Proposed Rule: Program Regulations: Mutual and Self-Help Housing Program

27988 Federal Register / Vol. 72, No.
96 / Friday, May 18, 2007 / Proposed Rules
This includes, but is not limited to, Signed in Washington, DC, on May 10, Management Branch, U.S. Department
being employed by or contracting with 2007. of Agriculture, STOP 0742, 1400
any approved insurance provider that Eldon Gould, Independence Avenue, SW.,
sells, services, or adjusts policies offered Manager, Federal Crop Insurance Washington, DC 20250–0742.
under the authority of the Act. FCIC Corporation. • Hand Delivery/Courier: Submit
may waive this provision if it is satisfied [FR Doc. E7–9418 Filed 5–17–07; 8:45 am] written comments via Federal Express
that the person who employs the BILLING CODE 3410–08–P Mail or other courier service requiring a
suspended or debarred person has taken street address to the Branch Chief,
sufficient action to ensure that the Regulations and Paperwork
suspended or debarred person will not DEPARTMENT OF AGRICULTURE Management Branch, U.S. Department
be involved, in any way, with FCIC or of Agriculture, 300 7th Street, SW., 7th
receive any benefit from any program Rural Housing Service Floor, Washington, DC 20024.
under the Act. All written comments will be
7. Amend § 400.456 as follows: Rural Business-Cooperative Service available for public inspection during
A. Remove paragraph (a). regular work hours at 300 7th Street,
B. Redesignate paragraphs (b) through Rural Utility Service SW., 7th Floor address listed above.
(d) as paragraphs (a) through (c). FOR FURTHER INFORMATION CONTACT:
C. Revise newly redesignated Farm Service Agency Debra S. Mangrum, Senior Loan
paragraphs (a) and (b) to read as follows: Specialist, Special Programs and New
7 CFR Part 1944 Initiatives Branch, Single Family
§ 400.456 Governmentwide debarment and
suspension (nonprocurement). Housing Direct Loan Division, RHS,
Rural Housing Service Stop 0783, Room 2209, South
* * * * *
(a) FCIC will proceed under 7 CFR Agriculture Building, 1400
7 CFR Part 3551 Independence Avenue, SW.,
part 3017 when taking action to suspend
or debar persons involved in non- RIN 0575–AC20
Washington, DC 20250–0783, telephone
(202) 720–1366.
procurement transactions.
(b) Any person suspended or debarred Streamlining of the Section 523 Mutual SUPPLEMENTARY INFORMATION:
under the provisions of 7 CFR part 3017, and Self-Help Housing Program Classification
will not be eligible to contract with AGENCY: Rural Housing Service, USDA. This proposed rule has been
FCIC or the Risk Management Agency
ACTION: Proposed rule. determined not to be significant for
and will not be eligible to participate in
purposes of Executive Order 12866 and,
or receive any benefit from any program SUMMARY: This action proposes to therefore, has not been reviewed by the
under the Act during the period of replace the Mutual and Self-Help Office of Management and Budget
ineligibility. This includes, but is not Housing Program’s (MSH) (OMB).
limited to, being employed by or administration under 7 CFR part 1944,
contracting with any approved Subpart I with 7 CFR part 3551. This Executive Order 12988
insurance provider, or its contractors, rule will apply to grants executed after This proposed rule has been reviewed
that sell, service, or adjust policies the effective date of the final rule. The under Executive Order 12988, Civil
either insured or reinsured by FCIC. Rural Housing Service (an agency Justice Reform. If this proposed rule is
FCIC may waive this provision if it is within the Rural Development mission adopted: (1) Unless otherwise
satisfied that the approved insurance area) proposes to streamline and clarify specifically provided, all State and local
provider or contractors have taken its regulations for MSH. This action is laws and regulations that are in conflict
sufficient action to ensure that the taken to reduce regulations, improve with this rule will be preempted; (2) no
suspended or debarred person will not customer service and enhance retroactive effect will be given to this
be involved in any way with the Federal efficiency, flexibility, and effectiveness rule except as specifically prescribed in
crop insurance program or receive any in managing the program. the rule; and (3) the appeal procedures
benefit from any program under the Act. DATES: Written or e-mail comments of the National Appeals Division (7 CFR
* * * * * must be received on or before July 17, part 11) must be exhausted before
8. Amend § 400.457 by adding a new 2007. The comment period for bringing suit.
paragraph (d) to read as follows: information collections under the
Unfunded Mandates Reform Act
§ 400.457 Program Fraud Civil Remedies
Paperwork Reduction Act of 1995
continues through July 17, 2007. Title II of the Unfunded Mandates
Act.
ADDRESSES: You may submit comments Reform Act of 1995 (UMRA), Public
* * * * * Law 104–4, establishes requirements for
(d) Civil penalties and assessments to this rule by any of the following
methods: Federal agencies to assess the effects of
imposed pursuant to this section are in their regulatory actions on State, local,
addition to any other remedies that may • Agency Web Site: http://
www.rurdev.usda.gov/regs. Follow and tribal governments and the private
be prescribed by law or imposed under sector. Under section 202 of the UMRA,
this subpart. instructions for submitting comments
on the Web Site. the Agency generally must prepare a
§ 400.458 [Amended] • E-Mail: comments@wdc.usda.gov. written statement, including a cost-
9. Amend § 400.458 by removing Include ‘‘RIN No. 0575–AC20’’ in the benefit analysis, for proposed and final
cprice-sewell on PRODPC61 with PROPOSALS
paragraph (b)(2), adding an ‘‘or’’ at the subject line of the message. rules with ‘‘Federal mandates’’ that may
end of paragraph (b)(1) and • Federal eRulemaking Portal: http:// result in expenditures to State, local, or
redesignating paragraph (b)(3) as www.regulations.gov. Follow the tribal governments, in the aggregate, or
paragraph (b)(2). instructions for submitting comments. to the private sector, of $100 million or
• Mail: Submit written comments via more in any one year. When such a
§ 400.459 [Removed] the U.S. Postal Service to the Branch statement is needed for a rule, section
10. Remove § 400.459 from subpart R. Chief, Regulations and Paperwork 205 of the UMRA generally requires the
VerDate Aug<31>2005 15:31 May 17, 2007 Jkt 211001 PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 E:\FR\FM\18MYP1.SGM 18MYP1
Federal Register / Vol. 72, No. 96 / Friday, May 18, 2007 / Proposed Rules 27989
Agency to identify and consider a State and local officials. The Agency has for OMB approval. All comments will
reasonable number of regulatory conducted intergovernmental also become a matter of public record.
alternatives and adopt the least costly, consultation in the manner delineated
E-Government Act Compliance
more cost-effective or least burdensome in RD Instruction 1940–J (available in
alternative that achieves the objectives any RD office). Rural Development is committed to
of the rule. This rule contains no complying with the E-Government Act,
Paperwork Reduction and E-
Federal mandates (under the regulatory to promote the use of the Internet and
Government Sections
provisions of Title II of the UMRA) for other information technologies to
State, local, and tribal governments or In accordance with the Paperwork provide increased opportunities for
the private sector. Therefore, this rule is Reduction Act of 1995, the Agency will citizen access to Government
not subject to the requirements of seek Office of Management and Budget information and services, and for other
sections 202 and 205 of the UMRA. (OMB) approval of reporting and purposes.
recordkeeping requirements contained
Executive Order 13132 in this proposed regulation. Background Information
The policies contained in this rule do Estimate of Burden: Public reporting The Mutual and Self-Help Housing
not have any substantial direct effect on burden for this collection of information (MSH) program is authorized by Section
States, on the relationship between the is estimated to average 4.60 hours per 523 of Title V of the Housing Act of
National government and States, or on response. 1949 (‘‘Act’’). Under the Act, the
the distribution of power and Respondents: Public or private non- Secretary of Agriculture is authorized to
responsibilities among the various profit organizations or state or political make MSH grants to, or contract with,
levels of government. Nor does this rule subdivisions. public or private non-profit
impose substantial direct compliance Estimated number of respondents: corporations, agencies, institutions,
costs on State and local governments. 230. organizations, Indian tribes, and other
Therefore, consultation with the States Estimated number of responses:
associations, to pay part or all of the
is not required. 4,063.
Estimated Number of Responses per cost of developing, conducting,
Environmental Impact Statement Respondent: 17.67. administering, or coordinating programs
Estimated Total Annual Burden on of technical and supervisory assistance
This document has been reviewed in to aid needy very-low and low-income
accordance with 7 CFR part 1940, Respondents: 18,698 hours.
There have been no new paperwork families in carrying out self-help
subpart G, ‘‘Environmental Program.’’ It housing efforts. One of the primary
is the determination of the Agency that requirements, however; the reporting
burden and associated costs have benefits of MSH is to fund organizations
the proposed action does not constitute that are willing to locate and work with
a major Federal action significantly increased consistent with the growth of
the program. families that otherwise do not qualify as
affecting the quality of the human homeowners. Generally, these are
environment, and in accordance with Copies of this information collection
can be obtained from Brigitte Sumter, families with incomes below 50 percent
the National Environmental Policy Act of the median income, living in
of 1969, neither an Environmental Regulations and Paperwork
Management Branch, Support Services substandard housing, and/or lacking the
Assessment nor an Environmental skills to be a homeowner.
Impact Statement is required. Division, Rural Development, at 202–
692–0042. The number of MSH families
Regulatory Flexibility Act Comments: Comments are invited on: participating in the Single Family
This proposed rule has been reviewed (a) Whether the proposed collection of Housing Direct loan program has grown
with regard to the requirements of the information is necessary for the proper from 518 families in 1968 to more than
Regulatory Flexibility Act (5 U.S.C. performance of the functions of the 41,000 families in 2006. Since 1996 the
601–612). The undersigned has Agency, including whether the funding level has more than tripled
determined and certified by signature of information will have practical utility; from $11 million to the current funding
this document that this rule will not (b) the accuracy of the Agency’s level of approximately $34 million. Both
have a significant economic impact on estimate of the burden of the proposed the numbers of families obtaining
a substantial number of small entities. collection of information including the homeownership through MSH and the
This rule will affect both small and large validity of the methodology and number of grantees participating have
entities in the same manner. This rule assumptions used; (c) ways to enhance increased since the program’s inception.
proposes no significant changes in the quality, utility, and clarity of the The rapid growth of interest in this
information collection or regulatory information to be collected; and (d) program has necessitated a change in
requirements that would have a negative ways to minimize the burden of the how the program is being delivered.
impact on either small or large entities collection of information on those who Therefore, this rule proposes to
in an economic way. are to respond, including through the implement a competitive process for
use of appropriate automated, application processing and awarding of
Programs Affected electronic, mechanical, or other grant funds. This process will ensure
This program is listed in the Catalog technological collection techniques or fairness, increase efficiency, and
of Federal Domestic Assistance under other forms of information technology. minimize the negative impact to the
Number 10.420, Rural Self-Help Comments may be sent to Cheryl customers we serve. Greater
Housing Technical Assistance. Thompson, Regulations and Paperwork accountability will be realized for rural
Management Branch, Support Services residents resulting in greater

