RD Instruction 1944-I
Table of Contents
Page 1

Part 1944 - HOUSING

Subpart I - Self-Help Technical Assistance Grants

Table of Contents

Sec.		Page

1944.40l  Objective.	1
1944.402  Grant purposes.	1
1944.403  Definitions.	2

	(a)  Agreement.	2
	(b)  Agreement period (or grant period).	2
	(c)  Date of completion.	2
	(d)  Direct costs.	2
	(e)  Disallowed costs.	2
	(f)  Equivalent units.	2
	(g)  Equivalent value of a modest house.	2
	(h)  Indirect costs.	2
	(i)  Mutual self-help.	3
	(j)  Organization.	3
	(k)  Participating family.	3
	(l)  Self-help.	3
	(m)  Sponsor.	3
	(n)  Technical assistance.	4
	(o)  Termination of a grant.	4

1944.404	Eligibility.	4
1944.405	Authorized use of grant funds.	5
1944.406	Prohibited use of grant funds.	7
1944.407	Limitations.	7
1944.408	[Reserved]  	8
1944.409	Executive Order 12372.	8
1944.410	Processing preapplications, applications, and
	completing grant dockets.	8

	(a)  Form SF-424, "Application for Federal Assistance."	8
	(b)  Preapplication review.	10
	(c)  Form AD-622, "Notice of Preapplication Review 
	     Action."	11
	(d)  Self-help technical assistance grant predevelopment
	     agreement.	12
	(e)  Form SF-424, "Application for Federal Assistance."	12

1944.411	Conditions for approving a grant.	13
1944.412	Docket preparation.	14


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RD Instruction 1944-I
Table of Contents (Con.)
Page 2

Sec.		Page
1944.413	Grant approval.	15

	(a)  Approval of grant.	15
	(b)  Cancellation of an approved grant.	15
	(c)  Disapproval of grant.	16

1944.414	[Reserved]	16
1944.415	Grant approval and other approving authorities.	16
1944.416	Grant closing.	17
1944.417	Servicing actions after grant closing.	17
1944.418	[Reserved]	19
1944.419	Final grantee evaluation.	20
1944.420	Extension or revision of the grant agreement.	21
1944.421	Refunding of an existing grantee.	21
1944.422	Audit and other report requirements.	21

	(a)  Nonprofit organizations and others.	22
	(b)  State and local governments and Indian tribes.	22

1944.423	Loan packaging and 502 RH application submittal.	23
1944.424	Dwelling construction and standards.	23
1944.425	Handling and accounting for borrower loan funds.	24
1944.426	Grant closeout.	24

	(a)  Grant purposes completed.	24
	(b)  Grant purposes not completed.	25
	(c)  Grant suspension.	25
	(d)  Grant termination.	26

1944.427  Grantee self-evaluation.	26
1944.428	- 1944.449  [Reserved]	27
1944.450	OMB Control Number.	27

Exhibit A	  Self-Help Technical Assistance Grant Agreement.
Exhibit B	  Evaluation Report of Self-Help Technical Assistance (TA)
	  Grants.
Exhibit B-1 Instructions for Preparation of Evaluation Report of
	  Self-Help Technical Assistance Grants.
Exhibit B-2 Breakdown of Construction Development for Determining
	  Percentage Construction Completed.
Exhibit B-3 Pre-Construction and Construction Phase Breakdown.
Exhibit C	  Amendment to Self-Help Technical Assistance Grant Agreement
Exhibit D	  Self-Help Technical Assistance Grant Predevelopment
	  Agreement.
Exhibit E	  Guidance for Recipients of Self-Help Technical Assistance
	  Grants.
Exhibit F  Site Option Loan to Technical Assistance Grantees.

oOo

RD Instruction 1944-I
PART 1944 - HOUSING

Subpart I - Self-Help Technical Assistance Grants

 1944.401  Objective.

	This subpart sets forth the policies and procedures and delegates authority for providing Technical Assistance (TA) funds to eligible applicants to finance programs of technical and supervisory assistance for self-help housing, as authorized under Section 523 of the Housing Act of 1949.  Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to Rural Development employees, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of Subpart D of Part 1900 of this chapter.  Applicants for this assistance are required to identify any known relationship or association with a Rural Development employee.  This financial assistance may pay part or all of the cost of developing, administering, or coordinating programs of technical and supervisory assistance to aid needy very low- and low-income families in carrying out self-help housing efforts in rural areas.  Very low-income families must receive a priority for recruitment and participation and may not comprise less than the percentage stated in Subpart L of Part 1940 of this chapter of those assisted in any grant.  The primary purpose is to fund organizations that are willing to locate and work with families that otherwise do not qualify as homeowners.  Generally, these are families below 50 percent of median incomes, living in substandard housing, and/or lacking the skills to be good homeowners.  Grantees will comply with the nondiscrimination regulation Subpart E of Part 1901 of this chapter which states that no person in the United States shall, on the grounds of race, color, national origin, sex, religion, marital status, mental or physical handicap, or age, be excluded from participating in, be denied the benefits of, or be subject to discrimination in connection with the use of grant funds and all provisions of the Fair Housing Act of 1988.  (Revised 02-04-93, SPECIAL PN.)

 1944.402  Grant purposes.

	Rural Development may contract or make a grant to an organization to:

(a)  Give technical and supervisory assistance to eligible very low- and low-income families as defined in Appendix 9 of HB-1-3550 (available in any Rural Development Office), in carrying out self-help housing efforts. (Revised 01-23-03, SPECIAL PN.)

(b)  Assist other organizations to provide technical and supervisory assistance to eligible families.

(c)  Develop a final application, recruit families and related activities necessary to participate under paragraph (a) of this section.
__________________________________________________________________________
Distribution:  WSDC                                 Loan and Grant Making
                                                     Housing

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RD Instruction 1944-I


 1944.403  Definitions.

(a)  Agreement.  The Self-Help Technical Assistance Agreement, which is a document signed by Rural Development and the grantee, sets forth the terms and conditions under which TA funds will be made available.  (Exhibit A of this subpart). 

(b)  Agreement period (or grant period).  The period of time for which an agreement is in force.  Generally, the period will not exceed 24 months.

(c)  Date of completion.  The date when all work under a grant is completed or the date in the TA grant agreement, or any supplement or amendment to it, when Federal assistance ends.

(d)  Direct costs.  Those costs that are specifically identified with a particular project or activity.  Grantees receiving funds from a single grant source would consider all costs as direct costs.

(e)  Disallowed costs.  Those charges to a grant which Rural Development determines cannot be authorized.

(f)  Equivalent units.  Equivalent units represent the "theoretical number of units" arrived at by adding the equivalent percentage of completion figure for each family in the self-help program (pre-construction and actual construction) together at any given date during program operations.  The sum of the percentage of completion figures for all participant families represent the total number of "theoretical units" completed at any point in time.  Equivalent units are useful in measuring progress during the period of the grant and are not a measurement of actual accomplishments.  The number of equivalent units for any group can never exceed the number of planned or completed houses for that group.

(g)  Equivalent value of a modest house.  The equivalent value of a modest house is the typical cost of a recent contractor-built Rural Development financed home in the area plus the actual or projected costs of an acceptable site and site development.  If Rural Development has not financed a contractor-built house during the last twelve months, the value will be established by use of the Marshall and Swift cost handbook or a similar type of handbook.  Equivalent value of a modest house is established by Rural Development.

(h)  Indirect costs.  Those costs that are incurred for common or joint objectives and therefore, cannot be readily and specifically identified with a particular project or activity, e.g. self-help.



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1944.403 (Con.)	RD Instruction 1944-I


(i)  Mutual self-help.  The construction method by which participating families organized in groups generally of 4 to 10 families utilize their own labor to reduce the total construction cost of their homes.  Participating families complete construction work on their homes by an  exchange of labor with one another.  The mutual self-help method must be used for new construction.

(j)  Organization.

(1)  A State, political subdivision, or public nonprofit corporation (including Indian tribes or Tribal corporations); or

(2)  A private nonprofit corporation that is owned and controlled by private persons or interests and is organized and operated for purposes other than making gains or profits for the corporation and is legally precluded from distributing any gains or profits to its members.

(k)  Participating family.  Individuals and/or their families who agree to build homes by the mutual self-help method and rehabilitate homes by the self-help method.  Participants are families with very low- or low-incomes who have the ability to furnish their share of the required labor input regardless of the handicap, age, race, color, national origin, religion, family status, or sex of the head of household.  The participating family must be approved for a Section 502 RH loan or similar loans from other Federal, state, and private lenders that uses income guidelines substantially similar to the Department of Housing and Urban Development before the start of construction, have sufficient time available to assist in building their own homes, and show a desire to work with other families.  Each family in the group must contribute labor on each other's homes to accomplish the 65 percent of the total 100 percent of tasks listed in Exhibit B-2 of this subpart.  A participating family may use a substitute to perform the labor with prior approval of the Grantee and the Rural Development State Director.  A substitute is only permitted when the participating family is incapacitated.

(l)  Self-help.  The construction method by which an individual family utilizes their labor to reduce the construction cost of their home without an exchange of labor between participating families.  Unless otherwise authorized by the District Director, this method is only funded for repair and rehabilitation type construction.

(m)  Sponsor.  An existing entity that is willing and able to assist an applicant, with or without charge, in applying for a grant and in carrying out responsibilities under the agreement.  Examples of sponsors are local rural electric cooperatives, institutions of higher education, community action agencies and other self-help grantees.  Also, when available, regional technical and management assistance contractors may qualify to serve as a sponsor at no charge. 

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RD Instruction 1944-I
1944.403 (Con.)


(n)  Technical assistance.  The organizing and supervising of groups of families in the construction of their own homes including:

(1)  Recruiting families who are interested in sharing labor in the construction of each other's homes and assisting such families in obtaining housing loans.

(2)  Conducting meetings of the families to explain the self-help program and subjects related to home ownership, such as loan payments, taxes, insurance, maintenance, and upkeep of the property.

(3)  Helping families in planning and developing activities that lead to the acquisition and development of suitable building sites.

(4)  Assisting families in selecting or developing house plans for homes which will meet their needs and which they can afford.

(5)  Assisting families in obtaining cost estimates for construction materials and any contracting that may be required.

(6)  Providing assistance in the preparation of loan applications.

(7)  Providing construction supervision and training for families while they construct their homes.

(8)  Providing financial supervision to individual families with Section 502 Rural Housing (RH) loans which will minimize the time and effort required by Rural Development in processing borrower expenditures for materials and contract services.

(9)  Assisting families in solving other housing problems.

(o)  Termination of a grant.  The cancellation of Federal assistance, in whole or in part, at any time before the date of completion.

1944.404  Eligibility.  

	To receive a grant, the applicant must:

(a)  Be an organization as defined in 1944.403(j) of this subpart.



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1944.404 (Con.)	RD Instruction 1944-I


(b)  Have the financial, legal, administrative, and actual capacity to assume and carry out the responsibilities imposed by the Agreement.  To meet the requirement of actual capacity it must either:

(1)  Have necessary background and experience with proven ability to perform responsibly in the field of mutual self-help or other business management or administrative ventures which indicate an ability to perform responsibly in the field of mutual self-help; or

(2)  Be sponsored by an organization with background experience, and ability, which agrees in writing to help the applicant to carry out its responsibilities.

