
project case basis. Requests for funds will be made to the Director,
Water and Waste Disposal Division. (Added 4-4-90, SPECIAL PN.)

\(g\) [System for Delivery of Certain Rural Development Programs Panel
Grants]{.underline}. Control of funds will be retained in the National
Office and made available to eligible States. (Added 05-06-92, SPECIAL
PN.)

\(h\) [Television Demonstration Grants]{.underline}. Since this is a
demonstration program, all funds are being retained in the National
Office. Funds\
may be requested by sending in attachment 1, section C of RD Instruction
1942-G. (Added 08-20-92, SPECIAL PN.)

## 39

## (Revision 7)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.590 (Con.)

\(i\) [Section 306C WWD loans and grants in subpart E of part 4284 of
this title]{.underline}. Control of funds will be retained in the
National Office and allocated on a project case basis. Requests for
funds will be made to the Director, Water and Waste Disposal Division.
(Added 01-22-93, SPECIAL PN.)

\(j\) [Rural Cooperative Development Grants]{.underline}. Control of
funds will be retained in the National Office and allocated on a project
case basis. Funds may be requested by sending in exhibit B of RD
Instruction 4284-F. (Revised 08-07-97, SPECIAL PN.)

§ 1940.591 [Community Program Guaranteed loans]{.underline}. (Revised
3-26-90, SPECIAL PN.)

\(a\) [Amount available for allocations]{.underline}. See § 1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source, and weight]{.underline}. See
§ 1940.552(b) of this subpart. (Revised 10-22-93, SPECIAL PN.)

\(1\) The criteria used in the basic formula are:

\(i\) State\'s percentage of national rural population - 50 percent.

\(ii\) State\'s percentage of national rural population with incomes
below the poverty level - 25 percent.

\(iii\) State\'s percentage of national nonmetropolitan unemployment -
25 percent.

\(2\) Data source for each of these criterion is based on the latest
census data available. Each criterion is assigned a specific weight
according to its relevance in determining need. The percentage
representing each criterion is multiplied by the weight factor and
summed to arrive at a State factor (SF). The SF cannot exceed .05.

SF = (criterion (b)(1)(i) x 50 percent) +

(criterion (b)(1)(ii) x 25 percent) +

(criterion (b)(1)(iii) x 25 percent)

\(c\) [Basic formula allocation]{.underline}. See § 1940.552(c) of this
subpart. States receiving administrative allocations do not receive
formula allocations.

## 40

## (Revision 7) 

RD Instruction 1940-L

§ 1940.591 (Con.)

\(d\) [Transition formula]{.underline}. The transition formula for
Community Programs Guaranteed loans is not used. (Revised 3-26-90,
SPECIAL PN.)

\(e\) [Base allocation]{.underline}. See § 1940.552(e) of this subpart.
States receiving administrative allocations do not receive base
allocations.

\(f\) [Administrative allocation]{.underline}. See § 1940.552(f) of this
subpart. States participating in the formula base allocation procedures
do not receive administrative allocations.

\(g\) [Reserve]{.underline}. See § 1940.552(g) of this subpart. States
may request funds by forwarding a request following the format found in
Guide 26 of subpart A of Part 1942 of this chapter to the National
Office. Generally, a request for additional funds will not be honored
unless the State has insufficient funds from the State\'s allocation to
obligate the loan requested. (Revised 3-26-90, SPECIAL PN.)

\(h\) [Pooling of funds]{.underline}. See § 1940.552(h) of this subpart.
Funds are generally pooled at mid-year and year-end. Pooled funds will
be placed in the National Office reserve and will be made available
administratively.

\(i\) [Availability of the allocation]{.underline}. See §1940.552(i) of
this subpart. The allocation of funds is made available for States to
obligate on an annual basis although the Office of Management and Budget
apportions it to the Agency on a quarterly basis.

\(j\) [Suballocation by State Director]{.underline}. See §1940.552(j) of
this subpart. State Director has the option to suballocate to District
Offices.

\(k\) [Other documentation]{.underline}. Not applicable.

§ 1940.592 [Community Facilities Grants]{.underline}. (Added 04-07-97,
SPECIAL PN.)

\(a\) [Amount available for allocation]{.underline}. See § 1940.552(a)
of this subpart.

\(b\) [Basic formula criteria, data source, and weight]{.underline}. See
§ 1940.552(b) of this subpart.

\(1\) The criteria used in the basic formula are:

\(i\) State's percentage of National rural population - 50 percent.

41

(Revision 4)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.592(b) (Con.)

\(ii\) State's percentage of National rural population with incomes
below the poverty level - 50 percent.

\(2\) Data source for each of these criterion is based on the latest
census data available. Each criterion is assigned a specific weight
according to its relevance in determining need. The percentage
representing each criterion is multiplied by the weight factor and
summed to arrive at a State factor (SF).

SF (criterion (b)(1)(i) x 50 percent)

\+ (criterion (b)(1)(ii) x 50 percent)

\(c\) [Basic formula allocation]{.underline}. See § 1940.552(c) of this
subpart. States receiving administrative allocations do not receive
formula allocations.

\(d\) [Transition formula]{.underline}. The transition formula for
Community Facilities Grants is not used.

\(e\) [Base allocation]{.underline}. See § 1940.552(e) of this subpart.
States receiving administrative allocations do not receive base
allocations.

\(f\) [Administrative allocation]{.underline}. See § 1940.552(f) of this
subpart. States participating in the formula base allocation procedures
do not receive administrative allocations.

\(g\) [Reserve]{.underline}. See § 1940.552(g) of this subpart. States
may request funds by forwarding Form Letter RD 3570-B-1 to the National
Office. Generally, a request for additional funds will not be honored
unless the State has insufficient funds from the State's allocation to
obligate the grant requested.

\(h\) [Pooling of funds]{.underline}. See § 1940.552(h) of this subpart.
Funds are generally pooled at midyear and yearend. Pooled funds will be
placed in the National Office reserve and will be made available
administratively.

\(i\) [Availability of the allocation]{.underline}. See § 1940.552(i) of
this subpart. The allocation of funds is made available for States to
obligate on an annual basis although the Office of Management and Budget
apportions it to the Agency on a quarterly basis.

\(j\) [Suballocation by State Director]{.underline}. See § 1940.552(j)
of this subpart. State Director has the option to suballocate to area
offices.

42

## (Revision 1) 

RD Instruction 1940-L

§ 1940.593 [Rural Business Opportunity Grants]{.underline}. (Added
04-25-03, SPECIAL PN.)

\(a\) [Amount available for allocations]{.underline}. See § 1940.552(a).

\(b\) [Basic formula criteria, data source, and weight]{.underline}. See

§ 1940.552(b).

\(1\) The criteria used in the basic formula are:

\(i\) State's percentage of national rural population - 50 percent.

\(ii\) State's percentage of national rural population with incomes
below the poverty level - 25 percent.

\(iii\) State's percentage of national nonmetropolitan unemployment - 25
percent.

\(2\) The data source for each criterion is based on the latest census
data available. The percentage representing each criterion is multiplied
by the weight factor and added to arrive at a State Factor (SF). The SF
cannot exceed .05.

SF = (criterion (b)(1)(i) x 50 percent) +

(criterion (b)(1)(ii) x 25 percent) +

(criterion (b)(1)(iii) x 25 percent)

\(c\) [Basic formula allocation]{.underline}. See § 1940.552(c).

\(d\) [Transition formula]{.underline}. The transition formula is not
used for Rural Business Opportunity Grants (RBOG).

\(e\) [Base allocation]{.underline}. See § 1940.552(e).

\(f\) [Administrative allocation]{.underline}. The administrative
allocation is not used for RBOG.

\(g\) [Reserve]{.underline}. See § 1940.552(g). States may request funds
by submitting a copy of RD Instruction 4284-G, Exhibit A, to the
National Office. Generally, a request for additional funds will not be
honored unless the State has insufficient funds to obligate from the
State's allocation. The National Office may also consider requests to
provide funds from the National Reserve for projects that will operate
in multiple states.

## 43

## (Added 04-25-03, SPECIAL PN.)

(7-12-85) SPECIAL PN

RD Instruction 1940-L

§ 1940.593 (Con.)

\(h\) [Pooling of funds]{.underline}. See § 1940.552(h). Funds are
pooled near fiscal year-end. Pooled funds will be placed in the National
Office reserve and will be made available administratively.

\(i\) [Availability of the allocation]{.underline}. See § 1940.552(i).
The allocation of funds is made available to States on an annual basis.

\(j\) [Suballocation by the State Director]{.underline}. Suballocation
by the State Director is authorized for this program.

§§ 1940.594 - 1940.600 \[Reserved\]

Attachments: Exhibits A, B, C, and D.

## oOo

## 44

## (Added 04-25-03, SPECIAL PN.) 

RD Instruction 1940-L

Exhibit A

## ALLOCATION OF PROGRAM FUNDS 

This exhibit provides the allocation for program funds and instructions
for the use of those funds. Planning and the commitment of resources
should be based on these allocations.

The methodology and formulas for the allocation of funds to the States
is as stated in the Instruction. Only those areas where it was necessary
to provide additional information have been addressed in this exhibit.
Refer to the main body of this Instruction for all basic information on
the allocation and use of program funds. Attachments 1 and 2 of this
exhibit provide information on the various programs as follows:

+---------------+------------------------------------------------------+
| Attachment 1  | Rural Business-Cooperative Service                   |
| -             |                                                      |
+---------------+------------------------------------------------------+
| Attachment 2  | Rural Housing Service                                |
| -             |                                                      |
|               | Part I - Rural Community Advancement Program/Rural   |
|               |                                                      |
|               | Housing Assistance Grants                            |
|               |                                                      |
|               | Part II - Rural Housing Service                      |
|               |                                                      |
|               | Subpart A - Rural Community Advancement Program\     |
|               | Community Facilities                                 |
|               |                                                      |
|               | Subpart B - Multi-Family Housing (MFH)               |
|               |                                                      |
|               | Subpart C - Single Family Housing (SFH)              |
+---------------+------------------------------------------------------+

The fund control function is performed by the National Office. Fund
control balances can be obtained on the State Office terminal through
APROPTN, the acronym for the Appropriation Accounting System, on the
Online Subsystem Selection Menu screen. Should you have any questions
regarding your State's distribution balances, call the respective
program division. You can monitor your distribution amount via the
Detail File Appropriation Screen.

## oOo

(02-17-99) PN 300

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 1

RURAL DEVELOPMENT

BUSINESS AND COOPERATIVE PROGRAMS

I. [General]{.underline}. This attachment details funding for programs
administered by Rural Development, Business and Cooperative Programs,
and includes those administered under a State allocation system as well
as those not using such allocations. (Throughout this attachment the
reference to "Agency" Refers to Rural Development, Business and
Cooperative Programs).

A. [Funding Computations]{.underline}. This attachment provides loan and
grant funding allocations available for fiscal year (FY) 2008.
Computations for allocations available to individual States have been
performed in accordance with §§ 1940.588 and 1940.589 of this
instruction. Every effort will be made to re-emphasize Rural
Development's mission as a provider of affordable credit to those areas
of greatest need.

B. [Rural Area Eligibility]{.underline}. Program assistance under the
Rural Business Program Account(RBPA) is limited to rural areas, as
defined in applicable program regulations, with the exception of the
following:

Business and Industry (B&I) Guaranteed Loans may be made to cooperative
organizations in non-rural areas provided the primary purpose of the
loan guarantee is for a facility that provides value-added processing
for agricultural producers that are located within 80 miles of the
facility and the applicant demonstrates that the primary benefit of the
loan guarantee will provide employment for residents of a rural area.

Until the release of 2010 Decennial Census date, the following areas
will be considered rural for these programs, Rural Business Enterprise
Grant (RBEG), Rural Business Opportunity Grant (RBOG), Intermediary
Relending Program (IRP), Business and Industry Guaranteed Loan Program
(B&I), and Rural Economic Development Loan and Grant Program (REDLG):

\- City of Berlin, New Hampshire

\- City of Guymon, Oklahoma

\- City of Shawnee, Oklahoma

\- City of Altus, Oklahoma

\- City of Coachella, California

\- County of Honolulu, Hawaii (with certain areas to be

excluded)

-   City of Great Falls, Montana (for B&I)

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 2

-   City of St. Joseph, Missouri (for an application submitted

by a farmer-owned cooperative for the purchase and

operation of a facility beneficial to the purpose of the

cooperative)

\- City of Hidalgo, Texas (RBEG-only)

> \- Designated census areas for the Upper Kanawha
>
> Valley Enterprise Community, West Virginia, are eligible
>
> rural areas for purposes of eligibility for Enterprise
>
> Zone/Enterprise Community (EZ/EC) funded programs in the
>
> Rural Development mission area;

\- Municipalities of Vega Baja, Manati, Guayama, Fajardo,

Humacao, and Naguabo, Puerto Rico shall be eligible for

RCAP loan and grant programs and Intermediary Relending

Program (IRP).

-   City of Alamo, Texas; the City of Mercedes, Texas; the the City of
    Weslaco, Texas; the City of Donna, Texas; the City La Feria, Texas;
    and the city of Northampton, Massachusetts, (including individuals
    and entities with projects within the cities) eligible for loans and
    grants funded through the Rural Business Program account.

\- City of Leavenworth, Kansas, and the City of Lansing,

Kansas, as separate geographic entities for purposes of

REDLG.

\- The county of Lexington, South Carolina, shall be

considered to be a rural area for the purposes of

financing a farmers' market under the Business and

Industry Loan Guarantee Program in a local area that has

Rural characteristics as determined by the Secretary.

C. [RBPA Budget Authority]{.underline}. RBPA budget authority has been
allotted to the Rural Business Cooperative Programs for B&I Guaranteed
Loans, RBEGs and RBOGs.

D. [Scope of Work Changes]{.underline}. For any funds obligated for
statutorily authorized programs where funds cannot be used in accordance
with the original approved plan of work or Scope of Work, the State
Director can approve changes in accordance with their delegated
authority, regulations, policy, and statutes, subject to review and
concurrence of the National Office. For EZ/EC and Rural Economic Area
Partnership (REAP) set-aside funds, the State Director should coordinate
with Cooperative Programs to ensure that changes in the project Scope of
Work are consistent with approved benchmarks. The project file should
contain a copy of documentation to verify Cooperative Programs
concurrence. Random reviews of selected projects submitted for funding
will be conducted by the National Office prior to States being notified
of the awards.

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 3

E. [Obligation Dates]{.underline}. Throughout this instruction, you will
find references where funds have to be obligated by certain dates. There
has been some confusion in the past as to whether reserving the funds on
the deadline date fulfills obligation requirements; it does not. The
deadline date we refer to is the last possible date your project can be
obligated; you must reserve the funds in the Guaranteed Loan System
(GLS) 6 working days before the deadline date in order to fulfill the
obligation requirement.

F. [Biobased Products and Bioenergy]{.underline}. Executive Order 13134,
Developing and Promoting Biobased Products and Bioenergy, signed by the
President on August 12, 1999, attempts to stimulate the creation and
adoption of technologies needed to make biobased products and bioenergy
cost-competitive in large national and international markets. One of the
fundamental goals articulated in the Executive Order is to promote
national economic growth, with specific attention to rural economic
interests through the conversion of renewable farm and forestry
resources to affordable electricity, fuel, chemicals, pharmaceuticals,
and other materials. The President has further articulated the
importance of sustainable biobased products and bioenergy development in
goals that have been established in the Advanced Energy Initiative and
the "Twenty in Ten" biofuels and alternative fuels initiative. States
are encouraged to work with these applicants and consider these
applications, where allowed under current program regulations. Further
guidance will be provided, under separate cover, outlining guidelines to
utilize in evaluating and processing these applications.

II\. [State Allocations]{.underline}. State allocations are made on an
annual basis.

B&I guaranteed loan and RBEG grant allocations have been calculated in
accordance with the methodology and formulas stated in §§ 1940.588 and
1940.589 of this instruction and calculated as program level amounts,
not budget authority. The additional information provided here is
coordinated with the format of the regulation.

A. Business and Industry Guaranteed Loans.

1.  [Program level available for allocation]{.underline}. (See Page 20
    for program level available for allocation).

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 4

2\. [Basic formula criteria, data source, and weight]{.underline}. The
census information used in the formula is from the 2000 Census data of
rural population, rural population with incomes below the poverty level,
and non-metropolitan unemployment.

3\. [Basic formula allocation]{.underline}. State allocations are shown
on page 22 of this attachment.

4\. [Transition formula]{.underline}. Not used.

5\. [Base allocation]{.underline}. The amount of base allocation is \$5
million.

6\. [Administrative allocation]{.underline}. Not used.

7\. [Unrestricted Reserve]{.underline}. Funds will be allocated on a
twice weekly competitive basis to States from the National Office
Reserve for projects that best meet Agency priorities from funds
available at the time of the request. The cutoff for requests for
reserve funds is noon eastern time on Wednesdays and Fridays.

The amount of National Office Reserve funds available quarterly will be
divided by three to determine the amount available monthly. Funds not
used in any month will be carried over to the next month. Highest
priority projects must be funded with State allocations to the extent
possible. National Office Reserve funds may only be requested when the
State Office allocation is not sufficient to fund projects ready to be
obligated. Requests for National Office Reserve funding must be
accompanied by a list of projects funded this fiscal year and those
applications currently on hand. Information provided is to include date
received, current status, and priority score, using the same format as
Shown on page 31 of this attachment.

It has been determined that no Administrator Points will be awarded in
FY 2008. A copy of Appendix C to RD Instruction 4279-B must be attached
to the request. **A request for funding should not be submitted unless
the project is ready to be obligated**.

The State Director or designee may request funds from the Reserve by\
e-mailing a copy of Appendix C to RD Instruction 4279-B and LAPAS
Project Information sheet which has been updated to include program
specific data required for each program, (See example on page 33 of this
attachment) to the National Office contact on pages 26 and 27 of this
attachment). Requests will be processed

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 5

on a twice weekly basis and States notified. Funds for any projects
funded from the National Office Reserve that are subsequently
deobligated cannot be used for funding other projects within the State
but, instead, must be returned to the National Office Reserve.

All States will be notified of the project selections. For projects not
selected, States should contact the lenders to advise them and determine
if the lenders want the projects to be reconsidered in the next funding
cycle. States are responsible for notifying the National Office of
projects that lenders do not want considered in the next funding cycle;
these projects will be removed from consideration.

8\. [Pooling of funds]{.underline}. Funds not obligated by the close of
business June 30, 2008, will be pooled and revert to the National Office
Reserve. Any funds that are deobligated after the close of business June
30, 2008, will also revert to the National Office Reserve. Pooled funds
will be placed in the National Office Reserve and made available to
States on a competitive basis. States are to immediately notify the
National Office of any deobligations by sending a copy of Form RD
1940-10, "Cancellation of U. S. Treasury Check and/or obligation," to
the National Office B&I Division, Attention: Andrea Patterson.

9\. [Certified Lenders Program (CLP]{.underline}). RD Instruction
4279-A,\
§ 4279.43(f)(1), provides that a State may hold an amount in reserve,
equal to the proposed loan, for a period of 30 days, pending receipt of
a complete application from the CLP lender, provided the complete
application is not rejected within that time period. Funds may not be
held in reserve for CLP lenders after pooling. RD Instruction 4279-A,\
§ 4279.43(f)(1), provides that the Agency will notify a CLP lender if
there is sufficient guarantee authority for the CLP lender's proposed
guaranteed loan request. National Office Reserve funds may not be
requested for this purpose. Furthermore, the State may not request funds
from the National Office Reserve if the State has funds outstanding that
have been set aside for this purpose.

10\. [Funding for B&I Guaranteed Loans where the percentage of guarantee
is in excess of 80 percent or for 1 percent guarantee fees]{.underline}.
A limited amount of the annual appropriation for the B&I Guaranteed Loan
Program with a percentage of guarantee that exceeds 80 percent and loans
with a 1 percent guarantee fee will be available. The amount of funding
available will be apportioned on a quarterly basis. All requests for
authority to approve loans

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 6

where the percentage of guarantee will exceed 80 percent must be\
e-mailed, including a copy of the LAPAS Project Information Sheet which
has been updated to include program specific data required for each
program (see example on page 33 of this attachment; to obtain a program
specific copy, go to <http://teamrd.usda.gov/rd/lapas/leg/default.htm>
and click on the applicable program). Also, please refer to
<http://www.house.gov/house/MemStateSearch.shtml> and
[http://www.senate.gov/general/contact_information/senators_cfm.cfm]{.underline}
for correct Representative and Senatorial information required for all
LAPAS Project Information sheets in advance of reserving or obligating
funds. Attachments are to be e-mailed to the National Office in
accordance with the procedures outlined on pages 26 and 27 of this
attachment. Requests on hand will be processed on a twice weekly basis
and States notified.

Requests must include a copy of the priority score sheet, RD Instruction
4279-B, Appendix C, and written documentation from the lender that the
loan will not be made and the project will not be completed without the
increased percentage of guarantee. Not more than 15 percent of the total
national appropriation of B&I funding authority will be available for
guarantees in excess of 80 percent.

