Refunding Application Best Practices Section 523 Self-Help Housing Technical Assistance Prepared by NCALL Research November 2007, updated 3/09.

Refunding Refunding Application Best Application Best

PracticesPracticesSection 523 Self-Help Housing Section 523 Self-Help Housing

Technical AssistanceTechnical Assistance

Prepared by NCALL ResearchPrepared by NCALL ResearchNovember 2007, updated 3/09November 2007, updated 3/09

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Throughout this slide Throughout this slide presentation, NCALL’s presentation, NCALL’s recommended “best practices” recommended “best practices” will be notated with a will be notated with a *BP*BP..

A. IntroductionA. Introduction

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What Now?What Now? No more predevelopment grant No more predevelopment grant

availableavailable Unless you’re going into a new areaUnless you’re going into a new area

Refunding application combines items in Refunding application combines items in Pre-Application and FinalPre-Application and Final

Should take 3 to 4 monthsShould take 3 to 4 months A working relationship with Rural A working relationship with Rural

Development is critical Development is critical NCALL is available throughout the NCALL is available throughout the

processprocess *BP *BP Use NCALL as a resource Use NCALL as a resource

ANYTIME assistance is needed!ANYTIME assistance is needed!

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RD’s Expectations from grantees:RD’s Expectations from grantees: Operate within RD’s regulationsOperate within RD’s regulations Carry out the responsibilities of the Grant Carry out the responsibilities of the Grant

Agreement including:Agreement including: Recruiting low and very-low income applicants Recruiting low and very-low income applicants

and applicants from substandard housingand applicants from substandard housing Building the number of homes proposedBuilding the number of homes proposed Building the houses in a timely mannerBuilding the houses in a timely manner Keeping program costs within the required Keeping program costs within the required

limitlimit Ensuring that participants work on each others’ Ensuring that participants work on each others’

homeshomes Setting up an acceptable accounting systemSetting up an acceptable accounting system

B. FeasibilityB. Feasibility

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FeasibilityFeasibility

*BP *BP Even experienced grantees cannot Even experienced grantees cannot bypass feasibilitybypass feasibility

The old way is not always the best wayThe old way is not always the best way Organizations must continually Organizations must continually

monitor:monitor: Need Need AffordabilityAffordability Land availability and costLand availability and cost Availability of potential participantsAvailability of potential participants Staffing patternsStaffing patterns

*BP *BP See Guide for Feasibility WorkbookSee Guide for Feasibility Workbook

C. Refunding C. Refunding Application Application

FormatFormat

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Required FormatRequired Format

The format of the application is very The format of the application is very importantimportant

Rural Development Rural Development requiresrequires that that the information be in a specific orderthe information be in a specific order

A three-ring binder with table of A three-ring binder with table of contents and tabbed sections must contents and tabbed sections must be includedbe included

Tabs must correspond with item Tabs must correspond with item numbers on RD checklistnumbers on RD checklist

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*BP*BP An organization can drastically reduce its chances of error by having someone that did not put the application together recheck the it for completion and accuracy before copying and mailing it to Rural Development.

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Application Processing Application Processing Through Grant Closing Through Grant Closing Checklist (RD AN 4387)Checklist (RD AN 4387)

RD’s checklistRD’s checklist Refer to the Refunding Application Refer to the Refunding Application

Manual for actual checklistManual for actual checklist

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NCALL’s Final Application NCALL’s Final Application Review ChecklistReview Checklist

Checklist NCALL uses to review Checklist NCALL uses to review applicationsapplications

It is has more detail and will help It is has more detail and will help with assembling the application and with assembling the application and meeting all of the requirementsmeeting all of the requirements

See Guide for actual checklistSee Guide for actual checklist

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1. Standard Form 424, 1. Standard Form 424, version 2version 2

Standard Form 424, v. 2, Standard Form 424, v. 2, “Application for Federal Assistance” “Application for Federal Assistance” and Intergovernmental Review and Intergovernmental Review Response 1994.410 (e)Response 1994.410 (e) First thing that reviewers see, sample in First thing that reviewers see, sample in

ManualManual Provides RD will all of the pertinent Provides RD will all of the pertinent

information about the project – how information about the project – how many homes, time period, area, fundingmany homes, time period, area, funding

Must be completeMust be complete

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*BP*BP There are many outdated or incorrect There are many outdated or incorrect forms out there. Use the correct form! forms out there. Use the correct form!

