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5.1 INTRODUCTION

In the second stage of the application process, the Agency completes and confirms its 

underwriting of those applications that passed beyond Stage 1—the Notice of Funding 

Availability (NOFA) initial application process—and completes its environmental review.

During this stage, applicants must submit additional information about the proposed project, 

project construction or improvements, other financing, a subsidy layering reviews using Sources 

and Uses Comprehensive Evaluation (SAUCE) or similar documentation approved by the 

National Office, and the proposed entity and procedures for managing the project. Agency staff 

use this information to make a final determination about the feasibility of the project, establish 

that the applicant has adequate systems to successfully develop and operate the project under the 

program, and set the terms of Agency financing. Applicants also sign the loan agreement or 

resolution, as applicable, which becomes their legal obligation to comply with all Agency 

program requirements.

5.2 OVERVIEW OF STAGE 2, FINAL APPLICATIONS

In the final application stage, or Stage 2 of the loan origination process, the Loan 

Originator requests final applications from those loan applicants who have met the tests of 

eligibility and feasibility and passed the underwriting analysis conducted in the initial application 

stage. The environmental review is completed, and the Loan Originator generally meets with the 

loan applicant to discuss any outstanding issues and how to assemble the loan docket. As soon 

as the final application is requested, the Loan

Originator will once again contact any other 

States in which the applicant has loans to 

confirm that the applicant is in compliance 

with those loans.

Once the final applications are 

submitted, the Loan Originator conducts a 

final analysis of the loan applications to 

confirm project eligibility and feasibility and 

to ensure that compliance with

environmental requirements is accomplished. 

The Loan Originator then makes a 

recommendation to the State Director as to 

whether to approve and fund the loan. The 

State Director, or the State Director’s 

designee, will make the final decision on the 

loan.

CHAPTER 5: PROCESSING FINAL 

APPLICATIONS — STAGE 2

Required Affirmative Fair Housing

Marketing Plan (AFHMP) Attachments

• Request final application;

• Confirm that applicant is in compliance 

with other states;

• Meet with loan applicant;

• Perform final analysis to confirm eligibility 

and feasibility;

• Run SAUCE program;

• Work with loan review committee as 

appropriate;

• Make recommendation for loan approval 

or rejection to State Director; and

• Obligate funds and Rental Assistance (RA) 

(if appropriate).
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SECTION 1: REQUESTING FINALAPPLICATIONS 

AND MEETING WITH APPLICANTS

5.3 REQUESTING FINAL APPLICATIONS

A. Invitation to Submit Final Application

The Loan Originator must send Handbook Letter 106 (3560), Notice of Preapplication Review Action to all loan applicants who are to proceed to the final 

application stage of the loan origination process, reminding them of the information and 

forms that they are required to submit as a final application, and telling them they have 

30 days from the date of the notification letter to do so. These letters must be sent 

immediately following the notification by the National Office for selection to provide for 

new construction or review of the information submitted in Stage 1 for other requests.

The letter should also include an invitation to applicants to attend another meeting with 

the Loan Originator to discuss final application requirements and establish the loan 

docket.

The cover letter to the invitation to submit a final application must include the 

following statement:

“The action taken herein is based upon representation made in 

your loan request. Any changes therein, including but not limited 

to changes in complex cost, size, or scope of complex, rental rates, 

or subsidy costs to the Agency, scope of services, sources of funds, 

etc., may adversely affect this decision and must be reported to and 

approved by the Agency in writing. Any changes not approved by 

the Agency will be cause for the Agency to discontinue processing 

your request. All applicants requesting changes will be required to 

give full justification for each change and, if Agency approval is 

not given, written reasons will be given with a 30-day negotiation 

period to resolve the difference.”

B. Content of Final Application

The final application from a loan applicant consists of additional information about a 

proposed project that confirms and documents a project’s eligibility and feasibility. The 

initial application package sent to the applicant by the Agency included the required 

forms and listed the information that would be due at Stage 2. As a result, some 

applicants may have already submitted some of the information that is now requested 

from them. Regardless, the Loan Originator must send the loan applicant another letter 

that includes the forms and lists the information that is due within 30 days. Exhibit 5-1 

lists the forms and information that must be sent to and returned by the applicant, and 

Exhibit 5-2 lists the information that the Agency must identify to the applicant as 

required at Stage 2.
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Exhibit 5-1

Contents of Final Application Package Sent to

Loan Applicant and Forms to be Returned by Applicant at Final Application

1. Form RD 3560-30, Certification of No Identity of Interest (IOI)

2. Form RD 3560-31, Identity of Interest Disclosure/Qualification Certificate;

3. Form RD 1910-11, Applicant Certification Federal Collection Policies for Consumer or 

Commercial Debts;

4. Form RD 3560-13, Management Certification;

5. Form HUD 935.2, Affirmative Fair Housing Marketing Plan;

6. Form RD 1924-13, Estimate and Certificate of Actual Cost;

7. Form RD 400-1, Equal Opportunity Agreement;

8. Form RD 400-4, Assurance Agreement; and

9. AD 1047, Certification Regarding Debarment.

Other Materials Provided to the Loan Applicant

10. Form RD 3560-33, Loan Agreement or Form RD 3560-35, Loan Resolution, as 

applicable.
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Exhibit 5-2

Information Required at Final Application

1. Attorney’s opinion letter that entity is in conformance with program requirements;

2. Final organizational documents or Certificate of Good Standing, if existing 

organization;

3. Land survey;

4. Interim lender’s commitment letter with evidence of license to do business in state (if 

interim financing is being used);

5. Detailed operating budget showing typical year’s operation (as shown on Form 

RD 3560-7, Multiple Family Housing Project Budget/Utility Allowance), the first 

year’s budget (also on Form RD 3560-7), and use of 2 percent initial operating 

capital;

6. Final cost estimates (on Form RD 1924-13);

7. Final planning, bidding, and contract documents as listed in Guide 1 of RD 

Instruction 1924-A, Planning and Performing Construction and Other Development;

8. Environmental review;

9. Agreements/documents (architectural/engineering, legal);

10. State or local approvals (zoning, utilities);

11. Preliminary title report;

12. Confirmation of SHPO evaluation and comments;

13. Disclosure of any change in financing;

14. Management plan with attachments;

15. Schedule of charges for nonshelter services (congregate);

16. Services agreement (congregate);

17. Executed copy of a limited equity agreement (Attachment 11-E, cooperative 

housing);

18. Completed subscription agreement (Attachment 11-I, cooperative housing);

19. Relocation plan, if relevant; and

20. Appraisal.

C. Construction Bidding and Contract Documents

The invitation to submit final applications should also include the following 

information to assist applicants with their development plans and documents:

 Guide 1 to RD Instruction 1924-A. This guide specifies the required documents and 

modifications thereto. All contract documents may not be available by the specified 

final application deadline, as they may depend upon loan approval. If all documents
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are not available, any missing documents must be identified as due before loan 

closing in the letter of conditions sent at loan approval.

 Exhibit C of RD Instruction 1924-A.

5.4 MEETING WITH THE APPLICANT AND PREPARING THE LOAN DOCKET

The Loan Originator should meet with all loan applicants in individual meetings within a 

week after the letter inviting final application has been mailed. It is recommended that this 

meeting be held in person, even if the applicant has experience with prior Rural Development 

Multi-Family Housing loans, but the meeting may be conducted by phone in the case of such 

experienced loan applicants.

At this meeting, the Loan Originator will:

 Discuss any outstanding issues with the loan applicant, including the status of the 

environmental review;

 Provide loan applicants with copies of appropriate exhibits and forms, including 

Form RD 3550-6, Notice of Special Flood Hazards, Flood Insurance Purchase 

Requirements, and Availability of Federal Disaster Relief Assistance;

 Furnish guidance necessary for orderly application processing;

 Initiate a processing checklist for use in establishing a schedule for completion of 

docket items (this item is to be provided to the loan applicant); and

 Provide any other guidance to the applicant upon request and answer any of their 

questions.

The Loan Originator must explain to the loan applicants that they are responsible for 

providing the necessary information to develop the docket and that all items must be submitted 

by the final application deadline. Extensions of the deadline may be granted on a case-by-case 

basis. Attachment 5-A provides a list of Agency-required docket items and their positions in the 

docket.

The Loan Originator must confirm decisions made at this meeting in a follow-up letter to 

the loan applicant. The original processing checklist and a copy of the letter to the loan applicant 

must be retained in the Loan Servicing Office and a copy of each must be sent to the State 

Office.

It is important for the Loan Originator to remember that if a face-to-face meeting is not 

held with an experienced loan applicant, then the docket, processing checklist, deadlines, and all 

forms mentioned above must be mailed to the applicant. The cover memo sent with these items 

will serve as confirmation that the Agency has provided the applicant with the necessary 

information required to continue processing the application.
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5.5 APPLICANT’S COMPLIANCE WITH OTHER AGENCY DEBT

At this time, the Loan Originator must contact any other states in which the applicant has 

existing loans to verify that the applicant is either in compliance with those loans, or has been in 

compliance with a workout agreement for 6 months as of the date the initial application was due. 