Where the guarantee fee will be 1 percent, all requests for authority to
approve loans must be submitted, in advance of reserving or obligating
funds, to the National Office. Requests on hand will be processed on a
weekly basis and States notified. Requests must include a copy of the
priority score sheet and RD Instruction 4279-B, Appendix C. Not more
than 12 percent of the total national appropriation of B&I funding
authority will be available for loans with a 1 percent guarantee fee.\
**A [Federal]{.underline} [Register]{.underline} notice announcing these
restrictions was published on December 31, 2007.** Seventy-five percent
of the funds for EZ/EC and REAP have been reserved to be obligated at a
percentage of guarantee in excess of 80 percent and 12 percent of the
funds with a guarantee fee of 1 percent. Additionally, projects located
in isolated rural areas of the State of Alaska that are not connected by
a road system to other communities are eligible for 1 percent guarantee
fees and 90 percent guarantees.

B. [B&I Direct Loan Program]{.underline}.

There are no funds appropriated this fiscal year for this program.

C. [Rural Business Enterprise Grants (RBEG)]{.underline}.

> RD Instruction 1940-L

Exhibit A, Attachment 1

Page 7

1\. [Program level available for allocation]{.underline}. See Page 20
for program level available for allocation.

2\. [Transportation]{.underline}. There are two earmarks held in the
National Office Reserve for the purpose of providing technical
assistance for public transportation. (See Page 20 for earmark
allocation. **A notice was published in the [Federal
Register]{.underline} on November 27, 2007, inviting applications and
establishing a time schedule for accepting and processing the
applications**. **The deadline for applications in the State Office is
January 31, 2008.**

3\. [Basic formula criteria, data source, and weight]{.underline}. The
census information used in the formula is from the 2000 Census data for
rural population, rural population with incomes below the poverty level,
and non-metropolitan unemployment.

4\. [Basic formula allocation]{.underline}. State allocations are shown
on page 23 of this attachment.

5\. [Transition formula]{.underline}. Not used.

6\. [Base allocation]{.underline}. The amount of base allocation is
\$50,000.

7\. [Administrative allocation]{.underline}. Not used.

8\. [Reserve]{.underline}. Funds from the National Office Reserve will
be allocated to the States for projects that best meet Agency priorities
according to funds available at the time of the request. **No request
for funding will be considered unless the project is ready to be
obligated**. RBEG funds set-aside for EZ/EC and REAP, Native American
Tribes and Rural Transportation, may be requested in the same manner as
regular funds (see page 32 of this attachment for funding cycle
information). Applicants must submit their application to the Agency in
paper format. If your application meets more than one earmark, you must
inform the National Office from which earmark you want the application
to be considered.

There will be one funding cycle for regular non-set-aside funding. In
order to compete in the National Office Reserve funding cycle, all funds
allocated to the State must be obligated in accordance with the funding
cycle chart on page 32. Highest priority projects must be funded with
State allocations to the extent possible. National Office Reserve funds
may only be requested when the State Office allocation is not sufficient
to fund projects ready to be obligated. Requests for National Office

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 8

Reserve funding must be accompanied by a list of projects funded this
fiscal year and those applications currently on hand. Information
provided is to include date received, current status, and priority
score, using the same format as shown on page 34 of this attachment.

You may only have up to two requests competing in the National Office
Reserve funding cycle; however, this is not applicable to multi-State
projects. This is not applicable for any separate earmark funding
cycles, such as EZ/EC and REAP. Requests for National Office Reserve
funding will include a signed Certification for Request of Funds (see
page 24 of this attachment); State Project List (see page 34 of this
attachment); Priority Score Sheet, RD Instruction 1942-G, Attachment 1,
including backup scoring documentation and LAPAS Project Information
Sheet which has been updated to include program specific data (see
example on page 33 of this attachment; to obtain a Program specific
copy, go to <http://teamrd.usda.gov/rd/lapas/leg/default.htm> and click
on the applicable program). Also, please refer to
<http://www.house.gov/house/MemStateSearch.shtml> and
[http://www.senate.gov/general/contact_information/senators_cfm.cfm]{.underline}
for correct Representative and Senatorial information required for all
LAPAS Project Information sheets. Random reviews of projects selected
for funding will be conducted by the National Office prior to States
being notified of awards. The request must be e-mailed to the National
Office as outlined on pages 26 and 27 of this attachment after the grant
has been developed to the point where it can be approved upon
notification that funds are available. Multi-State projects will be
considered for funding from the National Office Reserve. The originating
office will receive a confirmation from the National Office that the
National Office received all requests sent via e-mail. Consideration
will not be given to requests received in the National Office after the
dates indicated on page 32 of this attachment listing funding cycles for
FY 2008.

All applications on the National Office Reserve list for FY 2007 were
removed on October 1, 2007. Should the State Office determine that those
projects are still viable, they may use their State allocation to fund
the projects, or, if the State allocation has been committed to higher
scoring projects, the State Office may resubmit the requests for
competition.

9.  Pooling of funds. Except for the Native American and Rural

Transportation Earmarks, funds must have an obligation date of no later
than June 30, 2008, or they will revert to the National Office for

> RD Instruction 1940-L

Exhibit A, Attachment 1

Page 9

redistribution. For Native American projects, there will be one funding
cycle (see page 32 of this attachment). Any applications for Native
American funds received after the cutoff date will be considered on an
individual basis for any remaining available funds. Any funds not
obligated by September 30, 2008, will carry over to FY 2009.

III\. Funds Not Distributed to States. All funds for these programs are
retained in the National Office.

A. [Intermediary Relending Program (IRP)]{.underline}. See page 20 for
program level.

IRP funds set-aside for EZ/EC and REAP, Native American Tribes, and
Mississippi Delta Region Counties may be requested in the same manner as
regular program funds and will be allocated according to the schedule on
page 32 of this attachment. If you have any applications that qualify
for set-aside funds, including applications for which you have
previously submitted a score sheet, be sure to notify the National
Office. Also, please indicate on the Project Information Sheet if a
project qualifies for more than one source of funding.

[Pooling of funds]{.underline}. EZ/EC and REAP, Native American, and
Mississippi Delta Region Counties set-aside funds awarded to States must
have an obligation date of no later than June 30, 2008, before the funds
revert to regular program use.

Non-set-aside funds will be made available in accordance with the
schedule outlined on page 32 of this attachment and based on national
competition. Applications must be received by the National Office prior
to the date outlined on page 32 of this attachment to be considered
during the referenced periods for an allocation of funds. For this
fiscal year, the initial funding selection will include applications
that were received in the National Office by October 31, 2007. **No
request for funding will be considered unless the project is ready to be
obligated**. E-mail requests for IRP funding will include a
Certification for Request of Funds (see page 24); the administrative
point justification in accordance with RD Instruction 4274-D, §
4274.344(c)(6) and a priority score sheet in accordance with RD
Instruction 4274-D, Exhibit C; LAPAS Project Information Sheet which has
been updated to include program specific data required for each program
(see example on page 33 of this attachment; to obtain a program specific
copy, go to <http://teamrd.usda.gov/rd/lapas/leg/default.htm> and click
on the applicable program). Also, please refer to
<http://www.house.gov/house/MemStateSearch.shtml> and

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 10

[http://www.senate.gov/general/contact_information/senators_cfm.cfm]{.underline}
for correct Representative and Senatorial information required for all
LAPAS Project Information sheets.

**Random reviews of selected projects submitted for funding will be
conducted by the National Office prior to States being notified of the
awards. Funding requests should be e-mailed to the addresses listed on
pages 26 and 27 of this attachment**

B. [Rural Business Opportunity Grants (RBOG)]{.underline}. See Page 20
for program level including funding earmarks. Funds will be allocated to
the States for projects that best meet Agency priorities. **A Federal
Register notice announcing funding for FY 2008 will be published in the
near future**. In order to distribute limited non-set-aside funds among
more communities and applicants, no more than \$50,000 in RBOG funds may
be allocated to a single State or sub-State applicant or project. For
multi-State projects, no more than \$150,000 in RBOG funds may be
allocated to a single applicant. These limits do not, however, apply to
set-aside funds.

Requests for funding will include a Certification for Request of Funds
(see page 24 of this attachment); a Priority Score Sheet,\
RD Instruction 4284-G, Exhibit B) including backup scoring
documentation; and a LAPAS Project Information Sheet which has been
updated to include program specific data required for each program (see
example on page 33 of this attachment); to obtain a program specific
copy, go to <http://teamrd.usda.gov/rd/lapas/leg/default.htm> and click
on the applicable program). Also, please refer to
<http://www.house.gov/house/MemStateSearch.shtml> and
[http://www.senate.gov/general/contact_information/senators_cfm.cfm]{.underline}
for correct Representative and Senatorial information required for all
LAPAS Project Information sheets. For funding cycle information, see
page 22 of this attachment. The deadline for the receipt of applications
in the State Office is March 31, 2008. Applicants may submit their
application to the Agency in either electronic format via Grants.gov or
paper format. There will be one funding cycle for regular, non-set-aside
funds. Random reviews of selected projects for funding will be conducted
by the National Office prior to States being notified of awards.
Requests for National Office Reserve funding must be accompanied by a
list of applications currently on hand. The limitation on the number of
applications you can submit to the National Office is not applicable for
any separate set-aside funding cycles, such as EZ/EC and REAP. The
requests must be e-mailed to the National Office as outlined on pages 26
and 27 of this attachment after the docket has been developed to the
point where the grant can be approved upon notification that funds are
available. No request

> RD Instruction 1940-L

Exhibit A, Attachment 1

Page 11

for funding will be considered unless the project is ready to be
obligated. All applications on the National Office Reserve list for FY
2007 were removed on October 1, 2007. Should the State Office determine
that those projects are still viable, the State Office may resubmit the
requests for competition.

C. [Rural Economic Development Loan (REDL) Program]{.underline}. See
Page 20 for program level. **The maximum amount per any one project will
be announced in a [Federal Register]{.underline} publication in the near
future.** Selections will be made in the National Office based on
national competition. Please refer to page 32 of this attachment for
funding cycles for FY 2008. Each application will continue to be
considered each quarter until it has been selected for funding or
considered in four consecutive quarterly cycles. Requests for funds will
include a signed Certification for Request of Funds (see page 24 of this
attachment); Application Analysis and Project Evaluation Summary; and
LAPAS Project Information Sheet which has been updated to include
program specific data required for each program (see example on page 33
of this attachment; to obtain a program specific copy, go to
<http://teamrd.usda.gov/rd/lapas/leg/default.htm> and click on the
applicable program). Also, please refer to
<http://www.house.gov/house/MemStateSearch.shtml> and
[http://www.senate.gov/general/contact_information/senators_cfm.cfm]{.underline}
for correct Representative and Senatorial information required for all
LAPAS Project Information sheets. This information is to be e-mailed to
the National Office as outlined on pages 26 and 27 of this attachment.
No request for funding will be considered unless the project is ready to
be obligated.

The eligibility requirements under the REDLG program are included under
the FY 2008 Appropriations Bill. Under the FY 2008 appropriation, an
organization eligible to apply for REDLG funding is described as:

1\. any former Rural Utilities Service borrower that has repaid or
prepaid an insured, direct, or guaranteed loan under the Rural
Electrification Act (Act);

2\. any not-for-profit utility that is eligible to receive an insured or
direct loan under such Act; or

3\. any borrower under such Act.

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 12

D. [Rural Economic Development Grant (REDG) Program]{.underline}. At the
present time, no funding is available for this program. Should funding
become available, the amount of funding and the maximum amount per any
one project will be announced in **a [Federal Register]{.underline}**
publication**.** Applications will be processed in the State Office.
Selections will be made in the National Office based on national
competition. Each application will continue to be considered each
quarter until it has been selected for funding or considered in four
consecutive quarterly cycles. Requests for funding will include a
Certification for Request of Funds (see page 24 of this attachment);
Application Analysis and Project Evaluation Summary; and a LAPAS Project
Information Sheet which has been updated to include program specific
data required for each program (see example on page 33 of this
attachment); Applicants must submit applications to the Agency in paper
format. These attachments are to be e-mailed to the National Office as
outlined on pages 26 and 27 of this document. No request for funding
will be considered unless the project is ready to be obligated.

Applications will be accepted for a combination loan and grant from one
Rural Utilities Program borrower to finance the same project under this
program as well as dual applications where two Rural Utilities Program
borrowers wish to simultaneously participate in financing portions of
the same ultimate recipient project.

E. [Renewable Energy Systems and Energy Efficiency Improvement Program
(Section 9006]{.underline}). See page 21 for program level. A Federal
Register Notice will be published in the near future announcing the
grant program.

For all loan, grant, and combination packages, the following will apply:
Funding requests must be submitted in accordance with the instructions
below.  No funding request will be considered unless the environmental
assessment and technical merit determinations are complete and the
project is otherwise ready to be obligated. In order to ensure effective
tracking of funding requests, packages must be sent via overnight
express utilizing the U.S. Postal Service or a private express carrier,
provided the package can be traced with an electronic tracking number.
In addition to submitting the package, an e-mail must be sent to the
National Office as outlined on pages 26 and 27 of this attachment.

1\. Renewable Energy Systems and Energy Efficiency Improvement Grant
(Section 9006 Grants).  Applications will be processed in the State
Office. Applicants may submit their application to the Agency in either
electronic format via Grants.gov or paper format. Selections will be
made in the National Office in accordance with the Notice of Funding

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 13

Availability to be published in the near future. Please refer to page 32
of this attachment for funding cycles and deadlines. Requests for
funding are to include the following: (1) The priority score sheet with
supporting documentation tabbed and numbered for each criteria, to
include all calculations for each scoring criteria. (The Review
Committee will only consider awarding points when properly organized
supporting documentation and fully understandable calculations are
provided); (2) a copy of the executed project summary; (3) a copy of
LAPAS Project Selection Notice; (4) a copy of the results of the
technical review.  The e-mail must include the name of the applicant,
the date the package was sent, the tracking number, the type of
assistance requested, and the amount of the request; and (5) evidence of
demonstrated financial need. 

 

2\. Renewable Energy Systems and Energy Efficiency Improvements
Guaranteed Loan Program (Section 9006 Loans).  Funds will be allocated
on an on-going basis to States from the National Office Reserve for
projects that best meet Agency priorities from funds available at the
time of the request.  For funding requests within the State's approval
authority, the State Director or designee may request funds from the
reserve by e-mailing a copy of the priority score sheet, with supporting
documentation, LAPAS Project Selection Notice; and a copy of the results
of the DOE's technical review.

For guaranteed loans that exceed the State's delegation of authority,
the State Office will be required to submit the complete application to
the National Office for review and funding consideration.

All State Offices will be notified as to the results of the National
Office and Loan Committee reviews.  In the event an application for a
guarantee is not approved, the National Office will indicate the
weaknesses and identify ways to mitigate same.  The State Office will
notify the lender.  Such loan guarantee applications may only be
resubmitted after weaknesses are addressed.  Weaknesses on fundable
applications will be addressed as loan conditions.  Any guaranteed loan
funds that are not obligated by July 15, 2008, will be pooled and revert
to the National Office reserve for loan use.

3\. Combination Renewable Energy Systems and Energy Efficiency
Guaranteed Loan and Grant Applications (Section 9006 combination
packages). All combination Guaranteed Loans and Grant packages

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 14

submitted will be considered through a competitive process in accordance
with the Notice of Funding Availability.  Requests on hand as of the
1^st^ and 15^th^ of the month will be processed and States notified. 
The Agency will collect all combination packages submitted and score the
grant portion of each under the bi-weekly competition.  Those packages,
for which the grant portion is deemed acceptable, including demonstrated
financial need, will be considered for loan funding.  This method will
ensure that no loan is approved without the grant leveraging it needs,
and minimize delays on the loan portion of application decisions. Any
combination package for which the grant portion is deemed unacceptable
may be considered as a loan-only request.

F. [Biomass Research and Development Grants (Section 9008]{.underline}).
Procedures for applying will be announced in a Federal Register notice
to be published by the Department of Energy at a later date.

Through an Interagency Agreement with the Department of Energy, the
National Energy Laboratory will be responsible for the intake and
processing of applications. Applications must be submitted using a
two-part process that includes pre-applications which are accepted from
invited successful pre-applicants only. All Section 9008 applications
should be submitted electronically, via Grants.gov.

G. [Value-Added Agricultural Market Development Grant Program
(VAPG]{.underline}). See page 21 for program level. The VAPG program
encourages independent agricultural commodity producers to further
refine or enhance their products thereby increasing their value to end
users and increasing the returns to producers. Grants may be used for
planning purposes such as conducting feasibility analyses or developing
business plans, or for working capital accounts to pay salaries,
utilities, and other operating costs. While this program uses extensive
resources from the State Offices, no funds are allocated to the States.

H. [The Agricultural Marketing Resource Center (AgMRC)]{.underline}. See
page 21 for program level. AgMRC is an electronically-based information
center to create, process, analyze, and present information on
value-added agriculture. The center is housed at Iowa State University;
however, it has partners at Kansas State University and the University
of California--Davis. The center provides producers, processors, and
other interested parties with critical information necessary to build
successful value-added businesses. No funds are allocated to the State
Offices; however, the Iowa State Office helps monitor the Center. Since
the passage of the Farm Bill, funding for AgMRC has been set at

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 15

5 percent of the funding made available to the other value-added
programs.

I. [Rural Cooperative Development Grant Program (RCDG)]{.underline}. See
page 21 for program level. RCDG grants are made to nonprofit
corporations including institutions of higher education to establish and
operate centers for cooperative development and to improve the
operations of existing cooperatives. Centers provide a variety of
cooperative development activities that include conducting feasibility
and marketing studies, developing business plans, marketing strategies,
and by-law provisions, and providing educational and training sessions.
No funds are allocated to the State Offices; however, the State Offices
are responsible for monitoring those centers that received grant funds.

J. [Grants to Assist Small Minority Producer (SMP)]{.underline}. See
page 21 for program level. The SMP makes funding available to
cooperatives or associations of cooperatives whose primary focus is to
provide assistance to small, minority producers. No funds are allocated
to the State Offices; however, the State Offices are responsible for
monitoring those centers that received grant funds.

K. [The Appropriate Technology Transfer for Rural Areas
(ATTRA]{.underline}). See page 21 for program level. ATTRA provides
information to farmers, extension agents, and other rural residents on a
variety of sustainable agricultural practices that include both cropping
and livestock operations. The program encourages agricultural producers
to adopt sustainable agricultural practices, which allow them to
maintain or improve profits, produce high quality food, and reduce
adverse impacts to the environment. This program is administered
exclusively in the National Office.

L. [Cooperative Agreements]{.underline}. See page 20 for program level.
Cooperative Agreements are contractual agreements between the Federal
government and another party to accomplish a specific public purpose in
which both the government agency and the recipient must be substantially
involved. While State Offices may participate in the activities, funds
are not allocated to the State Offices.

IV\. [Set-aside Funds]{.underline}. See Page 21 for funding levels. All
set-aside funds will be retained in the National Office and allocated in
accordance with page 32 of this attachment. All funds are retained in
the National Office. See pages 20 and 21 for program level. Set-aside
funds will be kept in a National Reserve fund and allocated on a
national competitive basis, in accordance with the schedule outlined on
page 32 of this attachment. Funds cannot

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 16

be used for purposes other than set-aside program purposes. The
following amounts are available this fiscal year:

A. Native American Set-aside Funds. Native American set-aside funds will
be used for projects where at least 75 percent of the benefits of the
project will be received by members of a Federally Recognized Native
American Tribe. Waiver of the 75 percent minimum is possible on a
case-by-case basis if the project will otherwise provide significant
benefits to members of Federally Recognized Native American Tribes.
Requests for exceptions must be submitted to the Administrator. The
Administrator must approve all waiver requests.

Requests should clearly document how the specific project meets the
above criteria to qualify for the set-aside funds. Requests not
providing this documentation will be returned to the State. Procedures
to be followed in the distribution of these funds are addressed under
applicable program funding allocation procedures of this attachment.
Except for IRP, funds not used during FY 2008 will be carried over to\
FY 2009 for funding of Native American projects.

For IRP, funds will be available for Native American projects through
June 30, 2008. This means that set-aside funds must have an obligation
date of no later than June 30, 2008. After that date, any remaining
funds not obligated will revert to the regular IRP reserve.

B. Delta Regional Authority (DRA) Set-aside Funds. RBPA set-aside funds
plus any carryover will be available to the DRA to provide assistance
for any purpose under RBPA to businesses and residents residing in the
Lower Mississippi Delta designated counties. Set-aside funds will be
kept in the National Office Reserve and awarded to the DRA upon receipt
of an application complete with a Scope of Work identifying the intended
use of the funds. Any RBPA set-aside funds not used in FY 2008 will be
carried over into FY 2009.

