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Catalog of Federal Domestic Assistance

Program Descriptions

CATALOG OF FEDERAL DOMESTIC ASSISTANCE

10.445:  Direct Housing: Natural Disaster

Popular Name:  Section 502 Very Low and Low Income Loans

Objectives:  To assist qualified lower income rural families to meet emergency assistance needs resulting from natural disaster to buy, build, rehabilitate, or improve dwellings in rural areas. Funds are only available to the extent that funds are not provided by the Federal Emergency Management Agency (FEMA). For the purpose of administering these funds, natural disaster will only include those areas identified by a Presidential declaration.

PROGRAM AND AWARD	FINANCIAL AND INFORMATION CONTACTS
ELIGIBILITY REQUIREMENTS	FINANCIAL AND ADMINISTRATIVE INFO.
APPLICATION AND AWARD PROCESS	INFORMATION CONTACTS
RELATED PROGRAMS	ASSISTANCE CONSIDERATIONS
PROGRAM ACCOMPLISHMENTS	POST ASSISTANCE REQUIREMENTS

10.445 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Applicants must be without adequate resources to obtain housing or related facilities. Applicants must be unable to secure the necessary credit from other sources at prevailing terms and conditions for residential financing.

Beneficiary Eligibility:  Applicants/borrowers are the direct beneficiaries when they meet all eligibility criteria.

Credentials/Documentation:  Natural disasters will only include those areas identified by a Presidential declaration. Funds are only available to the extent that funds are not provided by the Federal Emergency Management Agency (FEMA). Applicants must establish that physical damage was caused by natural disaster. An applicant need to submit evidence of inability to obtain credit elsewhere, verification of income and debts, plans, specifications, and cost estimates. This program is excluded from coverage under OMB Circular No. A-110.

10.445 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  This program is excluded from coverage under OMB Circular No. A-102 and E.O. 12372.

Application Procedure:  Applicants must file Form RD 410-4 at the RHS/RD county office serving the county where the dwelling is located. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedure:  Final approval of the application is approved by the Community Development Manager.

Deadlines:  Applicants must file applications from the date of declaration/designation and until supplemental appropriated funds are exhausted.

Range of Approval/Disapproval Time:  From 30 to 60 days subject to the availability of funds, from the time the application is filed if no backlog of applications exists.

Appeals:  Applicants may request reconsideration at the local RD county office or may appeal adverse actions in accordance with RD Instruction appeal procedure. Appeals may be filed within 30 days after notification of the adverse decision is received by the loan applicant.

Renewals:  Applicants may reapply at any time.

Criteria for Selecting Proposals:  Not applicable.

Examples of Funded Projects:  Not applicable.

Range and Average of Financial Assistance:  (Loans) $71,921.

10.445 RELATED PROGRAMS:

• 10.405 Farm Labor Housing Loans and Grants;
• 10.411 Rural Housing Site Loans;
• 10.417 Very Low-Income Housing Repair Loans and Grants;
• 10.420 Rural Self-Help Housing Technical Assistance.

10.445 PROGRAM ACCOMPLISHMENTS:

In fiscal year 1999, 44 houses were financed through the Section 502 Direct Loan (Natural Disaster) Program.

10.445 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  RURAL HOUSING SERVICE (RHS), (DEPARTMENT OF AGRICULTURE )

Type of Assistance:  Direct Loans.

Obligations:  (Loans) FY 99 $2,343,000 (based on cancellations from previous fiscal years); FY 00 est $60,717; and FY 01 est $0. Note: Funds under this program are based on supplemental funding provided by Congress in response to a natural disaster. No funding legislation has been enacted yet for fiscal year 2001.

Budget Account Number:  12-2081-0-1-371; 12-4215-0-3-371.

Authorization:  Housing Act of 1949, Title V, Section 502, as amended, Public Law 89-117, 42 U.S.C. 1471 et seq; Public Law 92-310, 42 U.S.C. 1480, 42 U.S.C. 1472; Public Law 98-51; Public Law 100-233; Amendment of Consolidated Farm and Rural Development Act of 1987, Section 601.

Regulations, Guidelines, and Literature:  7 CFR Part 3550.

10.445 INFO CONTACTS:

Regional or Local Office:  Consult your local phone directory under United States Department of Agriculture for RD county office number. If no listing, contact appropriate RD State Office listed in Appendix IV of the Catalog or on the internet at www.rurdev.usda.gov/recd_map.html.

Headquarters Office:  Director, Single Family Processing Division, Rural Housing Service (RHS), Department of Agriculture, Washington, DC 20250. Phone: (202) 720-1474. Use the same number for FTS. (Home Page)

(See Appendix IV for more contact info.)

10.445 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  This program has no matching requirement or statutory formula.

Length and Time Phasing of Assistance:  These funds are available only until the Supplemental Emergency Funding for Natural Disaster are exhausted.

Uses and Use Restrictions:  Direct loans may be used for construction, repair, or purchase of housing. Payment subsidy is available to eligible low and very low-income applicants. The term payment subsidy refers to either payment assistance or interest credit. A payment subsidy reduces the borrower's scheduled payment to an amount equal to what it would be if the note were amortized to as low as one percent. Payment subsidies are subject to recapture by the government when the borrower transfers title or ceases to occupy the property.

10.445 POST ASSISTANCE REQUIREMENTS:

Reports:  None.

Audits:  None.

Records:  Borrowers are not required to, but should retain copies of loan related documents.