If the applicant was not in compliance as of that date, the Loan Originator must contact the 

applicant immediately to reject their application and give them appeal rights in accordance with 

7 CFR Part 11. The Loan Originator must also immediately notify the National Office so funds 

can be redistributed.

SECTION 2: REVIEWING THE FINALAPPLICATION

5.6 OVERVIEW

The Loan Originator reviews all submitted final loan applications for completeness and 

adequacy. Final applications that are not submitted on time or are not complete are rejected and 

returned to the applicant, unless the Loan Originator grants an extension for unforeseen 

circumstances.

The analysis conducted at this stage is one that:

 Verifies and documents feasibility and eligibility;

 Confirms that the project still complies with the basis upon which it was originally 

scored and ranked; and

 Verifies environmental compliance.

Any changes to the loan application in terms of financing, applicant entity, or project 

design must be reviewed carefully to ensure that the project continues to be eligible and feasible 

and the original basis upon which the project was scored and ranked has not changed. To 

establish continued eligibility and feasibility, it may be necessary for the Loan Originator to 

repeat some of the underwriting tests conducted in Stage 1 of the loan origination process.

5.7 APPLICANT ELIGIBILITY

The Loan Originator reviews the following documents submitted by the applicant and 

confirms that they establish that the applicant meets the eligibility criteria of 7 CFR 3560.55.

A. Acceptable Borrower Entity

The Loan Originator ascertains whether the loan applicant is an acceptable borrower 

entity by taking the following actions when reviewing the final application documents.

1. Organizational Documents

The Loan Originator reviews the final organizational documents or Certificate of 

Good Standing if the applicant is an existing organization to confirm that all documents
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have been properly signed, that they include the correct citation for the organization, and 

that the State documentation and all necessary recording information is included. If the 

applicant is a nonprofit organization, the Loan Originator confirms that the purpose 

includes the provision of affordable housing. Once the Loan Originator has established 

that the organizational documents meet these criteria, they are sent to Office of the 

General Counsel (OGC) for its review.

2. Attorney Opinion Letter

The Loan Originator sends the applicant’s attorney’s opinion letter that states that the 

entity is in conformance with the program requirements to OGC for its review.

3. Certification Regarding Debarment

The Loan Originator confirms the signed submission of Form AD 1047, which is the 

applicant’s certification that there are no debarment issues with their loan application.

The Loan Originator will have already checked the list of debarred individuals when the 

project proposal was first submitted and contacted other States in which the applicant has 

projects, so receipt of this form will further document that the applicant is a borrower in 

good standing with the Government.

B. Identity-of-Interest Disclosure

The Loan Originator reviews the identity-of-interest (IOI) disclosures to determine 

existing IOI relationships involving the applicant entity. Forms RD 3560-30, and RD 

3560-31 must be crosschecked. Form RD 3560-30 must disclose all IOI companies and 

the Loan Originator must verify that each such disclosed company has completed a Form 

RD 3560-31.

C. Applicant Certification Regarding Debt Collection

The applicant must sign Form RD 1910-11, to certify to their understanding of the 

collection policies that will be taken by the Agency to recover delinquent or defaulted 

debts. The Loan Originator makes sure that the signed form is included in the final 

application.

5.8 FINAL PROJECT ELIGIBILITY

During the final project eligibility review stage, the Loan Originator must establish that 

the project continues to meet all program requirements.

A. Property Requirements

In reviewing the final application, the Loan Originator must determine that:

 Any concerns about environmental, site, or design issues identified in the initial 

application stage have been resolved;
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 The appropriate level of environmental review has been completed in full (to include 

applicable public notices and their review periods) and the applicant has agreed to 

any mitigation measures contained in the environmental review; and

 No other changes in project site or design have occurred since the last review. If so, 

these changes need to be evaluated to make sure the project still meets program 

requirements.

The final planning, bidding, and contract documents must be provided to the State 

Architect who will review them to see that any required changes have been made and that 

applicable Agency requirements have been met.

B. Acceptable Agreements and Contracts

The Loan Originator or appropriate Agency staff must review all architectural, 

engineering, environmental, and legal documents to determine that they are acceptable.

C. Concurrence with Construction Contracts

All construction contracts between the loan applicant and contractor for development 

of a project must contain a provision that the contract is not in full force and effect until 

the State Director concurs in writing with the contract. Before loan closing or before the 

start of construction, whichever occurs first, the State Director or delegate must concur 

with the contract by including the following paragraph at the end of the contract:

“The Agency, as a potential lender or insurer of funds to defray 

the costs of this contract, and without liability for any payment 

thereunder, hereby concurs with the form, content, and execution 

of this contract.”

Date 

D. Clear Title and Necessary Local Approval

1. Clear Title

Rural Housing Service:

By: 

Title: 

The preliminary title report is a part of the final application. The Loan Originator 

must make sure that it does not show any unacceptable exceptions. Examples of 

unacceptable exceptions include outstanding liens, unresolved estates, easements, 

restrictions on minority individuals living on the land, and outstanding mining rights.
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2. State and Local Approvals

The Loan Originator must ensure that the final application shows that all the 

necessary State or local approvals have been obtained for site development and 

construction. These would include proper zoning, necessary utility rights, and building 

permits.

E. Prohibited Conditions

The Loan Originator must make a final confirmation that no conditions that would 

prohibit the further processing of the loan have come up for the area in which the project 

is being located. Paragraph 4.17 explains these conditions and the procedures for making 

sure that such conditions do not exist.

5.9 FINAL PROJECT FEASIBILITY ANALYSIS

The Loan Originator reviews the applicable documents in the final application to verify 

that project costs are indeed going to be as proposed and that there are no impediments to 

finalizing the project. A final subsidy layering review is also conducted to confirm that the 

Agency is not providing any more assistance than is necessary to make the project feasible.

Section 3 of this chapter provides further details on this review.

A. Are Final Costs Acceptable?

As the final analysis of project costs, the Loan Originator must establish that:

 Any concerns about project costs identified in the initial application stage have been 

resolved; and

 No other changes in project costs have occurred since the last review. If so, these 

changes need to be evaluated to make sure the project still meets program 

requirements.

 The final Form RD 1924-13 is consistent with the successful construction bid and 

signed by the applicant and contractor in accordance with the FMI.

B. Matching Income Stream with Projected Costs

The SAUCE program will show whether the projected income stream will match 

projected costs. This program should be rerun as a final feasibility analysis. If the 

projected income and costs do not match, the project costs and rent structure must be 

reassessed for changes that can be made to either the costs or the rents to bring the two in 

line with each other.

C. Failure to Obtain Leveraging

If the applicants have not been able to confirm the leveraging they anticipated in the 

initial application by this time, they will be given 10 days in which to find alternative
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leveraging. An application involving low-income housing tax credits, or other sources of 

leveraged financing would be considered to have met this requirement if they have filed 

or intend to file the appropriate application and are awaiting an award letter. If the 

applicant has not filed the application yet, a letter confirming the applicant’s intent to file 

an application must be provided to the Agency. If none is available, the application must 

be rejected and the National Office informed immediately of the availability of 

unallocated funds.

D. Adequacy of the Initial Operating Capital

For initial loans, all applicants, except nonprofits, must contribute from their own 

resources adequate initial operating capital. Form RD 3560-7 will indicate the estimated 

initial operating capital that is needed. An additional amount will be contributed for 

materials and equipment not generally shown on Form RD 3560-7.

Loan applicants must provide with their final application a list of materials and 

equipment that need to be funded by the 2 percent initial operating capital. These items 

may include, but are not limited to, property and liability insurance premiums, fidelity 

bond premiums when the applicant is an organization, utility hook-up charges and 

deposits, maintenance and other equipment, lease forms, loan payments that may become 

due during construction, purchase of office equipment and furniture, community room 

furnishings, other movable equipment and furnishing, advertising expenses, management 

fees, etc.

For the Loan Originator to approve the list, the Loan Originator must conclude that:

 The items shown are necessary for the project; and

 The costs identified are comparable to other comparable projects in the area.

E. Management Systems

The Loan Originator must evaluate whether the applicant has proposed adequate 

systems to manage the property successfully in accordance with Agency requirements.

1. Acceptable Project Management

For a final application to be approved, loan applicants must show that they will 

provide professional management to ensure the successful operation of the project. The 

Loan Originator will evaluate the acceptability of the following management documents 

provided by the loan applicant at this stage:

 The management certification form, which describes the relationship between the 

management agent, the loan applicant, and the Agency and certifies that the 

management agent will comply with Agency requirements and contract obligations.

 The management plan, which provides the details of how the management agent 

intends to operate the project. The Loan Originator must review all attachments to
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the management plan, including proposed leases, waiting lists, etc., to make sure that 

everything is in compliance with program rules.