C. Mississippi Delta Region Counties IRP Set-aside Funds. IRP set-aside
funds will be made available for projects located in designated
Mississippi Delta Counties. Set-aside funds will be kept in the National
Reserve and awarded in accordance with the schedule on page 32 of this
attachment. Funds can be used for projects where at least 75 percent of
the benefits of this project will be received by residents within one or
more of the designated counties.

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 17

D. EZ/EC and REAP Set-aside Funds. EZ/EC and REAP set-aside funds will
be kept in a Reserve fund and controlled by the National Office. Funds
may be requested in the same manner as requesting Reserve funds for
regular programs. The set-aside funds will be available for EZ/EC and
REAP projects through June 30, 2008. This means that set-aside funds
must have an obligation date of no later than June 30, 2008.

After that time, any remaining unobligated funds will be pooled and
revert to regular program use. This includes funds that have been
allocated to States but have not been obligated (see page 32 of this
attachment for funding cycle information).

The Benchmark Management System (BMS) allows rural communities located
throughout the Nation to maintain their own activity work plans,
budgets, and status reporting on-line via the web. In order to be
eligible for competition for EZ/EC and REAP set-aside funds, you must
submit a copy of the BMS documents identifying your project or include
the specific benchmark number in your request for funds. Please do not
submit any requests for projects not specifically identified in the BMS
documents.

EZ/EC and REAP set-aside funds will be used for projects identified in
the EZ/EC or REAP Strategic Plan and BMS documents, provided at least 75
percent of the benefits of the project will be received by residents
within the EZ/EC and REAP census tract boundaries. Waiver of the 75
percent minimum is possible on a case-by-case basis if the project would
otherwise provide significant benefits to the EZ/EC and REAP areas.
Requests for waivers should be submitted to the Administrator, with a
copy to the Cooperative Programs-EZ/EC Program.

E. Pooling of Set-aside Funds.

1\. [Native American Set-aside Pooling of Funds]{.underline}. There will
not be a pooling of funds for the Native American funds. For Native
American projects, there will be one funding cycle (see page 32 of this
attachment). Any applications for Native American funds received after
the cutoff date will be considered on an individual basis for any
remaining available set-aside funds. Any B&I, RBEG, or RBOG funds not
obligated by September 30, 2008, will carry over into FY 2009. Any IRP
set-aside funds not obligated by June 30, 2008, will be pooled and
revert back to the regular IRP fund.

2\. [Rural Business Opportunity Grant Set-aside Funds
(RBOG]{.underline}). RBOG funds set-aside for EZ/EC and REAP and Native
American Tribes may be requested in the same manner as regular funds and
will be

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 18

allocated according to the schedule on page 32 of this attachment. Any
awarded EZ/EC and REAP applications not obligated by June 30, 2008, will
be pooled and revert to the National Office Reserve. If your application
meets more than one earmark, inform the National Office from which
earmark you want that application to be considered.

3\. [The North American Development Bank (NADBank)
Initiative]{.underline}. Loans made under this authority are processed
under provisions of the Memorandum of Understanding (MOU) between USDA
and Treasury, Guidelines for the Community Adjustment and Investment
Program (CAIP), CAIP Policies and Procedures, and RD Instructions 4279-A
and B, as if they were regular B&I Guaranteed Loans. Loans made under
this authority are serviced in accordance with RD Instruction 4287-B.
Funding under this program may be used to assist businesses in
CAIP-eligible areas by paying the loan subsidy or the guarantee fee, but
not both. The loan cost-per-job created cannot exceed \$70,000 (computed
on the guaranteed portion and excluding jobs saved) and any debt
refinancing must be less than half the total loan amount.

Because of the high CAIP subsidy rate of 9.15 percent, NADBank is only
interested in providing the loan subsidy for loans to businesses that
will have an impact on the community by providing necessary or essential
services or by showing the promise for continued growth, either directly
or through the catalytic impact of the transaction. The business should
be well positioned in industry sectors considered viable and growing
versus mature and declining, e.g., textiles and sewing.  The jobs should
provide wages that are at least equal to the average wage in the county
where the business is located. The company\'s employees should have an
opportunity for advancement and they should receive or be eligible for
benefits.  Therefore, when you receive an application for a business in
a CAIP-eligible area, and you would like NADBank to consider paying the
loan subsidy, you should call Hugh Loftus, Director, United States
Adjustment and Investment Program, at (562) 908-2100 and discuss the
merits of the proposal. Mr. Loftus will then provide you with a letter
of findings with a recommendation, and with a copy to Andrea Patterson.
This conversation should take place early in your review of the
proposal, well before loan approval. Up to 50 percent of FY 2008 CAIP
funding used to pay loan subsidy can be used for loans with a guarantee
percentage exceeding 80 percent, and any such request must include a
strong justification. Therefore, before a loan exceeding 80 percent is
obligated, an equal or greater amount must have been obligated at 80
percent or lower. This limit does not apply to loans where NADBank pays
only the guarantee fee. Requests for funds (guarantee fee or loan

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 19

subsidy) should be e-mailed to Steve Levy (<levysteve@mail.com>) and the
National Office as outlined on pages 26 and 27 of this ttachment. The
request should include the Endorsement Checklist (pages 28 thru 30 of
the attachment). The National Office will present the request to the
CAIP Finance Subcommittee for funding, and advise the State Office when
the requested funds are available. For loans exceeding the State
Director's delegated B&I approval authority, prior concurrence of the
Administrator should be obtained. The CAIP guidelines, policies and
procedures, and list of CAIP-eligible areas are available on NADBank's
Web site at [www.nadbank-caip.org](http://www.nadbank-caip.org/).

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 20

Tomatoes

A. Business and Industry Guaranteed Loans

[Program level available for allocation]{.underline}.

Amt avail. including carryover (\$465,316,140.27) 1,458,316,140.27

Less National Office Unrestricted Reserve 218,784,140.27

Basic formula amount 1,239,532,000.00

B. Rural Business Enterprise Grants (RBEG)

[Program level available for allocation]{.underline}.

Amount available including carryover (\$5,496,026) \$44,223,026.01

Less EZ/EC 7,251,900.00

Less MS Delta (DRA) 2,979,000.00

Less Rural Transportation Earmark 493,000.00

Less Native American Tribes Transportation Earmark 248,250.00

Less Native American Tribes 2,733,750.00

Less National Office Unrestricted Reserve 6,658,126.00

Basic formula amount \$23,859,000.01

C.  Delta Regional Authority Grants (DRA)

[Program level available for allocation]{.underline}.

Amount \$2,979,000.00

D. Intermediary Relending Program

[Program level available for allocation]{.underline}.

Amount available \$33,536,034.00

Less EZ/EC and REAP 2,037,397.99

Less MS Delta 7,985,211.00

Less IRP Federally Reorganized Native Amer. Tribes 3,991,447.88

Amount available 19,521,977.13

E. Rural Business Opportunity Grant Program

[Program level available for allocation]{.underline}.

Amt available (including carryover \$152,110) \$2,634,610.17

Less EZ/EC 990,000.00

Less Native American 990,000.00

Amount available 654,110.17

F. Rural Economic Development Loan Program

[Program level available for allocation]{.underline}.

Amount available (including carryover \$43,656) \$33,120,656.53

G. Rural Economic Development Grant Program

[Program level available for allocation]{.underline}.

Amount \$0.00

At the present time, no funding is available for this program. Should
funding become available, the amount of funding and the

RD Instruction 1940-L

Exhibit A, Attachment 1

> Page 21

maximum amount per any one project will be announced

in **a [Federal Register]{.underline}** publication**.**

H. Section 9006 Renewable Energy Systems and Energy

Efficiency Improvement Grant

[Program level available for allocation]{.underline}.

Amount \$15,888,000.00

Section 9006 Renewable Energy Systems and Energy

Efficiency Guaranteed Loan Program

[Program level available for allocation]{.underline}.

Amount \$204,953,560.00

I.  Value-Added Agricultural Market Development

Grant Program

[Program level available for allocation]{.underline}.

Amount \$18,867,000.00

J. The Agricultural Marketing Resource Center

[Program level available for allocation]{.underline}.

Amount \$943,350.00

K.  Rural Cooperative Development Grant Program

[Program level available for allocation]{.underline}.

Amount \$4,424,000.00

L.  Grants to Assist Small Minority Producer

[Program level available for allocation]{.underline}.

Amount \$1,463,000.00

M.  The Appropriate Technology Transfer for Rural

Areas

[Program level available for allocation]{.underline}.

Amount \$2,582,000.00

N.  Cooperative Agreements

[Program level available for allocation]{.underline}.

Amount \$492,000.00

(02-07-08) PN 418

Exhibit A, Attachment 1, Pages 22 and 23 in PDF only.

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 24

**CERTIFICATION FOR REQUEST OF FUNDS**

Program:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name of Applicant:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Amount of Funds Requested:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Type of Funds:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

I HEREBY CERTIFY THAT:

1\. All priority points are accurate according to the regulations of the
program for which the funds are being requested.

2\. The applicant is eligible under the regulation from which funds are
being requested, the proposed loan/grant is for an eligible purpose, and
the proposed loan/grant complies with all applicable statutes and
regulations.

3\. For funds requested from the EZ/EC/REAP earmark, at least 75 percent
of the benefits of the project will be received by residents within the
designated boundaries. Set-aside funds will be used for projects
identified in the EZ/EC/REAP Strategic Plan and benchmark documents. The
benchmark and task number is:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

4\. If funds are requested from the Native American earmark, at least 75
percent of the benefits of the project will be received by members of a
Federally Recognized Native American Tribe.

5\. If funds are requested from the Mississippi Delta earmark, at least
75 percent of the benefits of the project will be received by residents
within one or more lower Mississippi Delta designated counties.

6\. Adequate documentation to justify points is part of the file and can
be clearly discerned if the file is requested for review.

7\. All other sources of funds (leveraging) have been verified and
are/or will be available at the start of the project.

BY: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

State Director, Rural Development

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 25

## Revised Guide for Recommending Administrative Points 

## [for Fiscal Year 2008 IRP Applications]{.smallcaps}

Applicant:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

State: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

####  

####  Administrative Point Criteria

*(Points)* Score

1\. [Assuming there is adequate documentation of need for the\
amount requested. The amount of funds requested in]{.underline}

[relation to the amount of need]{.underline}: *[4 pts]{.underline}*

2\. [A particularly successful business development record]{.underline}\
[and/or excellent utilization of a previous IRP loan]{.underline}: *[4
pts]{.underline}*

3\. [A service area with no other IRP coverage]{.underline}:\
(Disregard coverage by multi-State intermediaries or\
intermediaries that specialize in indirect business-related\
financing, such as only loans for water/sewer or for\
transportation.

No coverage: [1*5 pts*]{.underline}

Some: *[5 pts]{.underline}*

4\. [A service area with severe economic problems]{.underline}:\
Such as communities that have remained persistently\
poor over the last 60 years or have experienced long-\
term population decline or job deterioration. *[5 pts]{.underline}*

5\. [A service area with emergency conditions caused by]{.underline}\
[a natural disaster or loss of a major industry]{.underline}: *[2
pts]{.underline}*

6\. [A work plan that is in accord with a strategic plan]{.underline}:\
Particularly a plan prepared as part of a request for\
an Empowerment Zone/Enterprise Community\
designation or Champion Community or work plan\
identified in State Office Strategic Plans. *[5 pts]{.underline}*

Any combination may be used up to the maximum of 35 points.

**Total Administrative Points Awarded**: [**\_\_\_\_\_**]{.underline}

(02-07-08) PN 418

**RD Instruction 1940-L**

**Exhibit A, Attachment 1**

**Page 26**

**E-mail addresses by task**

**Acknowledgement of receipt of all e-mail requests will be provided by
the National Office.**

**RBPA Transfer Requests**

**Original to: Sylvia Neal, (<sylvia.neal@wdc.usda.gov>)**

**Copies to: Andrea Patterson,
([andrea.patterson@wdc.usda.gov](mailto:andrea.patterson@usda.gov))**

**Maria Cartagena, (<maria.cartagena@wdc.usda.gov>)**

**Set-aside B&I Funding Requests**

**Original to: Andrea Patterson (<andrea.patterson@wdc.usda.gov>)**

**Copy to: Fred Kieferle (<fred.kieferle@wdc.usda.gov>)**

**Set-aside RBEG and RBOG Funding Requests**

**Original to: Cindy Mason, ([Cindy.Mason@wdc.usda.gov]{.underline})**

**Copy to: Maria Cartagena, (<maria.cartagena@wdc.usda.gov>**

**Copy to: Deidra Garris, ([deidra.garris@wdc.usda.gov]{.underline})**

**IRP Application Submission**

**At least 5 days prior to submission of an IRP application to the
National Office notify via e-mail.**

**Original to: Lori Washington,
([Lori.Washington@wdc.usda.gov]{.underline})**

**Copy to: Maria Cartagena, (<maria.cartagena@wdc.usda.gov>**

**IRP Funding Requests**

**Original to: Lori Washington
([Lori.Washington@wdc.usda.gov]{.underline})**

**Copy to: Maria Cartagena (<maria.cartagena@wdc.usda.gov>**

**Copy to: Deidra Garris, ([deidra.garris@wdc.usda.gov]{.underline})**

**REDLG Funding Requests**

**Original to: Melvin Padgett
([Melvin.padgett@wdc.usda.gov]{.underline})**

**Copy to: Maria Cartagena (<maria.cartagena@wdc.usda.gov>**

**RBEG Funding Requests**

**Original to: Cindy Mason([Cindy.Mason@wdc.usda.gov]{.underline})**

**Copy to: Maria Cartagena (<maria.cartagena@wdc.usda.gov>)**

**Copy to: Deidra Garris, ([deidra.garris@wdc.usda.gov]{.underline})**

**9006 Funding Requests**

**Original to: Frederick Petok
([Frederick.petok@wdc.usda.gov]{.underline})**

**Copy to: Maria Cartagena (<maria.cartagena@wdc.usda.gov>**

**Copy to: Alice Thompson,
(alice.thompson[\@wdc.usda.gov]{.underline})**

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 27

**B&I Unrestricted Reserve**

**Original to: Andrea Patterson (<andrea.patterson@wdc.usda.gov>)**

**1^st^ copy to: Kenya Nicholas
([Kenya.Nicholas@wdc.usda.gov]{.underline})**

**2^nd^ copy to: Fred Kieferle
([fred.kieferle@wdc.usda.gov](mailto:fred.kieferle@usda.gov))**

**B&I Guaranteed Loans where percent of guarantee exceeds 80 percent**

**Original to: Andrea Patterson (<andrea.patterson@wdc.usda.gov>)**

**1^st^ copy to: Fred Kieferle
([fred.kieferle@wdc.usda.gov](mailto:fred.kieferle@usda.gov))**

**2^nd^ copy to: Kenya Nicholas
([kenya.nicholas@wdc.usda.gov]{.underline})**

**B&I Guaranteed Loans requesting 1 percent guarantee fee**

**Original to: Andrea Patterson
([andrea.patterson@wdc.usda.gov](mailto:andrea.campbell@usda.gov)))**

**Copy to: Fred Kieferle
([fred.kieferle@wdc.usda.gov](../../../../../../../../A:%5Cfred.kieferle@usda.gov))**

**NADBank**

**Original to: Donetta Rigney
(<Donnetta>[.Rigney@wdc.usda.gov]{.underline})**

**Copy to: Fred Kieferle (<fred.kieferle@wdc.usda.gov>)**

**Copy to: Andrea Patterson
([andrea.patterson@wdc.usda.gov](mailto:andrea.campbell@usda.gov)))**

**Copy to: Pandor Hadjy ([pandor.hadjy@wdc.usda.gov]{.underline})**

**RBEG National Office Reserve competition**

**Original to: Cindy Mason (<cindy.mason@wdc.usda.gov>)**

**Copy to: Deidra Garris, ([deidra.garris@wdc.usda.gov]{.underline})**

**E-mail copy to: Maria Cartagena
([m]{.underline}<aria.cartagena@wdc.usda.gov>)**

(02-07-08) PN 418

Number range CHAPTERRD Instruction 1940-L

Exhibit A, Attachment 1

Page 28

**ENDORSEMENT CHECKLIST FOR THE CAIP FINANCE COMMITTEE**

**Borrower Name:**

**Request for CAIP to pay**: (Insert guarantee fee or loan subsidy) in
the amount of \$\_\_\_\_\_\_\_. See special requirements in 1940-L
package if the request is for loan subsidy.

**Location:** City, State, (County)

**Area Eligibility:** You need to choose the correct description of why
the area is eligible. In some cases you will need to access data on the
Internet and fully discuss why the area is eligible. You should use some
variant of ONE of the following three statements, each of which meets
the Finance Committee requirement for certification that the area where
the borrower will be applying the loan proceeds is eligible for USDA
under the CAIP.

Unemployment data are available at:

<http://naid.sppsr.ucla.edu/NADBANK/NDB>\_[COLD_FUSION_ROOT/index.cfm]{.underline}

This area has a rural Beale (Rural-Urban Continuum) Code and is an
eligible area designated by the Finance Committee.

This county has an urban Beale Code, but the area in which the new
facility \[substitute the right description\] is being constructed is
eligible for B&I loans and the county has an unemployment rate of \_\_\_
percent, which is at least 1 percent over the national average.

This county has an urban Beale Code, but the area in which the new
facility \[substitute the right description\] is being constructed is
eligible for B&I loans and the Local Area Unemployment Statistics (LAUS)
of the U.S. Department of Labor shows an unemployment rate of \_\_\_
percent for the immediate \_\_\_\_ \[locality or census tract\], which
is at least 1 percent over the national average.

**Amount/Rate/Term:** \$ \_\_\_\_\_\_\_ (full loan amount) at \_\_% or
WSJ Prime + \_\_% (or other benchmark) for \_\_\_ years).

**Case number**: (Borrower case number as assigned by State Office)

**Loan Purpose:** (Describe purpose of loan)

**Jobs:** Clearly describe the jobs that will be created and saved as a
result of the loan (within 2 years of loan closing). In order to count
jobs saved, the loan must actually be preventing the loss of those jobs.
The numbers must be realistic. This is where the CAIP committee most
often questions the proposals. Describe the quality of the jobs,
including average wage or range of wages.

> Number range CHAPTERRD Instruction 1940-L

Exhibit A, Attachment 1

Page 29

**Lender name/location:**

**Sources and Uses of funds**: Using the following format, reflect the
overall scope of the project and the partnering between different
sources of funding, not simply the B&I/CAIP portion. Identify other
sources of funds.

**Uses CAIP Loan Borrower Locality Entity A Totals**

Land \$0 \$50,000 \$100,000 \$150,000

Buildings \$150,000 \$25,000 \$100,000 \$275,000

M&E \$100,000 \$100,000

W/C \$75,000 \$275,000 \$350,000

Fees \$7,200 \$ 7,200

Other \$25,000 \$ 25,000

Totals: \$357,200 \$350,000 \$100,000 \$100,000 \$907,200

**Collateral summary:** Briefly describe the collateral, including lien
position. Provide the market and discounted net collateral values.

**Guarantees/backing**: Provide name(s) of personal/corporate
guarantors, (full/unconditional) or (amount of guarantee), and outside
net worth(s).

**Tangible balance sheet equity**: The proforma balance sheet indicates
the borrower will have \_\_\_\_ percent tangible balance sheet equity
when the guarantee is issued. As a (new)(existing) business, this meets
the regulatory minimum or (10)(20) percent.

**Loan to job ratio:** \$\_(loan amt) / \_\_ (#) jobs = \$\_\_\_\_\_\_
per job.

Guaranteed portion to job: \$\_(loan amt) X 80% guaranteed = \$/ jobs =
\$per job.

**Guarantee fee needed:** \$\_\_\_\_\_\_\_ (loan amt) X 80% guaranteed X
.02 = \$\_\_\_\_\_. (Complete only if the request is for CAIP to pay the
guarantee fee, otherwise insert N/A.)

**Subsidy needed**: \$\_\_\_\_\_\_\_ (loan amt) X .9.15 (for FY 2007) =
\$\_\_\_\_\_\_\_.

(Complete only if the request is for CAIP to pay the subsidy, otherwise
insert N/A.)

(02-07-08) PN 418

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 30

**Subsidy required per job:** \$\_\_\_\_\_\_\_\_\_\_\_
(\$\_\_\_\_\_\_\_\_ / \_\_ jobs = \$\_\_\_\_\_\_ per job). (Complete
only if the request is for CAIP to pay the

subsidy, otherwise insert N/A.)

**FUNDING APPROVED BY VOTE OF THE FINANCE COMMITTEE:**

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

CHAIR DATE

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} \[ \]Yes
\_[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} \[ \] Yes

Agriculture \_\_\_ \[ \] No Treasury \[ \] No

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}
\[ \] Yes

Small Business Administration \[ \] No

RD Instruction 1940-L

Exhibit A, Attachment 1

Page 31

BUSINESS AND INDUSTRY GUARANTEED LOAN PROGRAM

NATIONAL OFFICE RESERVE PRIORITY PROJECT SCORING INFORMATION SHEET

Projects Obligated in fiscal year 2008 to Date:

Per RD Instruction 1940-L, Exhibit A, Attachment 1, page 4, highest
priority projects must be funded with State allocations to the extent
possible.