(c)  Legally obligate itself to administer TA funds, provide  adequate accounting of the expenditure of such funds, and comply with the Agreement and Rural Development regulations.

(d)  If the organization is a private nonprofit corporation, be a corporation that:

(1)  Is organized under State and local laws. 

(2)  Is qualified under Section 501(c)(3) of the Internal Revenue Code of 1986.

(3)  Has as one of its purposes the production of affordable housing. 

(4)  Has a Board of Directors which consist of not less than five. 

1944.405  Authorized use of grant funds.

(a)  Payment of salaries of personnel as authorized in the Agreement.

(b)  Payment of necessary and reasonable office expenses such as office rental, office utilities, and office equipment rental.  The purchase of office equipment is permissible when the grantee determines it to be more economical than renting.  As a general rule, these types of expenses would be classified as indirect costs in multiple funded organizations.








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RD Instruction 1944-I
1944.405 (Con.)

(c)  Purchase of office supplies such as paper, pens, pencils, and trade magazines.

(d)  Payment of necessary employee benefit costs including but not limited to items such as Worker's Compensation, employer's share of social security, health benefits, and a reasonable tax deferred pension plan for permanent employees.

(e)  Purchase, lease, or maintenance of power or specialty tools such as a power saw, electric drill, saber saw, ladders, and scaffolds, which are needed by the participating families.  The participating families, however, are expected to provide their own hand tools such as hammers and handsaws.

(f)  Payment of liability insurance and special purpose audit costs associated with self-help activities.  These would be considered direct costs, even though the grantee's general liability insurance cost and the cost of audits for the organization are generally indirect costs.

(g)  Payment of reasonable fees for training of grantee personnel including board members.  This may include the cost of	travel and per diem to attend in or out-of-state training as authorized by the board of directors and, when necessary, for the employee to do the current job.  These costs are generally direct costs.

(h)  Payment of services rendered by a sponsor or other organization after the grant is closed and when it is determined the sponsor can provide the necessary services which will result in an overall reduction in the cost of assistance.  Typically, this will be limited to new grantees and an existing grantee for the period of time that its size or activity does not justify a full staff.  A full staff is a full or part-time director, project worker, secretary-bookkeeper, and a construction supervisor.  This type of cost is generally direct.

(i)  Payment of certain consulting and legal costs required in the 		administration of the grant if such service is not available without cost.  This does not include legal expenses for claims against the Federal Government.  (Legal costs that may be incurred by the organization for the benefit of the participating families may be paid with prior approval of the State Director).

(j)  Payments of the cost of an accountant to set up an accounting system and perform audits that may be required.  Generally, these costs are indirect.

(k)  Payments of reasonable expenses of board members for attending regular or special board meetings.  These costs are indirect.


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RD Instruction 1944-I


1944.406  Prohibited use of grant funds.

(a)  Hiring personnel specifically for the purpose of performing any of the construction work for participating families in the self-help projects.

(b)  Buying real estate or building materials or other property of any kind for participating families.

(c)  Paying any debts, expenses, or costs which should be the responsibility of the participating families in the self-help projects.

(d)  Paying for training of an employee as authorized by 
Attachment B of OMB Circular A-122.

(e)  Paying costs other than approved indirect (including salaries) that are not directly related to helping very low- and low-income families obtain housing consistent with the objectives of this program.

1944.407  Limitations.

	The amount of the TA grant depends on the experience and capability of the applicant and must be justified based on the number of families to be assisted.  As a guide, the maximum grant amounts for any grant period will be limited to:

(a)  An average TA cost equivalent per unit of no more than 15 percent of the cost of equivalent value of modest homes built in the area.  (Upon request, the County Supervisor will provide the grantee the average cost of modest homes for the area); or 
(Revised 04-24-91, PN 163.)

(b)  An average TA cost per equivalent unit that does not exceed the difference between the equivalent value of modest homes in the area and the average mortgage of the participating families minus $1,000; or

(c)  A TA per equivalent unit cost that does not exceed an amount established by the State Director.  The State Director may authorize a greater TA cost than paragraph (a) or (b) of this section when needed to accomplish a particular objective, such as requiring the grantee to serve very low-income families, remote areas, or similar situations; or

(d)  A negotiated amount for repair and rehabilitation type proposals.  At a minimum, applicants applying for repair and rehabilitation grants must include information on the proximity of the houses in a project, the typical needed repairs, and the cost savings between self-help and contractor rehabilitation and repair.

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RD Instruction 1944-I


1944.408  [Reserved]  (Revised 07-31-96, PN 264.)

1944.409  Executive Order 12372.

	The self-help program is subject to the provision of Executive Order 12372 which requires intergovernmental consultation with State and local officials.  Under Subpart J of Part 1940 (available in any Agency office), new applicants for the self-help program must submit their Statement of Activities to the State single point of contact prior to submitting their preapplication to the Agency.  The name of the point of contact is available from the State Office.

1944.410  Processing preapplications, applications, and completing grant dockets.

(a)  Form SF-424, "Application for Federal Assistance."  Form SF-424 in an original and one copy must be submitted by the applicant to the District Director.  It will be used to establish communication between the applicant and RHS, determine the applicant's eligibility, determine how well the project can compete with similar applications from other organizations and eliminate any proposals which have little or no chance for Federal funding before applicants incur significant expenditures for preparing an application.  In addition, the following information will be attached to and become a part of the preapplication:

(1)  Complete information about the applicant's previous experience and capacity to carry out the objective of the agreement.

(2)  If the applicant organization is already formed, a copy of or an accurate reference to the specific provisions of State law under which the applicant is organized; a certified copy of the applicant's Articles of Incorporation and Bylaws or other evidence of corporate existence; certificate of incorporation for other than public bodies; evidence of good standing from the State when the corporation has been in existence 1 year or more; the names and addresses of the applicant's members, directors, and officers; and, if another organization is a member of the applicant-organization, its name, address, and principal business.  If the applicant is not already formed, attach copies of the proposed organizational documents demonstrating compliance with 1944.404(d) of this subpart.








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1944.410(a) (Con.)	RD Instruction 1944-I


(3)  A current (no more than 12 months old) dated and signed financial statement showing the amounts and specific nature of assets and liabilities together with information on the repayment schedule and status of any debt owed by the applicant.  If the applicant is being sponsored by another organization, the same type of financial statement also must be provided by the applicant's sponsor.

(4)  A narrative statement which includes information about the  amount of the grant funds being requested, area(s) to be served, need for self-help housing in the area(s), the number of self-help units proposed to be built, rehabilitated or repaired during the agreement period, housing conditions of low-income families in the area and reasons why families need self-help assistance.  Evidence should be provided that the communities support the activity and that there are low-income families willing to contribute their labor in order to obtain adequate housing.  Evidence of community support may be letters of support from local officials, individuals and community organizations.  The pre-application may contain information such as census materials, local planning studies, surveys, or other readily available information which indicates a need in the area for housing of the type and cost to be provided by the proposed self-help TA program. 

(5)  A plan of how the organization proposes to reach very low-income families living in houses that are deteriorated, dilapidated, overcrowded, and/or lack plumbing facilities.

(6)  A proposed budget which will be prepared on SF-424A, "Budget Information (Non-Construction Programs)" will be completed to address applicable assurances as outlined in 3015.205 of 7 CFR Part 3015.  State and local Government will include an assurance that the grantee shall comply with all applicable Federal statutes and regulations in effect with respect to the periods for which it receives grant funding.  The State and local governments shall also comply with 7 CFR Part 3016.

(7)  A preliminary survey as to the availability of lots and projected cost of the sites.  

(8)  A list of other activities the applicant is engaged in and expects to continue, and a statement as to other sources of funding and whether it will have sufficient funds to assure continued operation of the other activities for at least the period of the agreement.  If multi-funded, its cost allocation plan or indirect cost rate must be part of the pre-application.

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1944.410(a)  (Con.)


(9)  Whether assistance under paragraph (d) of this section is requested and a brief narrative identifying the need, amount of funds needed, and projected time period.

(10)  If a project is planned for five or more housing lots or units, an Affirmative Fair Marketing Plan is required.  The plan will be in effect until the completion of the project.

(b)  Preapplication review.

(1)  The District Director, within 30 days of receipt of the preapplication, Form SF-424, and all other required information and material will complete a thorough review for completeness, accuracy, and conformance to program policy and regulations.  Incomplete preapplications will be returned to the applicant for completion.  The applicant should be given the name of the regional technical assistance contractor.  The County Supervisor in the prospective county will be contacted as to the need for the program in the proposed area and if the necessary resources are available to the grantee.  This will include a discussion of the number of 502 and 504 units that will need to be committed to the grantee and the potential work impact on the office during the grant period.  If it is determined that the County Office lacks the resources (either personnel or funds) to process all loan requests in a timely manner, the District Director must communicate this need to the State Director along with a recommended solution.  (Lack of resources at the county level are not grounds to deny a request).  After the District Director has determined that the preapplication is complete and accurate, the District Director will assemble the material in an applicant case file and forward it to the State Director.  The case file, as a minimum, must contain the following:

(i)  Form SF-424, 

(ii) Original and one copy of Form RD 1940-20, "Request for Environmental Information," 

(iii) Eligibility recommendations, and 

(iv) HUD Form 935.2 "Affirmative Fair Housing Marketing Plan", if applicable.







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1944.410(b) (Con.)	RD Instruction 1944-I


(2)  The State Director may, if needed, submit the organizational documents with any comments or questions to the Office of General Counsel (OGC) for a preliminary opinion as to whether the applicant is or will be a legal organization of the type required by these regulations and for advice on any other aspects of the preapplication.

(3)  The State Director, if unable to determine eligibility or qualifications with the advice of the OGC, may submit the preapplication to the National Office for review.  The preapplication will contain all memoranda from OGC giving the results of its review.  The State Director will identify in the transmittal memorandum to the National Office the specific problem and will recommend possible solutions and any information about the applicant which would be helpful to the National Office in reaching a decision. 

(4)  After an eligibility determination has been made, which should be completed within 30 days unless OGC is involved, the State Director will:

(i)If the applicant is eligible, contact the National 	Office as to the availability of funds or submit the proposal to the National Office for authorization if the requested amount exceeds the State Director's approval authority.  If funds are available, the final review officer, either the State Director or the Assistant Administrator, Housing will issue a letter of conditions that the applicant must meet and direct the District Director to issue Form AD-622, "Notice of Preapplication Review Action."

(ii) If the applicant is determined not eligible, the State Director will direct the District Director to issue Form AD-622.

(c)  Form AD-622, "Notice of Preapplication Review Action."

(1) If the applicant is eligible and after the State Director has returned the preapplication information and the executed original Form RD 1940-20 to the District Office, the District Director will, within 10 days, prepare and issue Form AD-622.  The original Form AD-622 will be signed and delivered to the applicant along with the letter of conditions, a copy to 





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RD Instruction 1944-I
1944.410(c)(1) (Con.)

the applicant's case file, a copy to the County Supervisor, and a copy to the State Director.

(2)  If the applicant is not eligible and after the State Director has returned the preapplication information, the District Director will within 5 days notify the applicant on Form AD-622.  The notification will inform the applicant that an appeal of the decision may be made to the National Appeals Staff under Subpart B of Part 1900 of this chapter.