Chapter 3 in HB-2-3560 provides details on how to evaluate these management 

documents.

2. Affirmative Fair Housing Marketing Plans (AFHMP)

As part of the final application, loan 

applicants must submit Form HUD 935.2 

to describe their marketing plans for the 

project. The intent of this plan is to 

ensure that all eligible tenants are made 

aware of the Multi-Family Housing 

project.

The Loan Originator or designated 

Agency staff must approve and sign this 

form. It is, therefore, the Agency’s 

responsibility to ask the loan applicant to 

make revisions to the plan if the Agency 

review shows such revisions to be 

necessary.

The Loan Originator can use

Exhibit 5-3 when reviewing AFHMPs. This exhibit describes each part of the plan and 

provides guidance on what to look for in each part.

Required AFHMP Attachments

 Copies of the specific page(s) from the 

census report on which the plan was based;

 Photograph or drawing of the project sign;

 Copies of the newspaper advertisement or 

sample of proposed advertisement;

 Sample community contact letters;

 Brochures, leaflets, or handouts used; and

 Written instructions provided to staff 

concerning Federal, State, and local fair 

housing laws and regulations, as well as 

concerning the AFHMP.
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Exhibit 5-3

Contents of the Affirmative Fair Housing Marketing Plan

A. Part 1 of the AFHMP provides general information about the loan applicant and the project’s location.

1. Make sure that the blank for the U.S. Census tract is completed. Copies of the specific page(s) from

the U.S. Census report on which the plan was based must be attached and the areas considered to be the 

market area should be identified (highlighted) by the loan applicant. By doing so, both the market and 

the source of the market data will be identified.

2. In the blanks for the rental rates, indicate the lowest to the highest rents. If there is rental assistance, 

the lowest rent should be shown as zero.

B. Part 2 of the AFHMP indicates whether the market area is a minority, nonminority, or mixed area. Verify 

that what is checked in this part corresponds directly to the U.S. Census data.

C. Part 3 of the AFHMP indicates the groups toward which the marketing efforts are going to be directed. It 

should also correspond directly with the U.S. Census data and the community contacts that are identified.

D. Part 4 describes the marketing program.

1. Ensure that the loan applicant has indicated that they will advertise on an annual basis.

2. Check to see if minority newspapers have been considered as part of the advertising plan.

3. Make sure that the loan applicant has attached a sample of the proposed advertisement.

4. Review any copies of brochures, leaflets, or handouts that the loan applicant intends to use. Review 

them to ensure the equal housing opportunity statement, logo, or slogan is used.

5. Make sure that a photo or rendering of the project sign has been provided. The dimensions of the 

project sign must be indicated and described in terms of feet and/or inches. The logo and the words 

“Equal Housing Opportunity” must be distinguishable in the photo or rendering. The accessibility logo 

and a TDD number must also appear.

6. Ensure that the proposed community contacts reflect efforts directed toward groups identified in block

3. Ensure each blank in this section is completed (address, phone numbers, etc.). The frequency of 

contacts must be stated, at a minimum, as “at least once annually“ or “(date) and annually thereafter.” 

Sample community contact letters must be attached.

E. Part 5 describes future marketing activities. Make sure that the loan applicant has indicated future 

marketing activities that include, as a minimum, “Newspapers, site sign, and community contacts.”

F. Part 6 describes the loan applicant’s experience and the instructions given to staff regarding fair housing 

marketing. Make sure that the loan applicant has attached the instructions given to staff concerning 

Federal, State, and local fair housing laws and regulations, as well as instructions concerning the 

Affirmative Fair Housing Marketing Plan.

G. Part 7 describes additional considerations that are planned to outreach to groups not previously mentioned 

in the AFHMP or to groups identified as least likely to apply for the housing. If this plan is for an elderly 

project, the loan applicant must have included community contacts for the handicap/disabled, who are also 

eligible to reside at the project. If the plan is for a family project, loan applicants must include efforts to 

make the units with special design features known to provide accessibility to impaired persons.

H. Part 8 is the signature block. It must be signed by the legal applicant or by the applicant’s agent.
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SECTION 3: DETERMINING LOAN LIMITS, RATES, AND TERMS

5.10 DETERMINING LOAN LIMITS [7 CFR 3560.63]

The Agency applies a maximum debt limit to every project that is based on the value of 

the project and the type of applicant entity. Attachment 5-B provides several loan calculation 

worksheets and examples of different types of loans.

A. Determining Maximum Debt Limit and Equity Contribution

The maximum amount the Agency will lend for a project is based on the lesser of a 

project’s total development cost (TDC) or appraised value minus any other loans on the 

project. This is referred to as the loan basis.

Example

$1,000,000 

950,000

200,000

750,000

TDC

Appraised value 

Other loans

Agency’s loan basis ($950,000 – $200,000)

The Agency will use $750,000 as the loan basis on which it will 

determine its loan amount.

The loan basis is then multiplied by 95 percent, 97 percent, or 102 percent, depending 

upon the applicant entity. The applicants must make up any difference as the equity 

requirement from their own resources. Exhibit 5-4 shows the Agency loan limits and 

applicant contribution requirements.

Exhibit 5-4

Agency Loan Limits and Applicant Contribution Requirements

Agency Loan 

Limit

Applicant 

Contribution Operating Capital Qualifications

97% loan 3% applicant 

contribution

2% initial operating 

capital provided by the 

applicant

Individuals, corporations, or 

partnerships that do not

receive low-income housing 

tax credits (LIHTCs)

95% loan 5% applicant 

contribution

2% initial operating 

capital provided by the 

applicant

Individuals, corporations, or 

partnerships that do receive 

LIHTCs

100% loan

102% loan

contribution 

not required

2% initial operating 

capital provided by the 

applicant or included in 

the loan

Nonprofit organizations or 

public bodies

For all applicants, the amount of loan after capitalized construction interest is 

considered will not exceed the loan limits set forth in Exhibit 5-4. However,
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Predetermined Amortization Schedule System (PASS) loans closed with multiple 

advances may exceed that amount when the loan is closed other than on the first of the

month. In this case, the interest is capitalized to the first of the following month and is 

added to the loan amount.

B. Land or Cash Equity Contribution

Loan applicants may make their equity contribution only in the form of land or cash.

If a borrower uses owned land as equity contribution and the land value is more than 

the equity requirement, the additional value of the land will not be covered by loan funds. 

However, the borrower may receive a return to owner on the additional value of the land 

up to the value of the land provided that:

 The value of the land on which the return is paid, when added to the loan and grant 

amounts from all sources, does not exceed the security value of the housing project; 

and

 Payment of the additional return does not cause rents to exceed Conventional Rents 

for Comparable Units (CRCU).

Land that has been donated and received points in the scoring process as donated land 

may not be considered equity contribution nor may a return on the value of the land be 

allowed.

Any borrower contribution that is cash will be used first as project development 

commences; then the rest of any leveraged funds will be used in lien priority. In most 

cases, the interim lender will collect all funds and distribute them, but the Agency must 

nevertheless track these disbursements and their sources as they occur.

C. Subsidy Review

The loan applicant must identify any changes in sources and uses. If there are any, 

the Loan Originator must make sure that they still meet the program requirements by 

rerunning the SAUCE program to confirm that the amount of Government assistance is 

no more than necessary to make the project feasible.

If sources of financing exceed proposed uses by more than $25,000, then Government 

assistance to the project must be reduced. When the Loan Originator must reduce the loan 

amount, the Loan Originator will provide the loan applicant with formal notification and 

inform the State agency (if there are LIHTCs being applied to the project), any other 

financing source, and the National Office.

The Loan Originator will consult with the applicant, as well as with the State Agency 

or any other financing sources, to reach an agreement on reducing the excess assistance 

by taking one of the following steps:
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 Reducing the number of LIHTCs requested;

 Reducing the level of assistance provided by one or more of the other sources of 

funds (if applicable);

 Revising the uses to include eligible costs for any funding participants, provided that 

the project enhancement is consistent with the intent of the Multi-Family Housing 

program and will assist the resident population being served by the housing; or

 As a last resort, reducing the amount of equity contribution through the reduction of 

the loan amount.

5.11 SETTING LOAN RATES AND TERMS [7 CFR 3560.67]

A. Interest

Loans are closed at the lower of the interest rate in effect at the time of loan approval 

or that in effect at the time of loan closing. The Agency specifies interest rates 

periodically in RD Instruction 440.1. The Loan Originator refers to this Instruction to 

make a note of the interest rate at the time a loan is approved, compares this rate with the 

interest rate in effect at loan closing, and inserts whichever rate is lower into Form

RD 3560-52, Promissory Note.

B. Interest Credit

The Agency provides interest credit to subsidize the interest rate shown in Form RD 

3560-52 to a payment rate of one percent for all loans. Form RD 3560-9, Interest Credit 

and Rental Assistance Agreement, is used to establish the credit at loan closing. This 

form amends Form RD 3560-52.