A listing of all applications on hand indicating the date each was
received, current status, priority score, and a brief explanation of why
it was funded in the order in which it was presented or has not yet been
funded is to be provided.

A copy of Appendix C of RD Instruction 4279-B should be attached to the
memorandum.

  -------------- -------------- -------------- -------------- --------------
  Name           Priority Score Amount         Date App. Rec. Date Obligated

                                                              

                                                              

                                                              

                                                              
  -------------- -------------- -------------- -------------- --------------

Projects Requested to be Obligated from the National Office Reserve:

  ----------------- ----------------- ----------------- -----------------
  Name              Priority Score    Amount            Date App. Rec.

                                                        

                                                        

                                                        

                                                        

                                                        
  ----------------- ----------------- ----------------- -----------------

If a project with a lower priority score was funded ahead of a project
with a higher priority score, provide an explanation of why this was
done.

Explain
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(02-07-08) PN 418

Exhibit A, Attachment 1, Pages 32 and 33 in PDF only.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part I

Page 1

(Revision 1)

RURAL HOUSING SERVICE

RURAL COMMUNITY FACILITY PROGRAM AND RURAL HOUSING ASSISTANCE GRANTS

I. [General]{.underline}.

A. The Agriculture, Rural Development, Food and Drug Administration,

and Related Agencies Appropriations Act, 2008, funded the Rural

Community Facilities Program Account (RCFPA) and the Rural Housing

> Assistance Grants (RHAG). All of the Community Facilities (CF funds
> are included in RCFPA. The housing grant programs, except for section
> 523 Mutual and Self Help Technical Assistance grants, section 516
> Domestic Farm Labor Housing Grants, and section 521 Rental Assistance,
> are included in RHAG. The Administrator has allocated RCFPA and RHAG
> budget authorities into program funds as provided in part II, subparts
> A, B, and C of this attachment. Each dollar of budget authority may
> support a different program level dependent upon whether it is a loan
> or grant program and the nature of the program. Program authorities
> are discussed in part II, subparts A, B, and C of this attachment.
> Rural Housing Service, hereinafter referred to as Housing and
> Community Facilities Programs (HCFP) administering RCFPA or RHAG loan
> and grant funds are subject to the Equal Credit Opportunity Act, Title
> VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act
> of 1968 (also known as the Fair Housing Act of 1988, as amended),
> section 504 of the Rehabilitation Act of 1973, and Executive Orders
> 11246 and 12898.
>
> B. RHAG programs provide flexibility for transfers in budget authority
> between programs in FY 2008. Because of the way the funds control
> system is currently configured, the National Office will have to make
> these transfers on behalf of the State Directors.
>
> [RHAG transfers]{.underline}. For FY 2008, State Directors will have
> the flexibility to transfer their initial allocations of budget
> authority between the section 504 Rural Housing Repair Grant program
> and the section 533 Housing Preservation Grant (HPG) program when
> funds allocated under the HPG program are uncommitted after receipt of
> HPG applications. RHAG transfers cannot be considered until the last
> day for applicants to file HPG applications in order to allow time to
> determine if funds are available for transfer. If a State Director
> determines that they cannot fully utilize their section 504 grant
> allocation, they may request to transfer unusable funds to the section
> 533 HPG program. Of the total unusable section 504 grant funds, the
> maximum transfer to section 533 grant funds will be 25%. The remaining
> 75% of the section 504 grant funds will be returned to the National
> Office reserve to meet the section 504 grant needs of senior citizens
> in other States.
>
> C. [Public notification]{.underline}. State Directors are encouraged
> to notify nonprofit and public agencies of the availability of Rural
> Development loan and grant funds. When applicable, State Directors are
> to ensure these programs comply with Executive Order 12898 and

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part I

Page 2

(Revision 1)

> RD Instruction 1901-E by directing outreach activities to low income
> and minority populations, underserved communities, and colonias. State
> Directors are also reminded of the need to emphasize initiatives, such
> as the Faith-Based and Community Initiatives, and special funding
> needs, such as critical access hospitals.
>
> D. [Empowerment Zone (EZ), Enterprise Community (EC) and Rural
> Economic]{.underline}
>
> [Area Partnership (REAP) Zone Set-aside]{.underline}. The
> Appropriations Act provides for EZ, EC and REAP zones \$993,000 in
> budget authority for Community Facility programs, \$2,482,500 for
> Rural Housing Insurance Fund (RHIF) programs, \$993,000 for section
> 523 Mutual and Self-Help Technical Assistance grants and \$1,191,600
> in the RHAG programs. See part II, subpart A of this attachment for
> RCAP, part II, subparts B and C of this attachment for RHIF programs,
> and part II, subpart B and C of this attachment for RHAG.
>
> E. [Underserved counties and colonias]{.underline}. The
> Cranston-Gonzalez Affordable Housing Act requires HCFP to set aside 5
> percent of its Rural Housing funds for the "100 Underserved Areas and
> Colonias." The top 100 counties, as listed on pages 4 and 5 of this
> part, are eligible for these funds. Pool counties are listed on page
> 6. These funds have been set aside as follows:

  ------------------------------------------ ----------------------------
  SFH direct 502 loans:                      \$56,074,297

  SFH direct 504 loans:                      1,720,450

  SFH direct 504 grants:                     1,489,500

  MFH direct 515 loans:                      3,475,500
  ------------------------------------------ ----------------------------

1.  [Indian Country]{.underline}. When a county on the list is
    associated with Indian Country, the entire Indian Country area is
    eligible even though it crosses into one or more additional
    counties. Indian Country is defined as land inside the boundaries of
    Indian reservations, communities made up mainly of Native Americans,
    Indian trust and restricted lands, and tribal allotted lands.

> 2\. [Pooling]{.underline}. The additional counties listed on page 6
> for the underserved counties will be eligible for the pooled funds
> after June 30, 2008. Funds remaining after an appropriate program
> pooling date will be pooled and made available with the other program
> funds.
>
> 3\. [Single family housing programs]{.underline}. Section 502 and
> Section 504 loans and grants should be processed in accordance with
> Part II, subpart C, paragraph (B)(3)(e) and (C)(2)(b) of this
> Attachment.
>
> 4\. [Multi-family housing programs]{.underline}. Section 515 loans
> should be processed in accordance with part II, subpart B, paragraph
> IV.B.1.b. of this attachment.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part I

Page 3

> 4\. [Multi-family housing programs]{.underline}. Section 515 loans
> should be processed in accordance with part II, subpart B, paragraph
> IV.B.1.b. of this attachment.

II. [Exception authority]{.underline}. The Administrator, or the
    Administrator\'s designee, may, in individual cases, make an
    exception to any of the requirements of this attachment which are
    not inconsistent with the authorizing statute if the Administrator
    finds that application of such requirement would adversely affect
    the interest of the Government. The Administrator, or designee, may
    exercise this authority upon the request of the State Director. The
    request must be supported by information that demonstrates the
    adverse impact or effect on the program. The Administrator, or
    designee, also reserves the right to change pooling dates, establish
    or change minimum or maximum fund usage from set asides and
    reserves, or restrict participation in set asides and reserves.

(04-01-08) SPECIAL PN

Exhibit A, Attachment 2, Part I - pages 4, 5, and 6 in PDF ONLY.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart A, Page 1

## Housing and Community Facilities Programs

## RURAL COMMUNITY FACILITIES PROGRAM

## 

## 

I. [General]{.underline}.

A.  This attachment provides funding allocations available for fiscal

> year (FY) 2008. All Community Facilities (CF) funds are included in
> the Rural Community Facilities Program Account (RCFPA). Computations
> for allocations available to individual States have been performed in
> accordance with §§ 1940.585, 1940.591, and 1940.592 of this
> Instruction. Both the direct and guaranteed loan programs have
> positive subsidy rates for FY 2008.

B.  The Appropriations Act provides a set-aside until June 30, 2008, of
    budget authority that has been converted to \$993,000 in grant funds
    for Empowerment Zones (EZ) and Enterprise Communities (EC) and
    communities designated by the Secretary of Agriculture as Rural
    Economic Area Partnership (REAP) Zones. State Offices may submit
    Guide 26 of RD Instruction 1942-A or RD Form Letter 3570-B-1, as
    appropriate, at any time. The projects must be obligated by June
    30, 2008. For FY 2008, the maximum grant reserve request amount is
    \$100,000.

C.  Congress has appropriated \$6,255,900 for the Rural Community
    Development Initiative. The funds will be used to develop the
    capacity and ability of private, nonprofit, community-based housing
    and community development organizations, low-income rural
    communities, and Indian tribes to undertake projects to improve
    housing, community facilities, and community and economic
    development projects in rural areas. A Notice of Funds Availability
    regarding this program was published in the [Federal
    Register]{.underline} on February 4, 2008. For FY 2008, each State
    Office or its designated Area Offices will accept and perform the
    initial screening of RCDI applications before forwarding them to the
    National Office for scoring and ranking. The initial screening is
    designed to determine completeness of the application and
    eligibility of the applicants, recipients, and beneficiaries.
    Further guidance as to processing and deadlines will be forthcoming.

D.  A set-aside of \$2,037,338 in CF grant funds is provided for child
    care facilities. State Offices must forward a general description of
    the project, Form RD 3570-1 and Letter 3570-B-1 to the National
    Office by close of business on March 30, 2008. The grants must be
    obligated by April 30, 2008. The maximum grant amount is \$50,000.

E.  State allocations are made on an annual basis; however, the National
    Office usually receives apportionment of loan funds on a quarterly
    basis for these programs. If States collectively request

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart A, Page 2

> Obligations greater than the amount apportioned for the quarter, there
> may not be sufficient funds to honor all obligations requested in that
> particular quarter.

II\. [State Allocations]{.underline}. All allocations have been
calculated in accordance with the methodology and formulas contained in
§§ 1940.585, 1940.591, and 1940.592 of this Instruction.

A. [All Community Facilities Programs]{.underline}.

1\. [Basic formula criteria, data source, and weight]{.underline}. The
census information used in the formula is derived from 2000 census data
on population and income.

2\. [Basic formula allocation]{.underline}. State allocations are shown
on pages *7, 8, 9, and 10* of this subpart.

3\. [Transition formula]{.underline}. The transition formula is not
used.

4\. [Base allocations]{.underline}. The amounts of the base allocations
to each State are \$1.275 million for the direct loan program, \$850,000
for the guaranteed loan program, and \$65,000 for the grant program.
Economic Impact Initiative funds also will be allocated to each State,
with a base allocation of \$65,000.

5\. [Administrative allocation]{.underline}. An administrative
allocation was used to establish an allocation for the U.S. Virgin
Islands and the Western Pacific Islands.

6\. [Reserve]{.underline}. Funds will be allocated to the States for
those projects which best meet the Agency's priorities, depending on the
amount available at the time of the request. Program Managers may
request reserve funds by forwarding a general description of the project
with the Guide 26 of RD Instruction 1942-A, Exhibit C of RD Instruction
3575-A, or RD Form Letter 3570-B-1, Form RD 3570-1, and the Legislative
and Public Affairs Staff Project Announcement Sheet, as appropriate, to
the National Office after the docket has been developed to the point
where the loan or grant can be approved upon notification that funds are
available. Requests for direct and guaranteed loan reserves may be made
at any time. Requests for grant reserves will be considered once during
the course of the year. The procedure for requesting grant reserves is
contained in section D, paragraph 3, "Grant Processing," below.

Reserve funds will only be made available after the State's allocation
has been allocated or obligated for particular projects. The
Administrator will consider a State Director's utilization of all his or
her CF allocations in determining whether to honor requests for funds
from the direct or guaranteed loan or grant reserves.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart A, Page 3

7\. [Pooling of funds]{.underline}. Year-end pooling is scheduled for
August 15, 2008. All funds for which requests for obligation of funds
have not been entered and processed will be pooled. Further details will
be provided prior to pooling.

B. [Community Facilities Direct Loans]{.underline}.

Amount available for allocation.

Amount available \$294,947,837

Less National Office reserve [28,079,837]{.underline}

Base, Administrative, and\
Basic formula amount distributed \$266,868,000

C. [Community Facilities Guaranteed Loans]{.underline}.

Amount available for allocation.

Amount available \$206,425,271

Less National Office reserve [19,713,271]{.underline}

Base, Administrative, and\
Basic formula amount distributed \$186,712,000

D. [Community Facilities Grants]{.underline}.

1\. Amount available for allocation.

Amount available \$20,373,381

Less National Office reserve 1,705,043

Less Child Care reserve 2,037,338

Less EZ/EC and REAP set-aside [993,000]{.underline}

Base, Administrative, and\
Basic formula amount distributed \$15,638,000

2\. Maximum grant amount. For FY 2008, the maximum grant reserve request
amount is \$100,000. The maximum grant amount for a child care reserve
request is \$50,000.

3\. Grant processing. There will be a primary deadline to request
Community Facilities grant funds from the National Office Reserve.
Program Managers must forward a general description of the project, Form
RD 3570-1, RD Form Letter 3570-B-1, and a separate electronic file copy
of the Legislative and Public Affairs Staff Project

Announcement Sheet for each request to the National Office by close of
business on June 1, 2008. Indicate clearly the type or types of grant
that this request is being submitted for on the "Type of Request" line
on RD Form Letter 3570-B-1. Any request received after this time period
will be held in the National Office to

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart A, Page 4

compete for any additional funds that remain available after all other
eligible requests have been funded. The National Office will transfer
the funds and provide verbal notification to the State Office that the
funds are available. The National Office does not maintain unfunded
requests beyond the end of the fiscal year.

4\. For each grant application approved, the State Director must
document that the minimum grant amount needed to achieve financial
feasibility for the project has been determined. A copy of this analysis
must be kept in the project file.

E.  [Economic Impact Initiative Grants.]{.underline}

```{=html}
<!-- -->
```
1.  

> Amount available \$13,206,900

Less National Office reserve [1,383,900]{.underline}

Base, Administrative, and Basic

formula amount distributed \$11,823,000

2.  Grant processing. This program is authorized under section

306(a) of the Consolidated Farm and Rural Development Act. For FY 2008,
Congress appropriated \$13,206,900 for a Community Facilities grant
program for rural communities with extreme unemployment and severe
economic depression, hereinafter referred to as the Economic Impact
Initiative. These funds are in addition to the Community Facilities
grant program's regular allocation of funds. These funds will be
administered under the same regulations governing the Community
Facilities grant program. Program administration, eligibility,
processing, and servicing requirements for this program may be found
under 7 CFR part 3570, subpart B.

3\. In addition to those requirements contained in 7 CFR part 3570, the
essential community facility must be located in a rural community where
the "not employed rate" is greater than 19.5 percent as mandated by 7
USC 1926(a)(20)(B). The "not employed rate" is the percentage of
individuals over the age of 18 who reside within the community and are
ready, willing, and able to be employed but are unable to find
employment, as determined by the Department of Labor of the State in
which the community is located. This department must typically analyze
"not employed rates" or similar data.

4\. The Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies Appropriations Act, 2002, expanded eligibility for
the Economic Impact Initiative to provide local dial-up Internet access
or broadband service where it does not currently exist. Under this
provision, the Agency may make grants

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart A, Page 5

to State agencies for use by regulatory commissions in States with rural
communities which do not have those services. The State agencies will
establish a competitive, technologically-neutral grant program for
telecommunications carriers or cable operators that establish common
carrier facilities and services that, in the commission's determination,
will result in the long-term availability of affordable broadband
services used for high speed Internet access in these communities.

5\. For each grant application approved, the State Director must
document that the minimum grant amount needed to achieve financial
feasibility for the project has been determined. A copy of this analysis
must be kept in the project file.

6\. Documentation that the Economic Impact Initiative grant project is
located in an area where the "not employed rate" is greater than 19.5
percent must be maintained in each Economic Impact Initiative grant
file. The term "not employed rate" is defined in paragraph 2 above.

F. [Tribal College Grants]{.underline}

1\. This program is authorized under section 306(a) of the Consolidated
Farm and Rural Development Act. Congress appropriated \$3,972,000 for a
Community Facilities grant program for the 32 tribal colleges that are
1994 land-grant institutions meeting the criteria of the Equity in
Education Land-Grant Status Act of 1994. Rural Development will
administer these funds using the same regulations that govern its
Community Facilities grant program. Program administration, eligibility,
processing, and servicing requirements for that program may be found at
7 CFR part 3570, subpart B.

2\. All Tribal College Initiative funds will remain in the National
Office reserve for funding consideration in FY 2008. Project selections
will be made on a nation-wide competitive basis. When a State Office
determines that an applicant is eligible, the preapplication will be
evaluated competitively and points awarded as specified in the project
selection priorities contained in the above-cited regulations. For FY
2008, the maximum Tribal College grant amount is \$400,000.

3\. The State Director or designee will forward the request to

the National Office to compete for funding consideration. The request
must consist of a general description of the project,

Form RD 3570-1, RD Form Letter 3570-B-1, and a separate electronic file
copy of the Legislative and Public Affairs Staff Project Announcement
Sheet for each project. These items must be forwarded to the National
Office by the close of business on June 1, 2008.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart A, Page 6

Any request received after this date will be held in the National Office
to compete for any additional funds that remain available after all
other eligible requests have been funded

4\. All preapplications selected for funding consideration will be
notified by the State or field office by issuance of Form AD-622,
"Notice of Preapplication Review Action." At that time, the proposed
recipient will be invited to submit a complete application, along with
instructions related to the agreed-upon award amount. An application
conference will be scheduled to discuss items needed for the formal
application and to further clarify issues related to the project.

5\. Final approval is subject to the availability of funds; the
submission of a formal, complete application and related materials
meeting the program requirements and responsibilities of the grantee
(set forth in 7 CFR part 3570, subpart B); the letter of conditions; and
the grant agreement.

6\. The National Office does not maintain unfunded requests beyond the
end of the fiscal year. Those preapplications not having sufficient
priority to receive funding consideration for FY 2008 will be notified,
in writing, by the State or designated field office.

Exhibit A, Attachment 2, Part II, Subpart A, Pages 7 thru 10 in PDF
ONLY.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 1

(Revision 1)

## Housing and Community Facilities Programs

## MULTI-FAMILY HOUSING (MFH)

I. [General]{.underline}.

A. This Attachment provides guidance on MFH funding for the Rural

Rental Housing program (RRH) for FY 2008. For fiscal year (FY) 2008,
State Directors, under the Rural Housing Assistance Grants (RHAG) will
have the flexibility to transfer their initial allocations of budget
authority between the Single Family Housing (SFH) section 504 Housing
Repair Grants and the section 533 Housing Preservation Grant (HPG)
programs in accordance with attachment 2, part I of this exhibit.

B.  MFH loan and grant levels for FY 2008 are as follows:

+------------------------------------------------+---------------------+
| MFH Loan Programs Credit Sales                 | \$ 1,475,864        |
+------------------------------------------------+---------------------+
| Section 514 Farm Labor Housing (LH) loans\*\*  | \$ 27,545,076       |
+------------------------------------------------+---------------------+
| Section 515 Rural Rental Housing (RRH)         | \$ 69,510,000       |
+------------------------------------------------+---------------------+
| Section 514, 515 and 516 Multi-Family Housing  | \$ 19,860,000       |
| Revitalization Demonstration Program \*\*\*\*  |                     |
+------------------------------------------------+---------------------+
| Section 521 Rental Assistance (RA) and         | \$472,757,370       |
| 502(c)(5)(C) Advance                           |                     |
+------------------------------------------------+---------------------+
| Section 516 LH grants                          | \$ 9,930,000        |
+------------------------------------------------+---------------------+
| Section 525 Supervisory and Technical          | \$ -0-              |
|                                                |                     |
| Assistance and Section 509 Housing             |                     |
|                                                |                     |
| Application Packaging grants\*\*               |                     |
|                                                |                     |
| Total Available for Single and Multi-Family    |                     |
+------------------------------------------------+---------------------+
| Section 533 Housing Preservation               | \$ 9,593,704        |
|                                                |                     |
| Grants (HPG)\*\*\*                             |                     |
+------------------------------------------------+---------------------+
| Section 538 Guaranteed Rural Rental            | \$129,090,000       |
|                                                |                     |
| Housing Program                                |                     |
+------------------------------------------------+---------------------+
| Rural Housing Voucher Demonstration            | \$ 4,965,000        |
| Program\*\*                                    |                     |
+------------------------------------------------+---------------------+
| Preservation Revolving Loan Fund Demonstration | \$ 6,421,642        |
| Program                                        |                     |
+------------------------------------------------+---------------------+
| \*\*Does Not Include Carryover Funds           |                     |
+------------------------------------------------+---------------------+
| \*\*\*Includes Carryover Funds                 |                     |
+------------------------------------------------+---------------------+
| \*\*\*\*Stated at the budget authority level,  |                     |
| rather than at the program level               |                     |
+------------------------------------------------+---------------------+

II\. [Multi-Family Housing Programs (Funds not allocated to the
States).]{.underline}

A. [Credit Sales Authority]{.underline}. For FY 2008, \$1,475,864 will
be available for credit sales to program and nonprogram buyers. Credit
sale funding will not be allocated by State. The State Director must
submit [requests]{.underline} for authority to approve credit sales
using page 9 of this subpart via facsimile (202) 720-0302, to the
National Office. Credit sales funds will be pooled if not
obligated/closed by August 11, 2008.