To ensure that you are using the most To ensure that you are using the most recent, accurate form, you can:recent, accurate form, you can:

1.1. Contact the State or Area RD office Contact the State or Area RD office

2.2. Go to Go to www.hudclips.orgwww.hudclips.org or NCALL’s or NCALL’s website, website, www.ncall.orgwww.ncall.org

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Intergovernmental Intergovernmental ReviewReview

Intergovernmental review Intergovernmental review established to foster partnership established to foster partnership through coordination of Federal through coordination of Federal fundingfunding

Include response from SPOC, may be Include response from SPOC, may be on A-95on A-95

Not every state has a SPOC, refer to Not every state has a SPOC, refer to Guide for listGuide for list

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1b. Survey on Ensuring 1b. Survey on Ensuring Equal Opportunity for Equal Opportunity for

ApplicantsApplicants This form helps to ensure that the This form helps to ensure that the

government is fairly distributing government is fairly distributing grant fundsgrant funds

Complete this required form and Complete this required form and include it in your applicationinclude it in your application

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2. Waiting List of Participants2. Waiting List of Participants

Waiting list should include:Waiting list should include: Information on potential applicants are Information on potential applicants are

interested in participating in the self-help interested in participating in the self-help programprogram Names, addresses, number of persons in Names, addresses, number of persons in

household and total annual income is requiredhousehold and total annual income is required Date of initial contact not required but helpful Date of initial contact not required but helpful

for marketing & recruitment (See sample form for marketing & recruitment (See sample form in Guide) in Guide)

*BP *BP Aim to have at least twice as many potential Aim to have at least twice as many potential participants as would be needed to complete the participants as would be needed to complete the grantgrant

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3. Proof of Qualified 3. Proof of Qualified ParticipantsParticipants

Proof is required that participants in Proof is required that participants in the the first groupfirst group have qualified for have qualified for assistance or been determined assistance or been determined “eligible” by RD “eligible” by RD

Proof will be letters from RDProof will be letters from RD

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What Has to Happen for DE letters to What Has to Happen for DE letters to be issued:be issued: Full application must be processed and Full application must be processed and

reviewedreviewed Household income is verifiedHousehold income is verified Credit history is checkedCredit history is checked All other eligibility requirements metAll other eligibility requirements met Loan Originator determines payment Loan Originator determines payment

subsidy and maximum loan amountsubsidy and maximum loan amount Letter of eligibility is issuedLetter of eligibility is issued

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*BP*BP Include a cover page to this section

Narrative should include number of families in the first group, list of family names, total cost estimates, total 502 loan amount and other loan/grant information that will be used for the participant

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If RD 502 loan does not cover If RD 502 loan does not cover complete building costs, include complete building costs, include narrative indicating how gap will be narrative indicating how gap will be coveredcovered

If additional loans, advise RD’s local If additional loans, advise RD’s local office office Additional debt = increased debt to Additional debt = increased debt to

income ratiosincome ratios Proof will be needed that these funds Proof will be needed that these funds

have been securedhave been secured

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4. Lot Options for First 4. Lot Options for First GroupGroup

Land for the first group must be in Land for the first group must be in controlcontrol Purchase agreementsPurchase agreements Copy of deed if ownedCopy of deed if owned Option agreements Option agreements

Include a narrative identifying number Include a narrative identifying number in first group, how land is controlled, in first group, how land is controlled, by whom, when it will be purchased by whom, when it will be purchased and where it is locatedand where it is located

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Often grantees need interim Often grantees need interim financing to obtain land financing to obtain land

Control land by purchasing or Control land by purchasing or entering into an option agreemententering into an option agreement

See sample of Option to Purchase See sample of Option to Purchase Real Estate in GuideReal Estate in Guide

Caution!! 523 Grant funds Caution!! 523 Grant funds CANNOTCANNOT be be used to option or purchase land.used to option or purchase land.

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5. Evidence of Lot 5. Evidence of Lot AvailabilityAvailability

Evidence of lot availability for remaining Evidence of lot availability for remaining groups is requiredgroups is required

Lists of available lots, maps and prices are Lists of available lots, maps and prices are requiredrequired

Include a narrative summarizing what land Include a narrative summarizing what land is available, whether site development is is available, whether site development is required, timeframe for completionrequired, timeframe for completion

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6. House Plans, Specs, 6. House Plans, Specs, Detailed Cost Estimates Detailed Cost Estimates

Certified house plans are required for Certified house plans are required for EVERY EVERY model that will be built model that will be built during the grant periodduring the grant period

Specifications are required for every Specifications are required for every model and for every family in the model and for every family in the first groupfirst group

Detailed cost estimates are requiredDetailed cost estimates are required

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House PlansHouse Plans

Certified house plans are required for Certified house plans are required for EVERY EVERY model that will be built model that will be built during the grant periodduring the grant period A complete set consists of plans and A complete set consists of plans and

blueprints which have been certified by blueprints which have been certified by an architect or engineer licensed in your an architect or engineer licensed in your state state

CERTIFIED!