C. Loan Term and Amortization Period

Initial loans are amortized over 50 years and paid over a period not to exceed 30 

years, except for manufactured housing that is amortized and paid for over a period of 30 

years. The amortization period is shown in the Form RD 3560-52.

Subsequent loans for repair and rehabilitation are amortized over 50 years or the 

remaining economic life of the project, whichever is less. The loan term is 30 years or 

the economic life of the project, whichever is less.

5.12 ESTABLISHING PROFIT BASE AND RETURN ON INITIAL INVESTMENT

[7 CFR 3560.68]

A. Return on Required Investment

Limited-profit applicants are permitted a return not to exceed 8 percent on their initial 

required investment (the equity contribution of 3 percent or 5 percent of the Rural 

Development loan amount; see Paragraph 5.10 for details).
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The return to owner is shown as an operational cash use on budget Form RD 3560-7

and approved by the Loan Originator as part of the budget approval process.

B. Return on Additional Investment

A return will be allowed on additional contributions of the loan applicant’s own 

resources, provided and to the extent that:

 The additional contribution, when added to the Agency loan amount and all sources 

of project funding or financing, does not exceed the security value of the project; and

 The additional return does not result in an increase in rents beyond the CRCU. The 

return on the additional investment may be less than 8 percent if necessary to keep 

rents below CRCU.

Thus, for example, a return will not be allowed on any proceeds contributed by the 

applicant to cover total development costs that exceed appraised value.

C. Tax Credit Proceeds

Proceeds received by the loan applicant from the syndication of LIHTC and 

contributed to the project may be considered funds from the loan applicant’s own 

resources for the portion of the proceeds that exceeds:

 The allowable developer’s fee determined by the State agency administering the 

LIHTCs; and

 The amounts expected to be contributed to the transaction, as determined by the State 

agency administering the low-income housing tax credit.

D. Building Sites

A building site contributed to meet the equity requirement by the loan applicant will 

be appraised by the Agency to determine its value. A return may be allowed on the 

amount above the required equity contribution up to the value of the land that is needed 

for the project and so long as project rents do not exceed CRCU when the return is 

allowed.

If the appraisal shows a lower value than originally estimated and is less than the 

required contribution, applicants will have to contribute additional funds from their own 

resources to make up the difference. If points were given for the value that was not 

realized, the National Office must be contacted for guidance.
HB-1-3560

5-19

(02-24-05) SPECIAL PN

Revised (02-24-23) PN 577

SECTION 4: REJECTING AND APPROVING FINALAPPLICATIONS

5.13 REJECTING FINAL APPLICATIONS

If a loan is disapproved after the docket has been developed, the Loan Originator will 

take the following steps:

 Change the current stage code in Automated Multi-Family Housing Accounting 

System (AMAS) to reflect rejected or withdrawn applicant;

 Handle the disapproved docket in accordance with RD Instruction 2033-A; and

 Notify the applicant of the reason(s) for rejection. If rejection is not at the applicant’s 

request or mutual agreement, the applicant will be notified of the right to request a 

further review of the decision in accordance with 7 CFR Part 11. Any notice of 

rejection or adverse action must include the following paragraph:

“The Federal Equal Credit Opportunity Act (ECOA) prohibits 

creditors from discriminating against credit applicants on the basis of 

race, color, religion, national origin, sex, marital status, age (provided 

the applicant has the capacity to enter into a binding contract), because 

all or part of the applicant's income is derived from any public 

assistance program, or because the applicant has, in good faith, 

exercised any right under the Consumer Credit Protection Act. The 

Federal Agency that administers compliance with this law is the 

Federal Trade Commission. If any person believes they were denied 

assistance in violation of this law, they should contact the Federal 

Trade Commission, Equal Credit Opportunity, Washington, DC 

20580.”

5.14 RECOMMENDING PROJECTS FOR FINAL APPROVAL

A. Preparing the Recommendation for Approval

In preparing the recommendation for approval, the Loan Originator will:

 Ensure that the appropriate level of environmental review has been completed in full, 

including the review and concurrence of the State Environmental Coordinator and all 

applicable public notices and associated review periods;

 Obtain the analysis and recommendations of the Loan Review Committee, if 

appropriate; and

 Conduct a complete review of the proposed management and occupancy procedures 

to ensure compliance with Title VI of the Civil Rights Act of 1964 and the 

Rehabilitation Act of 1973. The USDA Office of Civil Rights can assist the Loan 

Originator in conducting this review.
HB-1-3560

5-20

B. Submitting the Completed Docket

The Loan Originator will submit the completed docket with a cover memo 

recommending approval to the Loan Approval Official. The cover memo will detail the 

proposed conditions of loan approval and indicate if construction will be financed by 

interim financing or multiple advances.

5.15 LOAN APPROVAL ACTIONS

A. Reviewing of Docket

The MFH Production and Preservation Division Director may redelegate loan

approval authority in writing to MFH Production and Preservation Division staff.

MFH staff must review the docket to confirm that the proposed loan complies with 

established policies and all pertinent regulations. In making this review, MFH staff will 

verify that:

 The applicant is eligible and has legal authority to contract for a loan and enter into 

the required agreements;

 The location of the housing meets program requirements;

 The funds are requested for an authorized purpose;

 The proposed loan is sound;

 The commitment of leveraged funds has been obtained;

 The security is adequate (see Chapter 7);

 All preapproval documents required for a complete loan application have been 

executed;

 The proposal is in compliance with all environmental requirements; and

 If applicable, flood insurance requirements have been met and Form RD 3550-6 has 

been executed by the applicant.

B. Approving Loans

When the final analysis is complete and the Agency is ready to approve the loan, the 

Agency must first complete and deliver to the applicant for signature and date Form RD 

3560-51, Obligation Fund Analysis. Once this form has been returned, the Agency will 

execute the form and send a copy of it to the applicant.
HB-1-3560

5-21

(02-24-05) SPECIAL PN

Revised (02-24-23) PN 577

Loans will be approved in accordance with 7 CFR part 3560, subpart B and RD 

Instruction 1901-A.

5.16 LETTER TO INTERIM LENDER

When the loan has been approved, the Loan Originator will send Handbook Letter 104 

(3560), Letter To Interim Lender, informing them of the amount and terms of the loan that Rural 

Development is preparing to close for the loan applicant.

5.17 OBLIGATING FUNDS

Once the Agency approves a loan, the loan funds must be obligated.

A. Initial Obligation

When the loan has been approved, the Loan Originator must take the following steps 

to obligate the funds:

 Complete Form RD 3560-51, and

 In AMAS, complete the screen [M1A], Obligate Loan/Grant Funds. The number of 

months entered in the [M1A] should be the number of months for loan amortization 

(e.g., 600), not loan term.

B. Changing the Loan Amount

1. Decreasing the Loan Amount

It may, at times, be necessary to decrease the amount of a loan obligation prior to loan 

closing. For example, if the loan applicant changes from interim financing to multiple 

advances, the interest costs designated for the interim lender must be subtracted from the 

loan amount.

In these cases, the extra loan funds must be deobligated and all paperwork and 

AMAS records corrected. The Loan Originator must notify the National Office so that 

funds may be redistributed when possible.

 To change the loan amount in the application record, use screen [M1AA].

 To change the obligation amount, deobligate the excess funds in AMAS using the 

screen [M1D], Cancel Loan/Grant Obligation.

 Forms to be updated when funds are deobligated include:

◊ Form RD 3560-51, and

◊ Form RD 3560-33, Loan Agreement, 3560-34, Loan Agreement, or 3560-35, 

Loan Resolution.
HB-1-3560

5-22

2. Increasing the Loan Amount

The Agency rarely allows the amount of the loan to be increased. In cases in which 

the borrower can justify the need for extra funds (e.g., for circumstances beyond the 

borrower’s control), and it is in the same fiscal year in which the loan was obligated, the 

Agency may deobligate the loan and obligate a larger loan if approved by the National 

Office. If the funds are required in a fiscal year following that in which the loan was 

originally obligated, the Agency may approve a subsequent loan. See Chapter 10 for 

details on subsequent loans.

3. Ordering Checks

The Loan Originator must take into account that it will take approximately 5 days to 

receive the check after ordering it.

 Multiple advances. AMAS is used to order, disburse, and track multiple advances. 

Monitoring multiple advances is especially important to ensure that:

◊ Accrued interest does not cause the maximum debt limit to be exceeded; and

◊ Any funds not needed for the final draw are deobligated before the final check is 

drawn, otherwise the Amortization Effective Date (AED) will not be established.

The following screens are used to process multiple advances:

◊ To order checks for multiple advances, complete the screen [M1C], Issue 

Loan/Grant Check;

◊ To see all disbursed checks, use screen [M8CI], Loan/Grant/Cost Checks;

◊ Use screen [M1AI], Inquiry on Loan/Grant Obligations for maximum debt limit;

◊ Use screen [M1XI], Accrual Calculation Request, for disbursed amount and 

accrued interest to ensure that the maximum debt limit is not exceeded.