B.  [Section 538 Guaranteed Rural Rental Housing program]{.underline}.
    Guaranteed loan funds have been made available under a Notice of
    Funding Availability (NOFA) that was published in the [Federal
    Register]{.underline} on

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 2

(Revision 1)

> February 4, 2008. Additional guidance will be provided at that time.

C.  [Sections 514, 515 and 516 Multi-family Housing and Revitalization
    Demonstration Program (MPR) for Fiscal Year 2008]{.underline}. The
    MPR program is designed to preserve and revitalize Section 515
    multi-family rental housing properties and Sections 514/516 Off-Farm
    labor housing properties. The Program is designed to utilize several
    demonstration revitalization tools to restructure debt and financing
    of an aging portfolio of rental properties. The objective is to
    ensure that properties have sufficient resources to continue
    providing safe and affordable housing for low-income rural
    residents. Funds have been made available under a NOFA published in
    the [Federal Register]{.underline} on March 12, 2008.

D.  [Rural Housing Voucher Demonstration Program.]{.underline} This
    Demonstration Program is designed to provide tenant protections in
    properties that prepay their mortgages after October 1, 2005. These
    Vouchers are portable and will enable tenants to continue to access
    affordable housing without the benefit of the traditional Rental
    Assistance Program. Funds have been made available under a NOFA
    published in the [Federal Register]{.underline} on March 24, 2008.

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```
III. [Farm Labor Program Account]{.underline}. The Farm Labor Housing
     Program Account

> includes budget authority for the Section 514 Loan and Section 516
> Grant Programs. The Administrator has the authority to transfer budget
> authority between the two programs. Upon closing of the NOFA, the
> Administrator will evaluate the responses and determine proper
> distribution of funds between loans and grants.

A. [Section 514 and Section 516 Program Level Estimates.]{.underline}
These loans

> and grants are funded in accordance with § 1940.579(a) and 1940.579(b)
> respectively, of this Instruction. Unobligated prior year balances and
> cancellations will be added to the amounts shown. LH grants for
> off-farm have been made available under a NOFA that was published in
> the [Federal Register]{.underline} on March 12, 2008. Additional
> guidance is provided in the NOFA. On-farm loans will be made available
> on a first-come-first-served basis. The total amount available for
> on-farm loans is \$2,000,000 for FY 2008. States should utilize page 8
> of this subpart to request approval to obligate funds.

  -------------------------------------------- --------------------------
  Loan level                                   \$27,545,076

  Available for off-farm loans                 \$19,158,807

  Available for on-farm loans                  \$2,000,000

  National Office Reserve                      \$6,386,269

  Grant level                                  

  Available for LH grants for Off-Farm         \$7,447,500

  National Office Reserve                      \$2,482,500

  Total Program                                \$37,475,076
  -------------------------------------------- --------------------------

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 3

(Revision 1)

> B. [National Office Reserve]{.underline}. A \$2,482,500 LH grant
> reserve and a \$6,386,269 LH loan reserve will be available until
> fully allocated to selected loan and grant applicants. Reserve funds
> are not considered NOFA funds. All unused section 514 and section 516
> funds will be made a part of the National Office Reserve Account. The
> National Office Reserve Account will be used for Repair and
> Rehabilitation, Hardships and Emergencies.
>
> Priority will be given to projects in the following order: First
> priority to projects that are leveraged with third party funds and LH
> loan. Second priority to projects requesting LH loan. Third priority
> to projects with LH loan and LH grant. Fourth priority to projects
> with third party funds and LH grant. Fifth priority to projects
> requesting LH grant. State Directors must categorize all repair and
> rehabilitation request as follows:

1.  Health Concerns;

2.  Safety Concerns;

3.  Deferred Maintenance; and

4.  Fair Housing Compliance.

> Request for repair and rehabilitation LH loans and LH grants are to be
> submitted to the National Office. Selected request will be announced
> within 30 days after the aforementioned NOFA selections. Repair and
> Rehabilitation loan and grant funds are held in the National Office
> and may be distributed based upon rehabilitation needs to projects
> selected and processed under the FY 2008 MPR NOFA.

C. [RA for LH]{.underline}. It is anticipated that RA will not be
available for Fiscal Year (FY) 2008.

#### IV. Section 515 RRH Loan Funds. States should use page 9 of this subpart to request approval to obligate all funds.

+-------------------------------------------------------+--------------+
| Section 515 Rural Rental Housing                      | \$69,510,000 |
|                                                       |              |
| Allocation (Total)                                    |              |
+-------------------------------------------------------+--------------+
| New Construction funds and set-asides                 | \$14,529,124 |
+-------------------------------------------------------+--------------+
| Non-Restricted                                        | \$ 2,341,200 |
+-------------------------------------------------------+--------------+
| Set-aside for nonprofits                              | \$ 6,255,900 |
+-------------------------------------------------------+--------------+
| Set-aside for underserved counties and colonias       | \$ 3,475,500 |
+-------------------------------------------------------+--------------+
| Set-aside for EZ, EC, or REAP Zones                   | \$ 1,456,524 |
+-------------------------------------------------------+--------------+
| Designated Reserve for States with RA programs        | \$ 1,000,000 |
+-------------------------------------------------------+--------------+
| Rehab and repair funds and equity                     | \$40,036,226 |
+-------------------------------------------------------+--------------+
| Rehab and repair loans                                | \$35,036,226 |
+-------------------------------------------------------+--------------+
| Designated equity loan reserve                        | \$ 5,000,000 |
+-------------------------------------------------------+--------------+
| General reserve                                       | \$14,944,650 |
+-------------------------------------------------------+--------------+

A.  [New Construction Loan Funds]{.underline}. New construction loan
    funds have been made available under a Notice of Funding
    Availability (NOFA) that was published in the [Federal
    Register]{.underline} on March 12, 2008. Upon closing of the NOFA,
    States will submit a list, in rank order of the eligible projects.
    The list must show the name of the applicant;

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 4

(Revision 1)

location of the project (City & State); whether it is located in an
Empowerment Zone (EZ) or Enterprise Community (EC), REAP Zone, Tribal
Land, or Colonia; amount of leveraging; HCFP loan amount; point score;
total project units; number of tax credit units; and other information
as requested in the NOFA, to the National Office. Requests that are
eligible for the nonprofit set-aside must be so indicated. Include
requests for the Underserved Counties and Colonias Set-Aside and EZ, EC
or REAP Zone set-aside. Indicate if they are also eligible for regular
section 515 funds by being located in a designated place. The National
Office will rank the States' requests by point score using the same tie
breaker criteria established in 7 CFR 3560.56(c)(2). Funds will be
distributed to the States for loan requests in rank order, up to a
maximum of \$2.5 million (regardless of Agency funding source) for any
one State.

B. [National Office New Construction Set-asides]{.underline}. The
following funds

have been set-aside as described below and made available using a

national NOFA.

1\. [Nonprofit set-aside]{.underline}. The following funds have been
set-aside

as described below and made available using a national NOFA.

a\. [Nonprofit set-aside]{.underline}. An amount of \$6,255,900 has been
set

aside for nonprofit applicants.

b\. [Underserved counties and colonias set-aside]{.underline}. An amount
of

\$3,475,500 has been set aside for loan requests to develop units

in the underserved 100 most needy counties or colonias as

defined in section 509(f) of the Housing Act of 1949.

c\. [EZ, EC or REAP Zone set-aside]{.underline}. An amount of
\$1,456,524 has

been set-aside for loan requests to develop units in EZ, EC or

REAP Zones through June 30, 2008. The State must indicate on

the list submitted to the National Office if the loan request is

eligible for both this set-aside and regular section 515 funds.

> C. [Rental Assistance (RA)]{.underline}. It is anticipated that RA
> will not be available for Fiscal Year (FY) 2008.
>
> D. [State RA]{.underline}. An amount of \$1,000,000 of the section 515
> loan fund is available for matching with projects in which an active
> State sponsored RA program is available. The State RA program must be
> comparable to the HCFP RA program. To receive this funding, the State
> Director should submit a written request with specific information
> about the State RA program; i.e., memorandum of understanding,
> documentation from the provider, etc., to the Director, Multi-Family
> Housing Processing Division (MFHPD). Funds will be distributed to
> participating States based on a *pro rata* basis.

E.  [Repair and Rehabilitation Loans]{.underline}. All funds will be
    held in the National Office and will be distributed based upon
    rehabilitation needs to projects selected and processed under the FY
    2008 MPR NOFA.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 5

(Revision 1)

F.  [Designated reserve for equity loans]{.underline}. An amount of
    \$5,000,000 has

been designated for the equity loan preservation incentive

described in 7 CFR 3560.656. The \$5,000,000 will be further

divided into \$4,000,000 for equity loan requests currently on the

> pending funding list and \$1,000,000 to facilitate the transfer of
>
> properties from for-profit owners to nonprofit corporations and
>
> public bodies. Funds for such transfers would be authorized only
>
> for for-profit owners who are currently on the pending funding list
>
> who agree to transfer to nonprofit corporations or public bodies
>
> rather than to remain on the pending list. If insufficient transfer
>
> requests are generated to utilize the full \$1,000,000 set aside for
>
> nonprofit and public body transfers, the balance will revert to the
>
> general reserve.

G. [General Reserve]{.underline}. There is one general reserve fund of
\$14,944,650.

Some examples of immediate allowable uses include, but are not

limited to the following:

1\. [Hardships and Emergencies]{.underline}. The request must include
sufficient documentation to support the hardship or emergency, including
reasons why it is in the Government\'s best interest to favorably
consider the request.

2\. [HCFP Cooperatives or group homes]{.underline}. Requests for
cooperative housing or group homes must be in designated places and
submitted under the NOFA.

3\. [RRH preservation]{.underline}. Funds may be used to promote
innovative approaches to preserving existing RRH projects including the
provision of equity payments during a transfer. Requests to use these
funds will be considered in accordance with specific standards
established by the Administrator and with an agreement to extend the
project's restrictive use period at least 20 years. The Office of Rental
Housing Preservation (ORHP) will be responsible for reviewing these
requests.

> H. [Requesting Funds for Special Needs]{.underline}. States should
> utilize page 9
>
> of this subpart to request reserve funds. This format will ensure
>
> a prompt turnaround since it can be used for the request and
>
> National Office approval.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 6

(Revision 1)

V. [Section 533 Housing Preservation Grants (HPG)]{.underline}. Due to
limited funds this

fiscal year, the funding process will be followed as described in

paragraph (V) (A) of this subpart.

A. [State allocation options]{.underline}. After receipt of
applications, States

will have the following options:

1\. Use their allocations as reflected on page 10 of this subpart to
make two or more grants so that no one grantee receives more than 50
percent of the State allocation, unless there is a single applicant from
that state.

> 2\. Return the allocation to the National pool. Once a State returns
> its allocation to the National pool, the State may request one grant
> of no more than \$50,000 from that pool. Funds will be limited and
> States are not guaranteed funding from the National pool. If the pool
> is insufficient, selection will be in order of point score.
>
> 3\. Transfer a portion of the unused funds to section 504 in
> accordance with RD Instruction 1940-L, exhibit A, attachment 2, part
> I, paragraph I.B.1.

B.  [Amount Available for Allocation]{.underline}. See page 10 of this
    subpart for

> HPG State allocations. EZ, EC or REAP Zone set-aside funds will be
> included in the NOFA.

  -------------------------------------------------- -------------------------
  Total HPG available                                \$9,593,704.00

  Less reserve                                       \$ 957,570.40

  Less designated set-aside (EZ, EC or REAP Zones)   [\$
                                                     595,800.00]{.underline}

  Total Available for Distribution                   \$8,040,333.60
  -------------------------------------------------- -------------------------

C. [Base Allocation]{.underline}. The base allocation is not used.
Distribution of funds is based on the allocation formula in accordance
with RD Instruction 1940-L.

D. [Administrative Allocations]{.underline}. The administrative
allocation is not

used.

E. [Reserve.]{.underline} The National Office reserve is 10 percent of
the total

> funds available. The eligible uses for reserve funds include natural
> disasters, and targeted areas. State Directors may request reserve
> funds with sufficient documentation to support the request, including
> reasons why it is in the Government's best interest to consider the
> request. The National Office reserve may also be used to augment the
> individual grants or National pool.

F. [National Office Pooling]{.underline}. Pooling for unused
(unobligated) HPG

> funds under the RHAG is tentatively scheduled for August 11, 2008.
> Further details will be provided in conjunction with pooling.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 7

G.  [Availability of the Allocation]{.underline}. A distribution of
    funds is made to

> all states. The Agency does not have the authority to waive the

statutory rule that not more than 50 percent of the state's

allocation may go to one eligible applicant, unless there is a

single grantee from that state.

H.  [HPG is a competitive grant program]{.underline}. State Directors
    must implement

> maximum outreach measures to ensure 100 percent utilization of HPG
> funds. Opening and closing dates for submission of preapplications
> were announced in the [Federal Register]{.underline} on February 20,
> 2008. Exhibit G to RD Instruction 1944-N must be submitted to the
> National Office. (The deadline for submission was announced in the
> [Federal Register]{.underline} on February 20, 2008).

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 8

## \[On Rural Development Letterhead\]

+---------------+---+---------------------------------------------------+
| TO:           |   | Michael Steininger                                |
|               |   |                                                   |
|               |   | Director, Multi-Family Housing Processing         |
|               |   | Division                                          |
+---------------+---+---------------------------------------------------+
| ATTENTION:    |   | MFHPD, STOP 0781                                  |
|               |   |                                                   |
|               |   | Henry Searcy, Senior Loan Specialist              |
+---------------+---+---------------------------------------------------+
| SUBJECT:      |   | Request for Obligation of FY 2008 Section 514     |
|               |   | Loan or 516 Grant Funds                           |
+---------------+---+---------------------------------------------------+

State Name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Authorization is requested for the following application:

  --------------------------------------- -------------------------------
  Applicant:                              

  Is the Applicant a Non-Profit           
  Organization? Faith-Based or Community  
  Based? (Yes or No)                      

  Is the property located within a        
  colonia? (Yes or No)                    

  Total HCFP Loan:                        

  Total HCFP Grant:                       

  Total Number of Units in the Complex:   

  Total Number of Migrant Units:          

  Total Number of Year Round Units:       

  Number of Units with Operating          
  Assistance:                             

  Number of Units with Rental Assistance: 

  Type of Housing (on-farm or off-farm)?  

  Amount of Funds from Other Sources:     

  Type of Loan or Grant (new construction 
  or rehab):                              
  --------------------------------------- -------------------------------

I certify that the above information is correct and the borrower
represents that uses of this loan (or grant) will meet the requirements
of Section 504 of the Rehabilitation Act of 1973, the Fair Housing
Amendments Act of 1988, the American with Disabilities Act of 1990, and
all applicable regulations. I certify that the cash flow analysis has
been completed for the grant, and has been submitted to the National
Office, and is for the minimum amount of assistance necessary. Please
feel free to contact
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ at
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ should you have any questions regarding
this matter. After National Office approval, return signed form to the
following fax number:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

  -------------------------------------------------------------------- --------------------------------------------------------
  \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_   \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

  State Director                                                       Date
  -------------------------------------------------------------------- --------------------------------------------------------

\####################################################################################

\[ \] APPROVED. Use of these funds is authorized solely for the above
named applicant and may not be used for other applicants/purposes:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[ \] DISAPPROVED. We regret that our response could not be more
favorable for the following reasons:
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

Please feel free to contact Henry Searcy at (202) 720-1753 should you
have any questions regarding this matter. Our FAX number is (202)
690-3444.

+-------------------------------------+--------------------------------+
| \_\_\_\_\_                          | > \_\_\_\_\_\_\_\_\_           |
| \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\ | \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ | >                              |
|                                     | > DATE                         |
| Michael Steininger                  |                                |
|                                     |                                |
| Director, MFH Processing Division   |                                |
+-------------------------------------+--------------------------------+

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart B, Page 9

(Revision 1)

## \[On Rural Development Letterhead\]

+--------------+---+----------------------------------------------------+
| TO:          |   | Multi-Family Housing Processing Division           |
+--------------+---+----------------------------------------------------+
| ATTENTION:   |   | William K. Coles                                   |
|              |   |                                                    |
|              |   | Loan Specialist, Multi-Family Housing Processing   |
|              |   | Division                                           |
+--------------+---+----------------------------------------------------+
| SUBJECT:     |   | Request for Obligation of FY 2008 Section 515      |
|              |   | Funds                                              |
+--------------+---+----------------------------------------------------+

## 

State Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Authorization is requested for the following:

+------------------------------------------------+---------------------+
| Applicant Name:                                |                     |
+------------------------------------------------+---------------------+
| Is the Applicant a Non-Profit Organization?    |                     |
| Faith-Based or Community Based? (Yes or No)    |                     |
+------------------------------------------------+---------------------+
| Is the Property Located Within a Colonia Area? |                     |
| (Yes or No)                                    |                     |
+------------------------------------------------+---------------------+
| Total HCFP Loan:                               | \$                  |
+------------------------------------------------+---------------------+
| Source and Amount of Leveraged Funds:          | \$                  |
+------------------------------------------------+---------------------+
| RA Units Required & Type (new construction     |                     |
| only)                                          |                     |
+------------------------------------------------+---------------------+
| Total Complex Units:                           |                     |
+------------------------------------------------+---------------------+
| Number of Units to be repaired:                |                     |
+------------------------------------------------+---------------------+
| Type of Loan (Please put an "X" in the         |                     |
| appropriate box)                               |                     |
+------------------------------------------------+---------------------+
| New Construction                               |                     |
+------------------------------------------------+---------------------+
| New Construction funded from EZ/EC Set-aside   |                     |
|                                                |                     |
| (Must obligate before June 30, 2008)           |                     |
+------------------------------------------------+---------------------+
| Repair/Rehabilitation                          |                     |
+------------------------------------------------+---------------------+
| Inventory/Credit Sale                          |                     |
+------------------------------------------------+---------------------+
| Emergency or Hardship                          |                     |
+------------------------------------------------+---------------------+
| Other (Describe)                               |                     |
+------------------------------------------------+---------------------+

I certify that the above information is correct and the borrower
represents that uses of this loan and/or grant will meet the
requirements of Section 504 of the Rehabilitation Act of 1973, the Fair
Housing Amendments Act of 1988, the Americans with Disabilities Act of
1990, and all applicable regulations. Please contact
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ at
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ should you have any questions
regarding this matter. After National Office approval, return signed
form to the following fax
number:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

  -------------------------------------------------------------------- --------------------------------------------------------
  \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_   \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

  State Director                                                       DATE
  -------------------------------------------------------------------- --------------------------------------------------------

**\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--NATIONAL
OFFICE USE\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--**

\[ \] APPROVED. Type of Assistance Code \_\_\_262 \_\_\_021. Use of
these funds is authorized solely for the above named applicant and may
not be used for other applicants/purposes.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[ \] DISAPPROVED. Our response could not be more favorable for the
following reasons:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Please feel free to contact William K. Coles at 202-720-2554 should you
have any questions regarding this matter. Our FAX number is (202)
690-3444.

+-------------------------------------+--------------------------------+
| \_\_\_\_\_                          | > \_\_                         |
| \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\ | \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ | \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ |
|                                     | >                              |
| Michael Steininger                  | > DATE                         |
|                                     |                                |
| Director, MFH Processing Division   |                                |
+-------------------------------------+--------------------------------+

(04-01-08) SPECIAL PN

Exhibit A, Attachment 2, Part II, Subpart B, Page 10 in PDF ONLY.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 1

(Revision 1)

## Housing and Community Facilities Programs

## SINGLE FAMILY HOUSING (SFH)

I. [General]{.underline}.

A. This attachment provides SFH allocations for fiscal year (FY) 2008.
Allocation computations have been made in accordance with §§ 1940.563
through 1940.568 of this Instruction. State Directors are reminded of
their authority to transfer funds between the section 504 Rural Housing
Grant program and the section 533 Housing Preservation Grant program in
accordance with attachment 2, part I of this exhibit. Program contacts
for funds held in the National Office are located on a chart on page 16
of this subpart. Information on basic formula criteria, data source and
weight, administrative allocation, pooling of funds, and availability of
the allocation are located on a chart on page 17 of this subpart.

B. The SFH levels authorized for FY 2008 are as follows:

> \*Includes funds for EZ/EC and REAP communities. After June 30, 2008
>
> funds will be available for regular program.