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Blueprints need to include the Blueprints need to include the following views with mechanicals following views with mechanicals noted:noted:

Foundation planFoundation plan Floor planFloor plan Cross sectionCross section Front and rear elevationsFront and rear elevations Right and left side elevationsRight and left side elevations

Average cost per set is $500-$700Average cost per set is $500-$700 Include a statement of the square Include a statement of the square

footage of livable space for each planfootage of livable space for each plan

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*BP *BP Standardize plansStandardize plans Limit selections to three basic plans Limit selections to three basic plans

Plans can have varying living areas and varying Plans can have varying living areas and varying number of roomsnumber of rooms

Cost estimate and use of materials will remain the Cost estimate and use of materials will remain the samesame

Construction Supervisor and participants will become Construction Supervisor and participants will become familiar with plans familiar with plans

Try to standardize the cabinet and kitchen Try to standardize the cabinet and kitchen arrangementarrangement

House plans should be prepared in advance of House plans should be prepared in advance of the formation of the first group of participantsthe formation of the first group of participants

Only one set needs to be certified original, the Only one set needs to be certified original, the rest can be copiesrest can be copies

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*BP*BP Choose plans based on what is in Choose plans based on what is in demand by surveying the target area demand by surveying the target area and participants’ affordability!! and participants’ affordability!!

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Developing Developing SpecificationsSpecifications

After selecting house plans, develop After selecting house plans, develop a specification sheeta specification sheet

Use Form RD 1924-2, “Description of Use Form RD 1924-2, “Description of Materials” Materials”

One spec sheet should be used for One spec sheet should be used for each participant in the first groupeach participant in the first group

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The “Description of Materials” Form 1924-2 The “Description of Materials” Form 1924-2 can be located at can be located at www.rurdev.usda.govwww.rurdev.usda.gov/ regs/forms/1924-02.pdf/ regs/forms/1924-02.pdf..

Contact NCALL or the local RD office if you Contact NCALL or the local RD office if you need assistance need assistance

Material identification should be detailedMaterial identification should be detailed Attach additional sheets if necessary and Attach additional sheets if necessary and

manufacturer’s specification sheets for manufacturer’s specification sheets for equipment and/or special materialsequipment and/or special materials

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The design must meet RD’s The design must meet RD’s requirements which include: requirements which include:

RD’s Thermal Performance Standards RD’s Thermal Performance Standards (1924-A, Exhibit D)(1924-A, Exhibit D)

RD’s guidelines for affordabilityRD’s guidelines for affordability No income producing facilitiesNo income producing facilities No swimming poolNo swimming pool

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Inspect every spec sheet for accuracy and Inspect every spec sheet for accuracy and completenesscompleteness

If questions arise, the specs and plans If questions arise, the specs and plans submitted to RD will be used by the RD submitted to RD will be used by the RD building inspector building inspector

Use the Guide for Inspection of Use the Guide for Inspection of Construction of Dwellings and Buildings Construction of Dwellings and Buildings

Construction supervisor responsible for Construction supervisor responsible for completing the specs submitted in each completing the specs submitted in each loan applicationloan application

The State and the RD State Architect must The State and the RD State Architect must approve the plans and specificationsapprove the plans and specifications

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Cost EstimatesCost Estimates

One of an agency’s primary responsibilities One of an agency’s primary responsibilities is to is to accuratelyaccurately estimate the cost of each estimate the cost of each participant’s home participant’s home beforebefore it is built it is built

These cost estimates must be accurate, These cost estimates must be accurate, they eventually become the participant’s they eventually become the participant’s 502 mortgage502 mortgage

Avoid making estimates that are Avoid making estimates that are unrealistically lowunrealistically low

Cost estimates can range from 2% to 3% Cost estimates can range from 2% to 3% over, but never underover, but never under

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*BP *BP If there is a significant time between If there is a significant time between the time of actual construction and the the time of actual construction and the time of cost estimates were obtained, time of cost estimates were obtained, update the figures to reflect the update the figures to reflect the current market prices.current market prices.

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Construction MaterialsConstruction Materials To do a take-off, the Construction To do a take-off, the Construction

Supervisor must:Supervisor must: Review the drawings of a single house planReview the drawings of a single house plan Record the materials that are called for in the Record the materials that are called for in the

drawingsdrawings Once the take-off is completed, you should Once the take-off is completed, you should

have a full listing of all materials (quantity have a full listing of all materials (quantity and quality) requiredand quality) required

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After obtaining the material bids, visit the After obtaining the material bids, visit the suppliersupplier

Meet the salespersonMeet the salesperson Discuss delivery format, return policy, Discuss delivery format, return policy,

service area and inquire about credit service area and inquire about credit accounts for the participants accounts for the participants

Look for discounts for bulk purchases or Look for discounts for bulk purchases or get a guarantee on prices in advanceget a guarantee on prices in advance

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After obtaining subcontractor bids:After obtaining subcontractor bids: Interview the potential subcontractorsInterview the potential subcontractors Ask for and check client referencesAsk for and check client references View their past jobsView their past jobs Determine their integrity and timelinessDetermine their integrity and timeliness Get a copy of their license and insurance Get a copy of their license and insurance

coverage – check the expiration date of bothcoverage – check the expiration date of both Include the participants in this process, Include the participants in this process,

they will be signing the contracts they will be signing the contracts Advise the participants, explain benefits Advise the participants, explain benefits

and drawbacks concerning the and drawbacks concerning the subcontractorssubcontractors