 Interim financing. If interim financing is used, a single check must be ordered to 

pay off the interim financier. Use the screen [M1C], Issue Loan/Grant Check.

5.18 FOLLOW-UP TO OBLIGATIONS

To ensure that obligated funds are used promptly, the MFH Production and Preservation 

Division staff should make periodic checks to verify that project construction is progressing. If

after 12 months construction on an approved project has not begun or is significantly behind 

schedule, the MFH Production and Preservation Division staff must document in the case file 

that the project has been reviewed and that one of the following decisions has been made 

regarding the continued obligation of funds.

 The MFH Production and Preservation Division staff may choose to cancel the loan 

and deobligate the funds. If the deobligation occurs during the same fiscal year in

which the obligation was initiated,
HB-1-3560

5-23

(02-24-05) SPECIAL PN

Revised (02-24-23) PN 577

the funds are returned to the National Office. If the obligation was made in a prior 

fiscal year, the deobligated funds revert to the U.S. Treasury.

 The MFH Production and Preservation Division staff may choose to allow the

borrower another 12 months to make progress on the construction.

5.19 TRANSFER OF FUND OBLIGATION

The transfer of fund obligations may occur only when:

 The organizational entity remains the same. The entity remains legally the same but a 

substitution of the member occurs. All or part of the membership may change as long 

as eligibility is not affected. The project site location and market must remain the 

same;

 The organizational entity changes. The membership and their interest remain 

identical, the project site location and market are the same, but the legal entity 

changes;

 There is a monetary default by the original applicant/entity. An obligation may be 

transferred to any person or applicant eligible to receive an Agency loan when the 

original applicant/entity is in monetary default, which has or may result in foreclosure 

by the interim lender, and:

◊ The applicant/entity assuming the obligation, or the interim lender, removes any 

liens filed against the property;

◊ There have been no deviations from the Agency-approved plans and

specifications;

◊ The transferee will not be composed of any principals of the transferor;

◊ The transfer will be in the best interest of the Agency and prospective tenants;

◊ The applicant/entity and all members thereof whose obligations are transferred 

will not be considered eligible for further participation in the Agency’s MultiFamily Housing programs for at least five years from the date of the transfer of 

the Agency loan obligation; and

◊ Prior approval is obtained from the National Office.

5.20 CANCELING AN OBLIGATION

In some cases, it may be necessary to cancel an obligation prior to closing either because 

the borrower withdraws from the process or the Agency receives new information that 

disqualifies the borrower. In these cases, the Loan Originator must:
HB-1-3560

5-24

 Notify the applicant and closing agent of the cancellation. In situations where the 

cancellation is not the applicant’s choice, the Loan Originator must inform the 

borrower of any action that can be taken to correct or appeal the decision. (It is the 

applicant’s responsibility to notify other interested parties, such as any contractors, of 

the cancellation.)

 Notify the National Office so that funds may be redistributed when possible.

 Deobligate the loan. This involves the following steps.

◊ In AMAS, cancel the obligation using screen [M1D], Cancel Loan/Grant 

Obligation; and

◊ Complete Form RD 3560-53, Multi-Family Housing Cancellation of U.S. 

Treasury Check and/or Obligation.

 Void the check, if necessary. If the check has already been ordered and received by 

the Field Office, it must be voided and returned to the St. Louis Office.

The Loan Originator must document the Agency’s or applicant’s decision to cancel 

the obligation in the running record or project case file.

5.21 LETTER OF CONDITIONS

When a loan is approved, the Loan Approval Official must send the applicant Handbook 

Letter 102 (3560), Letter of Conditions, Loan Approval, or Obligation of Funds that must be met 

in order for loan closing to occur. This letter describes the rates and terms at which the loan has 

been approved, restates program requirements to which the applicant must adhere, specifies the 

construction requirements, and lists any conditions which the applicant must meet prior to loan 

closing. The loan applicant must sign and return this letter to the Agency within 5 days. The 

Loan Approval Official must send a copy of this letter to the Loan Originator since it provides all 

the details of the approved loan and the construction requirements. The information to be 

included in the letter is listed in Exhibit 5-5.
HB-1-3560

5-25

(02-24-05) SPECIAL PN

Revised (02-24-23) PN 577

Exhibit 5-5

Information to be Included in the Handbook Letter 102 (3560), Letter of Conditions, Loan 

Approval, or Obligation of Funds

The following information should be included in the letter of conditions:

To describe loan rates and terms:

 The debt limit approved, the applicable interest rate, the loan term, and the amortization 

term;

 Equity contribution requirements;

 Initial 2 percent operating capital requirement;

 A request for confirmation that the borrower will pay cost overruns;

 Security requirements;

 Any changes required to the management profile, certification, or plan;

 All mitigation measures required by the environmental review;

 Allowed rents; and

 Rental assistance, if any, and associated requirements.

To summarize program requirements:

The letter of conditions should include a brief summary of each of the following requirements:

 Tenant eligibility requirements (see 7 CFR 3560.152);

 Accounting requirements (see 7 CFR 3560.302);

 Annual financial examination requirements (see 7 CFR 3560.308);

 Annual budgets and other reporting requirements (see 7 CFR 3560.303);

 Compliance with applicable civil rights laws, regulations, and Agency policies (see 7 CFR

3560.2 and 7 CFR 3560.104);

 Insurance requirements (see 7 CFR 3560.105 and paragraph 5.22);

 Other conditions (agreement to allow Agency access, agreement to keep records, identity of

person keeping records and accounts); and

 Required covenant in instrument of conveyance or deed of trust concerning civil rights as 

follows:

“The property described herein was obtained or improved with federal financial 

assistance and is subject to the provisions of Title VI of the Civil Rights Act of 

1964 and Section 504 of the Rehabilitation Act of 1973 and the regulations issues 

thereto. This covenant is in effect for as long as the property continues to be used 

for the same or similar purpose for which the financial assistance was extended, or 

for as long as the above recipient owns it, whichever is longer.”

To describe construction and development requirements:

 Public bid requirements;

 Construction accounting requirements; and

 Cost certification requirements.

To accept letter of conditions:

 Space for applicant’s signature of agreement; and

 Return address.
HB-1-3560

5-26

5.22 INSURANCE REQUIREMENTS

The loan applicant must have certain insurance in place at loan closing. The loan 

applicant is notified of these requirements at loan approval in Handbook Letter 102 (3560), 

Letter of Conditions, Loan Approval, or Obligation of Funds. At a minimum, the following 

types of insurance must be carried:

 Fire and extended coverage on all buildings included in the security for the loan;

 Suitable worker’s compensation insurance carried by the applicant for all employees;

 Flood insurance on all buildings located in or to be located in special flood or 

mudslide prone areas; and

 Liability insurance.

Chapter 3 in HB-2-3560 covers these requirements in greater detail.

5.23 ASSIGNING CASE NUMBERS, PROJECT NUMBERS, AND LOAN CODES

The Loan Approval Official assigns the borrower’s case number using the State and 

county codes where the project will be located and the borrower’s tax identification number. If 

the borrower does not have a tax identification number, the state assigns a temporary number 

from the block of numbers assigned to the state. When the Borrower receives a tax identification 

number, the state must replace the temporary number. Form 3560-51, provides the details on 

how these numbers are assigned.

Each project will be assigned a project number by AMAS. When the tax identification 

number is identified in a future case number anywhere in the nation, AMAS will assign project 

numbers sequentially.

When the total number of units financed are built or purchased at one place at one time, 

the loan will be coded as the initial loan on the project.
HB-1-3560

Attachment 5-A

Page 1 of 3

(02-24-05) SPECIAL PN

ATTACHMENT 5-A 

AGENCY DOCKET CHECKLIST

ITEM Agency Applicant

Docket 

Position

Date 

Due

Date 

Received

1. Form RD 3560-51, Multi-Family 

Housing Obligation — Fund Analysis X 2

2. SF 424, Application for Federal 

Assistance (For Construction) X 3

3. Form RD 1944-37, Previous 

Participation Certification X 3

4. Form RD 3560-30, Certification of No 

Identity of Interest (IOI) X 3

5. Form RD 3560-31,Identity of Interest 

Disclosure/Qualification Certificate X 3

6. Form RD 1910-11, Applicant 

Certification, Federal Collection 

Policies for Consumer or Commercial 

Debts

X 3

7. Form RD 400-4, Assurance Agreement X 3

8. Form RD 440-25, Financing Statement X 1

9. Form RD 400-1, Equal Opportunity 

Agreement X 6

10. **Form RD 400-3, Notice to 

Contractors and Applicants X 6

11. Form RD 400-6, Compliance Statement X 6

12. Form RD 1922-7, Appraisal Report for 

Multi-Unit Housing X 8

13. *Proof of organization (certified copy of 

charter or articles of incorporation) X 5

14. *Certified copies of bylaws or 

regulations X 5

15. *List of names and addresses of 

officers, directors and members, and 

membership interests held by each

X 5

16. *Form RD 3560-35, Certified copy of 

Loan Resolution X 2
HB-1-3560

Attachment 5-A 

Page 2 of 3

ITEM Agency Applicant

Docket 

Position

Date 

Due

Date 

Received

17. Interim lender’s commitment letter with 

evidence of license to do business in 

state, if applicable

X 2

18. Forms RD 3560-33, 3560-34, or 3560-

35, Loan Agreement or Resolution, as 

applicable

X 5

19. **Survey of land given as security, 

plans, specifications, cost estimates, and 

proposed manner of construction

X 6

20. Form RD 3560-7, Multiple Family 

Housing Project Budget/Utility 

Allowance (first year)