\*\*Carry over funds are not included.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 2

(Revision 1)

C. SFH funding not allocated to States are:

1\. [Credit sale authority]{.underline}. Credit sale funds are available
[only]{.underline} for [nonprogram]{.underline} sales of Real Estate
Owned (REO) property. There will be no state distribution of nonprogram
credit sale authority; rather funds will be available on a
first-come-first-served basis. A separate reserve of Section 502 loan
funding is being maintained in the National Office for the sale of
program property to program applicants. Requests should be submitted
using the National

Office Reserve Funds (NORF) system as described on page 13, paragraph
II.B.3.g. of this attachment. The requested amount and the amount
reflected in MortgageServ [must]{.underline} match in order for the
request to be considered.

2\. [Section 509 compensation for construction defects]{.underline}. All
claims for compensation for construction defects, along with the
borrower's case file, must be submitted to the National Office for
authorization of funds prior to approval. After receipt of the
authorization, claims may be approved and submitted to the finance
office for funding.

3\. [Section 523 mutual and self-help technical assistance
grants]{.underline}. The State Director must request funding approval
from the National Office for all requests. A technical review and
analysis must be completed by the Technical and Management Assistance
(T&MA) contractor on all predevelopment, new and existing (refunding)
grant applications. In addition to the T&MA contractor's review, Agency
personnel must also review and evaluate the feasibility of the grantee's
request and make the appropriate recommendation. The level of National
office review will be based on the amount of the grant:

\(a\) For grant requests of \$300,000 or less, the State Director should
submit: (1) the analysis from the T&MA contractor, (2) statement
indicating whether or not the grant recipient will be working in
Empowerment Zones (EZ), Enterprise Communities (EC) or Rural Economic
Area Partnerships (REAP) and census tract designation of area; (3) the
State Director's recommendation, (4) a copy of the conditions to be met,
(5) a copy of Form RD 1940-1, "Request for Obligation of Funds," (6) if
the grantee is a marginal performer, specific information showing
actions to correct performance, and (7) USDA Survey on Ensuring Equal
Opportunity for Applicants.

\(b\) For grant requests that exceed \$300,000, the complete application
docket along with the items mentioned above, must be sent to the
National Office.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 3

\$38,727,000 is available for section 523 Mutual and Self-Help Technical
Assistance grants. This amount includes a \$993,000 set-aside for EZ, EC
or REAP communities. All section 523 grants will be obligated in the
National Office. This will enable the National Office staff to monitor
fund utilization.

4\. [Section 523 mutual and self-help site loans and section 524 RH site
loans]{.underline}. State Directors are responsible for developing an
outreach program to increase public awareness of these programs. The
State Director must request and receive funding authority from the
National Office prior to obligating loan funds.

5\. [Section 306C water and waste disposal (WWD) grants to individuals
in colonias]{.underline}. The objective of the section 306C WWD
individual grant program is to facilitate the use of community water or
waste disposal systems for the residents of the colonias along the
U.S.-Mexico border. Colonias are located in the States of Arizona,
California, New Mexico and Texas. A colonia is defined as the area of
the United States within 150 miles of the border between the United
States and Mexico except that the term does not include any standard
metropolitan statistical area that has a population exceeding 1,000,000;
is determined to be a colonia on the basis of objective criteria,
including lack of potable water supply, lack of adequate sewage systems,
and lack of decent, safe and sanitary housing; and was existing as a
colonia before the date of enactment of the Cranston-Gonzalez National
Affordable Housing Act. Eligible areas under section 306C WWD may be
different from areas under the 5 percent set-aside for the 100
underserved counties and colonias. The total amount available to
Arizona, California, New Mexico and Texas will be \$1,702,105 for FY
2008. This amount includes the carryover unobligated balance of
\$702,105 for processing individual grant applications. Allocation will
be evenly distributed to the above states.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 4

6\. [Section 525 technical and supervisory assistance (TSA) and section
509 housing application packaging grants (HAPG)]{.underline}. There is
no new FY 2008 funding for these programs. There is a carryover
unobligated balance of \$21,696.00

7\. [Natural disaster funds]{.underline}. Funds from previous
appropriations are available until exhausted to those States with active
Presidential Declarations. Any unused portion will be carried over into
the next fiscal year.

8\. [Deferred mortgage payment demonstration]{.underline}. There is no
FY 2008 funding provided for deferred mortgage authority or loans for
deferred mortgage assumptions.

9\. [Section 502 direct funds for families not qualifying for payment
assistance]{.underline}. Funds from State's allocation may be used for
qualified very-low and low-income applicants when the payment assistance
formula shows there is no need for the subsidy. This assistance will be
taken from the State\'s subsidized regular funding.

D.  [Increasing Minority Homeownership in Rural America]{.underline}.

In FY 2003 the President set a goal for increasing minority home
ownership. These goals are expected to remain in effect or be increased.
Additional guidance will be provided under separate cover.

II. [State Allocations]{.underline}. State allocation distributions can
    be found on pages 18 through 23 of this subpart.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 5

(Revision 1)

(This area is intentionally left blank.)

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 6

(Revision 1)

A. [Section 502 nonsubsidized guaranteed RH loans]{.underline}.

1\. [Purchase - Amount available for allocation]{.underline}.

+-------------------------------------------------+--------------------+
| Total Available - Purchase                      | \$4,958,563,379    |
+-------------------------------------------------+--------------------+
| Less National Office General Reserve            | \$1,090,994,365    |
+-------------------------------------------------+--------------------+
| Less Special Outreach Area Reserve              | \$467,569,014      |
+-------------------------------------------------+--------------------+
| Basic Formula and Administrative                | \$3,400,000,000    |
|                                                 |                    |
| Allocation                                      |                    |
+-------------------------------------------------+--------------------+

> \(a\) [National Office General Reserve]{.underline}. Requests for
> National Office reserve funds should be submitted by e-mail to the
> Guaranteed Loan Division's e-mail address of
> [sfhgld@wdc.usda.gov](mailto:sfhgld@usda.gov) with "Funding Request"
> or "Request for Funds" in the subject line. Your request should be
> placed in the body of the e-mail message must have the following
> information: Amount of the request; Purchase or Refinance Funds
> requested; and under which category: General or Special Outreach. The
> NORF system is not used for guaranteed funds. The Administrator may
> restrict access to this reserve for States not meeting their goals in
> special outreach areas.
>
> \(b\) [Reservation of funds]{.underline}. States must use the
> guaranteed rural housing reservation of funds system unless otherwise
> directed by the National Office.
>
> \(c\) [Special Outreach Areas]{.underline}. The intent of special
> outreach areas is to assure the GRH program reaches applicants
> residing in areas, which are the most rural in character. FY 2008 GRH
> funding is allocated to States in two funding streams. Seventy percent
> of GRH funds may be used in any eligible area. Thirty percent of GRH
> funds are to be used for special outreach areas. Special outreach
> areas for the GRH program are defined as those areas within a State
> that are not located within a Metropolitan Statistical Area (MSA).
>
> \(d\) [National Office Special Area Outreach Reserve]{.underline}. A
> special outreach area reserve fund has been established at the
> National office. Funds made available from this reserve may only be
> used in special outreach areas. The NORF system is not used for
> guaranteed funds.
>
> \(e\) [Sub-allocation by the State Director]{.underline}. The State
> Director may retain funds at the State office level or sub-allocate to
> the area or field office level.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 7

> \(f\) [Pooling of Guaranteed Purchase Loan Funds]{.underline}. Pooling
> is scheduled for August 15, 2008. However, if funds are used at a
> faster rate than anticipated, the pooling date may be moved forward
> and the National Office may opt to pool funds more than once. If funds
> are used at a slower rate than anticipated, pooling may be delayed. If
> it appears that ample funds will remain available for the entire year,
> the National Office may cancel the pooling of GRH funds.
>
> \(g\) [Funds Management.]{.underline} If analysis of the utilization
> of funds during the fiscal year indicates that, at the rate of current
> utilization, funds may not be sufficient to sustain that level of
> activity for the remainder of the fiscal year, the Agency may
> determine a shortage of funds exists. A determination that a shortage
> of funds exists will be made if, based on current obligation rates,
> funds are projected to run out before the end of the fiscal year. 
> Upon the determination that a shortage of funds exists, the Agency may
> restrict loan guarantees to first-time homebuyers or veterans.  First
> time homebuyers and veterans will be served in the order their
> applications are received.

2\. [Refinance - Amount available for allocation]{.underline}.

+-------------------------------------------------+--------------------+
| Total Available -- Refinance                    | \$269,375,804      |
+-------------------------------------------------+--------------------+
| Less National office general reserve            | \$269,375,804      |
+-------------------------------------------------+--------------------+
| Basic Formula and Administrative                | \$ -0-             |
|                                                 |                    |
| Allocation                                      |                    |
+-------------------------------------------------+--------------------+

> \(a\) [Refinance Funds]{.underline}. Refinance funds carry a separate
> subsidy rate and are tracked using a different Type of Assistance code
> in the Guaranteed Loan System. The funds are currently tracked in the
> Program Funds Control System (PFCS) as a separate allocation.
> Refinance loan funds will not be distributed to each State this year
> due to the inability to track these funds in the Guaranteed Loan
> System. Funds will be distributed to each State on a loan by loan
> basis and will be tracked by the National Office. The distribution
> amount listed in GLS will be the combined total allocation distributed
> to each state for purchase loans, Disaster Purchase Loans (if
> applicable), and refinance loans until GLS is upgraded to track the
> refinance loans independent of the purchase loans.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 8

> \(b\) [National Office general reserve]{.underline}. Requests for
> National Office reserve funds should be submitted by e-mail to the
> Guaranteed Loan Division's e-mail address of
> [sfhgld@wdc.usda.gov](mailto:sfhgld@usda.gov) with "Funding Request"
> or "Request for Funds" in the subject line. Your request should be
> placed in the body of the e-mail message must have the following
> information: Amount of the request; Purchase or Refinance Funds
> requested; and under which category: General or Special Outreach. The
> NORF system is not used for guaranteed funds. The Administrator may
> restrict access to this reserve for States not meeting their goals in
> special outreach areas.

(c) [Reservation of funds]{.underline}. States must use the guaranteed

> rural housing reservation of funds system unless otherwise directed by
> the National Office.
>
> \(d\) [Allocation of funds]{.underline}. The National Office will not
> distribute refinance funds to each State this year due to the
> inability to track these funds in the Guaranteed Loan System. Funds
> will be distributed to each State on a loan by loan basis and will be
> tracked by the National Office.
>
> \(e\) [Sub-allocation by the State Director]{.underline}. The State
> Director may retain funds at the State office level or sub-allocate to
> the area or field office level.
>
> \(f\) [Pooling of Guaranteed Refinance Loan Funds]{.underline}.
> Pooling is scheduled for August 15, 2008. However, if funds are used
> at a faster rate than anticipated, the pooling date may be moved
> forward and the National Office may opt to pool funds more than once.
> If funds are used at a slower rate than anticipated, pooling may be
> delayed. If it appears that ample funds will remain available for the
> entire year, the National Office may cancel the pooling of GRH funds.
>
> \(g\) [Funds Management]{.underline}. If analysis of the utilization
> of funds during the fiscal year indicates that, at the rate of current
> utilization, funds may not be sufficient to sustain that level of
> activity for the remainder of the fiscal year, the Agency may
> determine a shortage of funds exists. A determination that a shortage
> of funds will be made if, based on current obligation rates, funds are
> projected to run out before the end of the fiscal year.  Upon the
> determination that a shortage of funds exists, the Agency may restrict
> loan guarantees to first-time homebuyers or veterans.  First time home
> buyers and veterans will be served in the order their applications are
> received.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 9

(Revision 1)

B. [Section 502 Direct RH loans]{.underline}.

1.  [Amount available for allocation]{.underline}.

+----------------------------------------+-----------------------------+
|                                        |                             |
+----------------------------------------+-----------------------------+
| Total available                        | \$1,121,485,933             |
+----------------------------------------+-----------------------------+
| Less required set aside for            |                             |
+----------------------------------------+-----------------------------+
| Underserved counties and               | \$ 56,074,297               |
|                                        |                             |
| Colonias -- 5%                         |                             |
+----------------------------------------+-----------------------------+
| EZ, EC or REAP set-aside               | \$ 17,978,388               |
+----------------------------------------+-----------------------------+
| Less general reserve                   | \$ 170,148,593              |
+----------------------------------------+-----------------------------+
| Administrator's Reserve                | \$ 30,000,000               |
+----------------------------------------+-----------------------------+
| Hardships & Homelessness               | \$ 2,000,000                |
+----------------------------------------+-----------------------------+
| Rural Housing Demonstration            | \$ 1,000,000                |
|                                        |                             |
| Program                                |                             |
+----------------------------------------+-----------------------------+
| Homeownership Partnership              | \$ 112,148,593              |
+----------------------------------------+-----------------------------+
| Program funds for the sale of REO      | \$ 25,000,000               |
|                                        |                             |
| program properties                     |                             |
+----------------------------------------+-----------------------------+
|                                        |                             |
+----------------------------------------+-----------------------------+
| Less Designated Reserve for            | \$ 175,000,000              |
|                                        |                             |
| Self-help                              |                             |
+----------------------------------------+-----------------------------+
| Basic formula - administrative         | \$ 702,284,655              |
+----------------------------------------+-----------------------------+
| Allocation                             |                             |
+----------------------------------------+-----------------------------+
|                                        |                             |
+----------------------------------------+-----------------------------+

2\. [Base Allocation]{.underline}. Each State will receive a base
allocation in

accordance with §1940.552(e). The base allocation remains at

the same level as in FY 2005 so that each state receives at

least \$4 million.

3\. [Reserves]{.underline}.

a\. [State office reserve]{.underline}.

\(i\) State Directors must maintain an adequate reserve to fund the
following applications:

(A) Hardship and homeless applicants based upon historical data and
    projected demand.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 10

(Revision 1)

([B]{.underline}) The State's 25 percent portion of funds for Rural Home
Loan Partnerships (RHLP) and Community Development Financial
Institutions (CDFI).

\(ii\) State Directors must maintain records on how the State office
reserves are utilized, including a justification for each hardship and
homelessness case authorized.

b\. [National Office Reserves]{.underline}.

\(i\) [General reserve]{.underline}. The National Office has a general
reserve of \$170.1 million. Of this amount, the Administrator's reserve
is \$30 million. One of the purposes of the Administrator's reserve will
be for loans in Indian Country. Indian Country consists of land inside
the boundaries of Indian reservations, communities made up mainly of
Native Americans, Indian trust and restricted land, and tribal allotted
lands. Another purpose of the reserve will be to provide funding for
subsequent loans for essential improvements or repairs and transfers
with assumptions.

\(ii\) [Hardship and homelessness reserve]{.underline}. \$2 million has
been set aside for hardships & homelessness from 4^th^ quarter funds.
States are expected to fund hardship and homeless cases from their own
reserves. Priority will be given to applicants facing deficient housing
hardships including applicants who have been living in deficient housing
for more than 6 months, current homeowners in danger of losing a
property through foreclosure, and other circumstances determined by HCFP
on a case-by-case basis to constitute a hardship.

Priority will be given to homeless cases accompanied by a certification
from a third party entity such as an agency for the homeless. In
exceptional cases when State funding is not sufficient to serve such
applicants, State Directors may submit hardship and homeless cases for
National Office reserve funds. Requests should be submitted using the
NORF system as described on page 13, paragraph II.B.3.g. of this
attachment. The National Office will make a review of a State's
set-aside reserve prior to approving the funding request.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 11

\(iii\) [Rural Housing Demonstration Program]{.underline}. \$1 million
has been set aside for innovative construction demonstration
initiatives. Further instructions are included in the SFH Loan and Grant
Field Office Handbook, HB-1-3550, Appendix 15.

\(iv\) [Program Real Estate Owned (REO) sales]{.underline}. \$25 million
has been set aside for [program]{.underline} sales of program REO
property. There will be no State distribution of these funds; rather
funds will be available on a first-come, first-served basis. Requests
should be submitted using the NORF system as described on page 13,
paragraph II.B.3.g. of this attachment**.** The requested amount and the
amount reflected in MortgageServ [must]{.underline} match in order for
the request to be considered.

c\. [Homeownership partnership]{.underline}. \$112.1 million has been
set

> aside for homeownership partnerships. These funds will be
>
> used for SFH loans to eligible individuals in connection
>
> with new and existing partnerships that include long-term
>
> fixed-rate financing from another lender. Funds will be
>
> distributed from this reserve by quarter in the same
>
> manner as direct 502 funds.
>
> States will obligate the entire loan amount by utilizing 25 percent
> funding from the State's RHLP/CDFI reserve and 75 percent funding from
> the National Office reserve. The National Office contribution will be
> distributed from the section 502 homeownership partnership reserve by
> quarter in the same manner as direct 502 funds; however, additional
> funds will not be distributed until the previous quarter's allocation
> has been utilized.

\(i\) Department of Treasury, Community Development

Financial Institutions (CDFI) - Funds will be available to fund
leveraged loans made in partnership with the Department of Treasury CDFI
participants.

\(ii\) Partnership initiatives established to carry out the objectives
of the RHLP.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 12

d.  [Designated reserve for self-help]{.underline}**.** \$175 million
    has been

set aside to assist participating self-help applicants.

States will consult with their T&MA Contractor to get

planned and historical usage. Using the correct

proportions will help ensure that the State has adequately

funded the appropriate income categories.

> States are encouraged to work with self-help grantees and
>
> participating applicants in leveraging funds to expand the
>
> amount available for financing section 502 RH loans.
>
> States will obligate the entire loan amount by utilizing
>
> 100 percent funding from the National Office reserve. The
>
> National Office contribution will be distributed from the
>
> section 502 self-help reserve by quarter in the same
>
> manner as direct 502 funds; however, additional funds will
>
> not be distributed until the previous quarter's allocation
>
> has been utilized.
>
> When the National Office reserve is exhausted, states will use
> allocated funds for additional self-help requirements.

e\. [Underserved counties and colonias]{.underline}. \$56,074,297 has
been

set aside for the 100 underserved counties and colonias.

The underserved counties are identified in part I of this

attachment. Requests should be submitted using the NORF

system as described on page 13, paragraph II.B.3.g. of

this attachment. Additional underserved counties may be

requested after June 30, 2008. Allocation amounts for

underserved and colonias areas are listed on page 24.

f\. [Empowerment Zone (EZ), Enterprise Community (EC) or
Rural]{.underline}

[Economic Area Partnership (REAP) set-aside]{.underline}. \$17,978,388

has been set-aside for loans in EZs, ECs or REAPs only.

If these funds are not obligated for EZ, EC communities or

REAP Zones by June 30, 2008, they shall remain available

for other authorized purposes. Allocation amounts for

EZ/EC/REAP funds are listed on page 25.

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 13

g\. [Reserve requests]{.underline}. All National Office reserve requests

other than Homeownership Partnership and 502 Self-Help

should be submitted to the National Office on a case-by-

case basis utilizing the National Office Reserve Funds

(NORF) system. NORF is an automated, web-based system

used for requesting National Office reserve funds.

Requests for reserve funds must include the applicant\'s

name, account number, full loan amount, amount being

requested, and income category, as well as a justification

if applicable. The information in requests must match

exactly what is in MortgageServ. Requests with

inconsistencies between NORF and MortgageServ will not be

processed.

> h\. [State Office pooling]{.underline}. If pooling is conducted within
> a
>
> State, it must not take place within the first 30
>
> calendar days of the first, second, or third quarter.
>
> (There are no restrictions on pooling in the fourth
>
> quarter.) Pooled funds may be redistributed by the State
>
> Director provided the State Director has determined that
>
> the pooled funds could not be used in the field offices
>
> receiving the funds allocated in accordance with this
>
> instruction. This determination will be in writing,
>
> filed in the State office, and will include a statement
>
> that all appropriate efforts were made to use the funds
>
> as allocated.

i\. [Suballocation by the State Director]{.underline}. The State
Director

may suballocate to each area office using the

methodology and formulas required by this instruction.

If suballocated to the area level, the Area Director

will make funds available on a first-come, first-served

basis to offices at the field or area level. No field

office will have its access to funds restricted without

the prior written approval of the Administrator. State

Directors may hold funds in reserve for leveraging and

other initiatives.

C. [Section 504 housing loans and grants]{.underline}. Section 504 grant
funds are

included in the Rural Housing Assistance Grant program (RHAG) in the

FY 2008 appropriation. Funds included in RHAG may be transferred in

accordance with part I of this attachment.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 14

1\. [Amount available for allocation]{.underline}.

Section 504 loans

  ----------------------------------------------- -----------------------
  Total available                                 \$34,409,013

  less 5% for 100 underserved                     

  counties and colonias                           \$ 1,720,450

  EZ, EC or REAP set-aside                        \$ 627,666

  less general reserve                            \$ 733,915

  Basic formula -- administrative                 

  allocation                                      \$31,326,982
  ----------------------------------------------- -----------------------

Section 504 grants

  ----------------------------------------------- -----------------------
  Total available                                 \$29,790,000

  less 5% for 100 underserved                     

  counties and colonias                           \$ 1,489,500

  EZ, EC or REAP set-aside                        \$ 595,800

  less general reserve                            \$ 1,649,895

  Basic formula - administrative                  

  Allocation                                      \$26,054,805
  ----------------------------------------------- -----------------------

2\. [Reserves and set-asides]{.underline}.