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Prepare a construction contract Prepare a construction contract (samples in the book) and attach the (samples in the book) and attach the subcontractor bids subcontractor bids

Participants and subcontractors sign Participants and subcontractors sign the construction contractthe construction contract

Rural Development’s contract is Rural Development’s contract is preferredpreferred

*BP*BP If construction contracts other than If construction contracts other than RD’s are to be used, get RD approvalRD’s are to be used, get RD approval

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Land and other variable Land and other variable costscosts

In addition to direct costs, the indirect costs In addition to direct costs, the indirect costs need to be determined need to be determined

Indirect construction costs include:Indirect construction costs include: LandLand Fees (permits, surveys, closing costs, etc)Fees (permits, surveys, closing costs, etc) Appliances and equipmentAppliances and equipment Site improvements (grading, fences, driveways)Site improvements (grading, fences, driveways) Landscaping Landscaping Contingency funds (3-5%)Contingency funds (3-5%)

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Preparing House DesignsPreparing House Designs

A General Flow of EventsA General Flow of Events

I.I. Research Building StandardsResearch Building Standards Determine local building codesDetermine local building codes Determine acceptable RD designDetermine acceptable RD design

II.II. Select House DesignsSelect House Designs *BP *BP Have the house designs approved Have the house designs approved

by RD as early as possible to ensure by RD as early as possible to ensure they meet RD standardsthey meet RD standards

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III.III. Get Plans CertifiedGet Plans Certified

IV.IV.Estimate Costs for Each House DesignEstimate Costs for Each House Designa.a. Prepare material take-offsPrepare material take-offs

b.b. Determine which construction jobs to Determine which construction jobs to subcontractsubcontract

c.c. Issue request for bids, evaluate bids, select Issue request for bids, evaluate bids, select suppliers and subcontractorssuppliers and subcontractors

d.d. Issue request for bids, evaluate bids, select Issue request for bids, evaluate bids, select suppliers and subcontractorssuppliers and subcontractors

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V.V. Involve Individual FamiliesInvolve Individual Families Each family selects their lot and house Each family selects their lot and house

planplan

VI.VI.Prepare House Documents for 502 Prepare House Documents for 502 DocketsDockets

For each family 502 docket, prepare -For each family 502 docket, prepare - Detailed house plans and specsDetailed house plans and specs Plot planPlot plan Water/waste disposal system (if Water/waste disposal system (if

applicable)applicable) Cost estimateCost estimate

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VII. Send Docket to RD for ApprovalVII. Send Docket to RD for Approval

VIII. Send House Documents to Local OfficialsVIII. Send House Documents to Local Officials

a. Building permit obtaineda. Building permit obtained

IX. ConstructionIX. Construction

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Construction ContractConstruction Contract

See Guide for sample of the RD See Guide for sample of the RD Construction Contract, Form RD 1924-Construction Contract, Form RD 1924-6, or:6, or:

Contact the State or Area RD office Contact the State or Area RD office www.rurdev.usda.govwww.rurdev.usda.gov NCALL’s website, NCALL’s website, www.ncall.orgwww.ncall.org

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Guideline for Purchase of Bidding Guideline for Purchase of Bidding Supplies/Soliciting SubcontractorsSupplies/Soliciting Subcontractors

A guideline will need to be A guideline will need to be established established (Attachment O–OMB Circular (Attachment O–OMB Circular A-110)A-110)

Organizations may use their own Organizations may use their own procurement policies and proceduresprocurement policies and procedures They must meet the They must meet the minimumminimum

standards on page 98 in the Guidestandards on page 98 in the Guide

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See samples in Guide of:See samples in Guide of: Cost estimate summaryCost estimate summary Construction task matrixConstruction task matrix Self-help family time sheetsSelf-help family time sheets

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7. Staffing Needs and 7. Staffing Needs and Hiring ScheduleHiring Schedule

A self-help organization needs:A self-help organization needs:

A good programA good program A sound budgetA sound budget A committed BoardA committed Board Qualified and motivated staff!Qualified and motivated staff!

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Staffing / PersonnelStaffing / Personnel

The regulations require:The regulations require: Proposed hiring scheduleProposed hiring schedule Availability of prospective Availability of prospective

employeesemployees Board’s signed statement that Board’s signed statement that

authorizes the Executive Director authorizes the Executive Director to hire the necessary staffto hire the necessary staff

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Hiring ScheduleHiring Schedule

A hiring schedule should be included A hiring schedule should be included in the Refunding Applicationin the Refunding Application

Include all of the positions that will Include all of the positions that will be paid out of the self-help housing be paid out of the self-help housing grant fundsgrant funds

*BP*BP See Guide for a sample See Guide for a sample

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Indicate:Indicate: Which positions are filledWhich positions are filled The anticipated hiring date of the The anticipated hiring date of the

remaining positionsremaining positions Which positions will be full-time? Which positions will be full-time?