Intergovernmental Consultation Division, U.S. Department of investments that enhance rural
For the reasons set forth in the Final Agriculture, Rural Development, STOP competitiveness, improve and diversify
Rule related Notice to 7 CFR part 3015, 0742, 1400 Independence Avenue, SW., community services, and enable rural
Subpart V, this program is subject to Washington, DC 20250–0742. All residents to have a better quality of life.
Executive Order 12372 which requires responses to this notice will be These proposed revisions are consistent
intergovernmental consultation with summarized and included in the request with efforts to streamline Government
27990 Federal Register / Vol. 72, No. 96 / Friday, May 18, 2007 / Proposed Rules
functions, improve efficiency and the management assistance provider, Tribe, expand the pool of applicants and
effectiveness of Government activities. very-low income, and Workout assure the Agency of highly qualified
agreement. Definitions for the following grantees.
Enhancements To Improve Program The current regulation also requires
are removed as unnecessary: Date of
Success the organization to have a board of
completion, Direct costs, Disallowed
Streamlined Regulation costs and Termination of a grant. directors that consists of not less than
(b) Eligibility: This rule proposes to five members but does not detail
The proposed changes will provide
clarify or expand several current requirements of those board members
more flexibility for both grantees and
eligibility requirements and to add new (§ 1944.404(d)(4)). The proposed rule
Agency staff. Errors will be reduced
requirements (§ 3551.51) as discussed requires that at least one-third of these
because the proposed guidelines and
below. members be very-low or low income,
requirements will be clearer and items The current regulation does not their elected representatives, or
can be found in reduced and better- specify that organizations that have residents of a low income community
organized regulations. This will enable been suspended, debarred, or excluded and no more than one-third from the
the Agency to deliver the program with from participation in Federal programs public sector (§ 3551.51(3)(v)). This
fewer staff resources. The Agency based on the ‘‘List of Parties Excluded change will ensure that the customers
believes that streamlining of the from Federal Procurement and are being fairly represented by the
regulations to make them simpler and Nonprocurement Programs,’’ are not organization.
more direct will enhance the use of the eligible for this program. This proposed Under the current regulation,
program and encourage grantee rule includes that requirement in 7 CFR applicants must provide information to
participation. The ultimate benefits are 3551.51(e). This change is necessary to exhibit financial, legal and
increased activity resulting in better prevent the award of grant funds to administrative capacity to carry out the
living standards for residents of rural unreliable organizations and to comply requirements of this program
communities. with existing Federal Non-Procurement (§ 1944.404(b)). One of the requirements
This rule proposes policy changes Debarment and Suspension regulations includes submitting a staffing plan that
consistent with the existing statutory and USDA regulations at 7 CFR Part reflects they have qualified people to
authority, clarifies certain requirements 3017. carry out the responsibilities of
that have multiple interpretations, and Under the current regulation, grantees administering this program or can be
amends others that have led to applying for additional funding must hired or contracted. This rule proposes
unintended consequences as discussed have received or will receive at least an to change that requirement and states
below. This streamlining will reduce the acceptable rating on their current grant. the applicant must have experienced
program’s administrative burden not However, the State Director has staff on board prior to grant approval or
only for the Agency but also for authority to grant an exception to this provide documentation that a paid or
applicants and grantees. The following requirement if the grantee has removed volunteer consultant is secured with
contains more detailed information for or will remove the factor that caused the similar experience to assist and train
areas in which changes are proposed to unacceptable rating (§ 1944.421). The key staff members (§ 3551.51(b)(3)). This
streamline the program, reduce the proposed rule requires that an exception change will eliminate steps in
burden, and make needed policy under this section must be requested monitoring the grantee and taking any
changes: through the national office and only the needed enforcement action after the
Technical Enhancements Administrator can approve such an grant is closed to ensure required
exception (§ 3551.51(f)(1)). This change staffing levels are reached.
(a) Definitions: This rule proposes to is being proposed to eliminate funding Under the current regulation, grantees
make changes to the definitions of of unsuccessful grantees and in an effort must also submit a narrative statement
agreement (now Grant agreement) and to assure that only highly qualified detailing the number of homes to be
Mutual self-help (now Mutual self-help applicants receive funding. constructed, that low income families
method of construction) to be more The current regulation are being served, and those families are
consistent with 7 CFR part 3550 and for (§ 1944.404(d)(2)) considers only willing to contribute their labor
program clarity. New definitions for the organizations classified under section (§ 1944.410(a)(4)). The proposed rule
following terms are added for clarity: 501(c)(3) of the Internal Revenue Code expands that requirement to specifically
Administrator, Applicant, Board of of 1986 as eligible private nonprofit require the applicant to propose that no
Directors, Borrower, Bylaws, Close out, corporations. The proposed rule adds a fewer than five homes will be built
Colonias, Completed units, Custodial new source of eligibility simultaneously per participating family
account, Debarment, Environmental (§ 3551.51(a)(3)(iii) for organizations group, that at least 40 percent of the
review, Environmental due diligence, that are classified as tax exempt under participating families are very low
existing grantee, EZ/EC/REAP areas, 501(c)(4) of the Code. There are income, that all of the participating
Family labor contribution, Final grantee considerable overlaps between the two families are either low or very low
evaluation, Grantee, High risk, and many organizations could qualify income, and that participating family
household, Housing Act of 1949 as for exempt status under either. The members are willing to contribute at
amended, HUD, Indian reservation, major difference in the two types of least 50 percent of the labor required on
Leveraged assistance, Low-income, organizations affecting their their home (§ 3551.51(c)). The proposed
Member’s agreement, Modest housing, qualifications with Rural Development, rule also requires applicants to
Multi-funded applicants, Notice of is that the § 501(c)(4) classification document that upon completion of each
Funding Availability, Program allows organizations the right to lobby. participating family’s home, they will
requirements, Production based, However, all organizations applying for have at least 10 percent equity, based on
Reasonable costs, Rural area, Rural assistance in the MSH program must the appraised market value at
Development, Section 502 loan certify and disclose their lobbying completion (§ 3551.51(c)(3)). These
program, Self-help construction cost, activities in accordance with 7 CFR part additional requirements will ensure that
Specialty tools, Substitute labor, 3018 and § 3551.55(b)(10)(iv). Adding family members are receiving a quality
Supervised bank account, Technical and this additional source of eligibility will product and the goal to provide
affordable housing to very low and low associated with a grant application will ceiling to allow a higher technical
income families is being met. Greater encourage highly qualified MSH assistance cost under exigent
specificity of expectations will improve applicants. circumstances set out in a notice
consistency in grantee success in (d) Technical Assistance Grant published in the Federal Register. Such
meeting their goals. Ceilings: The proposed rule streamlines circumstances should be beyond the
Under the current regulation, grantees the method by which technical grantee’s control, and might affect
are generally expected to close out assistance grant ceilings are calculated. market prices such as natural disasters,
grants with all the homes proposed for While the current regulation lists four strikes, fuel prices, etc. This proposal is
the grant cycle as completed units. This different methods in which grant necessary to maintain continuity in the
method of operation, for the purpose of ceilings are calculated (§ 1944.407), the program, expand the use of grant
MSH, is considered as ‘‘grant based’’. In proposed rule establishes a single, dollars, and establish more
recognition of existing practices, consistent method (§ 3551.54(b)(1)). In accountability for the grantees while
however, the proposed rule adds addition, the proposed rule establishes continuing to provide flexibility. The
flexibility to allow certain grantees that some flexibility to permit exceptions by Agency understands that the calculation
operate on an ongoing, ‘‘production the State Director and the Administrator of technical assistance grant ceilings is
line’’ basis, to close out grants with only under specific circumstances. a particularly important issue and is
incomplete units and continue to Under the current regulation, grantees especially interested in receiving
operate without major lapses between generally opt for the method of comments on this issue. The Agency
funding cycles (§ 3551.51(g)). In such calculating technical assistance that encourages parties providing comments
case, the grantee must: (1) Have the produces the highest cost. An even to suggest alternative methods for
demonstrated capacity to close out the higher cost can be approved by the State calculating grant ceilings if they feel the
grant with incomplete homes and Director with few additional proposed method may not be effective.
continue to meet all program requirements and no maximum (e) Grant Application Process: Under
requirements; (2) have successfully percentage limit. This has resulted in the current regulation, grant
closed out at least two technical many exceptions being made at the state applications are received and processed
assistance grants with the Agency; (3) level, inconsistent technical assistance on a first come-first served basis until
have received at least a satisfactory costs among states, and the depletion of funding is exhausted
rating on their most recent final grantee funds more rapidly. The proposed rule (§ 1944.410(b)(4)(i)). The number of
evaluation and not currently be limits technical assistance cost to no applications received has far exceeded
designated ‘‘High Risk’’ or operating more than 15 percent of the equivalent the limited amount of grant funds
under a workout agreement; (4) be a value of a comparable modest home in available. Therefore, this rule proposes
multi-funded applicant (with funding the subject area for each home that is to a revised grant application process
from a resource other than the Agency); be constructed. This amount, when (§ 3551.55 and 3551.205) to award
and (5) propose that no more than 10 added to the self-help construction cost, grants by a competitive process. The
percent of the homes to be constructed shall not exceed the equivalent value of Agency will publish a ‘‘Notice of
will be incomplete at grant close out a comparable modest home in the area. Funding Availability’’ (NOFA) in the
and that all incomplete homes will be Self-help construction cost is defined Federal Register that lists the specific
completed during the next grant cycle. under proposed § 3551.10. The amount amount of grant funds available,
The Agency cannot guarantee that is calculated as the total debt to the establishes deadlines for the submission
successive grants will be made. The participating family, subtracting land and review of applications, and lists the
production line method of operation is costs, closing costs, and impact fees, criteria by which the Agency will
currently being used by some grantees and adding any additional financing evaluate applications (§ 3551.55(a)) for
without a negative impact on the such as grants that reduce the total debt that grant cycle. The NOFA may also
families. Under this method, no to the participating family. The method contain any special criteria designated
construction is begun, on homes within enables the Agency to make fair and by the Administrator to encourage
a group, unless the grantee is certain consistent comparisons of construction innovation, ensure geographic diversity,
there will be sufficient funds to costs among grantees in an area to respond to emergency situations, etc.