(3)  If the applicant is eligible and no grant or loan funds are available, the State Director will return the preapplication information to the District Director who will, within 10 days, notify the applicant on Form AD-622.  The notification will explain the facts concerning the lack of funding and that Rural Development will notify them when funding will be available.  This is not an appealable decision.

(d)  Self-help technical assistance grant predevelopment agreement.  If the grantee requested predevelopment assistance and the State Director determines that the applicant lacks the financial resources to meet the conditions of grant approval, a grant of up to $10,000 and for up to six months will be made in order for the applicant to provide what is required by paragraph (e) of this section.  Exhibit D of this subpart will be used for this purpose.  Existing grantees proposing to operate in an area different from the area that they are currently funded to operate are eligible for this grant.  However, this grant is available only once for a defined area.  This grant is available only after the letter of conditions has been issued.  Denial of this assistance is an appealable decision under Subpart B of Part 1900 of this chapter.

(e)  Form SF-424, "Application for Federal Assistance."  The applicant will submit Form SF-424 in an original and one copy to the District Director.  The application should provide a detailed proposal of its goals including:

(1)  Names, addresses, number in household, and total annual household income of families who have been contacted by the applicant and are interested in participating in a self-help housing project.  Community organizations including minority organizations may be used as a source of names of people interested in self-help housing.

(2)  Proof that the first group of prospective participating 
self-help families have qualified for financial assistance.




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RD Instruction 1944-I
1944.410(e) (Con.)


(3)  Evidence that lots are optioned by the prospective participating self-help families for the first group.  Evidence that lots are available for the remaining groups.

(4)  Detailed cost estimates of houses to be built by the mutual self-help method.  Plans and specifications should be submitted with the cost estimates.  

(5)  Proposed staffing need, including qualifications, experience, proposed hiring schedule, and availability of any prospective employees.

(6)  Name, address, and official position of the applicant's representative or representatives authorized to act for the applicant and work with Rural Development.

(7)  Budget information including a detailed budget for the Agreement period based upon the needs outlined in the proposal.  
SF 424A will be completed to furnish the budget information.

(8)  Indirect or direct cost policy and proposed indirect cost rate developed in accordance with 7 CFR Part 3015 and Part 3016. 

(9)  Personnel procedures and practices that will be established or are in existence.  Forms to be used should be submitted with the application.

(10)  A proposed monthly activities schedule showing the proposed dates for starting and completing the recruitment, loan processing and construction phases for each group of participant families.

1944.411  Conditions for approving a grant.

	A grant may be approved for an eligible applicant when the conditions in the letter of conditions are met and the following conditions are present:

(a)  The applicant has or can hire, or contract directly or indirectly with, qualified people to carry out its responsibilities in administering the grant.






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1944.411 (Con.)

(b)  The applicant has met all of the conditions listed in 1944.410(e) of this subpart.

(c)  The grantee furnishes a signed statement that it complies with the requirements of the Departmental Regulations found in 7 CFR Part 3015 and Part 3016. 

(d)  A resolution has been adopted by the board of directors which authorizes the appropriate officer to execute Exhibit A of this subpart and Form RD 400-4, "Assurance Agreement."  (Revised 04-24-91, PN 163.)

(e)  The grantee has fidelity bonding as covered in 7 CFR Part 3015 if a nonprofit organization or, if a State or local government, to the extent required in 7 CFR Part 3016.

(f)  The grantee has agreed by completing SF-424B, "Assurances-Non Construction Programs," that it will establish a recordkeeping system that is certifiable by a certified public accountant that it adequately meets the Agreement.  (Revised 04-24-91, PN 163.)

(g)  The grantee has established an interest bearing checking account on which at least two bonded officials will sign all checks issued and understands that interest earned in excess of $250.00 annually must be submitted to Rural Development quarterly.  (The use of minority depository institutions is encouraged.)

(h)  The grantee has developed an agreement to be executed by the grantee and the self-help participants which clearly sets forth what is expected of each and has incorporated Exhibit B-2 of this subpart which clearly shows what work is expected of the participating family.

1944.412  Docket preparation.

	When the application and all items required for the complete docket have been received, the District Director will thoroughly examine it to insure the application has been properly and accurately prepared and that it includes the required dates and signatures.  The docket items will be assembled and distributed by the District Director in the following order:

								 	Number
Form	   Name of Form     Total No.  Signed by    for Agree-	   Copy for
Number  or Document      of Copies  Applicant    ment docket   Applicant

SF-424  Application for       3         1          1-0&1C           1-C
        Federal Assistance    



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1944.412 (Con.)	RD Instruction 1944-I

AD-622  Notice of Pre-
        application Review
        Action                2         -          1-C              1-0

RD      Request for Obligation
1940-1  of Funds              4         2          3-0&2C           1-C

RD      Assurance
400-4   Agreement             2         1          1-0              1-C

        HUD Form 935.2,
        Affirmative Fair      3         1          1-0&1C           1-C
        Housing Marketing
        Plan

        Certified Copy
        Authorizing
        Resolution            1         1          1-0	         -

        Self-Help Technical
        Assistance Grant
        Agreement (Exhibit A) 2         1          1-0              1-C

        Any Personnel Forms
        to be used            2                    1-0              1-C

O=Original
C=Copy
_________________________________________________________________________
1944.413 Grant approval.

(a)  Approval of grant.  Within 30 days of the grantee meeting the conditions of 1944.411 of this subpart or, if applicable, signing Exhibit D, the approving official will:

(1)  Execute and distribute Form RD 1940-1 in accordance with the Forms Manual Insert (FMI).

(2) After the Finance Office acknowledges that funds are obligated, request an initial advance of funds on Form RD 440-57, "Acknowledgment of Obligated Funds/Check Request," in accordance with the FMI.  The amount of this request should cover the applicant's needs for the remainder of the month in which the grant is closed plus the next month.  Subsequent advances will cover only a one-month period.

(b)  Cancellation of an approved grant.  An approved grant may be canceled before closing if the applicant is no longer eligible, the 

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RD Instruction 1944-I
1944.413(b) (Con.)


proposal is no longer feasible, or the applicant requests cancellation.  Cancellation will be accomplished as follows:

(1)  The District Director will prepare Form RD 1940-10, "Cancellation of U.S. Treasury Check and/or Obligation,"  according to the FMI and send it to the State Director with the reasons for cancellation.  If the State Director approves the request, Form RD 1940-10 will be returned to the District Office for processing in accordance with the FMI.

(2)  The District Director will notify the applicant of the cancellation and the right to appeal under Subpart B of Part 1900 of this chapter.  If the applicant requested the cancellation, no appeal rights are provided, but the applicant will still be notified of the cancellation.

(c)  Disapproval of grant.  If a grant is disapproved after the docket has been developed, the approving official will state the reason on the original Form RD 1940-1, or in a memorandum to the District Director.  The District Director will notify the applicant in writing of the disapproval and the reason for disapproval.  Also, the notification will inform the applicant of its appeal rights under Subpart B of Part 1900 of this chapter.

1944.414  [Reserved]

1944.415  Grant approval and other approving authorities.

(a)	The State Director is authorized to approve or disapprove TA grants under this subpart.  For a grant in excess of $300,000, or in the case of a grant amendment when the amount of the grant plus any unexpended funds from a previous grant will exceed $400,000, prior written consent of the National Office is required.  In such cases, the docket, along with the State Director's recommendations, must be submitted to the National Office for review.

(b) The State Director may approve a grant not to exceed $10,000 to an eligible organization under 1944.410(d) of this subpart.  The grant must be limited to 6 months and funds must be used for the development of the final application, family recruitment, and related activities as explained in 1944.410(e) of this subpart.  The amount of this grant will not be included in figuring TA cost per units.






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RD Instruction 1944-I
1944.415  (Con.)

(c)  The authority to contract for services is limited to the Administrator of Rural Development.

(d)  Monthly expenditures of the grantee will normally be approved by the District Director unless:

(1)  The grantee operates in only one county, in which case the authority may be delegated to the County Supervisor.

(2)  The grantee operates in more than one Rural Development District, in which case the State Director will designate the approving official.

(3)  The grantee operates in more than one State Director's jurisdiction, in which case the Administrator will designate the approving official.

(4)  The expenditure is under contract authority, in which case the Contracting Official Representative will approve the monthly expenditure.

1944.416 Grant closing.

	The grant is closed on the date the Agreement is executed as defined in 1944.403(a) by the applicant and the Government.  Funds may not be advanced prior to the signing of the Agreement.  The District Director or Assistant District Director are authorized to execute the Agreement for Rural Development.  Person(s) authorized by resolution may sign for the applicant.

1944.417 Servicing actions after grant closing.
	
	Rural Development has a responsibility to help the grantee be successful and help the grantee avoid cases of fraud and abuse.  Servicing actions also include correlating activities between the grantee and Rural Development to the benefit of the participating families.  The amount of servicing actions needed will vary in accordance with the experience of the grantee, but as a minimum the following actions are required:

(a)  Monthly, the grantee will provide the District Director with a request for additional funds on Form SF-270, "Request for Advance or Reimbursement."  This request need only show the amount of funds used during the previous month, amount of unspent funds, projected need for the next 30 days, and written justification if the request exceeds the projected need for the next 30 days.  This request must be in the District Director's office fifteen days prior to the beginning of the month.  Upon receipt of the grantee's request, the District Director will:

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RD Instruction 1944-I 
1944.417(a) (Con.)

(1)  If the request appears to be in order, process Form RD 440-57 so that delivery of the check will be possible on the first of the next month.

(2)  If the request does not appear to be in order, immediately contact the grantee to resolve the problem.  After the contact:

(i)  if the explanation is acceptable, process Form RD 440-57 so delivery may be possible by the first of the next month, or

(ii)  if the explanation is not acceptable, immediately notify the grantee and request the amount of funds that appear reasonable for the next 30 days on Form RD 440-57, so that delivery may be possible by the first of the next month.  Unapproved funds that are later approved will be added to the next month's request.

(b)  Quarterly, the grantee will submit Exhibit B of this subpart in an original and three copies to the County Supervisor on or before January 15, April 15, July 15, and October 15 which will verify its progress toward meeting the objectives stated in the Agreement and the application.  The County Supervisor will immediately complete the County Office review part and forward the report to the District Office.  After Exhibit B is received in the District Office, a meeting should be scheduled between the grantee, District Director, and the County Supervisor since this is an opportune time for both the grantee and Rural Development to review progress to date and make necessary adjustments for the future.  This meeting is required if the grantee was previously identified as a problem grantee or will be identified as a problem grantee at this time.  Regardless of whether a meeting will be held, the following will be done:
(Revised 04-24-91, PN 163.)

(1)  Exhibit B and other information will be evaluated to determine progress made to date.  The District Director will comment on Exhibit B as to whether the grantee is ahead or behind schedule in each of the following areas:

(i)  Assisting the projected number of families.

(ii)  Serving very low-income applicants.  Is the grantee reaching a minimum of very low-income families as required in Exhibit A, Attachment 2 to Subpart L of Part 1940 of this chapter (available in any Rural Development office).





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1944.417 (b) (1) (Con.)	RD Instruction 1944-I

(iii)  Equivalent units (EUs).  Is the number of EUs completed representative of lapse in time of the grant?  For example, if 25 percent of the grant period has elapsed, are 25 percent of the number of EUs completed?

(iv)  Labor contributions by the family.  Are the families working together and are they completing the labor tasks as established on Exhibit B-2?