X 3

21. Form RD 3560-7, Multiple Family 

Housing Project Budget/Utility 

Allowance (typical year)

X 3

22. Form RD 1940-20, Request for 

Environmental Information, if 

applicable

X 3

23. Form RD 1940-22, Environmental 

Checklist for Categorical Exclusions, 

Form RD 1940-21, Environmental 

Assessment for Class I Actions, or 

Environmental Assessment for Class II 

Actions, or Exhibit H, RD Instruction 

1940-G

X 3

24. Phase 1 Environmental Site Assessment X 8

25. FEMA Form 81-93, Standard Flood 

Hazard Determination X 6

26. Form RD 3550-6, Notice of Special 

Flood Hazards, Flood Insurance 

Purchase Requirements, and 

Availability of Federal Disaster Relief 

Assistance

X 6

27. Relevant information from SHPO X 3

28. Market feasibility documentation X 3

29. SAUCE input data and analysis X 6

30. Appraisal X 8

31. Management certification X 3
HB-1-3560

(02-24-05) SPECIAL PN

Attachment 5-A

Page 3 of 3

ITEM Agency Applicant Docket 

Position Date Due Date Received

32. Management plan X 3

33. A preliminary title insurance 

commitment/binder and final 

title insurance policy

X 5

34. AFHMP X 3

35. Mortgage title insurance 

policy X 5

36. Copy of deed, purchase 

contract, or other instrument 

of ownership

X 5

37. A copy of the lease to be used 

between borrower and public 

housing authority or other 

authorized lessees, report of 

lien search, option or 

foreclosure notice agreement, 

and items of information 

concerning prior mortgage, if 

applicable

X 1

* When applicant is an organization.

** One copy for contractor.
HB-1-3560

This page intentionally left blank
HB-1-3560 

Attachment 5-B 

Page 1 of 28

(02-24-05) SPECIAL PN 

ATTACHMENT 5-B 

LOAN CALCULATION WORKSHEETS 

(Not for proposals with donated land, applicant owned sites, or 102 percent loans) 

(Applicant Name) 

$ Total Development Cost (TDC) (Line 58 of Form RD 1924-13, Estimate and Certificate of 

Actual Cost, including site cost on Line 50, and Line 27 of Form RD 3560-51, Obligation - 

Fund Analysis.) 

$ Security Value (SV) (Recent Rural Development or Rural Development-contracted appraisal, 

including the appraised value of the site.) 

$ Adjusted Total Development Cost (ATDC): 

$ TDC 

- Minus site cost, line 50 of Form RD 1924-13

+ Plus appraised value of site "as is"

$ ATDC 

$ Loan Basis Value (LBV) (Lower of SV or ATDC or TDC.) 

=========================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$ x .95 = $ LIHTC proposals 

$ x .97 = $ Non-LIHTC proposals 

Determining Applicant Contribution: (TDC minus ML) 

$ - $ = $ LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

$ - $ = $ LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 2 of 28 

EXAMPLE A 

WORK SHEET FOR LOAN CALCULATION 

Security value is greater than total development cost and 

value of site is greater than cost of site 

(Applicant Name) 

$ 980,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13, 

including site cost on Line 50, and Line 27 of Form RD 3560-51.) 

$1,000,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal, including the appraised value of the site.) 

$ 990,000 Adjusted Total Development Cost (ATDC): 

$ 980,000 TDC 

- 40,000 Minus site cost, line 50 of Form RD 1924-13.

+ 50,000 Plus appraised value of site "as is"

$ 990,000 ATDC

$ 980,000 Loan Basis Value (LBV) (Lower of SV or ATDC or TDC) 

===================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$980,000 x .95 = $931,000 LIHTC proposals 

$980,000 x .97 = $950,600 Non-LIHTC proposals 

Determining Applicant Contribution: (TDC minus ML) 

$980,000 - $931,000 = $49,000 LIHTC proposals 

$980,000 - $950,600 = $29,400 Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

$980,000 - $931,000 = $49,000 LIHTC proposals 

$980,000 - $950,600 = $29,400 Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 3 of 28

(02-24-05) SPECIAL PN 

EXAMPLE B 

WORK SHEET FOR LOAN CALCULATION 

Total development cost is greater than security value and 

value of site is greater than cost of site 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13, 

including site cost on Line 50, and Line 27 of Form RD 3560-51.) 

$ 980,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal including the appraised value of the site.) 

$1,010,000 Adjusted Total Development Cost (ATDC): 

$1,000,000 TDC 

- 40,000 Minus site cost, line 50 of Form RD 1924-13

+ 50,000 Plus appraised value of site "as is"

$1,010,000 ATDC

$ 980,000 Loan Basis Value (LBV) (Lower of SV or ATDC or TDC) 

===================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$980,000 x .95 = $931,000 LIHTC proposals 

$980,000 x .97 = $950,600 Non-LIHTC proposals 

Determining Applicant Contribution: (TDC minus ML) 

$1,000,000 - $931,000 = $69,000 LIHTC proposals 

$1,000,000 - $950,600 = $49,400 Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

$980,000 - $931,000 = $49,000 LIHTC proposals 

$980,000 - $950,600 = $29,400 Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 4 of 28 

EXAMPLE C 

WORK SHEET FOR LOAN CALCULATION 

Total development cost is greater than security value 

and value of site is less than cost of site 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13, 

including site cost on Line 50, and Line 27 of Form RD 3560-51.) 

$ 950,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal including the appraised value of the site.) 

$ 985,000 Adjusted Total Development Cost (ATDC): 

$1,000,000 TDC 

- 60,000 Minus site cost, line 50 of Form RD 1924-13

+ 45,000 Plus appraised value of site "as is"

$ 985,000 ATDC

$ 950,000 Loan Basis Value (LBV) (Lower of SV or ATDC or TDC.) 

===================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$950,000 x .95 = $902,500 LIHTC proposals 

$950,000 x .97 = $921,500 Non-LIHTC proposals 

Determining Applicant Contribution: (TDC minus ML) 

$1,000,000 - $902,500 = $97,500 LIHTC proposals 

$1,000,000 - $921,500 = $78,500 Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

$950,000 - $902,500 = $47,500 LIHTC proposals 

$950,000 - $921,500 = $28,500 Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 5 of 28

(02-24-05) SPECIAL PN 

WORK SHEET FOR LOAN CALCULATION 

(Donated land only) 

(Applicant Name) 

$ Total Development Cost (TDC) (Line 58 of Form RD 1924-13) (Line 58 should include value 

of site.) 

- Appraised value of site

$ Adjusted TDC (ATDC)

$ Security value (Recent Rural Development or Rural Development-contracted appraisal)

- Appraised value of site

$ Adjusted Security Value (ASV)

$ Loan Basis Value (LBV) (Lower of ASV or ATDC.)

===================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$ x .95 = $ 

$ x .97 = $ 

LIHTC proposals 

Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML plus appraised value of site) 

$ - $ = $ LIHTC proposals 

+ $ 

$ 

Appraised value of site

Total contribution 

$ - $ = $ Non-LIHTC proposals 

+ $ 

$ 

Appraised value of site 

Total contribution 

Determining Return on Investment: (LBV minus ML) (Not to exceed SV) 

$ - $ = $ 

$ - $ = $ 

LIHTC proposals 

Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 6 of 28 

EXAMPLE A 

WORK SHEET FOR LOAN CALCULATION 

(Donated land only) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

(Line 58 should include value of site.) 

- 100,000 Appraised value of site

$ 900,000 Adjusted TDC (ATDC) 

$1,000,000 Security value (Recent Rural Development or Rural Development-contracted appraisal) 

- 100,000 Appraised value of site

$ 900,000 Adjusted Security Value (ASV) 

$ 900,000 Loan Basis Value (LBV) (Lower of ASV or ATDC.) 