\(a\) [State Office Reserve]{.underline}. State Directors must:

\(i\) Maintain an adequate reserve to handle all anticipated hardship
applicants as determined by the State Director and based upon historical
data and projected demand for section 504 hardship applications (see
paragraph II.B.3.a.(i)([A]{.underline}) of this subpart).

\(ii\) Maintain records on how State office section 504 loan and grant
funds are utilized.

\(iii\) States will leverage an amount equal to 5 percent of their
initial section 504 Loan allocation. For example, if a State receives an
initial 504 Loan allocation of \$200,000, the amount to be leveraged
from other sources would be \$10,000 (\$200,000 X 5 percent) for a total
HCFP and other funding source of \$210,000 (\$200,000 + \$10,000).

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 15

(Revision 1)

\(b\) [Underserved counties and colonias]{.underline}. \$1,720,450 and

\$1,489,500 have been set aside for the 100 underserved

counties and colonias for the section 504 loan and grant

programs respectively. The underserved counties are

identified in part I of this attachment. Allocation

amounts for underserved and colonias areas are listed on

page 24.

\(c\) [Empowerment Zone (EZ), Enterprise Community (EC) or
Rural]{.underline}

[Economic Area Partnership (REAP) Set-aside]{.underline}. \$627,666 and

\$595,800 have been set-aside for EZ, EC or REAPs for the

section 504 loan and grant programs, respectively. These

funds are set-aside for EZs, ECs or REAPs only. If these

funds are not obligated for EZ, EC communities or REAP

Zones by June 30, 2008, they shall remain available for

other authorized purposes. Allocation amounts for

EZ/EC/REAP funds are listed on page 25.

\(d\) [National Office Reserve]{.underline}. \$733,915 for section 504
loan

hardships and \$1,649,895 for section 504 grant extreme

hardships have been set-aside in the general reserve.

\(i\) For section 504 grants, an extreme hardship case is one requiring
a significant priority in funding, ahead of other requests, due to
severe health or safety hazards. Prior to funding hardship cases, the
National Office will review the State's reserve account set aside for
grants.

\(ii\) Section 504 grant requests must be reviewed and sufficient
documentation must be provided to support the hardship. The following
information must be considered and included:

> ([A]{.underline}) A clear determination that the 504 grant applicant
> is unable to repay a section 504 loan. NOTE: A copy of the applicant's
> Form RD 1944-3, "Budget and/or Financial Statement" is no longer
> needed.

(04-01-08) SPECIAL PN

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 16

(Revision 1)

> ([B]{.underline}) The grantee is unable to obtain financial assistance
> from sources other than the HCFP loans or grants.
>
> ([C]{.underline}) The grantee lacks personal resources that can be
> utilized to meet the grantee's needs.

\(e\) [Requesting Section 504 Loan and Grant Funds]{.underline}.
Requests for

section 504 loan and grant funds from the National reserve

should be submitted on a case-by-case basis utilizing the

NORF as described on page 13, paragraph II.B.3.g. of this

attachment.

###### National Office contacts for program initiatives. 

+------------------------------------+----------------+----------------+
| **Program Initiatives**            | **Contact**    | **Phone \#**   |
+------------------------------------+----------------+----------------+
| 504 Loan & Grant Requests          | Nica Mathes    | \(202\)        |
|                                    |                | 205-3656       |
+------------------------------------+----------------+----------------+
| Compensation for Construction      | Myron Wooden   | \(202\)        |
| Defects                            |                | 720-4780       |
+------------------------------------+----------------+----------------+
| ### Fund                           | Renee May      | \(314\)        |
| s for Sale of Program/Non Program  |                | 206-2157       |
| Real Estate Owned (REO) Properties |                |                |
+------------------------------------+----------------+----------------+
| Hardship and Homelessness Requests | Scott Nista    | \(202\)        |
| (502)                              |                | 720-1463       |
+------------------------------------+----------------+----------------+
| Hardship Requests (504)            | Nica Mathes    | \(202\)        |
|                                    |                | 205-3656       |
+------------------------------------+----------------+----------------+
| Homeownership Partnership Fund     | Janet Carter   | \(202\)        |
| Usage Report/Requests for          |                | 720-1489       |
| additional Funds                   |                |                |
+------------------------------------+----------------+----------------+
| Housing Application Packaging      | Nica Mathes    | \(202\)        |
| Grants (HAPG)                      |                | 205-3656       |
+------------------------------------+----------------+----------------+
| Leveraging Participation           | Janet Carter   | \(202\)        |
|                                    |                | 720-1489       |
+------------------------------------+----------------+----------------+
| Matching funds for States with     | Scott Nista    | \(202\)        |
| approved Mutual Self-Help housing  |                | 720-1463       |
| grants                             |                |                |
+------------------------------------+----------------+----------------+
| Mutual & Self-Help Technical       | ##             | \(202\)        |
| Assistance Grants                  | # Chris Ketner | 690-1530       |
+------------------------------------+----------------+----------------+
| Mutual and Self-Help Site Loans    | #              | \(202\)        |
|                                    | ## Nica Mathes | 205-3656       |
+------------------------------------+----------------+----------------+
| National Office Reserve Funds      | Scott Nista    | \(202\)        |
| (NORF) System                      |                | 720-1463       |
+------------------------------------+----------------+----------------+
| HCFP Site Loans                    | #              | \(202\)        |
|                                    | ## Nica Mathes | 205-3656       |
+------------------------------------+----------------+----------------+
| Rural Housing Voucher              | Gloria Denson  | \(202\)        |
| Demonstration Program              |                | 720-1487       |
+------------------------------------+----------------+----------------+
| SFH Guaranteed Loan Division       | Melvin Carroll | \(202\)        |
| National Office Reserves           | or Dave Chaput | 690-4742       |
|                                    |                |                |
|                                    |                | \(202\)        |
|                                    |                | 720-1456       |
+------------------------------------+----------------+----------------+
| Technical & Supervisory Assistance | Nica Mathes    | \(202\)        |
| (TSA)                              |                | 205-3656       |
+------------------------------------+----------------+----------------+
| 502 Underserved Counties and       | Scott Nista    | \(202\)        |
| Colonias                           |                | 720-1463       |
+------------------------------------+----------------+----------------+
| 504 Underserved Counties and       | Nica Mathes    | \(202\)        |
| Colonias                           |                | 205-3656       |
+------------------------------------+----------------+----------------+

RD Instruction 1940-L

Exhibit A

Attachment 2, Part II

Subpart C, Page 17

(Revision 1)

**Information on basic formula criteria, data source and weight,
administrative allocation, pooling of funds, and availability of the
allocation**

+---+----------------+----------------+----------------+----------------+
| \ | DESCRIPTION    | SECTION 502    | SECTION 502    | SECTION 504    |
| # |                | NONSUBSIDIZED  | DIRECT RH      | LOANS AND      |
|   |                | GUARANTEED RH  | LOANS          | GRANTS         |
|   |                | LOANS          |                |                |
+---+----------------+----------------+----------------+----------------+
| 1 | Basic formula  | See            | See            | See §          |
|   | criteria, data | §1940.563(b)   | §1940.565(b)   | 1940.566(b)    |
|   | source, and    | of this        | of this        | and            |
|   | weight         | instruction.   | instruction.   | 1940.567(b) of |
|   |                |                |                | this           |
|   |                |                |                | instruction.   |
+---+----------------+----------------+----------------+----------------+
|   |                |                |                |                |
+---+----------------+----------------+----------------+----------------+
| 2 | Administrative |                |                |                |
|   | Allocation.    |                |                |                |
+---+----------------+----------------+----------------+----------------+
|   | Western        | \$8,298,821    | \$2,000,000    | \$500,000 loan |
|   | Pacific Area   |                |                |                |
|   |                |                |                | \$500,000      |
|   |                |                |                | grant          |
+---+----------------+----------------+----------------+----------------+
|   |                |                |                |                |
+---+----------------+----------------+----------------+----------------+
| 3 | Pooling of     |                |                |                |
|   | funds.         |                |                |                |
+---+----------------+----------------+----------------+----------------+
|   | a\. Year-end   | #### **Aug     | July 17, 2008  | July 17, 2008  |
|   | pooling        | ust 15, 2008** |                |                |
+---+----------------+----------------+----------------+----------------+
|   | b\.            | N/A            | June 30, 2008  | June 30, 2008  |
|   | Underserved    |                |                |                |
|   | counties &     |                |                |                |
|   | colonias       |                |                |                |
+---+----------------+----------------+----------------+----------------+
|   | c\. EZ, EC or  | N/A            | June 30, 2008  | June 30, 2008  |
|   | REAP           |                |                |                |
+---+----------------+----------------+----------------+----------------+
|   |                |                |                |                |
+---+----------------+----------------+----------------+----------------+
| 4 | Availability   |                |                |                |
|   | of the         |                |                |                |
|   | allocation.    |                |                |                |
+---+----------------+----------------+----------------+----------------+
|   | a\. first      | 40 percent     | 50 percent     | 50 percent     |
|   | quarter        |                |                |                |
+---+----------------+----------------+----------------+----------------+
|   | b\. second     | 70 percent     | 75 percent     | 75 percent     |
|   | quarter        |                |                |                |
+---+----------------+----------------+----------------+----------------+
|   | c\. third      | 90 percent     | 100 percent    | 100 percent    |
|   | quarter        |                |                |                |
+---+----------------+----------------+----------------+----------------+
|   | d\. fourth     | 100 percent    | 100 percent    | 100 percent    |
|   | quarter        |                |                |                |
+---+----------------+----------------+----------------+----------------+

1.  Data derived from the 2000 U.S. Census is available on the web at
    [http://census.sc.egov.usda.gov](http://census.sc.egov.usda.gov/).

2\. Due to the absence of Census data.

3.  All dates are tentative and are for the close of business (COB).
    Pooled funds

will be placed in the National office reserve and made available

administratively. The Administrator reserves the right to redistribute

funds based upon program performance.

4.  Funds will be distributed cumulatively through each quarter listed
    until

the National Office year-end pooling date.

(04-01-08) SPECIAL PN

Exhibit A, Attachment 2, Part II, Subpart C, Pages 18 thru 26 in PDF
ONLY.

RD Instruction 1940-L

Exhibit B

Page 1

[SECTION 515 NONPROFIT SET ASIDE (NPSA)]{.underline}

I. [Objective]{.underline}: To provide eligible nonprofit entities with
a reasonable opportunity to utilize Section 515 funds.

II\. [Background]{.underline}: The Cranston-Gonzalez National Affordable
Housing Act of 1990 established the statutory authority for the Section
515 NPSA funds.

III\. [Eligible entities]{.underline}. Amounts set aside shall be
available only for nonprofit entities in the State, which may not be
wholly or partially owned or controlled by a for-profit entity. An
eligible entity may include a partnership, including a limited
partnership, that has as its general partner a nonprofit entity or the
nonprofit entity\'s for-profit subsidiary which will be receiving
low-income housing tax credits authorized under section 42 of the
Internal Revenue Code of 1986. For the purposes of this exhibit, a
nonprofit entity is an organization that:

A. Will own an interest in a project to be financed under this section
and will materially participate in the development and the operations of
the project; and

B. Is a private organization that has nonprofit, tax exempt status under
section 501(c)(3) or section 501(c)(4) of the Internal Revenue Code of
1986; and

C. Has among its purposes the planning, development, or management of
low-income housing or community development projects; and

D. Is not affiliated with or controlled by a for-profit organization;
and

E. May be a consumer cooperative, Indian tribe, or tribal housing
authority.

IV\. [Nondiscrimination]{.underline}. Rural Development reemphasizes the
nondiscrimination in use and occupancy, and location requirements of
3560.104 of Subpart C of Part 3560 of this chapter.

(02-24-05) SPECIAL PN

RD Instruction 1940-L

Exhibit B

Page 2

V. [Amount of Set Aside]{.underline}. See Attachment 1 of this exhibit
(available in any Rural Development State Office):

A. [Small State Allocation Set Aside (SSASA)]{.underline}. The
allocation for small States has been reserved and combined to form the
SSASA, as shown in Attachment 1 of this exhibit (available in any Rural
Development State Office). The definition of small State is included in
Attachment 1 of this exhibit (available in any Rural Development State
Office).

B. [Large State Allocation Set Aside (LSASA)]{.underline}. The
allocation for large States has been reserved in the amounts shown in
Attachment 1 of this exhibit (available in any Rural Development State
Office). The definition of large State is included in Attachment 1 of
this exhibit (available in any Rural Development State Office).

C. [NPSA Rental Assistance (RA)]{.underline}. NPSA RA has been reserved
in the National Office as shown in Attachment 1 of this exhibit
(available in any Rural Development State Office).

VI\. [Access to NPSA funds and RA]{.underline}. RA is available and may
be requested, as needed, with eligible loan requests. NPSA funds and RA
should be requested by the State Director using a format similar to
Attachment 2 of this exhibit (available in any Rural Development State
Office). Funds are available as follows:

A. [SSASA:]{.underline} The SSASA is available to any SSASA State on a
first-come-first-served basis until pooling. See Attachment 3 of this
exhibit (available in any Rural Development State Office) for
information regarding pooling.

B. [LSASA:]{.underline} LSASA States may request LSASA funds up to the
amount the State contributed to LSASA until pooling. See Attachment 3 of
this exhibit (available in any Rural Development State Office) for
information regarding pooling.

VII\. [General information on priority/processing of
preapplications]{.underline}.

A. Preapplications/applications for assistance from eligible nonprofit
entities under this subpart must continue to meet all loan making
requirements of Subpart B of Part 3560 of this chapter.

RD Instruction 1940-L

Exhibit B

Page 3

B. A separate processing list will be maintained for NPSA loan requests.

C. The State Director may issue Form AD-622, \"Notice of Preapplication
Review Action,\" requesting a formal application to the highest ranking
preapplication(s) from eligible nonprofit entities defined in paragraph
III of this exhibit as follows:

1\. [LSASA]{.underline}. In LSASA States, AD-622s may not exceed 150
percent of the amount the State contributed to the LSASA. No single
Form\
AD-622 may exceed the amount of funds the State contributed to LSASA.

2\. [SSASA]{.underline}. In SSASA states, AD-622s should not exceed the
greater of \$750,000 or 150 percent of the amount the State contributed
to the SSASA; except that the State Director in a SSASA State may
request authorization to issue a Form AD-622, in an amount in excess of
\$750,000 if additional funds are necessary to finance an average-size
proposal based upon average construction costs in the state. For
example, if the average size proposal currently being funded in the
state is 24 units, and the average construction cost in the state is
\$35,000 per unit, the state may request authorization to issue a Form
AD-622 for \$840,000. The State Director will submit such requests to
the National Office including data reflecting average size/cost projects
in the State. No single Form AD-622 may exceed the amount of funds the
State may receive from the SSASA.

D. All AD-622s issued for proposals to be funded from NPSA will be
subject to the availability of NPSA funds. Form AD-622 should contain
the following or similar language: \"This Form AD-622 is issued subject
to the availability of Nonprofit Set Aside (NPSA) funds.\"

E. If a preapplication requesting NPSA funds has sufficient priority
points to compete with non-NPSA loan requests based upon the District or
State allocation (as applicable), the preapplication will be maintained
on both the NPSA and non-NPSA rating/ranking lists.

(02-24-05) SPECIAL PN

RD Instruction 1940-L

Exhibit B

Page 4

F. Provisions for providing preference to loan requests from nonprofit
organizations is contained in 7 CFR part 3560.56, Subpart B. Limited
partnerships, with a nonprofit general partner, do not qualify for
nonprofit preference.

VIII\. [Exception authority]{.underline}. The Administrator, or his/her
designee, may, in individual cases, make an exception to any
requirements of this exhibit which are not inconsistent with the
authorizing statute, if he/she finds that application of such
requirement would adversely affect the interest of the Government or
adversely affect the intent of the authorizing statute and/or Rural
Rental Housing program or result in an undue hardship by applying the
requirement. The Administrator, or his/her designee, may exercise this
authority upon the request of the State Director, Assistant
Administrator for Housing, or Director of the Multi-Family Housing
Processing Division. The request must be supported by information that
demonstrates the adverse impact or effect on the program. The
Administrator, or his/her designee, also reserves the right to change
pooling dates, establish/change minimum and maximum fund usage from
NPSA, or restrict participation in the set aside.

Attachments: Attachments 1, 2, and 3.

## oOo

RD Instruction 1940-L

Exhibit B

Attachment 1

## [SECTION 515 NONPROFIT SET ASIDE (NPSA) ALLOCATIONS]{.underline}

## 

## [FISCAL YEARS 1993 AND 1994]{.underline}

I. [Fiscal Year (FY) 93/94 NPSA allocation]{.underline}: Nine percent of
each State\'s FY 93 and FY 94 allocation has been set aside in the
National Office for NPSA, as follows:

A. [Small State Allocation Set Aside (SSASA)]{.underline}: Small States
are those in which 9 percent of their allocation is less than \$750,000.
Nine percent of each small State's allocation has been reserved and
combined to form the SSASA.

B. [Large State Allocation Set Aside (LSASA)]{.underline}: Large States
are those in which 9 percent of their allocation is more than \$750,000.
Nine percent of each large State\'s allocation has been reserved.

II\. [NPSA Rental Assistance]{.underline}: See the Multi-Family Housing
funding attachment to Exhibit A of this subpart (available in any Rural
Development State Office).

## oOo

(07-21-93) PN 209

RD Instruction 1940-L

Exhibit B

Attachment 2

SUBJECT: Request for Nonprofit Set Aside (NPSA)

Funds and Rental Assistance (RA)

TO:

Assistant Administrator

Housing

ATTN: Multi-Family Housing Processing Division

We hereby request NPSA funds and RA as follows:

State Name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ County Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

State Code: \_\_\_\_\_ District Code: \_\_\_\_\_ County Code: \_\_\_\_\_

Name of Applicant:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Type of Applicant:

\_\_\_\_ Nonprofit (NP) organization

\_\_\_\_ Limited partnership with NP general partner

\_\_\_\_ Indian tribe or tribal housing authority

\_\_\_\_ Other (please specify)
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Type of Complex: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ No. of Units:
\_\_\_\_\_\_

Priority Processing Point Score: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ points

Total Loan Request: \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ RA Units:
\_\_\_\_

NPSA Request: \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ RA
Units: \_\_\_\_

Other comments/information:

The applicant is an entity which meets the requirements of RD
Instruction 1940-L, Exhibit B.

State Director

(Instructions: Submit a separate request for each NPSA request.)

oOo

(07-21-93) PN 209

RD Instruction 1940-L

Exhibit B

Attachment 3

Page 1

## [SECTION 515 NONPROFIT SET ASIDE (NPSA) POOLING]{.underline}

## 

## [FISCAL YEAR (FY) 1994 AND THEREAFTER]{.underline}

[Pooling for Small State Set Aside (SSASA) and Large State Set Aside
(LSASA)]{.underline}: Beginning with FY 94, unused SSASA and LSASA funds
will be pooled as follows:

A. On or after July 1, of each year, unused funds from the SSASA and the
LSASA States will be combined and made available, on a
first-come-first-served basis, in any State, for eligible nonprofit
entities meeting the requirements of paragraph III of Exhibit B of this
subpart. The exact pooling date will be established annually and will be
included in the Multi-Family Housing (MFH) funding attachment to Exhibit
A of this subpart (available in any Rural Development State Office). The
MFH funding attachment is also published annually as a Notice in the
Federal Register.

B. Unused funds remaining 30 days after the pooling date will be
returned to the States for use for any Section 515 proposal ready for
obligation, without regard to the type of applicant entity. Funds will
be returned to States that did not use the full amount contributed, in
an amount proportionate to the amount contributed.

(07-21-93) PN 209

RD Instruction 1940-L

Exhibit B

Attachment 3

Page 2

## [SECTION 515 NPSA POOLING]{.underline}

## 

## [FY 1993]{.underline}

I. [Pooling for SSASA States]{.underline}:

A. June 18, 1993, is the last date for SSASA States to request SSASA
funds and RA units. At close of business (COB) June 18, 1993, any unused
SSASA funds will be pooled and made available to any SSASA State on a
first-come-first-served basis until COB July 19, 1993.

B. Unused funds, as of COB July 19, 1993, will be returned to SSASA
States which did not use the full amount of set aside funds they
contributed, in an amount proportionate to the amount contributed. The
returned funds may be used for Section 515 proposals ready for
obligation, without regard to the type of applicant entity.

II\. [Pooling for LSASA States]{.underline}:

A. LSASA States may request LSASA funds, up to the amount contributed,
until COB July 19, 1993.

B. Unused LSASA funds will be returned to the States as of COB

July 19, 1993. These funds may be used for Section 515 proposals ready
for obligation, without regard to the type of applicant entity.