(2)  The District Director will submit Exhibit B to the State Director who will evaluate the quarterly report along with the District Director's comments.  If the State Director determines the grantee is progressing satisfactorily, the State Director will sign and forward Exhibit B to the National Office.  However, if the State Director determines the grantee is not performing as expected, the State Director will notify the grantee that it has been classified a "High Risk" grantee.  The notice will specify the deficiencies and inform the grantee of proposed remedies for noncompliance.  

The notice will advise the grantee that Rural Development is available to assist and provide the name and address of an organization that is under contract with Rural Development to assist them.  The State Director will forward a copy of Exhibit B, District Directors comments, and the reasons for classifying them as "High Risk" to the National Office, Single Family Housing, Special Programs Branch.  When the period of time provided for corrective action has expired, an assessment will be made of the progress by the grantee toward correcting the situation.  If the State Director determines:

(i)  The situation has been corrected or reasonable progress has been made toward correcting the situation,  the "High Risk" status will be lifted and the grantee so notified.

(ii)  The situation has not been corrected but it is correctable if additional time is granted, an extension will be issued.

(iii)  The situation has not been corrected and it is unlikely to be corrected if given additional time, the grant will be terminated under 1944.426(b)(1) of this subpart.  

1944.418  [Reserved]






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RD Instruction 1944-I

1944.419  Final grantee evaluation.

	Near the end of the grant period but prior to the last month, an evaluation of the grantee will be conducted by Rural Development.  The State Director may use Rural Development employees or an organization under contract to Rural Development to provide the evaluation.  The evaluation is to determine how successful the grantee was in meeting goals and objectives as defined in the agreement, application, this regulation, and any amendments.

(a)  This is a quantitative evaluation of the grantee to determine if it met its goals in:

(1)  Assisting the projected number of families in obtaining adequate housing.

(2)  Meeting the goal of assisting very low-income families.

(3)  Meeting the family labor requirement in 1944.411(h) and Exhibit B-2 of this subpart.

(4)  Keeping costs within the guides set in 1944.407. 

(5)  Meeting other objectives in the Agreement.

(b)  The evaluation is a narrative addressed to the State Director with a copy to the National Office, Single Family Housing Processing Division.  It will be in 3 parts, namely; findings, recommendations, and an overall rating.  The rating will be either unacceptable, acceptable, or outstanding, as follows:

(1)  Outstanding if the grantee met or exceeded all of the goals  in paragraph (a) of this section.

(2)  Acceptable if the grantee met or exceeded all of the goals as defined in paragraph (a) except two.

(3)  Unacceptable if the grantee failed to obtain an acceptable rating.

(c)  After the State Director has reviewed the evaluation, a copy will be mailed to the grantee.  The grantee may request a review of the evaluation with the District Director.  This review is for clarification of the material and to dispute the findings if they are known to be wrong.  The rating is not open for discussion except to the extent it can be proven that the findings do not support the rating.  If this is the case, the District Director will file an amendment to the State Director.



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RD Instruction 1944-I

1944.420  Extension or revision of the grant agreement.

	The State Director may authorize the District Director to execute on behalf of the Government, Exhibit C of this subpart, at any time during the grant period provided:

(a)  The extension period is for no more than one year from the final date of the existing Agreement.

(b)  The need for the extension is clearly justified,

(c)  If additional funds are needed, a revised budget is submitted with complete justification, and

(d)  The grantee is within the guidelines in 1944.407 of this subpart or the State Director determines that the best interest of the Government will be served by the extension.  

1944.421  Refunding of an existing grantee.

	Grantees wishing to continue with self-help efforts after the end of the current grant plus any extensions should file Form SF-424, in accordance with 1944.410(e).  It is recommended that it be filed at least 6 months before the end of the current grant period.  Funds from the existing grant may be used to meet the conditions of a new grant to serve the same or redefined geographic area.  If the grantee is targeting a different geographic area, a new preapplication must be submitted in accordance with 1944.410 and the grantee may apply for a predevelopment grant in accordance with 1944.410(d).  In addition to meeting the conditions of an applicant as defined in 1944.411 of this subpart, the grantee must also have received or will receive an acceptable rating on its current grant unless an exception is granted by the State Director.  The State Director may grant an exception to the rating if it is determined that the reasons causing the previous unacceptable rating have been removed or will be removed with the approval of this grant. 

1944.422  Audit and other report requirements.

	The grantee must submit an audit to the appropriate Rural Development District Office annually (or biennially if a State or local government with authority to do a less frequent audit requests it) and within 90 days of the end of the grantee's fiscal year, grant period, or termination of the grant.  The audit, conducted by the grantee's auditors, is to be performed in accordance with Generally Accepted Government Auditing Standards (GAGAS), using the publication "Standards for Audit of Governmental Organizations, Programs, Activities and Functions" developed by the Comptroller General of the United States in 1981, and any subsequent revisions.  In addition, the audits are also to be performed in accordance with 7 CFR Parts 3015 and 3016 and Rural Development requirements as specified in this subpart.  Audits of borrower loan funds will

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RD Instruction 1944-I
1944.422 (Con.)


be required.  The number of borrower accounts audited will be determined by the auditor.  In incidences where it is difficult to determine the appropriate number of accounts to be audited, auditors should be authorized by the State Director to audit the lesser of 10 loans or 10 percent of total loans.
(Revised 04-24-91, PN 163.)

(a)  Nonprofit organizations and others.  If determined necessary,  these organizations are to be audited in accordance with Rural Development requirements OMB Circular A-110, A-133, and 7 CFR Part 3015.  These requirements also apply to public hospitals, public colleges, and universities if they are excluded from the audit requirements of paragraph (b) of this section.

(1)  An audit conducted by the grantee's auditor shall be supplied to the Rural Development District Director as soon as possible but in no case later than ninety (90) days following the period covered by the grant agreement.

(2)  Auditors shall promptly notify United States Department of Agriculture's Office of the Inspector General Regional Inspector General and the Rural Development District Office, in writing, of any indication of fraud, abuse, or illegal acts in grantees use of grant funds or in the handling of borrowers accounts.

(3)  Nonprofit organizations that receive less than $25,000 a year in Federal financial assistance need not be audited.

(b)  State and local governments and Indian tribes.  These organizations are to be audited in accordance with this subpart and 7 CFR Part 3016.  The grantee will forward completed audits to the appropriate Federal cognizant agency and a copy to the Rural Development District Director.  "Cognizant agency" means the federal agency assigned by OMB Circular A-128.  Within USDA, the OIG shall fulfill cognizant agency responsibilities.  Smaller grantees not assigned a cognizant agency by OMB should contact the Federal agency that provided the most funds.  When USDA is designated as the cognizant agency or when it has been determined by the borrower that Rural Development provided the major portion of Federal financial assistance, the State Director will contact the appropriate USDA OIG Regional Inspector General.  Rural Development and the borrower shall coordinate all proposed audit plans with the appropriate USDA OIG.








22
(Revision 1)

RD Instruction 1944-I
 1944.422(b) (Con.)


(1)  State and local governments and Indian tribes that receive $25,000 or more a year in Federal financial assistance shall have an audit made in accordance with 7 CFR Part 3016.

(2)  State and local and Indian tribes that receive less than $25,000 a year in Federal financial assistance shall be exempt from 7 CFR Part 3016.

(3)  Public hospitals and public colleges and universities may be excluded by the State Director from OMB Circular A-128 audit requirements.  If such entities are excluded, audits shall be made in accordance with paragraph (a) of this section.

 1944.423  Loan packaging and 502 RH application submittal.

	A grantee is required to assist 502 RH applicants in submitting their application for an RH loan.  Loan packaging will be performed in accordance with 7 CFR part 3550; therefore, it is important that the grantee be trained at an early date in the packaging of RH loans.  Typically, this training should take place before the first applications are submitted to the County Office and before the grant is closed.  A grantee should become very knowledgeable of Rural Development's eligibility requirements but must understand that only Rural Development can approve or deny an applicant assistance.  Grantee must work cooperatively with Rural Development in the 502 loan approval process and must work within the regulations for the 502 program and recognize Rural Development's ultimate decision making authority to approve or deny loans.  However, the grantee may ask for clarification that may be helpful in working with future applicants.  Grant funds may not be used to pay any expense in connection with an appeal that the applicant may file or pursue. 

 1944.424  Dwelling construction and standards.

	All construction will be performed in accordance with Subpart A of Part 1924 of this chapter.  The planned work must meet the building requirements of 7 CFR part 3550 and meet the Development Standards as defined in subpart A of part 1924 of this chapter and in any local codes.  Sites and site developments must conform to the requirements of subpart C of part 1924 of this chapter. 









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RD Instruction 1944-I


 1944.425  Handling and accounting for borrower loan funds. 
  
 	Grantees will be required to administer borrower loan funds during the construction phases.  The extent of their involvement will depend on the experience of the grantee and the amount of authority delegated to them by the District Director in accordance with  1924.6(c) of Subpart A of Part 1924 of this chapter.   Training should include Rural Development's non-discrimination policies in receiving applications.

 1944.426  Grant closeout.

(a)  Grant purposes completed.  Promptly after the date of completion, grant closeout actions will be taken to allow the orderly discontinuance of grantee activity.

(1)  The grantee will immediately refund to Rural Development any balance of grant funds advanced that are not committed for the payment of authorized expenses.  The unused grant funds will be remitted on Form RD 451-2, Schedule of Remittances in accordance with the forms manual insert.  (Revised 10-28-03, SPECIAL PN.)

(2)  The grantee will furnish Form SF-269A, "Financial Status Report (short form)" to Rural Development within 90 days after the date of completion of the grant.  All other financial, performance, and other reports required as a condition of the grant also will be completed.

(3)  After the grant closeout, Rural Development retains the right to recover any disallowed costs which are discovered as a result of the final audit.  7 CFR part 3550 will be used by Rural Development to recover any unauthorized expenditures.  (Revised 01-23-03, SPECIAL PN.) 

(4)  The grantee will provide Rural Development an audit conforming to those requirements established in this part, including audits of self-help borrower accounts.

(5)  Upon request from the recipient, any allowable reimbursable cost not covered by previous payments shall be promptly paid by Rural Development.











24
(Revision 2)

1944.426 (Con.)	RD Instruction 1944-I


(b)  Grant purposes not completed.

(1)  Notification of termination.  The State Director will promptly notify the grantee and the National Office in writing of the termination action including the specific reasons for the decision and the effective date of the termination.  The notification to the grantee will specify that if the grantee believes the reason for the proposed termination can be resolved, the grantee should, within 15 calendar days of the date of this notification, contact the State Director in writing requesting a meeting for further consideration.  The meeting will be an informal proceeding at which the grantee will be given the opportunity to provide whatever additional information it believes should be considered in reaching a decision concerning the case.  The grantee may have an attorney or any other person present at the meeting if desired.  Within 7 calendar days of the meeting, the State Director will determine what action to take.

(i)  If the State Director determines that termination is not necessary, the grantee will be informed by letter along with the District Director.

(ii)  If the State Director determines that termination of the grant is appropriate, he/she will promptly inform the grantee by the use of Exhibit B-3  of Subpart B of Part 1900 of this chapter.

(2)  National Office review.

(i)  Upon receipt of a request from a grantee that the decision of the State Director be reconsidered, the National Office will make a preliminary decision concerning the continued funding of the grantee during the appeal period.  Written notification of the decision will be given to the State Director and grantee.