complete the group project. Therefore, determine whether a particular Applications will be scored and ranked
no family’s home is left unfinished with requested amount per unit is reasonable. in accordance with the criteria outlined
the uncertainty of completion. The proposed rule allows for an in the NOFA, and grants will be
(c) Authorized Grant Uses: Under the exception to this grant ceiling by the awarded to those most qualified to the
current regulation no reference is made State Director, but only up to 20 percent extent of funding availability.
to expenses that might be incurred by of the equivalent value of a modest The current regulation requires
the applicant regarding environmental home in the area. Special conditions applicants to provide information at
reviews (§ 1944.405). The proposed rule must also exist in the marketplace or three separate stages: Preapplication
includes as an authorized grant use the locality, the participant’s situation or (§ 1944.410(a), (b), and (c)), application
payment of costs the applicant may labor rates must require the additional (§ 1944.410(a), (b), and (c)), and grant
incur to obtain information necessary cost, or no Agency-built homes must approval (§ 1944.411). The proposed
for the Agency to complete an have been built in the past 12 months rule eliminates the preapplication stage,
environmental review, when necessary and the cost to construct a modest home requires more documentation for the
(§ 3551.52(b)(10)). The proposed rule is obtained by the Agency from a eligibility/approval determination
also permits payment of other nationally recognized residential cost (§ 3551.55(b)), and minimizes the
reasonable costs the applicant may provider (§ 3551.54(b)(2)). These documents required for grant approval/
incur associated with the execution of a changes should greatly reduce the closing (§ 3551.55(d) and (e)) as
MSH program not covered in this part number of exceptions being made and discussed below. These proposed
but only when prior written approval by maintain an acceptable technical changes will reduce the grantees’
Rural Development is obtained assistance cost among the states. workload overall and provide the
(§ 3551.52(b)(12)). The Agency believes The proposed rule also permits for an Agency a more simplified review
such inclusion of incidental costs Administrator’s exception to the grant process. These changes are also
beneficial to establish a competitive oversight, improve the ability of satisfactorily within the specified time
application and award process. grantees to comply with program period. This change is necessary to
In addition, the proposed rule requirements, and ensure the success of identify problems early and eliminate
eliminates other unnecessary the MSH program. the possibility of project extensions and
application requirements that will The current regulation does not budget shortfalls by the grantee.
reduce the paperwork burden on require grantees to provide counseling The current regulation does not
existing grantees. Existing grantees who to participating family members. This clearly define the process of classifying
are not designated as high risk and who proposed rule will require grantees to a grantee as ‘‘High Risk’’. The proposed
received at least a satisfactory rating on provide family members with rule establishes a step by step procedure
their most recent final grantee counseling throughout the project (7 that leaves little room for flexibility.
evaluation will no longer be required to CFR 3551.101(b)). Counseling will This change will establish a simple, fair
resubmit documentation they have the include direct or indirect and consistent process, help to
demonstrated capacity to carry out the homeownership education in minimize the negative impact on
objectives of the MSH program accordance with new Single Family grantees, and reduce unnecessary
(§ 3551.55 (c)(2)) or organizational Housing loan regulations which was workload for Rural Development staff.
documents that have not changed in the published on February 5, 2007 at 72 FR The proposed rule more clearly
interim (§ 3551.55(c)(3)). That 51537 CFR 3550.11(c) and 3550.53(i) of delineates the performance goals that
information is readily available to the this proposed rule. This rule proposes grantees must meet based upon their
Rural Development staff and, therefore, for grantees to counsel family members proposal at the time of application and
is an unnecessary requirement. in selecting suitable and modest agreed upon by the grant agreement (7
The current regulation requires housing designs and assisting them in CFR 3551.152(a)). The grantee’s
applicants to submit a Form RD 1940– determining contracting and material commitment would include, but not
20, ‘‘Request for Environmental cost estimates. These rule changes will limited to: The number of homes to be
Information’’ (§ 1944.410(b)(1)(ii)). This ensure that the family receive a quality complete and/or incomplete at the end
rule proposes to remove that product at minimal cost, provide the of the grant cycle, the average per unit
requirement in order to conform with families with life skills necessary to cost of technical assistance, and the
the requirements of 7 CFR part 1940, become successful homeowners, and completion date of the project. At the
subpart G which states this action is minimize any loss to the government. end of the grant period, the Agency will
considered as a categorical exclusion. The current regulation permits evaluate grantees to see if they have
However, the Agency will continue to amendments to the grant agreement but attained these goals (7 CFR 3551.152(c).
complete the Form RD 1940–22, does not clearly define the purpose of Grantees who receive an unsatisfactory
‘‘Environmental Checklist for the amendment (7 CFR 1944.420). rating on their performance evaluation
Categorical Exclusions’’ with each Consistent with the increased emphasis are ineligible for subsequent grants as
application. If the Agency determines an on grantee performance, the proposed outlined in the eligibility requirements
Environmental Impact Analysis is rule provides that the Agency will (7 CFR 3551.51). This increased
necessary despite the categorical approve grant agreement amendments emphasis on performance means that
exclusion, the applicant must obtain only to modify the grant amount or grantees must deliver the results that
and/or assist the Agency in acquiring grant period (7 CFR 3551.151(a)) and if they have committed to in their grant
any additional information needed (7 other listed criteria are met. The agreement.
CFR 3551.55(d)(11)). Such information proposed rule specifies that the Agency The current regulation allows for a
may include delineating wetland areas will no longer approve grant agreement self-evaluation by the grantee to be
or performing an acheological survey, amendments to lower the number of submitted as a part of the grantee’s
for example. This requirement will help homes to be completed (7 CFR performance evaluation (7 CFR
to minimize unsuitable properties being 3551.151(b)(2)). The need must be due 1944.427). This rule proposes to remove
obtained by grantees for use under this to circumstances beyond the grantee’s this requirement as unnecessary for the
program and assist the Agency in control and consistent with the goals of grantee and an unproductive tool for the
meeting the environmental MSH. Adequate funds must be Agency. The elimination of this
requirements of 7 CFR part 1940, available, if requested. requirement will reduce both the
subpart G. Under the current regulation, the grantee and the Agency’s workload.
The proposed rule will add the State Director may designate a grantee (g) Family Labor Contribution: The
requirement for applicants to submit a ‘‘High Risk’’ based on quarterly reports current regulation (7 CFR 1944.403),
credit report fee to the Agency to obtain and comments received from Agency ‘‘participating family’’ requires
a commercial credit report on their field staff (7 CFR 1944.417(b)). Under participating families to contribute at
behalf (§ 3551.55(b)(9). This report will the proposed rule, greater emphasis is least 65 percent of the labor of the
be used as a tool in determining the being placed on better monitoring at the construction tasks as outlined in Exhibit
financial capacity of the applicant and early stages of a grantee’s project (7 CFR B–2 of 7 CFR part 1944. This method of
may be waived by the State Director if 3551.153). This rule proposes that at measurement is open to a wide variety
the applicant is an existing grantee or if any time it appears the grantee is not of interpretation by grantees, meaning
the Agency already obtained a report for meeting performance goals or is not that the amount of labor actually
a predevelopment grant. This will assist complying with program requirements, contributed by participating families
the Agency in assuring that only highly counseling must be initiated by Rural may vary greatly from grantee to
qualified applicants are funded. Development or its agent. This grantee. The proposed rule changes the
(f) Grantee Responsibility and counseling must advise the grantee of family labor contribution to meet a
Performance: The proposed rule places problems or concerns noted and provide minimum of at least 50 percent of the
more focus on and clarifies the the grantee with a reasonable time to total 100 percent labor required (7 CFR
eligibility requirements and standards return to a satisfactory rating. A ‘‘High 3551.7(b)(1)). This percentage was
for evaluating grantee performance as Risk’’ designation cannot be made until derived from surveying non-profit
discussed below. These changes will this process has taken place and only if organizations that currently participate
improve program management and the grantee did not address the issue in this type of program and participating
families. It is extremely difficult for CFR 1944.410(d)). The proposed rule rehabilitation grants will continue to be
participating families to work a regular increases the pre-development grant honored according to their existing
forty hour work week and then be limit from $10,000 to $15,000 (7 CFR grant agreements. This change will not
required to perform 65 percent of the 3551.206(a). This increase better reflects have a significant impact on applicants
labor requirements, which calculates to the costs required for pre-development because similar programs are available
approximately thirty hours per week. grantees to plan and prepare for the to accommodate the requests, and there
We have determined this is too operation of a MSH program in all rural has been little to no demand for this
burdensome on the participating areas. service under the MSH program.
families and difficult for the non-profit (i) Audits: Under the current (k) Site Option Loans: The current
organizations to accurately record. The regulation (7 CFR 1944.422(a) and (b)), regulation includes authority for site
required 100 percent labor task list will State and local governments, Indian option loans to grantees to establish
be provided in the agency handbook tribes, and nonprofit organizations that revolving funds to obtain options on
available in any Rural Development receive less than $25,000 a year in land for families participating in the
office. This task list will be more Federal financial assistance are exempt MSH program (7 CFR part 1944, subpart
detailed than the current Exhibit B–2 from the Federal annual audit I, Exhibit F). The proposed rule removes
contained in 7 CFR part 1944, subpart requirement. The proposed rule makes a authority for site option loans as
I. Each individual task will be assigned technical correction to amend the obsolete. These loans have not been
a percentage and will clearly identify threshold for exemption from $25,000 to funded and requests for this service
the labor that can be completed by the $300,000 a year (7 CFR 3551.103(c)(3)) have been nonexistent for several years,
family under that task in order to consistent with the Departmental therefore; there will be no impact by
receive that percentage of work requirements of 7 CFR part 3052. Other this change. The Rural Development
completed. The changes proposed in monitoring requirements of 7 CFR parts Section 524 Site Loan Program is still
this rule will provide a more objectively 3015, 3016, and 3019 continue to apply. available.
measurable labor requirement and (j) Rehabilitation Projects: The current
Regulatory Crosswalk
establish more consistency among regulation includes rehabilitation of
grantees. homes as an eligible activity (7 CFR The following is a crosswalk which
(h) Pre-development Grants: The 1944.407(d)). The proposed rule indicates where subjects can be found
current regulation sets a pre- eliminates any type of rehabilitation as under the current regulation and under
development grant limit at $10,000 (7 an eligible activity. Existing the proposed 7 CFR part 3551.
Located in 7
Topic Current location 7 CFR part 1944 CFR part 3551
General Subpart I Subpart A
Objective and Purpose ............................................................... § 1944.401 and § 1944.402 ........................................................ § 3551.2