Part-time?Part-time? What percentage of their time will be What percentage of their time will be

charged to the self-help programcharged to the self-help program

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Availability of Prospective Availability of Prospective EmployeesEmployees

To prove the existence of potential To prove the existence of potential candidates, include a resume’ and candidates, include a resume’ and letter of commitment from the letter of commitment from the candidatecandidate

If waiting until grant approval, If waiting until grant approval, include a description of how needed include a description of how needed staff will be located and a brief report staff will be located and a brief report on available personnel in the area on available personnel in the area

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Identifying the availability of Identifying the availability of personnel in the area will require:personnel in the area will require:

the number of applications received for the number of applications received for the job advertisedthe job advertised

a narrative describing the expected a narrative describing the expected hiring process hiring process

Rural Development needs to be Rural Development needs to be notified for prior approval notified for prior approval priorprior to to hiring changes occurringhiring changes occurring

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8. Authorized Representative 8. Authorized Representative of Applicantof Applicant

Provide the name, address and Provide the name, address and official position of the applicant’s official position of the applicant’s representative that is authorized to representative that is authorized to act for the applicant and work with act for the applicant and work with Rural DevelopmentRural Development

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9. Budget Information – 9. Budget Information – Non ConstructionNon Construction

Requirements:Requirements: 424-A424-A Detailed BudgetDetailed Budget Detailed Budget NarrativeDetailed Budget Narrative RD LetterRD Letter Method of TA CostMethod of TA Cost

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424-A424-A Budget must be on form SF-424A, Budget must be on form SF-424A,

“Budget Information (Non-“Budget Information (Non-Construction Programs)Construction Programs)

Complete it using the example in the Complete it using the example in the GuideGuide

See NCALL’s website for the most See NCALL’s website for the most recent versionrecent version

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Detailed budgetDetailed budget Include a Include a detaileddetailed budget budget See sample in GuideSee sample in Guide Remember to include funds for NRSHHA duesRemember to include funds for NRSHHA dues

Detailed budget narrativeDetailed budget narrative Include a Include a detaileddetailed budget narrative budget narrative See sample in GuideSee sample in Guide

RD LetterRD Letter Include a letter from RD identifying the equivalent Include a letter from RD identifying the equivalent

value of comparable contractor-built 502 homes, value of comparable contractor-built 502 homes, less than 12 monthsless than 12 months

Include total square feet and total living areaInclude total square feet and total living area Should include the actual or projected cost of an Should include the actual or projected cost of an

acceptable site and site developmentacceptable site and site development

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Method of TA Cost CalculationMethod of TA Cost Calculation Include the calculation of how the total Include the calculation of how the total

grant amount was calculatedgrant amount was calculated Indicate which allowable method was Indicate which allowable method was

usedused See sample calculation in GuideSee sample calculation in Guide

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10. Indirect or Direct Cost10. Indirect or Direct Cost

RequirementsRequirements Transmittal LetterTransmittal Letter Response Response ProposalProposal

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An approved direct or indirect cost An approved direct or indirect cost policy must be submittedpolicy must be submitted Document the indirect cost rate or the Document the indirect cost rate or the

lack thereoflack thereof If a new policy is needed:If a new policy is needed:

Prepare proposal for submission to DOI for Prepare proposal for submission to DOI for approval and include proposal in applicationapproval and include proposal in application

DOI will not review proposal until grant is DOI will not review proposal until grant is approvedapproved

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11. Monthly Activities 11. Monthly Activities Schedule Schedule

A finalized monthly activity schedule is A finalized monthly activity schedule is necessarynecessary

Monthly activities schedules allow for:Monthly activities schedules allow for: Setting specific goalsSetting specific goals Identifying time targetsIdentifying time targets Identifying person’s responsible for tasksIdentifying person’s responsible for tasks Letting everyone know what he/she is Letting everyone know what he/she is

suppose to do and whether they are on suppose to do and whether they are on target or nottarget or not

Identifying potential problems and Identifying potential problems and opportunitiesopportunities

Improving decision-making processImproving decision-making process Focusing on grant activities to resultsFocusing on grant activities to results

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*BP*BP When planning, estimate a time When planning, estimate a time range instead of a specific date, this range instead of a specific date, this keeps your schedule more realistickeeps your schedule more realistic

The four most significant time The four most significant time elements are:elements are:

Duration of each stepDuration of each step Earliest time each step may be startedEarliest time each step may be started Latest time each step may be startedLatest time each step may be started Latest time each step may be Latest time each step may be

completedcompleted

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It takes everyone’s commitment to It takes everyone’s commitment to implement the SH projectimplement the SH project