(ii)  The National Office will then obtain a comprehensive report on the matter from the State Office.  This information will be considered together with any additional information that may be provided by the grantee. 

(c)  Grant Suspension.  When the grantee has failed to comply with the terms of the agreement, the District Director will promptly report the facts to the State Director.  The State Director will consider termination or suspension of the grant usually only after a Grantee has been classified as "high risk" in accordance with 1944.417(b)(2) 




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RD Instruction 1944-I
1944.426(c) (Con.)


of this subpart.  When the State Director determines that the grantee has a reasonable potential to correct deficiencies the grant may be suspended.  The State Director will request written authorization from the National Office to suspend a grantee.  The suspension will adhere to 7 CFR Parts 3015 and 3016.  The grantee will be notified of the grant suspension in writing by the State Director.  The State Director will also promptly inform the grantee of its rights to appeal the decision by use of Exhibit B-3 of Subpart B of Part 1900 of this chapter.

(d)  Grant Termination.  The State Director may terminate the grant agreement whenever Rural Development determines that the grantee has failed to comply with terms of the Agreement.  The reasons for termination may include, but are not limited to, such problems as listed in paragraph (e)(3)(i) of Exhibit A of this subpart.  The State Director may also withhold further disbursement of grant funds and prohibit the grantee from incurring additional obligations of grant funds with written approval of the National Office.  Rural Development will allow all necessary and proper costs which grantee could not reasonably avoid.

(i)  Termination for cause.  The grant agreement may be terminated in whole, or in part, at any time before date of completion, whenever Rural Development determines that the grantee has failed to comply with terms of the Agreement.  The State Director will notify the grantee in writing giving the reasons for the action and inform the grantee of its rights of appeal by use of Exhibit B-3 of Subpart B of Part 1900 of this chapter.

(ii) Termination for convenience.  Rural Development or the grantee may terminate the grant in whole, or in part, when both parties agree that the continuation of the grant would not produce beneficial results.  The two parties will agree in writing to the termination conditions including the effective date.  No notice of rights of appeal will be issued by Rural Development.

1944.427  Grantee self-evaluation.

	Annually or more often, the board of directors will evaluate their own self-help program.  Exhibit E of this subpart is provided for that purpose.  It is also recommended that they review their personnel policy, any audits that may have been conducted and other reports to determine if they need to make adjustments in order to prevent fraud and abuse, and meet the goals in the current grant agreement.




26


RD Instruction 1944-I


1944.428 - 1944.449  [Reserved]

1944.450  OMB Control Number

The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575-0043.  Public reporting burden for this collection of information is estimated to vary from 10 minutes to 18 hours per response, with an average of 1.17 hours per response including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.  Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Department of Agriculture, Clearance Officer, OIRM, Room 404-W, Washington, D.C. 20250; and to the Office Management and Budget, Paperwork Reduction Project (OMB# 0575-0043), Washington, D.C. 20503.

Attachments:  Exhibits A, B, B-1, B-2, B-3, C, D, E, and F






oOo























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RD Instruction 1944-I
Exhibit A


SELF-HELP TECHNICAL ASSISTANCE GRANT AGREEMENT

THIS GRANT AGREEMENT dated _________________, 19___, is between _________
_________________________________________________________________________
a nonprofit corporation ("Grantee"), organized and operating under ___________________________________________________________________
	(authorizing State statute)
and the United States of America acting through Rural Development, Department of Agriculture.

In consideration of financial assistance in the amount of $______________
(called "Grant Funds") to be made available by Rural Development to Grantee under Section 523 (b) (1)(A) of the Housing Act of 1949 to be used in (specify area to be served) ___________________________________ for the purpose of providing a program of technical and supervisory assistance which will aid low-income families in carrying out mutual self-help housing efforts. Grantee will provide such a program in accordance with the terms of this Agreement and Rural Development regulations.

Definitions:

"Date of Completion" means the date when all work under a grant is completed or the date in the TA Grant Agreement, or any supplement or amendment thereto, on which Federal assistance ends.

"Disallowed costs" are those charges to a grant which the Rural Development determines cannot be authorized.

"Grant Closeout" is the process by which the grant operation is concluded at the expiration of the grant period or following a decision to terminate the grant.

"Termination" of a grant means the cancellation of Federal assistance, in whole or in part, under a grant at any time prior to the date of completion.

Terms of agreement:

(a)  This Agreement shall terminate ______________ years from this date unless extended or sooner terminated under paragraphs (e) and (f) of this Agreement.









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RD Instruction 1944-I
Exhibit A
Page 2

(b)  Grantee shall carry out the self-help housing activity described in the application docket which is attached to and made a part of this Agreement.  Grantee will be bound by the conditions set forth in the docket, 7 CFR Part 1944, Subpart I, and the further conditions set forth in this Agreement.  If any of the conditions in the docket are inconsistent with those in the Agreement or Subpart I of Part 1944, the latter will govern.  A waiver of any condition must be in writing and must be signed by an authorized representative of Rural Development.

(c)  Grantee shall use grant funds only for the purposes and activities specified in Rural Development regulations and in the application docket approved by Rural Development including the approved budget.  Any uses not provided for in the approved budget must be approved in writing by Rural Development in advance.

(d)  If Grantee is a private nonprofit corporation, expenses charged for travel or per diem will not exceed the rates paid Rural Development employees for similar expenses.  If Grantee is a public body, the rates will be those that are allowable under the customary practice in the government of which Grantee is a part; if none are customary, the Rural Development rates will be the maximum allowed.

(e)  Grant closeout and termination procedures will be as follows:

(1)  Promptly after the date of completion or a decision to terminate a grant, grant closeout actions are to be taken to allow the orderly discontinuation of Grantee activity.

(i)  Grantee shall immediately refund to Rural Development any uncommitted balance of grant funds.

(ii)  Grantee will furnish to Rural Development within 90 days after the date of completion of the grant a "Financial Status Report", Form SF-269A.  All financial, performance, and other reports required as a condition of the grant will also be completed.

(iii)  Grantee shall account for any property acquired with technical assistance (TA) grant funds, or otherwise received from Rural Development.

(iv)  After the grant closeout, Rural Development retains the right to recover any disallowed costs which may be discovered as a result of any audit.



RD Instruction 1944-I
Exhibit A
Paragraph (e) Con.
Page 3


(2)  When there is reasonable evidence that Grantee has failed to comply with the terms of this Agreement, the State Director may determine Grantee as "high risk".  A "high risk" Grantee will be supervised to the extent necessary to protect the Government's interest and to help Grantee overcome the deficiencies.

(3)  Grant termination will be based on the following:

(i)  Termination for cause.  This grant may be terminated in whole, or in part, 90 days after a Grantee has been classified as "high risk" if the State Director determines that Grantee has failed to correct previous deficiencies and is unlikely to correct such items if additional time is allowed.  The reasons for termination may include, but are not limited to, such problems as:

(A)	Actual TA costs significantly exceeding the amount stipulated in the proposal.

(B)	The number of homes being built is significantly less than proposed construction or is not on schedule.

(C)	The cost of housing not being appropriate for the self-help program.

(D)	Failure of Grantee to only use grant funds for authorized purposes.

(E)	Failure of Grantee to submit adequate and timely reports of its operation.

(F)	Failure of Grantee to require families to work together in groups by the mutual self-help method in the case of new construction.

(G)	Serious or repetitive violation of any of the provisions of any laws administered by Rural Development or any regulation issued under those laws.

(H)	Violation of any nondiscrimination or equal opportunity requirement administered by Rural Development in connection with any Rural Development programs.

(I)	Failure to establish an accounting system acceptable to Rural Development.


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RD Instruction 1944-I
Exhibit A
Page 4

(J)	Failure to serve very low-income families.

(K)	Failure to recruit families from substandard housing.

(ii)  Termination for convenience.  Rural Development or Grantee may terminate the grant in whole, or in part, when both parties agree that the continuation of the project would not produce beneficial results commensurate with the further expenditure of funds.  The two parties shall agree upon the termination conditions, including the effective date and, in case of partial termination, the portion to be terminated.

(4)  To terminate a grant for cause, Rural Development shall promptly notify Grantee in writing of the determination and the reasons for and the effective date of the whole or partial termination.  Grantee will be advised of its appeal rights under 7 CFR Part 1900, Subpart B.

(f)  An extension of this grant agreement may be approved by Rural Development provided in its opinion, the extension is justified and there is a likelihood that the grantee can accomplish the goals set out and approved in the application docket during the period of the extension.

(g)  Grant funds may not be used to pay obligations incurred before the date of this Agreement.  Grantee will not obligate grant funds after the grant termination or completion date.

(h)  As requested and in the manner specified by Rural Development, the grantee must make quarterly reports, Exhibit C of this subpart (on 1/15, 4/15, 7/15 and 10/15 of each year), and a financial status report at the end of the grant period, and permit on-site inspections of program progress by Rural Development representatives.  Rural Development may require progress reports more frequently if it deems necessary.  Grantee must also comply with the audit requirements found in 1944.422 of Subpart I of 7 CFR Part 1944,  if applicable.  Grantee will maintain records and accounts, including property, personnel and financial records, to assure a proper accounting of all grant funds.  These records will be made available to Rural Development for auditing purposes and will be retained by grantee for three years after the termination or completion of this grant.

(i)  Acquisition and disposal of personal, equipment and supplies should comply with Subpart R of 7 CFR Part 3015 and Subpart C of 7 CFR Part 3016.


RD Instruction 1944-I
Exhibit A
Page 5


(j)  Results of the program assisted by grant funds may be published by Grantee without prior review by Rural Development, provided that such publications acknowledge the support provided by funds pursuant to the provisions of Title V of the Housing Act of 1949, 42 U.S.C. 1471, et  seq., and that five copies of each such publication are furnished to the local representative of Rural Development.

(k)  Grantee certifies that no person or organization has been employed or retained to solicit or secure this grant for a commission, percentage, brokerage, or contingent fee.

(l)  Grantee shall comply with all civil rights laws and the Rural Development regulations implementing these laws.

(m)  In all hiring or employment made possible by or resulting from this grant, Grantee:  (1) will not discriminate against any employee or applicant for employment because of race, religion, color, sex, marital status, national origin, age, or mental or physical handicap, and (2) will take affirmative action to insure that applicants are employed, and that employees are treated during employment without regard to their race, religion, color, sex, marital status, national origin, or mental or physical handicap.  This requirement shall apply to, but not be limited to, the following:  Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.  In the event Grantee signs a contract which would be covered by any Executive Order, law, or regulation prohibiting discrimination, Grantee shall include in the contract the "Equal Employment Clause" as specified by Rural Development.

(n)  It is understood and agreed by Grantee that any assistance granted under this Agreement will be administered subject to the limitations of Title V of the Housing Act of 1949 as amended, 42 USC 1471 et seq., and related regulations, and that rights granted to Rural Development in this Agreement or elsewhere may be exercised by it in its sole discretion to carry out the purposes of the assistance, and protect Rural Development's financial interest.











(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit A
Page 6


(o)  Grantee will maintain a code or standards of conduct which will govern the performance of its officers, employees, or agents.  Grantee's officers, employees, or agents will neither solicit nor accept gratuities, favors, or anything of monetary value from suppliers, contractors, or others doing business with the grantee.  To the extent permissible by State or local law, rules, or regulations such standards will provide for penalties, sanctions, or other disciplinary actions to be taken for violations of such standards.