Construction Standards .............................................................. § 1944.424 .................................................................................. § 3551.7
Executive Order 12372 ............................................................... § 1944.409 .................................................................................. § 3551.8
Definitions ................................................................................... § 1944.403 .................................................................................. § 3551.10
Operating Grant Subpart B
Eligibility requirements ................................................................ § 1944.404 and § 1944.421 ........................................................ § 3551.51

Authorized use of funds .............................................................. § 1944.405 .................................................................................. § 3551.52
Prohibited use of funds ............................................................... § 1944.406 .................................................................................. § 3551.53
Technical assistance grant amounts .......................................... § 1944.407 .................................................................................. § 3551.54
Application submission and processing ...................................... § 1944.410; § 1944.411; § 1944.412; § 1944.413; § 1944.415; § 3551.55
and § 1944.416.
Grantee Responsibility Subpart C
Recruitment and education ......................................................... Numerous ................................................................................... § 3551.101

Construction supervision ............................................................. None ........................................................................................... § 3551.101
Accounting for 502 loan funds .................................................... § 1944.425 .................................................................................. § 3551.101
Request for payments ................................................................. § 1944.417 .................................................................................. § 3551.102
Audit requirements ...................................................................... § 1944.422 .................................................................................. § 3551.103
Grant Servicing Subpart D
Grant agreement amendment ..................................................... § 1944.420 .................................................................................. § 3551.151

Grantee monitoring ..................................................................... § 1944.417 .................................................................................. § 3551.152
Grantee performance .................................................................. § 1944.417 and § 1944.419 ........................................................ § 3551.153
Grant suspension and termination .............................................. § 1944.426 .................................................................................. § 3551.154
Grant closeout ............................................................................. § 1944.426 .................................................................................. § 3551.155
Predevelopment Grants Subpart E
Eligibility requirements ................................................................ § 1944.404 .................................................................................. § 3551.202

Authorized use of funds .............................................................. § 1944.410 and § 1944.415 ........................................................ § 3551.203
Prohibited use of funds ............................................................... § 1944.406 .................................................................................. § 3551.204
Application submission and processing ...................................... § 1944.410; § 1944.412; § 1944.413; § 1944.415; and § 3551.205
§ 1944.416.
Grant terms ................................................................................. § 1944.410; and § 1944.415 ....................................................... § 3551.206
Located in 7
Topic Current location 7 CFR part 1944 CFR part 3551
Predevelopment Grants Subpart E
Grant close out ........................................................................... § 1944.426 .................................................................................. § 3551.207
List of Subjects Subpart B—Technical Assistance Grant § 3551.2 Purpose.