The activity schedule should not be The activity schedule should not be created and forgottencreated and forgotten

Use it to stay on trackUse it to stay on track Adjust if necessaryAdjust if necessary See Guide for samples See Guide for samples

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12. Personnel Practices and 12. Personnel Practices and Procedures Procedures

A copy of the most recent personnel A copy of the most recent personnel policies is requiredpolicies is required Must be in compliance with federal, state and Must be in compliance with federal, state and

local laws that effect employeeslocal laws that effect employees Personnel forms also need to be included Personnel forms also need to be included

in the application and should include:in the application and should include: Time SheetsTime Sheets Travel Advance RequestsTravel Advance Requests Mileage FormsMileage Forms Leave RequestsLeave Requests Employment applicationEmployment application

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13. Authorizing Resolution13. Authorizing Resolution

A resolution must be adopted by the A resolution must be adopted by the Board of Directors:Board of Directors: Authorizing one or more specified persons Authorizing one or more specified persons

are authorized to act on organization’s behalfare authorized to act on organization’s behalf It must state that they are able to:It must state that they are able to:

Sign the Grant Agreement, 1994-I, Exhibit ASign the Grant Agreement, 1994-I, Exhibit A Sign Form RD 400-4 “Assurance Agreement”Sign Form RD 400-4 “Assurance Agreement” Work with RD on the self-help programWork with RD on the self-help program

Must include authorized person’s name, title, Must include authorized person’s name, title, addressaddress

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14. Assurance 14. Assurance AgreementAgreement

RD Form 400-4RD Form 400-4 Include a signed copy of this formInclude a signed copy of this form Sample form in GuideSample form in Guide

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15. Fidelity Bond 15. Fidelity Bond CoverageCoverage

Read Subpart C of 7 CFR 3015, deals with Read Subpart C of 7 CFR 3015, deals with “Bonding and Insurance”“Bonding and Insurance” Determine how it applies to youDetermine how it applies to you Review it with a lawyer and accountantReview it with a lawyer and accountant

Complete form RD 440-24 “Position Fidelity Complete form RD 440-24 “Position Fidelity Schedule Bond Declarations” to Schedule Bond Declarations” to demonstrate compliancedemonstrate compliance

All staff who have authority to make All staff who have authority to make purchases, execute contracts or sign checks purchases, execute contracts or sign checks should be covered should be covered

*BP*BP Amount of the coverage should be at Amount of the coverage should be at least equal to the maximum amount of least equal to the maximum amount of funds and property the organization will funds and property the organization will have at anytimehave at anytime

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16. Evidence of Interest 16. Evidence of Interest Bearing Checking Account Bearing Checking Account

and Statement of and Statement of Repayment of InterestRepayment of Interest

Submit a copy of the account agreement of Submit a copy of the account agreement of your two-signature interest-bearing checking your two-signature interest-bearing checking account account

Include a signed statement saying that the Include a signed statement saying that the organization will return, on a quarterly basis, organization will return, on a quarterly basis, any interest earned in excess of $250 per yearany interest earned in excess of $250 per year If the grantee is a public body, interest in excess of If the grantee is a public body, interest in excess of

$100 must be repaid. $100 must be repaid.

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17. Group Agreement 17. Group Agreement (including Exhibit B-2)(including Exhibit B-2)

Include a copy of your group agreementInclude a copy of your group agreement It must include Exhibit B-2, indicating the It must include Exhibit B-2, indicating the

breakdown of construction breakdown of construction *BP*BP Each member of the group must read Each member of the group must read

the document or have the document read the document or have the document read to him/her, thoroughly understand it, and to him/her, thoroughly understand it, and sign itsign it

*BP *BP The enforcement of the membership The enforcement of the membership agreement is key to the success of each agreement is key to the success of each groupgroup

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18. Request for Obligation of 18. Request for Obligation of Funds Form RDFunds Form RD

Include this completed form, RD Include this completed form, RD 1940-11940-1

At item 45, on the back, have the At item 45, on the back, have the authorized representative sign and authorized representative sign and date two copies of the formdate two copies of the form

See Guide for sampleSee Guide for sample

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19. Self-Help TA Grant 19. Self-Help TA Grant AgreementAgreement

Include a signed, but not dated, copy Include a signed, but not dated, copy of the grant agreementof the grant agreement

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20. Certification Regarding 20. Certification Regarding Drug Free WorkplaceDrug Free Workplace

Include a signed and dated AD 1049Include a signed and dated AD 1049 See Guide for formSee Guide for form

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21. Certification Regarding 21. Certification Regarding DebarmentsDebarments

Include a signed and dated AD 1047Include a signed and dated AD 1047 See Guide for formSee Guide for form

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22. Certification Regarding 22. Certification Regarding LobbyingLobbying

Include a signed and dated RD 1940-Include a signed and dated RD 1940-Q, Exhibit A-1Q, Exhibit A-1