(p)  Grantee shall not hire or permit to be hired any person in a staff position or as a participant if that person or a member of that person's immediate household is employed in an administrative capacity by the organization, unless waived by the State Director.  (For the purpose of this section, the term "household" means all persons sharing the same dwelling, whether related or not).

(q)  Grantee's board members or employees shall not directly or indirectly participate, for financial gain, in any transactions involving the organization or the participating families.  This includes activities such as selling real estate, building material, supplies, and services.

(r)  Grantee will retain all financial records, supporting documents, statistical records, and other records pertinent to this agreement for 3 years, and affirms that it is fully aware of the provisions of the Administrative Remedies for False Claims and Statements Act, 31 USC 3801, et seq.



By_____________________	By______________________
    (Signature)		  (Signature)


_______________________                       ___________________________
(Title)                                       (Title)
GRANTEE                                       FARMERS HOME ADMINISTRATION

RD Instruction 1944-I
Exhibit B


Evaluation Report of Self-Help Technical Assistance (TA) Grants



Evaluation for Quarter Ending:        ______(1)_______, 19______

1.  a. Name of Grantee: ____________________(2)________________________

    b. Address: ____________________________(3)________________________

    c. Area the grant serves: ______________(4)________________________



2.  Date of Agreement:_________________(5)________Time Extended___(6)___



3.  a. Equivalent unit increase during quarter:	       ______(7)_____
			   First Month

			  ______(8)_____
			   Second Month

			  ______(9)_____
			   Third Month

    b. Cumulative total number of Equivalent Units	 ______(10)_____
	  since beginning of grant:		   Total to Date



4.  a. Method of Construction:
	  Stick built ________%, Panelized ________%, Combined _______%

    b. Number of bedrooms per house built this grant period:
	  __________2BR,   ___________3BR,   ___________  

    c. Household size this Quarter:
       1 person _________, 2 persons _________, 3 persons ___________
       4 persons _________, 5 persons _________

    d. Number of houses under construction this grant period, but started 
       during previous grant period: __________________



5.  a. Number of houses proposed under this grant:    _______(11)______

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RD Instruction 1944-I
Exhibit B
Page 2


    b. Number of houses completed under this grant:    _______(12)______

    c. Number of houses currently under construction:  _______(13)______

    d. Number of families in pre construction:         _______(14)______

    e. Number of Construction Supervisors:             _______(15)______

    f. Number of TA employees:                         _______(16)______


6.  a. Average time needed to construct a single house: ______(17)______

    b. Number of months between submission of self-
	  help borrower's docket and approval/rejection:    ______(18)_____

    c. Number and percentage of loan docket rejections
	  during reporting period: __________________      ______(19)______


7.  a. Did any of the following adversely affect the Grantee's ability
	  to accomplish program objectives?
									YES			NO

	  TA Staff Turnover                      ___________     ___________

	  Rural Development Staff Turnover                    ___________     ___________

	  Bad Weather                            ___________     ___________

	  Loan Processing Delays                 ___________     ___________

	  Site Acquisition and Development       ___________     ___________

	  Unavailable Loan/Grant Funds           ___________     ___________

	  Lack of Participants                   ___________     ___________

	  Communication between Rural Development/Grantee     ___________     ___________


8.  Attach information concerning number of families contacted, number who  
    have indicated a willingness to be a participating family, number of
    mutual self-help groups organized, progress on any construction 
    started, and any problems relating to the operation of this grant.


RD Instruction 1944-I
Exhibit B
Page 3


	I certify that the statements made above are true to the best of my 
	knowledge and belief.

	________(20)_________   _________(21)_________  ________(22)_______
            (Date)                   (Title)	         (Signature)
	                                GRANTEE


COUNTY OFFICE REVIEW


I have reviewed the above information which I have found to be substantially correct.  Must be completed by County Office.

Comment:  Must be completed      (23)

Average appraisal value of units financed this 
Quarter:   	    _______________

Average amount loan per unit financed this Quarter:  _______________





________(24)____________	___________(25)________
	  (Date) 	   County Supervisor


DISTRICT OFFICE REVIEW


Comment:  Must be completed                (26)







_______(27)__________                    _________(28)___________
       Date                                 District Director






(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit B
Page 4


STATE OFFICE REVIEW


Comments:  Must be completed        (29)





________(30)___________                     _____________(31)____________
        Date                                 State Office Representative










oOo


RD Instruction 1944-I
Exhibit B-1
Page 1


Instructions for Preparation of
Evaluation Report of Self-Help Technical Assistance Grants


     Exhibit B will be used by all Technical Assistance (TA) Grantees obtaining self-help TA grants.  This attachment provides the grantee and Rural Development a uniform method of reporting the performance progress of self-help projects.  The TA Grantee will prepare an original and 4 copies of the attachment.  The TA Grantee will sign the original and 3 copies and forward it to the local Rural Development County Office.  The TA Grantee will keep the unsigned copy for its records.

	The evaluation report will be completed in accordance with the following:

	1.  Enter the date the quarter ends either March 31, June 30, 			    September 30, or December 31 and the year.

	2.  Enter the full name of the TA Grantee organization.

	3.  Enter the complete mailing address of the TA Grantee   	   			    organization.

	4.  Enter the area served by the grant.

	5.  Enter the date of the initial self-help TA grant agreement.

	6.  Enter the time of any extension self-help TA grant agreement(s).

	7.  Insert the number of equalivent units (EU) completed the 		    	    first/second/third month of the quarter using steps 1, 2, and
 	    3 of Exhibit B-3.

     8.  Insert the number of EU's completed the second month of the
         quarter by using steps 1, 2, and 3 of Exhibit B-3.

     9.  Insert the number of EU's completed the third month of the 			    quarter by using steps 1, 2, and 3 of Exhibit B-3.

    10.  Add items (7), (8), and (9) to the total from the previous
	    quarterly report to obtain the cumulative total number of EU's.
	    This total is the cumulative total number of EU's for the 			    project.

    11.  Enter the number of houses planned in the TA Grantee proposal(s).

    12.  Enter the number of houses completed and occupied since the 			    beginning of the grant.

(11-15-90) SPECIAL PN

RD Instruction 1944-I
Exhibit B-1
Page 2


    13.  Enter the number of houses that are under construction at the end     	    of this quarter.

    14.  Enter the number of families in the pre-construction phase.

    15.  Enter the total number of construction supervisor(s) paid with TA     	    grant funds. 

16.  Enter the number of employees paid with TA grant funds including
     those listed in item 15. 

    17.  Insert the average elapsed time needed per house from excavation 	
         to final inspection by Rural Development to complete construction of  
         a house.  If no self-help homes have been completed by this grantee, 
         use other projects or your best estimate as a guide.

    18.  Enter the number of months it takes on average to approve or 			    reject a borrower's docket once it's submitted.

    19.  Enter number and percent of dockets submitted and rejected this 		    quarter.

    20.  Enter date of Exhibit submittal.

    21.  Insert title of the Grantee or authorized representative.

    22.  Signature of Grantee or authorized representative.
  
    23.  County Supervisor must answer questions concerning market value 		    and loan amount and also should insert comments concerning 			    progress of construction, success of the project and any problems 	 
         that the organization may have.

    24.  Insert date of County Supervisor's review.

    25.  Signature of County Supervisor.

    26.  District Director representative should insert his/her comments
	    concerning items listed in 1944.417(b)(1) of 1944-I.

    27.  Insert date of District Director review.

    28.  Signature of District Director or representative.

    29.  Insert State Office comments.

    30.  Insert date of State Office review.

    31.  Signature of State Office representative.

RD Instruction 1944-I
Exhibit B-2

BREAKDOWN OF CONSTRUCTION DEVELOPMENT FOR
DETERMINING PERCENTAGE CONSTRUCTION COMPLETED

		With     With   With
     	Slab on  Crawl  Basement
		Grade %  Space %   % 
                              ___________________________________________
 1. Excavation                                    3         5       6 
	The removal of earth to allow the construction of a foundation or 			basement.
 
 2. Footing, Foundations, columns                 8         8       11 
	Footing:  Construction of the spreading course or courses at the base 	or bottom of a foundation wall, pier, or column.
	Foundation:  Construction of the supporting portion of a structure 		below the first floor construction, or below grade, including 			footing.

 3. Floor slab or framing                         6         4       4 
	The floor slab consist of concrete, usually reinforced, poured over 		gravel and a vapor barrier with perimeter insulation to prevent heat 	loss.

 4. Subflooring                                   0         1       1 
	The installation of materials used for flooring that is laid directly 	on the joist and serving the purpose of a floor during construction 		prior installation of the finish floor.

 5. Wall framing sheathing                        7         7       6 
	The construction process of putting together and erecting the 			skeleton parts of a building's walls (the rough lumber work) and, for 	the exterior walls, covering with sheathing (plywood, waferboard, 			oriented strand board or lumber) and insulating board to close up the 	side walls prior to the installation of finish materials on the 			surface.

 6. Roof and ceiling framing, sheathing           6         6       5
	The process, or method, of putting the parts of a roof, such as 			truss, rafters, ridge and plates in position.  Ceiling joist support 	the overhead interior lining of a room.  Roof sheathing is any sheet 	material, such as plywood or particleboard, connected to the roof 			rafters or truss to act as a base for sheathing felt, shingles or 			other roof covers.

 7. Roofing                                       5         5       4 
	The installation of a material that acts as a roof covering, making 		it impervious to the weather, such as shingles over sheathing felt, 		tile, or slate.


(11-15-90) SPECIAL PN

RD Instruction 1944-I
Exhibit B-2
Page 2

 8. Siding, exterior trim, porches                7         7       6 
	The installation of lumber, panel products or other materials 			intended for use as the exterior wall covering including all trim.

 9. Windows and exterior doors                    9         9       8 
	The installation of all exterior windows and doors.  This includes 		securely fastening windows and doors plumb and level, square and true 	and adjusting sash, screens and hardware for smooth and proper 			operation.

10. Plumbing - roughed in                         3         2       3 
	Subject to local codes and regulations the installation of all parts 	of the plumbing system which must be completed prior to the 				installation of plumbing fixtures or appliances.  This includes 			drain, waste, and vent piping, water supply, and the necessary built-	in fixture supports.

11. Sewage disposal                               1         1       1 
	Subject to local codes and regulations the construction and 				installation of a wastewater disposal system consisting of a house 		sewer, a pretreatment unit (e.g., septic tank, individual package 			treatment plant), an acceptable absorption system (subsurface 			absorption field, seepage pit, or subsurface absorption bed).  The 		system shall be designed to receive all sanitary sewage (bathroom, 		kitchen and laundry) from the dwelling, but not footing or roof 			drainage.  It shall be designed so that gases generated anywhere in 		the system can easily flow back to the building sewer stack.

12. Heating - roughed in                          1         1       1 
	Subject to local codes and regulations the installation of ducts 			and/or piping and the necessary supports to minimize the cutting of 		walls and joist.  This rough in is done before finish wall and floor 	installed.

13. Electrical - roughed in                       2         2       2 
	Subject to local codes and regulations the installation of conduit or 	cable and the location of switch, light, and outlet boxes with wires 	ready to connect.  This roughing-in work is done before the dry wall 	finish is applied, and before the insulation is placed in the walls 		and ceiling.