Application and Approval The Mutual and Self-Help Housing
7 CFR Part 1944
3551.51 Eligibility requirements. program funds organizations to assist
Home improvement, Loan programs— 3551.52 Authorized technical assistance very-low and low-income families in
Housing and community development, grant uses. obtaining home financing and building
Low and moderate income housing— 3551.53 Unauthorized technical assistance their new homes, located in rural areas,
grant uses.
Rental, Mobile homes, Mortgages, using the mutual self-help method of
3551.54 Technical assistance (TA) grant
Subsidies. amounts.
construction as described in 7 CFR part
3551.55 Application submission and 1924, subpart A. To achieve this
7 CFR Part 3551
processing. purpose, Rural Development may make
Home improvement, Loan programs— 3551.56–3551.99 [Reserved] available:
Housing and community development, 3551.100 OMB Control number [Reserved] (a) Technical assistance (TA) grant
Low and moderate income housing— funds to support programs of technical
Subpart C—Technical Assistance Grantee
Rental, Mobile homes, Mortgages, Responsibilities and supervisory assistance.
Subsidies. (b) Predevelopment grant funds to
3551.101 Provision of technical assistance.
support the development of a technical
For the reasons set forth in the 3551.102 Request for payment.
assistance grant application package.
preamble, Chapters XVIII and XXXV, 3551.103 Audit requirements.
3551.104–3551.149 [Reserved] (c) Grant or contract funds to
title 7, Code of Federal Regulations are
3551.150 OMB Control number [Reserved] Technical and Management Assistance
proposed to be amended as follows:
providers for the following services:
CHAPTER XVIII—RURAL HOUSING Subpart D—Technical Assistance Grant (1) Disseminate information about the
SERVICE, RURAL BUSINESS- Servicing
Mutual and Self-Help Housing program;
COOPERATIVE SERVICE, RURAL UTILITIES 3551.151 Grant agreement amendment. (2) Assist prospective grantees with
SERVICE, AND FARM SERVICE AGENCY, 3551.152 Grantee monitoring. their organizational and grant
DEPARTMENT OF AGRICULTURE 3551.153 Grantee performance.
application efforts;
3551.154 Grant suspension and
PART 1944—HOUSING termination. (3) Assist predevelopment grantees
3551.155 Grant close out. with the development of their technical
1. The authority citation for part 1944 3551.156–3551.199 [Reserved] assistance grant application packages;
continues to read as follows: 3551.200 OMB Control number [Reserved] (4) Assist technical assistance
Authority: 5 U.S.C. 301; 42 U.S.C. 1480.
grantees in achieving the goals of the
Subpart E—Predevelopment Grants
Mutual Self-Help Program; and
3551.201 General. (5) Assist Rural Development in
Subpart I of Part 1944—[Removed] 3551.202 Eligibility requirements. reviewing predevelopment grant and
3551.203 Authorized predevelopment grant
2. Subpart I of part 1944 is removed uses.
technical assistance grant applications,
and reserved. 3551.204 Unauthorized predevelopment evaluating grantee performance, and
CHAPTER XXXV—RURAL HOUSING grant uses. performing other financial and
SERVICE, DEPARTMENT OF 3551.205 Application submission and administrative responsibilities.
AGRICULTURE processing.
3551.206 Terms of the predevelopment § 3551.3 Standards of conduct.
3. A new part 3551, consisting of grant. (a) Prohibition on lobbying. Grantees
subparts A through E, is added to read 3551.207 Predevelopment grant close out. must comply with all restrictions on
as follows: 3551.208–3551.249 [Reserved] lobbying in accordance with 7 CFR part
3551.250 OMB Control number [Reserved] 3018 and Rural Development
PART 3551—MUTUAL AND SELF- Instruction 1940–Q.
Authority: 5 U.S.C. 301: 42 U.S.C. 1480.
HELP HOUSING PROGRAM (b) Conflict of interest restrictions. (1)
Subpart A—General Subpart A—General Applicants must identify any known
Sec.
relationship or association with an
§ 3551.1 Applicability.
3551.1 Applicability. employee of Rural Development.
3551.2 Purpose. This part contains the policies and the (2) Unless Rural Development grants
3551.3 Standards of conduct. requirements for applicants, grantees, a waiver, grantees must not hire any
3551.4 Civil rights and equal employment and contractors who participate in the person in a staff position/contractor or
opportunity. Mutual and Self-Help Housing program work with anyone as a participating
3551.5 Reviews and appeals. as authorized under Section 523 of the family if that person or a member of that
3551.6 Environmental requirements. Housing Act of 1949, as amended (42 person’s household is employed by
3551.7 Construction requirements. U.S.C. 1490c). Copies of applicable Rural Development.
3551.8 Compliance with other Federal,
State and local requirements.
regulations, Rural Development (c) Identity of interest. (1) Grantees’
3551.9 Exception authority. Instructions, Handbooks (HB), board members and employees and their
3551.10 Definitions. Department Regulations (DR), and forms immediate households must not directly
3551.11–3551.49 [Reserved] referenced in this part are available in or indirectly participate, for financial
3551.50 OMB Control number [Reserved] any Rural Development office. gain, in any transactions involving the
grantee organization or participating § 3551.5 Reviews and appeals. compliance with the requirements of 7
families. Whenever Rural Development makes CFR part 1924, Subpart A.
(2) Grantees’ board members must not a decision that is adverse to a (b) Participating families must agree
be compensated by the grantee as participant, Rural Development will to work together to perform labor on
employees, consultants, or independent provide the participant with written their homes in a mutual effort.
contractors. notice of such adverse decision and the (1) Each family in the group must
(d) Financial transactions with participant’s rights to a USDA National contribute labor on each other’s homes
participating families. With the Appeals Division hearing in accordance to accomplish a minimum of 50 percent
following exceptions, any savings with 7 CFR part 11. Any adverse of the total 100 percent labor required.
realized by the grantee on behalf of a decision, whether appealable or non- The labor task list is available in any
participating family, such as through appealable, may be reviewed by the next Rural Development office.
bulk purchases, must be passed on to level Rural Development supervisor. (2) A participating family may use
the participating family. substitute labor to perform their
§ 3551.6 Environmental requirements. required 50 percent labor only when a
(1) Grantees may sell lots to
participating families at a price up to (a) All processing and servicing participating family member is
the fair market value of the lot as actions provided under this part are physically or mentally incapable of
determined by independent appraisal. subject to the appropriate level of performing the required labor and with
(2) Grantees also may pass on to a environmental review conducted in prior written approval by the grantee
participating family any holding costs accordance with the requirements of 7 and Rural Development.
related to the purchase, acquisition, and CFR part 1940, subpart G, or successor (3) Volunteer labor is permissible in
development of a participating family’s regulation. conjunction with the family labor but
lot, so long as those costs do not result (1) Rural Development also will cannot replace the 50 percent family
in land costs that exceed the fair market review scattered sites and sites in labor requirement.
value of a comparable site. existing subdivisions individually.
§ 3551.8 Compliance with other Federal,
(3) Grantees may provide small tools (2) Rural Development will also State and local requirements.
for family’s use in construction at a review building sites located in a new
The grantee must comply with all
reasonable cost to the families. The cost subdivision in which five or more lots
applicable Federal, State and local
may not exceed fair market value of the will be used for this program with an
requirements, including the following:
tools plus a 10% (ten percent) fee for environmental review in accordance
(a) Intergovernmental review. For the
handling. with 7 CFR part 1940, subpart G that
reasons set forth in 7 CFR part 3015,
(e) Gifts and gratuities. Grantees’ covers all available lots in the
Subpart V, the Mutual and Self-Help
board members, officers, employees, or subdivision. If more than one
Housing program is subject to Executive
agents must neither solicit nor accept subdivision meeting this criterion is
Order 12372 which calls for an
gratuities, favors, or any item of involved, each will be subject to the
intergovernmental partnership with
monetary value from suppliers, same level of environmental review.
state and local officials. Under RD
contractors, or others doing business (b) Environmental due diligence will
Instruction 1940-J, the Agency will
with the grantee. be used on all properties by evaluating
provide opportunities for consultation
for potential contamination from
§ 3551.4 Civil rights and equal by elected officials of those state and
hazardous wastes, hazardous materials,
employment opportunity. local governments that would provide
petroleum products or other materials
(a) Civil rights. Grantees must comply the non-Federal funds for, or that would
having potential for a detrimental effect
with all applicable civil rights laws and be directly affected by this program.
on valuation or usability of the property.
USDA regulations found in 7 CFR parts (b) Federal assistance regulations 7
15, 15a, and 15b. § 3551.7 Construction requirements. CFR parts 3015, 3016, and 3019. 7 CFR
(a) Homes constructed under the part 3015 applies to all Mutual and Self-
(b) Equal employment opportunity. (1)
Mutual and Self-Help Housing program Help Housing program applicants. In
In all hiring or employment made
must be modest and meet the following addition, public agencies must comply
possible by or resulting from funding
requirements: with 7 CFR part 3016, and private
provided by Rural Development, the
(1) The construction must be nonprofit organizations must comply
grantee must:
performed in accordance with 7 CFR with 7 CFR part 3019, as applicable.
(i) Not discriminate against any
employee or applicant for employment part 1924, subpart A, including the § 3551.9 Exception authority.
because of race, religion, color, sex, model building code adopted by the A Rural Development official may
marital status, national origin, age, or Rural Development State Office under request, and the Administrator or
mental or physical disability; and this part; designee may make, an exception to any
(ii) Take affirmative action in (2) The design and construction must requirement of this part if it does not
employing applicants and ensure that meet the dwelling requirements of 7 conflict with applicable statutes and the
employees are treated during CFR part 3550, subpart B; Administrator or designee determines
employment without regard to their (3) The sites and site development that application of the requirement or
race, religion, color, sex, marital status, work must conform to 7 CFR part 1924, provision, or failure to take action in the
national origin, age, or mental or subpart C; case of an omission, would adversely
physical disability. (4) The construction must meet all affect the Government’s interest.
(2) If the grantee signs a contract with applicable State and local construction
another person or firm and the contract requirements. The more restrictive § 3551.10 Definitions.
is covered by an Executive Order, law, standard shall govern in the case of Administrator. The official of the
or regulation prohibiting discrimination, conflicts between local, State, and Rural Rural Housing Service within the Rural
the grantee must include in the contract Development requirements; and Development mission area (or official of
the Equal Opportunity Clause published (5) All work by contractors and its successor agency) delegated
at 41 CFR 60–1.4(a) and (b). subcontractors must be warranted in authority by the Secretary of the U.S.
Department of Agriculture (USDA) to number of equivalent units for any for the direct single family housing
administer the Agency and its programs. group can never exceed the number of programs. It is codified at 42 U.S.C.
Applicant. An organization that planned or completed units for that 1471, et seq.
submits an application for a section 523 group. HUD. The U.S. Department of
technical assistance grant or Equivalent value of a modest house. Housing and Urban Development.
predevelopment grant. The typical cost of a recent contractor- Indian reservation. All land located
Approving Official. The approving built modest home in the area financed within the limits of any Indian
official for the purposes of this part will by Rural Development plus the actual or Reservation under the jurisdiction of the
be the Rural Development State projected costs of an acceptable site United States notwithstanding the
Director. including site development. If Rural issuance of any patent and including
Board of directors. The governing Development has not financed a rights-of-ways running through the
body of an organization and its contractor-built house during the last 12 reservation; trust or restricted land
members. months, the value is established by located within the boundaries of a
Borrower. An applicant who has using data obtained from a nationally former reservation of a Federally
received a loan from Rural recognized residential cost provider. recognized Indian tribe in the State of
Development. Rural Development will establish the Oklahoma; or all Indian allotments, the
Bylaws. Rules adopted by an equivalent value of a modest house to titles to which have not been
organization to govern the conduct of its calculate maximum technical assistance extinguished if such allotments are
affairs. grant amounts in accordance with subject to the jurisdiction of a Federally
Close out. The process of taking final § 3551.54(b). recognized Indian tribe.
action connected with a completed or Existing grantee. Unless otherwise Indirect costs. Those costs that are
terminated grant, including closing of specified, a grantee that is currently incurred for common or joint objectives
grantee accounts, auditing grantee operating a technical assistance grant and therefore, cannot be readily
expenditures, and completing final from Rural Development. identified with a particular project or
reports. EZ/EC/REAP areas. Empowerment activity.
Colonias. A community that meets the Zones, Enterprise Communities, and Leveraged assistance. Non-Rural
criteria established in 7 CFR part 1940, Rural Economic Area Partnership areas Development financial assistance such
subpart L, exhibit C, or successor are designated areas in which as grant or loan funds, from a
regulation. communities are targeted for recognized source, which is combined
Completed unit(s). A home in which opportunities for growth and with Rural Development financial
100 percent of construction has been revitalization, including economic assistance to accomplish a Mutual and
completed and a final inspection has opportunity, sustainable community Self-Help housing program purpose.
been made or a Certificate of Occupancy development, community-based Low-income. An adjusted income that
has been issued. partnerships, and strategic planning in is greater than the HUD established very
Custodial account. A bank account accordance with 7 CFR part 25. low-income limit, but that does not
controlled by a grantee on behalf of a Family labor contribution. The exceed the HUD established low-income
participating family. amount of labor a participating family limit (generally 80 percent of median
Debarment. A determination that a provides for construction of homes income adjusted for household size) for
party is ineligible to participate in, or within a group. The amount of labor a the county or Metropolitan Statistical
receive assistance under Federal family contributes to the construction of Area where the property is or will be
programs in accordance with 7 CFR part their home assists in determining the located.
3017. amount of equity in the home at the Members’ Agreement. The Rural
Environmental review. The time of closing. Development form that serves as a
environmental analysis required by the Final grantee evaluation. An written contract signed by the grantee
National Environmental Policy Act and evaluation performed by Rural and the participating families to
7 CFR part 1940, subpart G (or successor Development at the end of the grant establish each party’s responsibilities
regulation). period to determine whether the grantee and obligations in the construction of
Environmental due diligence. The met its projected performance goals and the participating families’ homes.
process of evaluating real estate for complied with program requirements. Modest housing. See 7 CFR 3550.10.
potential contamination by hazardous Grant agreement. The contract signed Multi-funded applicants. Applicants
wastes, hazardous materials, petroleum by the grantee and Rural Development, who receive some type of funding from
products or other materials having a on the appropriate Agency form, that Rural Development and other funding
detrimental effect on valuation or use of contains the terms and conditions under sources.
a property. which technical assistance funds are Mutual self-help (MSH) method of
Equivalent unit(s). Equivalent units being made available. construction. A group of families
are useful in measuring progress during Grantee. An organization with which working together to provide mutual
the period of the grant and are not a Rural Development has closed a section labor in constructing their homes under
measurement of actual 523 technical assistance or the direction of a construction
accomplishments or completed units. predevelopment grant. supervisor.
Equivalent units represent the High risk. A designation that may be Notice of Funding Availability
‘‘theoretical number of units’’ arrived at placed on a grantee for noncompliance (NOFA). An announcement published
by adding the equivalent percentage of with the grant agreement and/or failure in the Federal Register announcing that
construction complete for each family in to meet requirements of this part. funds are available for specific programs
the self-help program together at any Household. All persons expected to and outlining the process for
given date during construction. The sum be living in the dwelling, except for submission and processing of
of the percentage complete for all live-in aids, foster children, and foster applications.
participating families represents the adults. Organization. A state or political
total number of ‘‘theoretical units’’ Housing Act of 1949, as amended. subdivision, public nonprofit
completed at any point in time. The The Act which provides the authority corporation, tribes or tribal
corporations, or private nonprofit fees, and adding any additional §§ 3551.11–3551.49 [Reserved]
corporations. financing such as grants which reduces § 3551.50 OMB Control number.
Participating family. A household that the total debt to the participating family. [Reserved]
has executed a Members’ Agreement
Specialty tools. Specialty tools are
pertaining to a Mutual and Self-Help Subpart B—Technical Assistance
those tools needed to complete the
Housing program and, thereby, Grant Application and Approval
construction of a home, not including
committed itself to joining with other
households to build each other’s homes hand tools that are commonly needed to § 3551.51 Eligibility requirements.
and uphold the requirements of the maintain a home, such as hammers, To be eligible for a Mutual Self-Help
program. screwdrivers, tape measures, pliers, and technical assistance grant, an applicant
Program requirements. Requirements wrenches. Specialty tools include, but must meet all of the following
set forth in any loan or grant document, are not limited to, power saws, electric requirements:
agreement, statute, or regulation drills, saber saws, ladders, and (a) Be an organization that qualifies as
applicable to the Mutual and Self-Help scaffolds. one of the following:
Housing program. Sponsor. An existing entity that is (1) A state or a political subdivision
Production based. When a grant is thereof;
willing and able to assist an applicant, (2) A public nonprofit corporation,
approved based on technical assistance with or without charge, in applying for
cost for a proposed number of including tribes or tribal corporations,
a grant and in carrying out that is in good standing with the State
equivalent units to be started during the responsibilities of the grant agreement.
grant cycle. or States in which it operates; or
Reasonable costs. A cost is reasonable Substitute labor. A person(s) who (3) A private nonprofit corporation
if, in its nature and amount, it does not substitutes their labor for a participating that is organized and operated for
exceed that which would be incurred by family member’s labor. purposes other than making gains or
a prudent person under the profits for the corporation; and that
Supervised bank account. A bank (i) Does not distribute any gains or
circumstances prevailing at the time the account established through deposit
decision was made to incur the cost. To profits to its founders, members, or
agreements between the borrower, Rural contributors;
be considered reasonable, costs must Development, and the financial (ii) Is properly organized under state
meet all of the following conditions: institution. Rural Development monitors and local or Tribal laws;
(1) The cost is of a type generally
and maintains control of the account in (iii) Is qualified under section 501(c)
recognized as ordinary and necessary
accordance with 7 CFR part 1902, (3) or section 501(c)(4) of the Internal
for the operation of the organization or Revenue Code of 1986;
the performance of the Federal award. subpart A.
(iv) Has the production of affordable
(2) The cost meets the restraints or Technical and management
housing as one of its purposes, as
requirements imposed by such factors as assistance provider. An organization evidenced by its charter, articles of
sound business practices; arms-length which receives Rural Development incorporation, resolutions, or by-laws;
bargaining; Federal, State, and other funding to provide services to Rural (v) Has a board of directors with at
laws and regulations; and terms and Development and training and least five members, one-third of whom
conditions of the award. management assistance to grantees and are very low or low income, their
(3) Market prices for similar goods or prospective grantees. elected representatives, or residents of a
services are comparable. low-income community; and no more
(4) The individuals concerned acted Technical assistance. The organizing
and supervising of groups of families in than one-third of whom are from the
with prudence in the circumstances public sector; and
considering their responsibilities to the the construction of their own homes.
(vi) Is in good standing with the state
organization, its members, employees, Supervision includes counseling and
or states in which it operates.
clients, the public at large, and the assisting families in decision making (b) Have the financial, legal and
Federal Government. and providing training as needed. administrative capacity to carry out the
(5) In incurring the cost, the Tribe. Any Federally-recognized tribe, relevant program requirements. An
organization did not deviate band, pueblo, group, community, or organization may satisfy this
significantly from its established nation of American Indian or Alaska requirement by:
practices and, thereby, unjustifiably natives in accordance with § 501 of the (1) Demonstrating that the
increase the award’s cost. Housing Act of 1949 as amended. organization currently has this capacity
Rural area. The definition of rural or will be sponsored by an organization
area provided in § 520 title V of the Very low-income. An adjusted income that does meet these requirements;
Housing Act of 1949, as amended, (42 that does not exceed the HUD- (2) Receiving an acceptable
U.S.C. 1490) applies to this part. established very low-income limits commercial credit report obtained by
Rural Development (RD). A mission (generally 50 percent of the median Rural Development as a determining
area within the USDA that includes income adjusted for household size) for factor of financial capacity; and
Rural Housing Service (RHS), Rural the county or Metropolitan Statistical (3) Documenting that the organization
Utilities Service (RUS), and Rural Area where the property will be located. has experienced staff members who
Business-Cooperative Service (RBS). Workout agreement. A written have successfully completed similar
Section 502 loan program. A Rural projects or has secured a consultant
agreement between a grantee and Rural
Development single family housing loan with similar experience who will assist
Development describing actions to be