See Guide for formSee Guide for form

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23. Statement of 23. Statement of ComplianceCompliance

Include a statement that the Include a statement that the organization complies with the organization complies with the requirements of the appropriate 7CFRrequirements of the appropriate 7CFR

7 CFR establishes uniform 7 CFR establishes uniform requirements for the administration of requirements for the administration of grantsgrants

The organization’s authorized The organization’s authorized representative must sign and date itrepresentative must sign and date it

See sample letter in GuideSee sample letter in Guide

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24. Assurances – Non-24. Assurances – Non-Construction ProgramsConstruction Programs

Complete SF 424B “Assurances -- Complete SF 424B “Assurances -- Non-Construction Programs”Non-Construction Programs”

Certifies to Rural Development the Certifies to Rural Development the organization’s accounting system is organization’s accounting system is certifiable by a CPA as meeting the certifiable by a CPA as meeting the Grant AgreementGrant Agreement

Signed and dated by authorized Signed and dated by authorized representativerepresentative

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25. RD Managers’ or Area 25. RD Managers’ or Area Managers’ Managers’

RecommendationRecommendation Hold a section for this to be added Hold a section for this to be added

later by RDlater by RD

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26. T&MA Contractor’s 26. T&MA Contractor’s Review and Review and

RecommendationRecommendation Hold a section for this to be added Hold a section for this to be added

later by RDlater by RD Required under National Office Required under National Office

ContractContract

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27. National Office 27. National Office ReviewReview

Hold a section for this to be added Hold a section for this to be added later by RDlater by RD

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28. Narrative Statement28. Narrative Statement

The narrative statement should The narrative statement should begin with a short paragraph that begin with a short paragraph that summarizes:summarizes: How many homes are being plannedHow many homes are being planned What area they will be builtWhat area they will be built How much grant funds are being How much grant funds are being

requestedrequested What time period is planned (usually 24 What time period is planned (usually 24

months but can be less)months but can be less)NARRATIVE

STATEMENT

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A description of the area to be served A description of the area to be served is neededis needed *BP*BP Include maps, population and housing Include maps, population and housing

statisticsstatistics *BP*BP Collect current data, include only what Collect current data, include only what

supports the needsupports the need Sources:Sources: U.S. Census, State Housing U.S. Census, State Housing

Finance Authority, local government Finance Authority, local government housing plan, area housing authorities, housing plan, area housing authorities, area Board of Realtorsarea Board of Realtors

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Include housing conditions and why Include housing conditions and why families need self-help housingfamilies need self-help housing *BP*BP Analyze your data for comprehension. Analyze your data for comprehension.

What does it show? Growth? Substandard What does it show? Growth? Substandard housing? Income qualifications? Vacant housing? Income qualifications? Vacant rentals? Cost of housing?rentals? Cost of housing?

A need occurs when very low and low A need occurs when very low and low income families want their own homes but income families want their own homes but adequate, affordable housing is not adequate, affordable housing is not available to them!available to them!

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*BP*BP Prove affordability!Prove affordability! Estimate the cost of the self-help Estimate the cost of the self-help

homes to the participantshomes to the participants Give estimate of monthly principle, Give estimate of monthly principle,

interest, taxes, insurance (PITI) interest, taxes, insurance (PITI) payments and total debt ratiospayments and total debt ratios

Compare this figure to the cost of Compare this figure to the cost of homes in the areahomes in the area

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Provide evidence of low-income Provide evidence of low-income families willing to contribute families willing to contribute laborlabor This information was included earlier in This information was included earlier in

the application, refer the reviewer to the the application, refer the reviewer to the correct sectioncorrect section

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Evidence of community support is Evidence of community support is requiredrequired Include letters of support from local Include letters of support from local

officials, individuals and community officials, individuals and community organizations organizations *BP*BP Develop and distribute brochures or Develop and distribute brochures or

fact sheets. Develop a relationship with fact sheets. Develop a relationship with the media. Know the benefits and the media. Know the benefits and drawbacks of the program. You will be drawbacks of the program. You will be asked!asked!

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Sources of community support:Sources of community support: Those in need of improved housingThose in need of improved housing Town and county governmentsTown and county governments Churches/religious groupsChurches/religious groups Civic organizationsCivic organizations Social service agenciesSocial service agencies Other nonprofitsOther nonprofits General publicGeneral public Business/industry sectorsBusiness/industry sectors MediaMedia

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29. Current Financial 29. Current Financial Statements Statements

A financial statement is required and A financial statement is required and should be prepared by an accountant (or should be prepared by an accountant (or by the sponsor’s accountant), and must be by the sponsor’s accountant), and must be no more that 12 months oldno more that 12 months old

Must be dated and signed by the Must be dated and signed by the Executive Director or Board PresidentExecutive Director or Board President

Needs to show the specific nature of Needs to show the specific nature of assets and liabilitiesassets and liabilities