14. Insulation                                    2         2       2 
	The installation of any material used in walls, floors, and ceilings 	to prevent heat transmission as required by RD Instruction 1924-A, 	Exhibit D of 7 CFR of Part 1924, Subpart A.


RD Instruction 1944-I
Exhibit B-2
Page 3

15. Dry wall                                      8         8       7 
	Dry walling is covering the interior walls using sheets of gypsum 			board and taped joints.

16. Basement or porch floor, steps                1         1       6 
	The construction of basement or porch floors and steps whether wood 		or concrete.

17. Heating - finished                            3         3       3 
	Subject to local codes and regulations the installation of registers, 	grilles and thermostats.

18. Flooring covering                             6		6       5 
	The installation of the "finish flooring" (the material used as the 		final wearing surface that is applied to a floor).  Floor covering 		include numerous flooring materials such as wood materials, vinyl, 		linoleum, cork, plastic, carpet and other materials in tile or sheet 	form.

19. Interior carpentry, trim, doors               6         6       5 
	Installing visible interior finish work (molding and/or trim), 			including covering joints around window and door openings.  The 			installation of an interior door including frames and trim.

20. Cabinets and counter tops                     1         1       1 
	Securing cabinets and counter tops (usually requiring only fastening 	to the wall or floor) that are plumb and level, square and true.

21. Interior painting                             4         4       3 
	Cleaning and preparation of all interior surfaces and applying paint 	in strict accordance with the paint manufacturer's instructions.  

22. Exterior painting                             1         1       1 
	Cleaning and preparation of all exterior surfaces and applying paint 	in strict accordance with the paint manufacturer's instructions.  

23. Plumbing - complete fixtures                  4         4       3 
	Subject to local codes and regulations the installation of a receptor 	or device which requires both a water supply connection and a 			discharge to the drainage system, such as water closets, lavatories, 	bathtubs or sinks.  Also, the installation of an energized household 	appliance with plumbing connections, such as a clothes washer, water 	heater, dishwasher or garbage grinder.






(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit B-2
Page 4


24. Electrical - complete fixtures                1         1       1 
	Subject to local codes and regulations the installation of the 			fixtures, the switches, and switch plates.  This is usually done 			after the dry wall finish is applied.

25. Finish hardware                               1         1       1 
	The installation of all the visible, functional hardware in a house 		that has a finish appearance, including such features as hinges, 			locks, catches, pulls, knobs, and clothes hooks.

26. Gutters and downspouts                        1         1       1 
	The installation of a shallow channel of wood, metal, or PVC 			(gutters) positioned just below and following along the eaves of the 	house for the purpose of collecting and diverting water from a roof 		to a vertical pipe (downspouts) used to carry rainwater from the roof 	to the ground by way of a splash block or into a drainage system.

27. Grading, paving, landscaping                 3          3       3 
	Landscaping includes final grading, planting of shrubs and trees, and 	seeding or sodding of lawn areas.  Final grading includes the best 		available routing of runoff water to assure that house and adjacent 		homes will not be endagered by the path of water runoff.  The minimum 	slope should be 6" in 10' or 5% from the foundation of the home.
	Paving includes both driveways and walks.

	                                      ______________________________
	                                           100%	    100%     100%


RD Instruction 1944-I
Exhibit B-3


Pre-Construction and Construction Phase Breakdown

I.	General.  This Exhibit will be used by Farmers Home Administration (Rural Development) and the Grantee in determining Grantee performance as required in 1944.417(b) of this subpart.

II.	Determining technical assistance (TA) cost per unit.  

A.  Equivalent units are used to measure progress at any time during the period of the grant.  It is necessary because self-help grantees have several groups of families in various stages of progress during the period of the grant.  The following formula has been developed to  provide a more accurate method of determining progress.

FORMULA

	PHASE BREAKDOWN               VALUE OF EACH PHASE	  CUMULATIVE
	                                     (%)				(%)
	Pre-Construction

	Phase I                               10		             10
	Phase II                              10	                  10

	Construction

	Phase III                             80	                21-100

B.  Using the Description of Phase Breakdown as a guide, the project staff selects the total percentage pertinent to the stage the self-help group is in and multiplies that percentage by the number of families (units) in the group.  The result is the equivalent number of units completed.  No credit may be given for Phase I, if the application is rejected.  When this computation has been completed for each group that falls within Phases I - III, the total number of equivalent units is divided into the total grant funds expended to that date.  The result is the TA cost per unit at that stage of the program's progress.

C.  The definition of pre-construction and construction phases described are follows:

PRE-CONSTRUCTION

Phase I:  Hold community meetings; conduct interviews; obtain house plans; prepare cost estimates; begin search for land; submit family applications to the lender; lender runs credit check; applications.  Lender either approves or rejects.



(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit B-3
Page 2


Phase II:  Organize an association of Section 502 Rural Housing eligible families; association conducts weekly meetings at which required lender forms are discussed and completed; house plans and land sites are selected; outside speakers explain and discuss taxes, insurance, how to keep a checking account how interest is computed, home maintenance, decorating, and landscaping; etc.; completed loan dockets for each family are submitted to the lender.  Family loan dockets are reviewed and recommendations made as to the loan amounts requested; the lender reviews family loan dockets; preliminary title search of each proposed building site is begun; requests loan check from Finance Office; when check arrives, final title search is made, loan closed, checking accounts opened, and construction begun.

Construction:  The grantee will utilize Exhibit B-2 which outlines 27 construction tasks to determine the percentage of completed construction activities.  

D.  The computation of equivalent units and TA costs will be computed as follows:

Exhibit C will be used for recording the following information and construction in this example which starts January 1.

Step 1

Both the grantee and Rural Development review the Rural Development loan application records to determine the percentage of completion for each family in the pre-construction phase of the program.  These are Phases I - III.  Total these percentages to find the number of "equivalent units" (EUs) completed at that date during pre-construction.  For example, if there are eight families in Group #2 and all have completed the 20 percent phase of preconstruction, then there would be 1.6 EUs in the pre-construction phase of the program as of that date.  Each phase must be completed before it is considered in the calculation.

Step 2

Refer to the records of construction progress for families in the construction Phase III.  As of that date, the director totals the percentage of completion figures for each family as followings:

	         Askew:        .45
              Whited:       .40
	         Martinez:     .40
	         Gonzalez:     .38

RD Instruction 1944-I
Exhibit B-3
Page 3


              Sherry:       .34
	         Duran:        .33
	         Johnson:      .13
	         Harvey:       .31

	                      2.92 EUs

Total production in the construction phase is therefore 2.92 EUs as of that date.

Step 3

Add the pre-construction and construction subtotals together:

		Pre-construction			1.60
		Construction			2.92
		Total EUs				4.52

This provides the total EUs of production during the first three months of operation.  Steps 1, 2, and 3 will be used to complete items 7, 8 and 9 of Exhibit B of this subpart.  

III.  Preparation:

Compile Exhibit B of this subpart in an original and four copies.  The exhibit will be signed by the TA Grantee.  Submit the original and three copies of the exhibit quarterly to Rural Development County Office on or before January 15, April 15, July 15, and October 15, of each year for the quarters ending March 31, June 30, September 30, and December 31 of each year.  The District Director will keep the original and forward two copies to the State Office.  The State Office will forward one copy to the National Office.  The State Office will prepare information concerning TA grants closed within 30 days of the end of a quarter on the next quarterly report.















(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit C

Amendment
to
Self-Help Technical Assistance Grant Agreement


This Agreement dated,__________________19_______between__________________
_________________________________________________________________________
a nonprofit corporation ("Grantee"), organized and operating under ____________________________________ and the United States of America
   (authorizing State Statute)
acting through the Rural Development, Department of Agriculture  ("Rural Development"), amends the "Self-Help Technical Assistance Grant Agreement" between the parties dated _________________ 19_________, ("Agreement").

The Agreement is amended by providing additional financial assistance in the amount of ________________to be made available by Rural Development to Grantee pursuant to Section 523 of Title V of the Housing Act of 1949 for the purpose of assisting in providing a program of technical and supervisory assistance which will aid low-income families in carrying out mutual self-help housing efforts; or

The Agreement is amended by changing the completion date specified in convenant 1 from _____________to ___________ and by making the following attachments to this amendment:  (List and identify proposal and any other documents pertinent to the grant.)



Agreed to this____________day of ___________19________.

									______________________
		   (Name of Grantee)

		By____________________
		      (Signature)

		______________________
		       (Title)

		UNITED STATES OF AMERICA
		By_____________________
		      (Signature)

		_______________________
		        (Title)
                                                    RURAL DEVELOPMENT

oOo

(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit D

SELF-HELP TECHNICAL ASSISTANCE GRANT PREDEVELOPMENT AGREEMENT

THIS GRANT PREDEVELOPMENT AGREEMENT dated, __________________________ 
19 ___, is between ___________________________________________________________________________ a nonprofit corporation ("Grantee"), organized and operating under _____________________________________________________________________ 		      	(authorizing State statute)
and the United States of America acting through the Rural Developemnt, Department of Agriculture.

In consideration of financial assistance in the amount of $______________
("Grant Funds") to be made available by Rural Development to Grantee under Section 523 (b)(1)(A) of the Housing Act of 1949 to be used in (specify area to be served) _____________________________________ for the purpose of developing a program of technical and supervisory assistance which will aid low-income families in carrying out mutual self-help housing efforts, Grantee will provide such a program in accordance with the terms of this Agreement and Rural Development regulations.

Grant funds will be used for authorized purposes as contained in 1944.410(d) of 7 CFR Part 1944, Subpart I, as necessary, to develop a complete program for a self-help TA grant.  This will include recruitment, screening, loan packaging and related activities for prospective self-help participants.




Agreed to this ____________________________ day of _____________________
19 _____.

	_______________________
		(Name of Grantee)

		By_____________________
		    (Signature)

		_______________________
		    	(Title)

		UNITED STATES OF AMERICA

		By_____________________
			(Signature)

		_______________________
			(Title)
	                                               RURAL DEVELOPMENT
oOo

(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit E

GUIDANCE
FOR RECIPIENTS OF
SELF-HELP TECHNICAL ASSISTANCE GRANTS
(SECTION 523 OF HOUSING ACT OF 1949)

7 CFR Part 1944, Subpart I provides the specific details of this grant program.  The following is a list of some functions of the grant recipients taken from this subpart.  With the list are questions we request to be answered by the recipients to reduce the potential for fraud, waste, unauthorized use or mismanagement of these grant funds.  We suggest the Board of Directors answer these questions every six months by conducting their own review.  Paid staff should not be permitted to complete this evaluation.

A.  Family Labor Contribution

    1.  Does your organization maintain a list of each           Yes   No
	   family and a running total of hours worked (when
        and on what activity)?

    2.  Are there records of discussions with participating      Yes   No
	   families counseling them when the family contribution
	   is falling behind?

    3.  Are there obstacles which prevent the family from	     Yes   No
        performing the required tasks?

B.  Use of Grant Funds

    1.  Were grant funds used to pay salaries or other           Yes   No
	   expenses of personnel not directly associated with
	   this grant?

    2.  Were grant funds used to pay for construction            Yes   No
   	   work for participating families?

    3.  Were all purchases or rentals (item and cost)		     Yes   No
	   of office equipment authorized?

    4.  Are all office expenses authorized by 7 CFR Part 1944,   Yes   No
        Subpart I?

    5.  Was a record of long distance telephone calls		     Yes   No
        maintained and was that log and telephone checked?