===================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$900,000 x .95 = $855,000 LIHTC proposals 

$900,000 x .97 = $873,000 Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML plus appraised value of site) 

$900,000 - $855,000 = $ 45,000 LIHTC proposals 

+ $100,000 Appraised value of site

$145,000 Total contribution

$900,000 - $873,000 = $ 27,000 Non-LIHTC proposals 

+ $100,000 Appraised value of site

$127,000 Total contribution

Determining Return on Investment: (LBV minus ML) (Not to exceed SV) 

$900,000 - $855,000 = $45,000 LIHTC proposals 

 $900,000 - $873,000 = $27,000 Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 7 of 28

(02-24-05) SPECIAL PN 

EXAMPLE B 

WORK SHEET FOR LOAN CALCULATION 

(Donated land only) 

(Applicant Name) 

$ 900,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

(Line 58 should include value of site.) 

- 100,000 Appraised value of site

$ 800,000 Adjusted TDC (ATDC) 

$1,000,000 Security value (Recent Rural Development or Rural Development-contracted appraisal) 

- 100,000 Appraised value of site

$ 900,000 Adjusted Security Value (ASV) 

$ 800,000 Loan Basis Value (LBV) (Lower of ASV or ATDC.) 

===================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$800,000 x .95 = $760,000 LIHTC proposals 

$800,000 x .97 = $776,000 Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML plus appraised value of site) 

$800,000 - $760,000 = $ 40,000 LIHTC proposals 

+ $100,000 Appraised value of site

$140,000 Total contribution

$800,000 - $776,000 = $ 24,000 Non-LIHTC proposals 

+ $100,000 Appraised value of site

$124,000 Total contribution

Determining Return on Investment: (LBV minus ML) (Not to exceed SV) 

$800,000 - $760,000 = $40,000 LIHTC proposals 

$800,000 - $776,000 = $24,000 Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 8 of 28 

EXAMPLE C 

WORK SHEET FOR LOAN CALCULATION 

(Donated land only) 

(Applicant Name) 

$ 900,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

- 50,000 

(Line 58 should include value of site.) 

Appraised value of site 

$ 850,000 Adjusted TDC (ATDC) 

$1,000,000 Security value (Recent Rural Development or Rural Development-contracted appraisal) 

- 50,000 Appraised value of site

$ 950,000 Adjusted Security Value (ASV)

$ 850,000 Loan Basis Value (LBV) (Lower of ASV or ATDC.) 

===================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$850,000 x .95 = $807,500 LIHTC proposals 

$850,000 x .97 = $824,500 Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML plus appraised value of site) 

$850,000 - $807,500 = $42,500 LIHTC proposals 

+ $50,000 Appraised value of site

$92,500 Total contribution

$850,000 - $824,500 = $25,500 Non-LIHTC proposals 

+ $50,000 Appraised value of site

$75,500 Total contribution

Determining Return on Investment: (LBV minus ML) (Not to exceed SV) 

$850,000 - $807,500 = $42,500 LIHTC proposals 

$850,000 - $824,500 = $25,500 Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 9 of 28

(02-24-05) SPECIAL PN 

EXAMPLE D 

WORK SHEET FOR LOAN CALCULATION 

(Donated land only) 

(Applicant Name) 

$ 900,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

- 200,000

(Line 58 should include value of site.) 

Appraised value of site 

$ 700,000 Adjusted TDC (ATDC) 

$1,000,000 Security value (Recent Rural Development or Rural Development-contracted appraisal) 

- 200,000 Appraised value of site

$ 800,000 Adjusted Security Value (ASV) 

$ 700,000 Loan Basis Value (LBV) (Lower of ASV or ATDC.) 

===================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV x .95 or .97) 

$700,000 x .95 = $665,000 LIHTC proposals 

$700,000 x .97 = $679,000 Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML plus appraised value of site) 

$700,000 - $665,000 = $ 35,000 LIHTC proposals 

+ $200,000 Appraised value of site

$235,000 Total contribution

 $700,000 - $679,000 = $ 21,000 Non-LIHTC proposals 

+ $200,000 Appraised value of site

$221,000 Total contribution

Determining Return on Investment: (LBV minus ML) (Not to exceed SV) 

$700,000 - $665,000 = $35,000 LIHTC proposals 

$700,000 - $679,000 = $21,000 Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 10 of 28 

WORK SHEET FOR LOAN CALCULATION 

(Applicant Owned Sites) 

(Applicant Name) 

(When value of site is equal to or greater than required applicant contribution) 

$ Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include cost of site.) 

$ 

appraisal.) 

Security Value (SV) (Recent Rural Development or Rural Development-contracted 

$ appraised value of site 

$ Adjusted Total Development Cost (ATDC): 

$ TDC 

- Minus site cost

+ Plus appraised value of site "as is"

$ ATDC

$ Loan Basis Value (LBV) (Lower of ATDC or SV) 

=========================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV minus site value) 

$ - $ = $ 

$ - $ = $ 

LIHTC proposals 

Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML minus site value) 

$ - $ = $ 

site value - $ 

cash $ 

LIHTC proposals 

$ - $ = $ 

site value - $ 

cash $ 

Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

$ - $ = $ 

$ - $ = $ 

LIHTC proposals 

Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 11 of 28 

(02-24-05) SPECIAL PN 

EXAMPLE A 

WORK SHEET FOR LOAN CALCULATION 

(Applicant Owned Sites) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include cost of site.) 

$ 900,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal.) 

$ 10,000 appraised value of site 

$ 910,000 Adjusted Total Development Cost (ATDC): 

$1,000,000 TDC 

- 100,000 Minus site cost

+ 10,000 Plus appraised value of site “as is”

$ 910,000 ATDC

$ 910,000 Loan Basis Value (LBV) (Lower of ATDC or SV) 

========================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV minus site value) 

$910,000 - $10,000 = $900,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML minus site value) 

$910,000 - $900,000 = $10,000 LIHTC proposals 

site value - $10,000 

cash $ -0- 

$ - $ - $

site value - $ 

cash $ 

Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

$910,000 - $900,000 = $10,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

CALCULATED BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 12 of 28 

EXAMPLE B 

WORK SHEET FOR LOAN CALCULATION 

(Applicant Owned Sites) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include cost of site.) 

$1,400,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal.) 

$500,000 appraised value of site 

$1,400,000 Adjusted Total Development Cost (ATDC): 

$1,000,000 TDC 

- 100,000 Minus site cost

+ 500,000 Plus appraised value of site "as is"

$1,400,000 ATDC

$1,400,000 Loan Basis Value (LBV) (Lower of ATDC or SV) 

========================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV minus site value) 

$1,400,000 - $500,000 = $900,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML minus site value) 

$1,400,000 - $500,000 = $500,000 LIHTC proposals 

site value - $500,000 

cash $ -0- 

$ - $ = $ 

site value - $ 

cash $ 

Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

 $1,400,000 - $900,000 = $500,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 13 of 28 

(02-24-05) SPECIAL PN 

EXAMPLE C 

WORK SHEET FOR LOAN CALCULATION 

(Applicant Owned Sites) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include cost of site.) 

$ 750,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal.) 

$100,000 appraised value of site 

$ 600,000 Adjusted Total Development Cost (ATDC): 

$1,000,000 TDC 

- 500,000 Minus site cost

+ 100,000 Plus appraised value of site "as is"

$ 600,000 ATDC

$ 600,000 Loan Basis Value (LBV) (Lower of ATDC or SV) 

========================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV minus site value) 

$600,000 - $100,000 = $500,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML minus site value) 

$600,000 - $500,000 = $100,000 LIHTC proposals 

site value - $100,000 

cash $ -0- 

$ - $ = $ 

site value - $ 

cash $ 

Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

 $600,000 - $500,000 = $100,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 14 of 28 

WORK SHEET FOR LOAN CALCULATION 

(Applicant Owned Sites) 

(Applicant Name) 

(When value of site is less than the required applicant contribution) 

$ Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include cost of site.) 

$ 

appraisal.) 

Security Value (SV) (Recent Rural Development or Rural Development-contracted 

$ appraised value of site 

$ Adjusted Total Development Cost (ATDC): 

$ TDC 

- Minus site cost

+ Plus appraised value of site "as is"

$ ATDC

$ Loan Basis Value (LBV) (Lower of ATDC or SV) 

========================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV minus site value) 

$ - $ = $ 

$ - $ = $ 

LIHTC proposals 

Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML minus site value) 

$ - $ = $ LIHTC proposals 

site value - $ - THIS IS LESS THAN REQUIRED CONTRIBUTION

cash $ 

Reduce loan amount by $ ; new loan amount $ 

$ - $ = $ 

site value - $ 

cash $ 

Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

$ - $ = $ 

$ - $ = $ 

LIHTC proposals 

Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 15 of 28 

(02-24-05) SPECIAL PN 

EXAMPLE A 

WORK SHEET FOR LOAN CALCULATION 

(Applicant Owned Sites) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include cost of site.) 

$ 800,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal.) 