An audit can be used for this, but one is An audit can be used for this, but one is not requirednot required

If using a sponsor, the same type of If using a sponsor, the same type of financial statement is required of themfinancial statement is required of them

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30. Outreach Plan for Very 30. Outreach Plan for Very Low IncomeLow Income

A plan is required of how you propose to A plan is required of how you propose to reach the very low income familiesreach the very low income families It is important to reach families that are living It is important to reach families that are living

in housing that is deteriorated, dilapidate, in housing that is deteriorated, dilapidate, over crowded or lacking in adequate over crowded or lacking in adequate plumbingplumbing

VLI- VLI- MinimumMinimum of 40% of total families building of 40% of total families building in program must be VLIin program must be VLI

Develop a marketing strategy that will reach Develop a marketing strategy that will reach and recruit the families needed for your and recruit the families needed for your programprogram

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31. HUD Fair Housing Marketing 31. HUD Fair Housing Marketing Plan 935.2B (8/2006)Plan 935.2B (8/2006)

Affirmative Far Housing Marketing PlanAffirmative Far Housing Marketing Plan HUD Form 935.2b, required for self-help HUD Form 935.2b, required for self-help

programprogram Follow instructionsFollow instructions Use accurate informationUse accurate information Marketing plan designed to attract those Marketing plan designed to attract those

“least likely to apply”“least likely to apply” Special outreach for those groups requiredSpecial outreach for those groups required Plan approved and monitored by Rural Plan approved and monitored by Rural

Development Development See Form in GuideSee Form in Guide

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32. Determination of TA 32. Determination of TA Grant AmountGrant Amount

This information is duplicated from This information is duplicated from the earlier budget sectionthe earlier budget section

If the information was included there, If the information was included there, copy it here also copy it here also

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33. Intergovernmental 33. Intergovernmental Review SubmittalReview Submittal

This section needs to contain proof This section needs to contain proof that the application was submitted to that the application was submitted to the appropriate state official for the appropriate state official for reviewreview

Not all states have this requirementNot all states have this requirement

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34. Civil Rights Impact Analysis 34. Civil Rights Impact Analysis Certification, Form RD 2006-38Certification, Form RD 2006-38

Form RD 2006-38 2006-P, Form RD 2006-38 2006-P, 2006.754(b)2006.754(b)

Rural Development will complete this Rural Development will complete this formform

Hold a spot for this in the applicationHold a spot for this in the application

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35. OGC Review (if 35. OGC Review (if necessary) necessary)

If necessary, RD may send If necessary, RD may send organizational documents for OGC organizational documents for OGC for their reviewfor their review

Hold a section for this to be added Hold a section for this to be added later by RDlater by RD

Putting the Putting the Application Application TogetherTogether

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Use the Rural Development Checklist for order Use the Rural Development Checklist for order and formatand format

Include a Table of Contents and tab the Include a Table of Contents and tab the sectionssections

*BP*BP Check every page for completeness, Check every page for completeness, signatures and datessignatures and dates

*BP*BP Send the application to NCALL first for a Send the application to NCALL first for a draft reviewdraft review

Make 2 copies of the applicationMake 2 copies of the application Submit applications in an original and one copy Submit applications in an original and one copy

to the designated Rural Development officeto the designated Rural Development office

E. Monthly E. Monthly ActivitiesActivities

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*BP*BP See Guide for a monthly See Guide for a monthly breakdown of activities to keep on breakdown of activities to keep on schedule for completing the schedule for completing the applicationapplication

F. Grant Closing F. Grant Closing and Drawdownsand Drawdowns

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Request for Advance or Reimbursement, Form Request for Advance or Reimbursement, Form SF-270SF-270 Form completed monthly and submitted to the Form completed monthly and submitted to the

RDM, original and two copiesRDM, original and two copies Used to notify RD of the grant funds used during Used to notify RD of the grant funds used during

the previous month, the unspent funds on hand, the previous month, the unspent funds on hand, and the projected need for the next monthand the projected need for the next month

Written justification should be forwarded if amount Written justification should be forwarded if amount exceeds the projected need for the next 30 daysexceeds the projected need for the next 30 days

Must be in the RDM’s office 15 days prior to the Must be in the RDM’s office 15 days prior to the beginning of the monthbeginning of the month

If in order, RD will try to have advance check If in order, RD will try to have advance check delivered on the first of the next monthdelivered on the first of the next month

This is normally the only report of grant This is normally the only report of grant expenditures that RD will require during the grant expenditures that RD will require during the grant periodperiod

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Rural Development can establish an Rural Development can establish an electronic transfer for the fundselectronic transfer for the funds They will need the routing and account They will need the routing and account

numbers numbers The first grant draw can be for the The first grant draw can be for the

month in which the grant was closed, month in which the grant was closed, the following month and can include the following month and can include funds for tool and equipment funds for tool and equipment purchasespurchases

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The End The End