    6.  Was all travel and mileage incurred for official         Yes   No
        business and properly authorized in advance?

    7.  Were mileage and per diem rates within authorized        Yes   No
        levels?

(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit E
Page 2

    8.  Were participating families charged for use of	     Yes   No
	   tools?

    9.  Were grant funds expended to train grant personnel?      Yes   No

   10.  Was training appropriate for the individual trainee?     Yes   No

   11.  Were any technical or consultant services obtained       Yes   No
        for participating families?

   12.  Were the provided technical or consultant services       Yes   No
	   appropriate in type and cost?

C.  Financial Responsibilities

    1.  Does each invoice paid by the grant recipient match      Yes   No
	   the purchase order?

    2.  Does each invoice paid by the borrower and Rural          Yes   No
        Development match the purchase order?
	

    3.  Were purchases made from the appropriate vendors?        Yes   No

    4.  Are the invoices and itemized statements totaled        Yes   No
        for materials purchased for individual families?

    5.  Is there a record of deposits and withdrawals to         Yes   No
	   account for all loan funds?

    6.  Are checks from grant funds signed by the Board          Yes   No
	   Treasurer and Executive Director?

    7.  Are grant funds deposited in an interest bearing         Yes   No
	   account?

    8.  Are checks from loan funds prepared by the grant         Yes   No
	   recipient for the borrower's and lender's signature?    

    9.  Are checks from loan funds accompanied by accurate       Yes   No
	   invoices?

   10.  Are any borrower loan funds including interest,          Yes   No
	   deposited in grantee accounts?

   11.  Are checks from loan funds submitted to Rural DevelopmentYes   No
	   more often than once every 30 days?

   12.  Is the reconciliation of bank statements for both        Yes   No
	   grant and loan funds completed on a monthly basis?

RD Instruction 1944-I
Exhibit E
Page 3


   13.  If the person who issues the checks also reconciles      Yes   No
	   them, does the Executive Director review this activity?

   14.  Are materials purchased in bulk approved by the          Yes   No
	   Executive Director?

   15.  Was the amount of materials determined by both the       Yes   No
	   Executive Director and construction staff?

   16.  Were any participating families consulted about the      Yes   No
	   purchase of materials?

   17.  Were savings accomplished by the bulk purchase method?   Yes   No

   18.  Did the Executive Director review the purchase           Yes   No
	   order and the ultimate use of the materials?

   19.  Are materials covered by insurance when stored by        Yes   No
	   grantee?

D.  Reporting

    1.  Are "Requests for Advance or Reimbursement" made         Yes   No
	   once monthly to the Rural Development District Office?

    2.  Has the grant recipient engaged a certified public       Yes   No
        Accountant (CPA) or CPA firm to review their 
	   operations on a regular basis:  (Annually is preferable 
	   but every two years and at the end or the grant period
	   are requirements)?

    3.  Are the quarterly evaluation reports submitted on 	     Yes   No
	   time to the County Supervisor?

What, if any, problems exist that need to be corrected for effective management of the grant project?





____________                                _____________________________
    Date                                    President, Board of Directors

(Period covered by report______________)



(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit E
Page 4


ANSWER KEY


The following answers should help your organization in assessing its vulnerablility to fraud, waste, and abuse.  You should take actions to correct practices that now generate an answer different from the key.

Question		Answer

A. 1			 yes
A. 2			 yes
A. 3			 yes
B. 1			 no
B. 2			 no
B. 3			 yes
B. 4			 yes
B. 5			 yes
B. 6			 yes
B. 7			 yes
B. 8			 no
B. 9			 yes
B. 10		 yes
B. 11		 yes
B. 12		 yes
C. 1			 yes
C. 2			 yes
C. 3			 yes
C. 4			 yes
C. 5			 yes
C. 6			 yes
C. 7			 no
C. 8			 yes
C. 9			 yes
C. 10		 no
C. 11		 no
C. 12		yes
C. 13		yes
C. 14		yes
C. 15		yes
C. 16		yes
C. 17		yes
C. 18		yes
C. 19		yes
D. 1			yes
D. 2			yes
D. 3			yes


RD Instruction 1944-I
Exhibit F
Page 1

Site Option Loan to Technical Assistance
Grantees

I.  Objectives.  The objective of a Site Option (SO) loan under Section 523(b)(1)(B) of Title V of the Housing Act of 1949 is to enable technical assistance (TA) grantees to establish revolving fund accounts to obtain options on land needed to make sites available to families that will build their own homes by the self-help method.  An SO loan will be considered only when sites cannot be made available by other means including a regular Rural Housing Site (RHS) loan.

II.  Eligibility requirements.  To be eligible for an SO loan, the applicant must be a TA grantee that is currently operating in a satisfactory manner under a TA grant agreement.  If the SO loan applicant has applied for TA funds but is not already a TA grantee and it appears that the TA grant will be made, the SO loan may be approved but not closed until the TA grant is closed.

III.  Loan purposes.  Loans may be made only as necessary to enable eligible applicants to establish revolving accounts with which to obtain options on land that will be needed as building sites by self-help families participating in the TA self-help housing program.  Loans will not be made to pay the full purchase price of land but only for the minimum amounts necessary to obtain an option from the seller.  The option should be for as long as necessary but in no case should the option be for less than 90 days.

IV.	Limitations.

(A)  If the amount of an SO loan will exceed $10,000, the prior consent of the National Office shall be obtained before approval.

(B)  The amount of the SO loan should not exceed 15 percent of the purchase price of the land expected to be under option at any one time, unless a higher percent is authorized by the State Director when other land is not available or the particular area requires more down payment than elsewhere or similar circumstances exist.

(C)  Form RD 440-34, "Option to Purchase Real Property," will be used without modification in all cases for obtaining options under this subpart.

(D)  The limitations of 1822.266(b)(1) and (2) of Subpart F of Part 1822 of this chapter (RD Instruction 444.8, paragraphs VI B(1) and (2)) concerning land purchase will apply to options purchased under this subpart.

V.	Rates and terms. 

(A)  Interest.  Loans will be made at an interest rate of 3 percent.

(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit F
Page 2

(B)  Repayment period.  Each SO loan will be repaid in one installment which will include the entire principal balance and accrued interest.  The maximum repayment period for each SO loan will be the applicant's remaining TA grant funding period.

(1)  A shorter repayment period will be established if SO funds will not be needed for the entire TA grant funding period.

(2)  If a regular RHS loan is to be processed, the SO loan should be scheduled for repayment when RHS loan funds will be available to purchase the land and repay the amount of SO funds advanced on the option, unless SO loan funds will still be needed to purchase other options.  Under no circumstances, however, will the repayment period exceed the applicant's remaining TA grant funding period.

VI.	Processing application. 

(A)  Form of application:  The application for assistance will be in the form of a letter to the Rural Development County Supervisor having jurisdiction over the area of the proposed site to be optioned.  The letter will be signed by the applicant or its authorized representative and contain, as a minimum, the following information:

(1)  A copy of the proposed option that shows a legal description of the land, option price, purchase price, and terms of the option.  If more than one site is to be purchased, a schedule of the proposed options should be included.

(2)  Information to verify that a regular RHS loan cannot be processed in time to secure the option.

(3)  Proposed method repayment of the SO loan.

(4)  Resolution from the applicant's governing body authorizing the application for an SO loan from Rural Development.

(B)  Responsibility of the County Supervisor.  Upon receipt of an SO loan application, the County Supervisor will:

(1)  Determine whether the applicant is eligible.  If the applicant is not eligible, or the loan cannot be made for other reasons, the application may be rejected by the County Supervisor with the concurrence of the District Director.  The reasons for the rejection should be clearly stated and provided, in writing to the applicant.  The applicant will have the right to have the decision reviewed following the procedure established in


RD Instruction 1944-I
Exhibit F
Page 3
(Revision 1)

Subpart B of Part 1900 of this chapter.

(2)  Review and verify the accuracy of the information provided.

(3)  Make an inspection and a memorandum appraisal of each proposed site "as is."  The appraisal will include a narrative statement as to whether the site has been recently sold, verify that the seller is the owner of the property, and indicate whether the purchase price is acceptable based on the selling price of similar properties in the area.

(4)  Indicate whether or not it appears that, considering the location and cost of development, adequate building sites can be provided at reasonable costs.

(5)  If the option is for a tract of land on which 5 or more sites are proposed, the County Supervisor will forward to the District Director with recommendations as defined in  1924.119 of Subpart C of Part 1924 of this chapter.

(6)  If approval is recommended, prepare and have the applicant execute Form RD 1940-1, "Request for Obligation of Funds," for the amount needed.  Copies of the form will be distributed as provided in the Forms Manual Insert (FMI).

(7)  Forward the SO loan application and the applicant's TA application or TA docket to the State Director.  The submission will include the appraisal report and the County Supervisor's comments and recommendations.

VII.  Loan approval authority and State Office actions.  The State Director is authorized to approve SO loans developed in accordance with this Exhibit.  The approval or disapproval of the loan will be handled in the same manner as provided in  1822.272 of Subpart F of Part 1822 of this chapter (RD Instruction 444.8, paragraph XII).  SO loans will be established in Automated Multiple Housing Accounting System (AMAS) using Form RD 3560-51, "Multiple Family Housing Obligation Fund Analysis".  The Issue loan/Grant checks transaction will be used to request a check for SO loans. (Revised 02-24-05, SPECIAL PN.)

VIII.  Loan closing. 

(A)  General.  Loan closing instructions will be provided by the Office of the General Counsel (OGC) to assure that the Promissory Note is properly completed and executed.  The County Supervisor may then close the loan.


(11-15-90)  SPECIAL PN

RD Instruction 1944-I
Exhibit F
Page 4
(Revision 1)


(B)  Security for the loan.  The loan will be secured by a Promissory Note properly executed by the grantee using Form RD 1940-16, "Promissory Note."  A lien on the optioned real estate will not be taken.

(1)  The "kind of loan" block on the note will read "SO loan."

(2)  The note will be modified to show that the only installment on the loan will be the final installment.

(C)  Loan is closed.  The loan will be considered closed when the note is executed and the loan check delivered to the grantee.

IX.	Establishment of SO loan revolving account. 

(A)  Supervised bank accounts will not be used for SO loans.

(B)  Grantee will deposit SO loan funds in a depository institution of its choice.  The use of minority institutions is encouraged.  Such funds will remain separate from any other account of the grantee and shall be established as an SO revolving account.

(C)  Checks drawn on the revolving account will be for the sole purpose of purchasing land options and must be signed by at least two authorized officials of the grantee who have been properly bonded in accordance with  1944.411(e) and (g) of this subpart.

(D)  Grantees will not expend funds for any options until the site and the option form have been reviewed and approved by the County Supervisor.

(1)  SO funds will not be left unused in the revolving account in excess of 60 days.

(2)  If the funds are not used for the intended purpose within the 60 days specified above, the unused portion will be refunded on the account.

(E)  When funds become available for repayment of the SO loan, such funds will be deposited in the revolving account for the purchase of additional site options if needed.  If such funds are not needed to purchase more options, they will be applied on the SO loan.

X.	Source of funds.

	SO loans will be funded from the self-help housing land development fund.