Direct loans may be used for construction, repair, or
purchase of housing. Payment subsidy is available to eligible low and very
low-income applicants. The term payment subsidy refers to either payment
assistance or interest credit. A payment subsidy reduces the borrower's
scheduled payment to an amount equal to what it would be if the note were
amortized to as low as one percent. Payment subsidies are subject to recapture
by the government when the borrower transfers title or ceases to occupy the
property.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility:
Applicants must be without adequate resources to obtain housing or related
facilities. Applicants must be unable to secure the necessary credit from
other sources at prevailing terms and conditions for residential financing.
Beneficiary Eligibility:
Applicants/borrowers are the direct beneficiaries when they meet all
eligibility criteria.
Credentials/Documentation:
Natural disasters will only include those areas identified by a Presidential
declaration. Funds are only available to the extent that funds are not
provided by the Federal Emergency Management Agency (FEMA). Applicants must
establish that physical damage was caused by natural disaster. An applicant
need to submit evidence of inability to obtain credit elsewhere, verification
of income and debts, plans, specifications, and cost estimates. This program
is excluded from coverage under OMB Circular No. A-110.
APPLICATION AND AWARD PROCESS:
Pre-application Coordination:
This program is excluded from coverage under OMB Circular No. A-102 and E.O.
12372.
Application Procedure:
Applicants must file Form RD 410-4 at the Rural Development field office
serving the county where the dwelling is located. This program is excluded
from coverage under OMB Circular No. A-110.
Award Procedure: Final
approval of the application is approved by the Community Development Manager.
Deadlines: Applicants must
file applications from the date of declaration/designation and until
supplemental appropriated funds are exhausted.
Range of Approval/Disapproval Time:
From 30 to 60 days subject to the availability of funds, from the time the
application is filed if no backlog of applications exists.
Appeals: Applicants may
request reconsideration at the local Rural Development field office or may
appeal adverse actions in accordance with RD Instruction appeal procedure.
Appeals may be filed within 30 days after notification of the adverse decision
is received by the loan applicant.
Renewals: Applicants may
reapply at any time.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements:
This program has no matching requirement or statutory formula.
Length and Time Phasing of Assistance:
These funds are available only until the Supplemental Emergency Funding for
Natural Disaster are exhausted.
POST ASSISTANCE REQUIREMENTS:
Reports: None.
Audits: None.
Records: Borrowers are not
required to, but should retain copies of loan related documents.
FINANCIAL INFORMATION:
Account Identification:
12-2081-0-1-371; 12-4215-0-3-371.
Obligations: (Loans) FY 01
$41,074,000; FY 02 est $10,495,428 (based on cancellations from previous
fiscal years); and FY 03 est $0. Note: Funds under this program are based on
supplemental funding provided by Congress in response to a natural disaster.
No funding legislation has been enacted for fiscal year 2002.
Range and Average of Financial Assistance:
(Loans) $54,349.
PROGRAM ACCOMPLISHMENTS:
In fiscal year 2001, 519 houses were financed through
the Section 502 Direct Loan (Natural Disaster) Program.
REGULATIONS, GUIDELINES, AND LITERATURE:
7 CFR Part 3550.
INFORMATION CONTACTS:
Regional or Local Office:
Consult your local telephone directory under United States Department of
Agriculture for Rural Development field office number. If no listing, contact
appropriate Rural Development State Office listed in Appendix IV of the
Catalog or on the internet at http://www.rurdev.usda.gov/recd_map.html.
Headquarters Office:
Director, Single Family Processing Division, Rural Housing Service (RHS),
Department of Agriculture, Washington, DC 20250. Telephone: (202) 720-1474.
Use the same number for FTS.
Web Site Address:
http://www.rurdev.usda.gov
EXAMPLES OF FUNDED PROJECTS:
Not applicable.
CRITERIA FOR SELECTING PROPOSALS:
Not applicable.