program. (See 7 CFR part 3550) and train appropriate key staff members
Self-Help construction cost. The cost taken over a period of time to correct a
of the organization.
of constructing a home under the program compliance violation or (c) Agree to administer a Mutual and
Mutual and Self-Help Housing program. problem identified by Rural Self-Help Housing program in which:
This cost is calculated as the total debt Development or the grantee. (1) No fewer than five homes are
to the participating family, subtracting simultaneously built by participating
land costs, closing costs and impact families in a mutual effort;
(2) At least 40 percent of the the cost principles outlined in 7 CFR excluded by § 3551.53. Written approval
participating families are very low- parts 3015 and 3016, as applicable. for any other such costs must be
income and all of the participating (b) The following expenses are obtained in writing from Rural
families are either low-or very low- authorized technical assistance grant Development prior to expenditures.
income; uses:
(3) The participating families will (1) Payment of salaries for consultants § 3551.53 Unauthorized technical
have equity in their homes of at least 10 and personnel to carryout required assistance grant uses.
percent of the appraised market value of functions as authorized by this part and Grantees must repay any funds that
their homes at completion; provided in the Grant Agreement; are used for unauthorized purposes.
(4) The participating families meet the (2) Payment of employee benefit costs Unauthorized technical assistance grant
minimum family labor contribution including, but not limited to, worker’s uses include:
requirement of at least 50 percent of the compensation, employer’s share of (a) Payment of any cost that is not
total 100 percent labor required; Social Security, health benefits, and a directly related to the purposes of the
(5) The grantee obtains general tax-deferred pension plan for permanent Mutual and Self-Help Housing program;
liability insurance coverage, in an employees; (b) Payment of any personnel hired to
amount sufficient to cover the proposed (3) Payment of office expenses such as perform any of the construction work
projects, for activities associated with office rental, office utilities, and office that is the responsibility of the
the Mutual and Self-Help Housing equipment, including computers and participating families as specified in the
program; and computer software. Office equipment approved Member’s Agreement;
(6) All requirements of this part are may be purchased rather than rented if (c) Purchase of real estate or property
met. the grantee determines that the cost of of any kind for the participating
(d) Propose to serve a rural area which purchasing is less than the cost of families;
is not currently being served by an renting equipment for the duration of a (d) Purchase of any building materials
existing grantee other than the single grant period; for the participating families;
applicant. (4) Purchase of office supplies (e) Payment of any expense associated
(e) Not be suspended, debarred, or necessary to function as an organization, with the administrative appeal of an
excluded from participation in Federal such as paper, pens, and pencils; adverse decision by the grant applicant
programs based on the ‘‘List of Parties (5) Payment for the cost of or grantee;
Excluded from Federal Procurement and establishing an accounting system and (f) Payment of any obligations that
Nonprocurement Programs.’’ obtaining audits in accordance with were incurred prior to the date of the
(f) In addition to the requirements of § 3551.103; execution of the grant agreement or after
this section, existing grantees must meet (6) Payment of fees for training the grant termination date; and
the following eligibility criteria: grantee personnel for skills directly (g) Payment of any expenses not
(1) Have received at least a related to the execution of a Mutual and authorized by § 3551.52.
satisfactory rating on the most recent Self-Help Housing activity;
final grantee evaluation performed by (7) Payment of board members’ travel § 3551.54 Technical assistance (TA) grant
Rural Development; and expenses to attend board meetings; amounts.
(2) Be operating successfully on the (8) Purchase, lease, or maintenance of (a) Rural Development will award
current grant, or is designated as ‘‘High equipment or power or specialty tools only technical assistance grants that:
Risk’’ but is successfully operating used for home construction. Power or (1) Are based on the proposed number
under a workout agreement at the time specialty tools may be purchased rather of homes to be completed;
of the application and closing. than rented if the grantee determines (2) Reflect a reasonable self-help
(g) If operating under a ‘‘production that the cost of purchasing is less than construction cost based on a proposed
based’’ method and proposing to close the cost of renting power and specialty budget;
out the grant with incomplete homes, tools for the duration of a single grant (3) Cover authorized grant uses; and
the applicant must also meet all of the period; (4) Comply with paragraph (b) of this
following requirements: (9) Payment of general liability section.
(1) Have the demonstrated capacity to (b) Rural Development will limit TA
insurance for the grantee organization
close out the grant with incomplete cost to:
for activities associated with Mutual
homes and continue to meet all program (1) No more than 15 percent of the
and Self-Help Housing;
requirements; (10) Payment of costs associated with equivalent value of a modest house in
(2) Have closed out at least two the subject area, comparable in size and
assisting Rural Development in
technical assistance grants with Rural design, for each home that is to be
obtaining necessary information to
Development; constructed. This TA grant amount,
(3) Have received at least a complete an environmental review for a
group of participating families, such as when added to the Self-Help cost of
satisfactory rating on their most recent
delineating wetland areas or performing construction, shall not exceed the
final grantee evaluation, and are not
an archeological survey, when equivalent value of a comparable
currently designated ‘‘High Risk’’ or
necessary; modest home in the area.
operating under a workout agreement; (2) The State Director may consider
(4) Be a multi-funded applicant; and (11) Payment of legal costs, with prior
(5) Propose that no more than 10 Rural Development approval, to resolve approval of a TA cost that exceeds 15
percent of the homes to be constructed legal issues that are directly impeding or percent but is not greater than 20
will be incomplete at grant close out delaying the Mutual and Self-Help percent, when at least one of the
and that all incomplete homes will be Housing construction effort, excluding following conditions exist: (i) No Rural
completed during the new grant cycle. any legal fees associated with any action Development contractor built homes
against the Federal government; and have been built in the past 12 months
§ 3551.52 Authorized technical assistance (12) Payment of other reasonable costs in the area and the cost to construct a
grant uses. that are associated with the execution of modest home is obtained by Rural
(a) All grant funds must be used for a Mutual and Self-Help Housing Development from a nationally
reasonable costs and in accordance with program objective and not specifically recognized residential cost provider.
(ii) Special conditions in the (ii) A certified copy of the applicant’s (iii) Whether there is any known
marketplace, locality, participant Articles of Incorporation and Bylaws or relationship or association between the
situations or labor rates require other evidence of corporate existence, if applicant and a Rural Development
additional costs. Such conditions will the applicant is a corporation; employee;
be documented in writing by the grantee (iii) If not a public body, a certificate (iv) Certification and disclosure of any
prior to Rural Development approval. of incorporation; lobbying activities on the appropriate
(c) The Administrator may revise (iv) If not a public body, a tax exempt Agency forms;
these grant ceilings in exigent certification under IRS 501(c)(3) or (v) That final drawings and
circumstances through a prior notice 501(c)(4); specifications are in conformance with
published in the Federal Register. (v) Current (no more than 90 days old) the applicable development standard in
certification that the organization is in accordance with 7 CFR part 1924,
§ 3551.55 Application submission and good standing from the state or states in
processing. subpart A, or any successor regulation;
which the grant is to be awarded; (vi) On the appropriate Agency form,
Rural Development will award (vi) The names and addresses of the
technical assistance grants through a that the organization meets drug-free
applicant’s members, directors, and workplace requirements; and
competitive process in accordance with officers and evidence of those
the following procedure: (vii) On the appropriate Agency form,
authorized by the board to execute legal that the organization has not been
(a) Notification of funding. Rural documents including the grant
Development will publish a Notice of debarred and/or suspended from
agreement; Government assistance.
Funding Availability (NOFA) in the (vii) A dated and signed financial
Federal Register each year that provides (11) A multi-funded applicant must
statement for the organization no more provide its best estimate of its indirect
the following information: than 12 months old.
(1) Notice of funding availability; cost rate or a cost allocation plan in
(4) The applicant must provide
(2) Guidance for obtaining and accordance with 7 CFR parts 3015 and
evidence of need and demand for the
submitting application packages; 3016, as applicable.
(3) How existing and new grantees program and income-eligible families
(12) The applicant must include a
will be awarded points and ranked on who wish to participate in the program.
brief narrative that:
various criteria; (5) The applicant must provide
(i) Specifies the number of homes to
(4) Application deadlines, which will evidence that it controls suitable land
be completed and a proposed technical
be no earlier than 30 days after for the first group of participating
assistance cost which reflects reasonable
publication of the notice; families and has access to land for the
costs for the area, and
(5) How selections will be made in the remaining families who will be served
(ii) Describes the extent to which the
event of a tie between applicants; and under the grant.
(6) The applicant must provide a application meets the criteria for
(6) If applicable, any special scoring preference established in this section or
criteria, funding limitations, or other program budget, in a format and form
approved by the Agency, detailing how any NOFA.
requirements designated by the (13) If the grantee is using a sponsor,
Administrator for the grant cycle. they plan to spend the technical
assistance grant funds. they must provide the sponsor’s name,
(b) Application requirements. The
(7) The applicant must provide address, experience, ability, and a
applicant must submit a complete
architectural plans, specifications, and written agreement to assist.
application that meets Rural
an estimate of reasonable costs to build (14) An applicant must provide a
Development requirements set forth in
this part and the NOFA. At a minimum, the house. comprehensive plan for outreach to
the following documentation is (8) The applicant must provide a very-low income families.
required: monthly activities schedule that (15) An applicant must provide a
(1) The applicant must submit an describes how the program will be copy of the organization’s standard
Application for Federal Assistance as implemented, including when the personnel practices and procedures.
specified by Rural Development. The participating families are expected to be (c) Scoring and ranking: Rural
application must be signed and dated. qualified and the construction schedule. Development will select applications for
(2) The applicant must provide (9) The applicant, other than a Tribe funding in rank order until the available
evidence of its ability to carry out the or public body, must submit the funds are no longer sufficient to fund an
objectives of the Mutual and Self-Help necessary fee to Rural Development for eligible application. Only applications
Housing program both on an completion of a commercial credit that meet the eligibility requirements of
organizational and staff member basis. report. The credit report will be used as § 3551.51 and contain all the necessary
The applicant need not provide this a tool in determining the applicant’s information required by this section and
item if demonstrated capacity was financial capacity. If a credit report was the NOFA will be accepted. Complete
established through a predevelopment obtained with an awarded and timely submitted applications will
grant awarded within the previous grant predevelopment grant application, or by then be awarded points and ranked
cycle, or if the grantee is an existing an existing grantee, this requirement based on the criteria listed in the NOFA.
grantee with at least a satisfactory rating may be waived by the State Director. The criteria that will be considered may
on the most recent final grantee (10) The applicant must provide the include any or all of the following:
evaluation. following certifications: (1) Will serve areas with special needs
(3) The applicant must provide the (i) Compliance with civil rights such as state designated targeted
following organizational documents statutes and regulations; counties, tribal lands, colonias, or
unless the applicant is an existing (ii) That a Statement of Activities EZ/EC/REAP areas that are not in a state
grantee and the item has not been describing the proposed Mutual and designated targeted county;
changed since last submitted to Rural Self-Help Housing activity has been (2) Will provide an equal amount of
Development: submitted to the state single point of technical assistance at a lesser cost per