## oOo 

RD Instruction 1940-L

Exhibit C

Page 1

## [HOUSING IN UNDERSERVED AREAS]{.underline}

I. [Objective]{.underline}.

A. To improve the quality of affordable housing by targeting funds under
Rural Housing Targeting Set Aside (RHTSA) to designated areas that have
extremely high concentrations of poverty and substandard housing and
have severe, unmet rural housing needs.

B. To provide for the eligibility of certain

colonias for rural housing funds.

II\. [Background]{.underline}. The Cranston-Gonzalez National Affordable
Housing Act of 1990 (herein referred to as the \"Act\") requires that
Rural Development set aside Section 502, 504, 514, 515, and 524 funds
for assistance in targeted, underserved areas. An appropriate amount of
Section 521 new construction rental assistance (RA) is set aside for use
with Section 514 and 515 loan programs. Under the Act, certain colonias
are now eligible for Rural Development housing assistance.

III\. [Colonias.]{.underline}

A. Colonia is defined as any identifiable community that:

1\. is in the State of Arizona, California, New Mexico or Texas;

2\. is in the area of the United States within 150 miles of the border
between the United States and Mexico, except that the term does not
include any standard metropolitan statistical area that has a population
exceeding 1 million;

3\. is designated by the State or county in which it is located as a
colonia;

4\. is determined to be a colonia on the basis of objective criteria,
including lack of potable water supply, lack of adequate sewage systems,
and lack of decent, safe, and sanitary housing; and

(03-04-92) SPECIAL PN

RD Instruction 1940-L

Exhibit C

Page 2

5\. was in existence and generally recognized as a colonia before
November 28, 1990.

B. Requests for housing assistance in colonias have priority as follows:

1\. When the State did not obligate its allocation in one or more of its
housing programs during the previous two fiscal years (FYs), priority
will be given to requests for assistance, in the affected program(s),
from regularly allocated funds, until an amount equal to 5 percent of
the current FY program(s) allocation is obligated in colonias. This
priority takes precedence over other processing priority methods.

2\. When the State did obligate its allocation in one or more of its
housing programs during the previous 2 FYs, priority will be given to
requests for assistance, in the affected program(s), from RHTSA funds,
until an amount equal to 5 percent of the current FY program(s)
allocation is obligated in colonias. This priority takes precedence over
other processing priority methods.

C. Colonias may access pooled RHTSA funds as provided in paragraph IV G
of this exhibit.

IV\. [RHTSA]{.underline}.

A. [Amount of Set Aside]{.underline}. Set asides for RHTSA from the
current FY allocations are established in Attachment 1 of this exhibit
(available in any Rural Development State Office).

B. [Selection of Targeted Counties]{.underline}.

1\. [Eligibility]{.underline}. Eligible counties met the following
criteria: (1) 20 percent or more of the county population is at or below
poverty level; (2) 10 percent or more of the occupied housing units are
substandard; and (3) the average funds received on a per capita basis in
the county during the previous 5 FYs were more than 40 percent below the
State per capita average during the same period. Data from the most
recent available Census was used for all three criteria, with criteria
(2) and (3) based on the Rural Development rural area definition.

RD Instruction 1940-L

Exhibit C

Page 3

2\. [Selection]{.underline}. The Act requires that 100 of the most
underserved counties be initially targeted for RHTSA funds. In
establishing the 100 counties, those with 28 percent or more of their
population at or below poverty level and 13 percent or more of their
occupied housing units substandard, have preference. If less than 100
counties meet this criteria, the remaining counties meeting the criteria
in paragraph IV B 1 of this exhibit will be ranked, based upon a total
of their substandard housing and poverty level percentages. The
highest-ranking counties are then selected until the list reaches 100.
The remaining counties are eligible for pool funds only.

C. [State RHTSA Levels]{.underline}. In the Section 502, 504, and 515
programs, each State\'s RHTSA level will be based on its number of
eligible counties, with each county receiving a pro rata share of the
total funds available. In order to ensure that a meaningful amount of
assistance is available to each State, minimum funding levels may be
established. When minimum levels are established, they are set forth on
Attachment 1 of this exhibit (available in any Rural Development State
Office).

D. [Use of Funds]{.underline}. To maximize the assistance to targeted
counties, allocated program funds should be used in addition to RHTSA
funds, where possible. The State Director has the discretion to
determine the most effective delivery of RHTSA funds among the targeted
counties within his/her jurisdiction. The 100 counties listed in
Attachment 2 of this exhibit (available in any Rural Development State
Office) are eligible for RHTSA funding consideration immediately.
Colonias are also eligible for RHTSA funds as described in Paragraph III
of this exhibit.

E. [National Office RHTSA Reserve]{.underline}. A limited National
Office reserve is available on an individual case basis when the State
is unable to fund a request from its regular or RHTSA allocation. The
amount of the reserve, and the date it can be accessed and any
conditions thereof, if applicable, are contained in Attachment 1 of this
exhibit (available in any Rural Development State Office).

(03-04-92) SPECIAL PN

RD Instruction 1940-L

Exhibit C

Page 4

F. [Requests for Funds and RA]{.underline}. All RHTSA funds are reserved
in the National Office and requests for these funds and/or units must be
submitted by the State Director using the applicable format shown on
Attachments 4 or 5 of this exhibit (available in any Rural Development
State Office). The State Director is responsible for notifying the
Director of Single Family Housing Processing Division (SFHPD) or
Multi-Family Housing Processing Division (MFHPD) of any RHTSA funds and
RA units authorized, but not obligated, by RHTSA pooling date.

G. [Pooling]{.underline}. Unused RHTSA funds and RA will be pooled.
Pooling dates and any pertinent information thereof are available on
Attachment 1 of this exhibit (available in any Rural Development State
Office). Pooled funds will be available on a first-come, first-served
basis to all eligible colonias and all counties listed on Attachments 2
and 3 of this exhibit (available in any Rural Development State Office).
Pooled RHTSA funds will remain available until the year-end pooling
date.

H. [Outreach]{.underline}. Outreach efforts publicizing the availability
of loan and grant funds for the eligible RHTSA counties will be
aggressively carried out. Each affected State Director will develop an
outreach plan which includes such techniques as news releases, community
meetings, coordination with other Federal, State, and local government
organizations, to promote full utilization of these targeted funds by
all qualified applicants regardless of race, color, and sex. In addition
to the above outreach efforts, States with eligible colonias should
establish liaison with community groups in order to leverage support and
assistance provided to residents of colonias.

I. [Monitoring Performance]{.underline}.

1\. [National Office]{.underline}: The National Office will track the
use of targeted funds on a regular basis throughout the FY and take
necessary follow-up actions to facilitate the delivery of the program.

2\. [State Office]{.underline}:

a\. The State Director will designate a staff member to coordinate all
efforts under RHTSA.

RD Instruction 1940-L

Exhibit C

Page 5

b\. Adequate records will be maintained for each of the eligible RHTSA
counties, in all programs with RHTSA set asides.

c\. The State Directors for Arizona, California, New Mexico, and Texas
will submit quarterly reports of funds usage in colonias to SFHPD and
MFHPD. Negative reports will be required.

J. [Requests for Assistance]{.underline}. Requests for assistance in
targeted counties must meet all loan making requirements of the
applicable program Instructions, except as modified for colonias in
paragraph III of this exhibit. For Section 515, States may:

1\. Issue Form AD-622, \"Notice of Preapplication Review Action,\" up to
150 percent of the amount shown in Attachment 1 of this exhibit
(available in any Rural Development State Office).

2\. All AD-622s issued for applicants in targeted counties will be
annotated, in Item 7, under \"Other Remarks,\" with the following:
\"Issuance of this AD-622 is contingent upon receiving funds from the
Rural Housing Targeting Set Aside (RHTSA). Should RHTSA funds be
unavailable, or the county in which this project will be located is no
longer considered a targeted county, this AD-622 will no longer be
valid. In these cases, the request for assistance will need to compete
with other preapplications in non-targeted counties, based upon its
priority point score.\"

V. [Exception Authority]{.underline}. The Administrator, or his/her
designee, may, in individual cases, make an exception to any
requirements of this exhibit which are not inconsistent with the
authorizing statute, if he/she finds that application of such
requirement would adversely affect the interest of the Government. The
Administrator, or his/her designee, may exercise this authority upon the
request of the State Director, Assistant Administrator for Housing,
Director of the SFHPD or Director of the MFHPD. The request must be
supported by information that demonstrates the adverse

(03-04-92) SPECIAL PN

RD Instruction 1940-L

Exhibit C

Page 6

impact or effect on the program. The Administrator, or his/her designee,
also reserves the right to change the pooling date, establish/change
minimum and maximum fund usage from set asides and/or the reserve, or
restrict participation in set asides and/or reserves.

Attachments: 1, 2, 3, 4, and 5

## oOo

Exhibit C: Attachments 1, 2, and 3 in PDF ONLY.

RD Instruction 1940-L

Exhibit C, Attachment 4

SUBJECT: Request for Rural Housing Targeting

Set Aside (RHTSA) Funds

TO: Ronnie O. Tharrington

Assistant Administrator

Housing

ATTN: Single Family Housing Processing Division

We hereby request RHTSA funds as follows:

State Name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Program Amount of RHTSA Requested

Section 502 Very Low-Income Funds \$
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Section 502 Low-Income Funds \$
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Section 504 Loan Funds \$ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Section 504 Grant Funds \$ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Section 524 Loan Funds \$ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

State Director

(General Instructions - Individual listing of counties or applicants not
required. Requests should be grouped and submitted on a periodic basis.)

(02-20-91) SPECIAL PN

RD Instruction 1940-L

Exhibit C, Attachment 5

SUBJECT: Request for Rural Housing Targeting Set Aside (RHTSA)

Funds and Rental Assistance (RA)

TO: Ronnie O. Tharrington

Assistant Administrator

Housing

ATTN: Multi-Family Housing Processing Division

We hereby request funds and RA from the RHTSA as follows:

State Name: \_\_\_\_\_\_\_\_\_\_\_ County Name: \_\_\_\_\_\_\_\_\_
Colonia: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

State Code: \_\_\_\_\_\_\_\_\_\_ County Code: \_\_\_\_\_\_\_\_ District
Code: \_\_\_\_\_\_\_\_\_\_\_

Name of Applicant:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project Physical Location:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Type of Project: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ No. of rental units:
\_\_\_\_\_\_\_\_\_\_\_\_\_

Priority Processing Point Score: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ points

Total Loan Request: \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ RA units
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

RHTSA Request: \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ RHTSA
RA Request \_\_\_\_\_\_\_\_\_\_\_

Projected Obligation Date: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other comments/information:

State Director

\[General Instructions - Complete a separate Attachment 5 for each RHTSA
request.\]

(02-20-91) SPECIAL PN

RD Instruction 1940-L

Exhibit D

Page 1

[RURAL RENTAL HOUSING DIVERSITY DEMONSTRATION PROGRAM
(RRHDDP)]{.underline}

I. [Objectives]{.underline}.

> A. To encourage applicants of limited gross incomes which have little
> or no participation in the Section 515 program.
>
> B. To provide housing in unserved areas.
>
> C. To provide an economic stimulus to the local economy by encouraging
> procurement of labor, goods, and services from the local community.

II\. [Background]{.underline}. In accordance with Section 506 (b) of the
Housing Act of 1949, as amended, the Secretary is authorized and
directed to conduct research, technical studies, and demonstrations
relating to the mission and programs of Rural Development and the
national housing goals defined in section 2 of this Act. In connection
with such activities, the Secretary shall seek to promote the
construction of adequate farm and other rural housing. The Secretary
shall conduct such activities for the purposes of stimulating
construction and improving the architectural design and utility of
dwellings and buildings. In furtherance of this goal, the Rural Rental
Housing Diversity Demonstration Program (RRHDDP) is implemented. An
appropriate amount of Section 521 new construction rental assistance
(RA) is set aside for use with Section 515 loan funds.

III\. [RRHDDP]{.underline}.

> A. [Amount of Set Aside]{.underline}. Set asides for RRHDDP from the
> current fiscal year (FY) allocations are established in Attachment 1
> of this exhibit.
>
> B. [Selection of States]{.underline}. All States were considered using
> the following criteria:
>
> 1\. Highest percentage of poverty;
>
> 2\. Highest percentage of substandard housing;
>
> 3\. Highest unemployment rates;
>
> 4\. Lowest rural median income; and
>
> 5\. Number of places with population of 2,500 or fewer.

(02-24-05) SPECIAL PN

RD Instruction 1940-L

Exhibit D

Page 2

> Each State selected for RRHDDP had to be in the top 10 of at least 3
> of the 5 criteria. Data from the 1990 census was used for all
> criteria. The States selected are listed in Attachment 1 of this
> exhibit.
>
> C. [State RRHDDP Levels]{.underline}. See Attachment 1 of this
> exhibit.
>
> D. [Use of Funds]{.underline}. To ensure the success of RRHDDP, the
> State Director may leverage funds from the RRHDDP with allocated funds
> from the Section 515 and 521 allocations held in the State Office
> reserve. The State Director has the discretion to determine the most
> effective delivery of RRHDDP funds; however, the intent and scope of
> the program should be ever present in the implementation and
> application processes.
>
> E. [National Office RRHDDP Reserve]{.underline}. There is no RRHDDP
> reserve available when the State is unable to fund a request from its
> regular or RRHDDP allocation.
>
> F. [Pooling]{.underline}. Unused RRHDDP funds and RA will be pooled.
> Pooling dates and any pertinent information thereof are available on
> Attachment 1 of this exhibit. Pooled funds will be available on a
> first-come-first-served basis to all eligible States listed on
> Attachment 1 of this exhibit. Pooled RRHDDP funds will remain
> available until the year-end pooling date.

IV\. [Eligibility]{.underline}. Applicants and proposals will need to
meet the following requirements, in addition to those found in 7 CFR
part 3560, Subpart B:

> A. The applicant must have had an interest (including family members)
> in no more than one Section 515 loan over the past 3 years. For entity
> applicants, this restriction applies to all general partners and their
> family members. For the purposes of this program, interest means a
> Section 515 loan which has been approved and funds obligated.
>
> B. The applicant must have had a gross aggregate income from business
> and personal operations of less than \$500,000 in the previous
> calendar year. For entity applicants, the aggregate income of all
> general partners will be considered. American Indian tribes and tribal
> housing authorities are exempt from these income requirements.
>
> C. At least 51 percent of the labor, goods, and services to develop
> the proposed housing must come from the market area as described in
> paragraph V B of this exhibit.

RD Instruction 1940-L

Exhibit D

Page 3

> D. The housing must be constructed in a market area without similar
> subsidized housing. Market area is defined in 7 CFR part 3560,\
> Subpart A.
>
> E. The proposed complex must contain no more than 50 percent of the
> average number of units of the average size Section 515 complex in the
> State based on the previous FY average.

V. [Processing Preapplications]{.underline}.

> A. [Requirements]{.underline}. To be eligible for participation in
> this demonstration program, applicants must ensure that the
> preapplication meets all requirements set forth in 7 CFR part 3560 and
> this exhibit.
>
> 1\. All [complete]{.underline} preapplications must be received in the
> place designated by the State Director by the date listed in
> Attachment 1 of this exhibit. Incomplete preapplications will not be
> considered. A [complete]{.underline} preapplication consists of all
> items specified in THC Notice of Funding Availability that will be
> published in the Federal Register each Fiscal Year.
>
> 2\. Based upon projected demand for the RRHDDP, the State Director
> will select the manner in which preapplications will be rated prior to
> implementation and/or announcement of the program to ensure the public
> is aware of how requests will be prioritized. The State Director may
> elect one of the following systems to prioritize and select proposals
> for further processing:
>
> a\. The priority point system contained in 7 CFR 3560.56 or
>
> b\. The following priority point scoring system;
>
> (i)Interest in Section 515 loans over the past 3 FYs as specified in
> paragraph IV A of this exhibit.
>
> No Interest - 5 points
>
> Interest in 1 project - 2 points
>
> \(ii\) Gross incomes as defined in paragraph IV B of this exhibit.
>
> Income: \$400,001-499,999 - 1 point
>
> \$300,000-400,000 - 2 points
>
> \$299,999 or less - 3 points
>
> American Indian Tribes/Tribal
>
> Housing Authorities - 3 points

(02-24-05) SPECIAL PN

RD Instruction 1940-L

Exhibit D

Page 4

> \(iii\) Percent of the labor, goods, and services must come from the
> local market described in paragraph V B of this exhibit.
>
> 100% from local market - 5 points
>
> 90-99% from local market - 4 points
>
> 80-89% from local market - 3 points
>
> 70-79% from local market - 2 points
>
> 51-69% from local market - 1 point
>
> \(iv\) Size of proposed complex compared to average size complex
> obligated in previous FY.
>
> 40-50% average size - 3 points
>
> 30-39% average size - 4 points
>
> less than 30% - 5 points
>
> c\. A combination of the points received in paragraphs V A 2 a and b
> of this exhibit.
>
> 3\. In the event of a tie, the proposal with the earliest date of
> [complete]{.underline} preapplication will take preference.
>
> B. [Procurement of labor, goods, and services]{.underline}. One of the
> intents of the RRHDDP is to stimulate the local economy by encouraging
> procurement of labor, goods, and services from the local area. Rural
> Development recognizes that defining a local trade area in which to
> procure the labor, goods, and services to build an apartment complex
> is difficult in rural America. To be responsive to the application
> procedures, applicants must procure labor, goods, and services from
> Level One of this paragraph. If labor, goods, and services are not
> available in Level One of this paragraph, the applicant may use the
> trade area defined in Level Two of this paragraph. Documentation as to
> why the labor, goods, and services are not available in Level One of
> this paragraph must be included in the case file. The applicant may
> propose to secure labor, goods, and services from Level Three or Four
> of this paragraph; however, documentation as to why same is not
> available in all of the previous levels must be included in the case
> file.
>
> 1\. Level One: Labor, goods, and services must be procured within 15
> miles of the proposed site of the apartments.
>
> 2\. Level Two: Labor, goods, and services must be procured within the
> county where the proposed apartments will be located.

RD Instruction 1940-L

Exhibit D

Page 5

> 3\. Level Three: Labor, goods, and services must be procured within
> the lesser of 50 miles from the site of the proposed complex OR the
> boundaries of any adjacent county (regardless of State boundary).
>
> 4\. Level Four: Labor, goods, and services must be procured within 100
> miles of the proposed site (regardless of State boundary).
>
> C. [Outreach]{.underline}. Outreach efforts publicizing the
> availability of loan funds for the eligible RRHDDP States will be
> aggressively carried out. Each affected State Director will develop an
> outreach plan which includes such techniques as news releases,
> community meetings, coordination with other Federal, State, and local
> government organizations, to promote full utilization of these funds
> by all qualified applicants regardless of race, color, religion,
> national origin, marital status, age, and sex. In addition to the
> above outreach efforts, States with eligible colonias and/or tribal
> lands should establish liaison with community groups in order to
> leverage support and assistance provided to residents of colonias and
> tribal lands.
>
> D. [Monitoring Performance]{.underline}.
>
> 1\. [National Office]{.underline}: The National Office will track the
> use of targeted funds on a regular basis throughout the FY and take
> necessary follow-up actions to facilitate the delivery of the program.
>
> 2\. [State Office]{.underline}: The State Director will designate a
> staff member to coordinate all efforts under RRHDDP.
>
> E. [Issuance of Form AD-622, \"Notice of Preapplication Review
> Action,\" inviting a formal application]{.underline}.
>
> 1\. The State Director may issue AD-622s up to 100 percent of the
> amount shown in Attachment 1 of this exhibit and any funds made
> available from the State Office reserve.
>
> 2\. All AD-622s issued for applicants under this demonstration program
> will be annotated, in Item 7 of the form, under \"Other Remarks,\"
> with the following:
>
> \"Issuance of this AD-622 is contingent upon receiving funds from the
> Rural Rental Housing Diversity Demonstration Program (RRHDDP). Should
> RRHDDP funds be unavailable or the program discontinued,

(02-24-05) SPECIAL PN

RD Instruction 1940-L

Exhibit D

Page 6

> this AD-622 will no longer be valid. In these cases, the request for
> assistance will need to compete with other preapplications based upon
> its priority point score established in accordance with 7 CFR 3560.56.

VI\. [Exception Authority]{.underline}. The Administrator, or his/her
designee, may, in individual cases, make an exception to any
requirements of this exhibit which are not inconsistent with the
authorizing statute, if he/she finds that application of such
requirement would adversely affect the interest of the Government. The
Administrator, or his/her designee, may exercise this authority upon the
request of the State Director, Assistant Administrator for Housing, or
Director of the Multi-Family Housing Processing Division (MFHPD). The
request must be supported by information that demonstrates the adverse
impact or affect on the program. The Administrator, or his/her designee,
also reserves the right to change the pooling date, establish/change
minimum and maximum fund usage from set asides and/or the reserve, or
restrict participation in set asides and/or reserves.

oOo