$10,000 appraised value of site 

$1,000,000 Adjusted Total Development Cost (ATDC): 

$1,000,000 TDC 

- 100,000 Minus site cost

+ 10,000 Plus appraised value of site "as is"

$ 910,000 ATDC

$ 800,000 Loan Basis Value (LBV) (Lower of ATDC or SV) 

========================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV minus site value) * 

$800,000 - $10,000 = $790,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML minus site value) 

$910,000 - $790,000 = $120,000 LIHTC proposals 

site value - $ 10,000 - THIS IS LESS THAN REQUIRED CONTRIBUTION 

cash $110,000 

Reduce loan amount by $110,000; new loan amount $680,000 * 

Determining Return on Investment: (LBV minus ML) 

 $800,000 - $790,000 = $10,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 16 of 28 

EXAMPLE B 

WORK SHEET FOR LOAN CALCULATION 

(Applicant Owned Sites) 

(Applicant Name) 

(When value of site is less than the required applicant contribution) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include cost of site.) 

$ 500,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal.) 

$100,000 appraised value of site 

$ 850,000 Adjusted Total Development Cost (ATDC): 

$1,000,000 TDC 

- 250,000 Minus site cost

+ 100,000 Plus appraised value of site "as is"

$ 850,000 ATDC

$ 500,000 Loan Basis Value (LBV) (Lower of ATDC or SV) 

========================================================================== 

CALCULATIONS 

Low Income Housing Tax Credit (LIHTC): LIHTC or similar tax incentive pursuant to Section 42 of the 

Internal Revenue Code. 

Determining Maximum Loan (ML): (LBV minus site value) * 

$500,000 - $100,000 = $400,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

Determining Applicant Contribution: (ATDC minus ML minus site value) 

$850,000 - $400,000 = $450,000 LIHTC proposals 

site value - $100,000 - THIS IS LESS THAN REQUIRED CONTRIBUTION 

cash $350,000 

Reduce loan amount by $350,000; new loan amount $50,000 * 

$ - $ = $ 

site value - $ 

cash $ 

Non-LIHTC proposals 

Determining Return on Investment: (LBV minus ML) 

$500,000 - $400,000 = $100,000 LIHTC proposals 

$ - $ = $ Non-LIHTC proposals 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 17 of 28 

(02-24-05) SPECIAL PN 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with donated land) 

(Applicant Name) 

$ Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include value of site.) 

$ Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal.) 

$ Loan Basis Value (LBV) (Lower of SV or TDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $ (LBV) 

Determining Applicant Contribution: The amount of funds that applicant must contribute beyond 

the value of the site. (TDC minus ML) 

$ - $ = $ 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 18 of 28 

EXAMPLE A 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with donated land) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

(Line 58 should include value of site.) 

$1,200,000 Security Value (SV) (Recent Rural Development or Rural Developmentcontracted 

appraisal.) 

$1,000,000 Loan Basis Value (LBV) (Lower of SV or TDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $1,000,000 (LBV) 

Determining Applicant Contribution: The amount of funds the applicant must contribute beyond 

the value of the site. (TDC minus ML) 

$1,000,000 - $1,000,000 = $ 0 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 19 of 28 

(02-24-05) SPECIAL PN 

EXAMPLE B 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with donated land) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

(Line 58 should include value of site.) 

$ 900,000 Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal.) 

$ 900,000 Loan Basis Value (LBV) (Lower of SV or TDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $900,000 (LBV) 

Determining Applicant Contribution: The amount of funds the applicant must contribute beyond 

the value of the site. (TDC minus ML) 

$1,000,000 - $900,000 = $ 100,000 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 20 of 28 

EXAMPLE C 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with site purchase) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

(Line 58 should include value of site.) 

$1,000,000 Security Value (SV) (Recent Rural Development or Rural Developmentcontracted 

appraisal.) 

$1,000,000 Loan Basis Value (LBV) (Lower of SV or TDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $1,000,000 (LBV) 

Determining Applicant Contribution: The amount of funds the applicant must contribute beyond 

the value of the site. (TDC minus ML) 

 $1,000,000 - $1,000,000 = $ 0 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 21 of 28 

(02-24-05) SPECIAL PN 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with applicant owned site) 

(Applicant Name) 

$ Total Development Cost (TDC) (Line 58 of Form RD 1924-13) 

(Line 58 should include cost of site.) 

$ Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal.) 

$ Loan Basis Value (LBV) (Lower of SV or TDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $ (LBV) 

Determining Applicant Contribution: (TDC minus ML) 

$ - $ = $ 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 22 of 28 

EXAMPLE A 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with applicant owned site) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

(Line 58 should include cost of site.) 

$1,000,000 Security Value (SV) (Recent Rural Development or Rural Developmentcontracted appraisal.) 

$1,000,000 Loan Basis Value (LBV) (Lower of SV or TDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $1,000,000 (LBV) 

Determining Applicant Contribution: (TDC minus ML) 

$1,000,000 - $1,000,000 = $ 0 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 23 of 28 

(02-24-05) SPECIAL PN 

EXAMPLE B 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with applicant owned site) 

(Applicant Name) 

$ 900,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

(Line 58 should include cost of site.) 

$1,000,000 Security Value (SV) (Recent Rural Development or Rural Developmentcontracted appraisal.) 

$ 900,000 Loan Basis Value (LBV) (Lower of SV or TDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $900,000 (LBV) 

Determining Applicant Contribution: (TDC minus ML) 

$900,000 - $900,000 = $ 0 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 24 of 28 

EXAMPLE C 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with applicant owned site) 

(Applicant Name) 

$1,080,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13.) 

(Line 58 should include cost of site.) 

$1,030,000 Security Value (SV) (Recent Rural Development or Rural Development contracted 

appraisal.) 

$1,030,000 Loan Basis Value (LBV) (Lower of SV or TDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $1,030,000 (LBV) 

Determining Applicant Contribution: (TDC minus ML) 

$1,080,000 - $1,030,000 = $ 50,000 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 25 of 28 

(02-24-05) SPECIAL PN 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with site purchase) 

(Applicant Name) 

$ Total Development Cost (TDC) (Line 58 of Form RD 1924-13, 

including site cost on Line 50.) 

$ Security Value (SV) (Recent Rural Development or Rural Development-contracted 

appraisal, including site value.) 

$ Adjusted Total Development Cost (ATDC): 

$ TDC 

- Minus site cost 

+ Plus appraised value of site “as is” 

$ ATDC 

$ Loan Basis Value (LBV) (Lower of SV or ATDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $ (LBV) 

Determining Applicant Contribution: The amount of funds the applicant must contribute. 

(TDC minus ML) 

$ - $ = $ 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 26 of 28 

EXAMPLE A 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with site purchase) 

(Applicant Name) 

$1,000,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13, 

including site cost on Line 50.) 

$1,200,000 Security Value (SV) (Recent Rural Development or Rural Developmentcontracted appraisal, including site value.) 

$ 975,000 Adjusted Total Development Cost (ATDC): 

$1,000,000 TDC 

- 150,000 Minus site cost 

+ 125,000 Plus appraised value of site "as is" 

$ 975,000 ATDC 

$ 975,000 Loan Basis Value (LBV) (Lower of SV or ATDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $975,000 (LBV) 

Determining Applicant Contribution: The amount of funds the applicant must contribute. 

(TDC minus ML) 

 $1,000,000 - $975,000 = $25,000 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 27 of 28 

(02-24-05) SPECIAL PN 

EXAMPLE B 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with site purchase) 

(Applicant Name) 

$1,125,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13, 

including site cost on Line 50.) 

$1,000,000 Security Value (SV) (Recent Rural Development or Rural Developmentcontracted appraisal, including site value.) 

$1,130,000 Adjusted Total Development Cost (ATDC): 

$1,125,000 TDC 

- 75,000 Minus site cost 

 + 80,000 Plus appraised value of site "as is" 

1,130,000 ATDC 

$1,000,000 Loan Basis Value (LBV) (Lower of SV or ATDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $1,000,000 (LBV) 

Determining Applicant Contribution: The amount of funds the applicant must contribute. 

(TDC minus ML) 

$1,125,000 - $1,000,000 = $125,000 

CALCULATIONS BY 

(Rural Development employee) (Date) 
HB-1-3560 

Attachment 5-B 

Page 28 of 28 

EXAMPLE C 

WORK SHEET FOR LOAN CALCULATION 

(102 percent loans with site purchase) 

(Applicant Name) 

$1,200,000 Total Development Cost (TDC) (Line 58 of Form RD 1924-13, 

including site cost on Line 50.) 

$1,150,000 Security Value (SV) (Recent Rural Development or Rural Developmentcontracted appraisal, including site value.) 

$1,250,000 Adjusted Total Development Cost (ATDC): 

$1,200,000 TDC 

- 100,000 Minus site cost 

+ 150,000 Plus appraised value of site “as is” 

$1,250,000 ATDC 

$1,150,000 Loan Basis Value (LBV) (Lower of SV or ATDC.) 

===================================================================== 

CALCULATIONS 

Maximum Loan (ML): $1,150,000 (LBV) 

Determining Applicant Contribution: The amount of funds the applicant must contribute. 

(TDC minus ML) 

$1,200,000 - $1,150,000 = $50,000 

CALCULATIONS BY 

(Rural Development employee) (Date)