(i) A copy of, or accurate reference to, contact in accordance with Executive unit relative to other applications;
the specific provisions of state law Order 12372 on intergovernmental (3) Will serve states that have had no
under which the applicant is organized; consultation; MSH grants within the past five years;
(4) Obtained a satisfactory (10) The applicant must assist Rural and construction material cost
performance evaluation in the last grant Development to adequately address any estimates.
cycle; findings in the Civil Rights Impact (c) Construction supervision. (1)
(5) Will have leveraged assistance Analysis Certification prepared by Rural Ensure that the participating families’
home financing for participating Development. homes meet the construction
families; (11) Grantee must address any requirements of § 3551.7;
(6) Will have leveraged assistance to environmental issues found by the (2) Ensure that participating families
provide the technical assistance Agency during an environmental have adequate insurance protection that
provided under this part; review, if required, and take the includes liability coverage;
(7) Will exceed the minimum family necessary steps to correct them. (3) Provide construction supervision
labor contribution requirement; and (12) The applicant must provide an and training for families;
(8) Meets other criteria that the Assurance Agreement indicating their (4) Ensure that the participating
Administrator designates, such as those obligation to follow all civil rights families perform the mutual labor to
that encourage innovation, ensure requirements of the Civil Rights Act of which they agreed in the Members’
geographic diversity, or respond to 1964 and regulations of the Agency. Agreement;
emergency situations. (13) The applicant must meet any (5) Ensure that all homes constructed
(d) Grant closing conditions. Rural other closing conditions specified by the by a group of participating families have
Development will notify the otherwise Agency as needed to meet the been completed before any of those
eligible applicant in writing of any requirements of this part or other homes are occupied;
conditions that must be met prior to the (6) Ensure that all permits for
applicable laws.
closing of the grant. Such conditions construction are obtained from
(e) Grant Closing. When all the
include, but are not limited to, the appropriate local and state agencies;
conditions for grant closing have been
following: (7) Conduct a preconstruction meeting
met, the grantee and Rural Development that includes grantee’s construction
(1) The applicant must meet its
will execute the Grant Agreement. The supervisor, all major contractors and the
staffing needs.
(2) The applicant must agree in grant term will be for a 24 month period family participants to ensure that all are
writing to comply with all Federal and will begin on the date of the first aware of the contractual requirements,
statutes and the requirements of 7 CFR transfer of funds to the grantee. The schedules, responsibilities and working
parts 3015, 3016, and 3019, as State Director is authorized to approve relationships on the job site. Rural
applicable, such as: grants in the amount of $300,000 or less. Development will be provided notice of
(i) Fidelity bonding, Grant requests exceeding $300,000 must the meeting(s) and may attend at their
(ii) Worker’s compensation insurance, be submitted to the National Office for option;
(iii) General liability insurance, and approval. (8) Ensure that all inspections
(iv) Accounting and recordkeeping. required by applicable building codes
(3) The applicant must be authorized §§ 3551.56–3551.99 [Reserved]
and local agencies are called for in a
by its Board of Directors to execute the § 3551.100 OMB Control number. timely manner; and
Grant Agreement with Rural [Reserved] (9) Conduct periodic inspection of the
Development. work with the families and
(4) The applicant must establish an Subpart C—Technical Assistance subcontractors to ensure that all work is
interest-bearing checking account that Grantee Responsibilities completed properly.
requires the signatures of at least two (d) Financial supervision for
bonded officials to sign all checks § 3551.101 Provision of technical
assistance. participating families with section 502
which comply with 7 CFR part 3019 and loans. (1) Monitor participating families’
Departmental Regulation 2120–1. Grantees are responsible for
section 502 loan funds in supervised
(5) The applicant and the organizing and supervising groups of
bank accounts. Rural Development may
participating families must develop a participating families in the mutual approve the use of custodial accounts
Members’ Agreement that describes the construction of their homes by for existing grantees. In either case,
responsibilities of the grantee and the performing the following activities: debits and credits must be tracked
participating families, including a (a) Recruitment and education. (1)
separately for each participating
description of the tasks that will be Conduct outreach activities to recruit family’s account; and
performed by each of the participating participating families, with preference (2) Ensure that contractors and
families. being given to applicants with very low material suppliers are paid by the
(6) The applicant must show evidence income; participating families.
that the first group of participating (2) Provide information to potential (e) Post-closing meeting. Hold at least
families has qualified for mortgage applicants fully explaining the Mutual one post-closing meeting with
financing. and Self-Help Housing program; and participating families to ensure they
(7) The applicant must provide a (3) Assist families in applying for understand the responsibilities of
schedule of how payments will be home financing, including obtaining homeownership including the loan
drawn upon. Generally, this is done on and assisting in the completion of the payment process, escrowing of taxes
a monthly basis. necessary loan application package. and insurance and home maintenance.
(8) The applicant must provide Rural (b) Counseling. (1) Homeownership (f) Environmental requirements. The
Development with a complete set of education must be provided to the applicant will assist Rural Development,
certified building specifications for each participating families with certification as necessary, in the gathering of
model home to be built. of completion submitted to the Agency information for the environmental
(9) The applicant must provide an in accordance with 7 CFR part 3550; review of applications filed by the
Affirmative Fair Housing Marketing (2) Counsel and assist participating participating families.
Plan (AFHMP) as required in 7 CFR part families in selecting suitable and
1901, subpart E, or successor regulation. modest housing designs; and § 3551.102 Request for payment.
The AFHMP shall be approved by the (3) Counsel and assist participating (a) The grantee must request funding
appropriate Rural Development official. families in determining their contracting disbursements from Rural Development
on the appropriate Agency form, prior to § 3551.104–3551.149 [Reserved] grantee evaluation to determine the
the end of the month to obtain funds for following:
§ 3551.150 OMB Control number
the upcoming month. (1) If the grantee met the
[Reserved]
(b) The grantee must provide Rural commitments made in the initial
Development with documentation of Subpart D—Technical Assistance application upon which the grant was
projected and actual costs to justify the Grant Servicing awarded;
requested payment. (2) If the grantee met the performance
(c) By the tenth of the month, the § 3551.151 Grant agreement amendment. goals of the grant agreement; and
grantee must provide financial (a) Rural Development may approve a (3) If the grantee complied with
information and a progress report for the grantee’s written request for a Grant program requirements under this part.
previous month. The progress report Agreement amendment only to modify § 3551.153 Grantee performance.
will be gathered from an approved Rural the grant amount and/or the grant
If it is determined by Rural
Development tracking system used by period.
Development, at any time during the
grantees to track their progress. Progress (b) Rural Development may approve
grant cycle, that a grantee is not meeting
will be based on equivalent units as such an amendment only when:
(1) The request is consistent with the the performance goals specified in the
outlined in the grant agreement. Grant Agreement or is not complying
(d) The grantee must provide goals of the program and will not
with program requirements the
documentation that the previous adversely affect the participating
following procedure must be followed:
month’s payments were disbursed families; (a) Counseling must be initiated by
appropriately. (2) The request is within the original
Rural Development or its agent. At a
(e) If the payment request varies from budget for the Grant Agreement,
minimum, counseling will:
the proposed draw schedule, the grantee including the original number of homes (1) Identify the problems and/or
must provide a written statement proposed. Amendments will not be concerns noted by Rural Development,
explaining the reasons for the approved to reduce the number of the contractor, and/or the grantee; and
discrepancy. homes; (2) Give the grantee a reasonable time
(3) The request is made due to to correct any deficiencies noted and
§ 3551.103 Audit requirements. circumstances beyond the grantee’s return to satisfactory performance.
(a) The grantee must submit an annual control; and (b) If after counseling and a
audit for each year of the grant period (4) Adequate funds are available, if reasonable time to correct the problems
within 90 days of the grantee’s fiscal requested. identified, the grantee continues not to
year end. Rural Development may § 3551.152 Grantee monitoring. meet performance goals or comply with
authorize a state or local government Rural Development will monitor the program requirements, Rural
that conducts less frequent audits to grantee’s performance in meeting grant Development will designate the grantee
submit a biennial audit. In such a case, goals and complying with program as ‘‘High Risk’’ and require the grantee
the grantee must submit a biennial audit requirements throughout the grant to develop a workout agreement with
until each year of the grant period has period. The grantee must assist Rural Rural Development. The notice to the
been covered in an audit submitted to Development as necessary to permit the grantee of ‘‘High Risk’’ designation will
Rural Development. The audit must be following monitoring activities: specify the remaining deficiencies that
performed in accordance with Generally (a) Quarterly review of progress. At a must be corrected, provide proposed
Accepted Government Auditing minimum, each quarter Rural remedies, and provide a deadline to
Standards (GAGAS). Development will meet with the grantee complete the workout agreement.
(b) The grantee must submit an audit to review their progress in meeting the (c) Upon expiration of the workout
of the accounts of participating families’ performance goals of the grant as agreement, the grantee shall be
section 502 loan funds if requested by specified in the Grant Agreement and reevaluated and one of the following
Rural Development. monitor compliance with program will occur:
(c) Audits will be conducted as (1) If the deficiencies have been
requirements of this part.
follows: corrected, the ‘‘High Risk’’ designation
(b) Physical inspections of
(1) State and local governments and will be removed and the grantee so
construction. (1) Rural Development
Indian tribes will be audited in notified; or
will inspect the construction sites to
accordance with 7 CFR parts 3015 and (2) If the deficiencies have not been
verify job progress and conditions,
3016, and this subpart. corrected, the grantee will be considered
information provided by the grantee,
(2) Nonprofit organizations will be for suspension or termination as
and the mutual labor contributed by the
audited in accordance with 7 CFR parts described in § 3551.154.
participating families.
3015, 3019, and this subpart. (2) A final inspection of the work will § 3551.154 Grant suspension and
(3) State and local governments, be conducted by all parties to the work: termination.
Indian tribes, and nonprofit grantee, contractors, participating (a) Rural Development may approve a
organizations that receive less than families and Rural Development. This grantee’s written request for a Grant
$300,000 a year in federal financial inspection should be done by all parties Agreement suspension or termination, if
assistance are exempt from annual simultaneously, however, if this is not it is in the best interest of the Agency
audits. practicable the inspection may be and does not negatively impact the
(4) Final audits are required as part of separately conducted. In all cases, all participating families.
grant closeout under § 3551.155. parties will acknowledge satisfactory (b) Rural Development may, upon
(d) Auditors must promptly notify completion by signing off on the final written notice, suspend a Grant
Rural Development in writing of any inspection in accordance with 7 CFR Agreement for up to 90 days if the
indication of fraud, abuse, or illegal acts part 1924, subpart A. following exists:
in a grantee’s use of grant funds or in (c) Final grantee evaluation. At the (1) Grantee has failed to comply with
the handling of participating families’ end of the grant period, Rural the terms of the Grant Agreement or
accounts. Development will perform a final meet program requirements;
(2) Grantee has been designated as does not guarantee the award of a requirements designated by the
‘‘High Risk’’; technical assistance grant. Administrator for the grant cycle.
(3) A workout agreement was (b) Application requirements. The
§ 3551.202 Eligibility requirements. applicant must submit a complete and
implemented and has expired; and
(4) The additional time under a In order to be eligible for a timely application that meets Rural
suspension will allow the grantee to predevelopment grant, an applicant Development requirements set forth in
correct deficiencies specified in the must meet all the eligibility this part and the NOFA. At a minimum,
workout agreement. requirements for a technical assistance the following documentation is
(c) Rural Development may terminate grant contained in § 3551.51. required:
a Grant Agreement for cause in whole or § 3551.203 Authorized predevelopment (1) The applicant must submit an
in part at any time if Rural Development grant uses. Application for Federal Assistance on
determines that the grantee has failed to The predevelopment grant must be the appropriate Agency form. The
comply with terms of the agreement or used for developing an application for a application must be signed and dated;
meet program requirements. The State technical assistance grant. Authorized (2) The applicant must provide
Director will notify the grantee in predevelopment grant uses include: evidence of its ability to carry out the
writing of the action and advise them of (a) Recruiting and disseminating objectives of the Mutual and Self-Help
their right to appeal. Any unused grant information to prospective participating Housing program both on an
funds must be returned to Rural families, and gathering their names and organizational and staff member basis.
Development. addresses for future contact; (3) The applicant must provide the
(d) Rural Development or the grantee (b) Performing a need and demand following organizational documents:
may terminate the Grant Agreement for study for the proposed type and amount (i) A copy of, or accurate reference to,
convenience in whole or part when both of Mutual and Self-Help housing in the the specific provisions of state law
parties agree that the continuation of the proposed community; under which the applicant is organized;
grant would not produce beneficial (c) Attending a self-help or housing (ii) A certified copy of the applicant’s
results. Both parties will agree in related training session; Articles of Incorporation and Bylaws or
writing to the conditions of termination, (d) Visiting another grantee to obtain other evidence of corporate existence, if
including the effective date. Any training or guidance in successful the applicant is a corporation;
unused grant funds must be refunded to project management and similar (iii) If not a public body, a certificate
Rural Development. purposes, with prior Rural Development of incorporation;
approval; and (iv) If not a public body, a tax exempt
§ 3551.155 Grant close out. (e) Performing other activities certification under IRS 501(c)(3) or
In order to close out the grant cycle, necessary to complete a technical 501(c)(4);
the grantee must perform the following assistance grant application under this (v) Current certification (no more than
actions within 90 days following the part, when prior written approval is 90 days old) that the organization is in
Grant Agreement expiration or obtained from Rural Development. good standing from the state or states in
termination date: which the grant is to be awarded;
(a) Provide documentation of the § 3551.204 Unauthorized predevelopment (vi) The names and addresses of the
grant uses. applicant’s members, directors, and
extent to which the goals in the Grant
Agreement were met; Predevelopment grant funds must not officers and evidence of those
(b) Provide a financial status report on be used for any of the unauthorized authorized by the board to execute legal
an Agency approved form that reflects purposes listed in § 3551.53, or either of documents for the grant; and
all information (Federal and non- the following purposes: (vii) A dated and signed financial
Federal) relating to obligations and (a) Payment of any expenses incurred statement for the organization no more
expenditures of Rural Development towards completing a technical than 12 months old.
grant funds; assistance grant activity, such as (4) The applicant must provide
(c) Provide a list of all equipment and obtaining home financing for evidence of need and demand for the
supplies purchased for the project; participating families; or program and a list that contains the
(b) Payment of any costs incurred for names and addresses of families who
(d) Must return any unused grant
land development. have expressed an interest in the
funds to Rural Development with the
financial status report; § 3551.205 Application submission and program;
(e) Must ensure the participating processing. (5) The applicant must provide
families’ section 502 supervised bank Rural Development will award evidence that there is available land
accounts are closed out and any residual predevelopment grants through a suitable for the construction of single
funds returned to the Agency; and competitive process in accordance with family homes;
(f) Provide a final audit. the following procedure: (6) The applicant must provide a
(a) Notification of funding. Rural program budget, in a format and form
§ 3551.156–3551.199 [Reserved] approved by the Agency, detailing how
Development will publish at least one
§ 3551.200 OMB Control number NOFA in the Federal Register each year they plan to spend the predevelopment
[Reserved] that provides the following information: grant funds;
(1) Notice of funding availability; (7) The applicant must provide a
Subpart E—Predevelopment Grants (2) Guidance for obtaining and monthly activities schedule that
submitting application packages; describes how the funds will be used.
§ 3551.201 General. (3) Application deadline, which will (8) The applicant, other than a Tribe
The objective of predevelopment be no earlier than 30 days after the or public body, must submit the
grants is to enable applicants to obtain publication of the notice; necessary fee to Rural Development for
the technical and financial assistance (4) How selections will be made in the completion of a commercial credit
necessary to complete a technical event of a tie between applicants; and report. The credit report will be used as
assistance grant application under this (5) If applicable, any special scoring a tool in determining the applicant’s
part. Award of a predevelopment grant criteria, funding limitations, or other financial capacity;
(9) The applicant must provide the §§ 3551.208–3551.249 [Reserved] • Federal eRulemaking Portal: Go to
following certifications: http://www.regulations.gov. Follow the
§ 3551.250 OMB Control number
(i) Compliance with civil rights [Reserved]
instructions for submitting comments.
statutes and regulations;
Examining the AD Docket
(ii) Whether there is a known Dated: April 20, 2007.
relationship or association between the Russell T. Davis, You may examine the AD docket on
applicant and a Rural Development Administrator, Housing and Community
the Internet at http://dms.dot.gov; or in
employee; Facilities Program. person at the Docket Management
(iii) That no person or organization Facility between 9 a.m. and 5 p.m.,
[FR Doc. 07–2406 Filed 5–17–07; 8:45 am]
has been employed or retained to solicit Monday through Friday, except Federal
BILLING CODE 3410–XV–P
or secure the grant for a commission, holidays. The AD docket contains this
percentage, brokerage, or contingent fee; proposed AD, the regulatory evaluation,
(iv) That the applicant has not been any comments received, and other
DEPARTMENT OF TRANSPORTATION information. The street address for the
debarred or suspended by the
Government, on the appropriate Agency Docket Office (telephone (800) 647–
Federal Aviation Administration
form; and 5227) is in the ADDRESSES section.
(v) That the organization meets drug- Comments will be available in the AD
14 CFR Part 39 docket shortly after receipt.
free workplace requirements, on the
appropriate Agency form. [Docket No. FAA–2007–27863; Directorate FOR FURTHER INFORMATION CONTACT: Karl
(c) Scoring and ranking. Rural Identifier 2007–CE–037–AD] Schletzbaum, Aerospace Engineer, FAA,
Development will select applications for RIN 2120–AA64 Small Airplane Directorate, 901 Locust,
funding in rank order until the available Room 301, Kansas City, Missouri 64106;
funds are no longer sufficient to fund an Airworthiness Directives; Pacific telephone: (816) 329–4146; fax: (816)
eligible application. Only timely Aerospace Limited, Model 750XL 329–4090.
applications that meet the eligibility and Airplanes SUPPLEMENTARY INFORMATION:
application requirements of this part Streamlined Issuance of AD
and the NOFA will be accepted. These AGENCY: Federal Aviation
applications will then be awarded Administration (FAA), Department of The FAA is implementing a new
points and ranked based on the criteria Transportation (DOT). process for streamlining the issuance of
in the NOFA. The criteria may include ACTION: Notice of proposed rulemaking ADs related to MCAI. This streamlined
any or all of the following: (NPRM). process will allow us to adopt MCAI
(1) Will serve areas with special safety requirements in a more efficient
SUMMARY: We propose to adopt a new manner and will reduce safety risks to
needs, such as state designated targeted
airworthiness directive (AD) for the the public. This process continues to
counties or tribal lands, colonias, or EZ/
products listed above. This proposed follow all FAA AD issuance processes to
EC/REAP areas;
AD results from mandatory continuing meet legal, economic, Administrative
(2) Will serve states that have never
airworthiness information (MCAI) Procedure Act, and Federal Register
received grants under this part; and
originated by an aviation authority of requirements. We also continue to meet
(3) Meets other criteria that the
another country to identify and correct our technical decision-making
Administrator designates, including
an unsafe condition on an aviation responsibilities to identify and correct
those that encourage innovation, ensure
product. The MCAI describes the unsafe unsafe conditions on U.S.-certificated
geographic diversity, or respond to
condition as: products.
emergency situations.
To prevent the rudder trim tab upper pivot This proposed AD references the
§ 3551.206 Terms of the predevelopment hole in the rudder rib flogging out, which MCAI and related service information
grant. may lead to aerodynamic flutter and possible that we considered in forming the
(a) The maximum predevelopment loss of aircraft control * * * engineering basis to correct the unsafe
grant amount is $15,000. The proposed AD would require actions condition. The proposed AD contains
(b) The predevelopment grant term that are intended to address the unsafe text copied from the MCAI and for this
will be 12 months. condition described in the MCAI. reason might not follow our plain
(c) The 12-month term will begin on language principles.
DATES: We must receive comments on
the date of the first transfer of funds. Comments Invited
this proposed AD by June 18, 2007.
(d) The grantee may request an
amendment to the predevelopment ADDRESSES: You may send comments by We invite you to send any written
grant agreement to extend the term, any of the following methods: relevant data, views, or arguments about
however, no additional funds will be • DOT Docket Web Site: Go to this proposed AD. Send your comments
provided. http://dms.dot.gov and follow the to an address listed under the
instructions for sending your comments ADDRESSES section. Include ‘‘Docket No.
§ 3551.207 Predevelopment grant close electronically. FAA–2007–27863; Directorate Identifier
out. • Fax: (202) 493–2251. 2007–CE–037–AD’’ at the beginning of
(a) Twelve months after the date of • Mail: Docket Management Facility, your comments. We specifically invite
the first transfer of funds, Rural U.S. Department of Transportation, 400 comments on the overall regulatory,
Development will close out the Seventh Street, SW., Nassif Building, economic, environmental, and energy
predevelopment grant. The grantee may Room PL–401, Washington, DC 20590– aspects of this proposed AD. We will
not incur any further costs to the grant 0001. consider all comments received by the
after close out. • Hand Delivery: Room PL–401 on closing date and may amend this
(b) Within 30 days of grant close out, the plaza level of the Nassif Building, proposed AD because of those
the grantee must submit a final 400 Seventh Street, SW., Washington, comments.
accounting of the predevelopment grant DC, between 9 a.m. and 5 p.m., Monday We will post all comments we
funds to Rural Development. through Friday, except Federal holidays. receive, without change, to http://

Proposed Rule: Program Regulations: Mutual and Self-Help Housing Program

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27988 Federal Register / Vol. 72, No.

96 / Friday, May 18, 2007 / Proposed Rules

Management Branch, Support Services residents resulting in greater

General Subpart I Subpart A

Objective and Purpose ............................................................... § 1944.401 and § 1944.402 ........................................................ § 3551.2

Operating Grant Subpart B

Eligibility requirements ................................................................ § 1944.404 and § 1944.421 ........................................................ § 3551.51

Grantee Responsibility Subpart C

Recruitment and education ......................................................... Numerous ................................................................................... § 3551.101

Grant Servicing Subpart D

Grant agreement amendment ..................................................... § 1944.420 .................................................................................. § 3551.151

Predevelopment Grants Subpart E

Eligibility requirements ................................................................ § 1944.404 .................................................................................. § 3551.202

Predevelopment Grants Subpart E

Grant close out ........................................................................... § 1944.426 .................................................................................. § 3551.207

List of Subjects Subpart B—Technical Assistance Grant § 3551.2 Purpose.

Development describing actions to be

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