[Code of Federal Regulations]
[Title 7, Volume 12]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1930.110]

[Page 200-201]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVIII--RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE 
SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF 
                         AGRICULTURE (CONTINUED)
 
PART 1930--GENERAL--Table of Contents
 
    Subpart C--Management and Supervision of Multiple Family Housing 
                     Borrowers and Grant Recipients
 
Sec. 1930.110  Methods of supervision.

    Supervisory methods used by FmHA or its successor agency under 
Public Law 103-354 employees include organizational and development 
planning; property management planning; affirmative marketing; 
construction conferences; long-term, annual, and other periodic planning 
and evaluation; accounts, budgets, and records inspections and guidance; 
project inspections; attendance at membership and governing body 
meetings; periodic group meetings with borrowers; analysis of 
accounting, budgets, and audit reports; guidance by memorandums; and 
similar activities. Supervision of cooperative borrowers will include 
coordination with the adviser to the board. Supervision of grant-only 
recipients will consist of at least the reviews and inspections outlined 
in Sec. 1930.119 of this subpart.
    (a) Applicants. Prior to loan or grant closing, supervision will 
largely be conducted during conferences and meetings with prospective 
borrowers and their various representatives such as applicant's 
attorney, architect, property manager, etc. Examples of supervision 
include:
    (1) Organizational meetings to discuss needs, services available, 
owner obligations, and to establish organizational committees.
    (2) Preapplication and application conferences.
    (3) Preconstruction conferences to reach an understanding regarding 
responsibilities and the manner in which development will be performed. 
The applicant at this point should be made fully aware of the 
responsibilities detailed in Sec. 1930.103 of this subpart.
    (4) Preloan and/or grant closing conferences to review requirements 
of the loan resolution or agreement, closing requirements, and 
management plan and to establish responsibilities for the operation of 
the project. The applicant at this point should be made fully aware of 
the responsibilities entailed in Sec. 1930.103 of this subpart.
    (5) Preoccupancy conferences to review the management plan, 
marketing plan, and the general readiness of project facilities, 
recordkeeping systems, renting or occupancy procedures, and personnel 
assignments to begin project operation. This conference will be 
conducted according to Sec. 1944.235(h) of subpart E of part 1944 of 
this chapter.
    (b) Borrowers who have yet to demonstrate their ability and 
borrowers with problems. When the borrower is establishing its 
operations, or when borrowers are delinquent, or have other 
difficulties, supervisory guidance will include:
    (1) Implementation and/or review for compliance with the management 
plan.
    (2) Establishment and maintenance of a financial recordkeeping and 
reporting system.
    (3) Compliance with the requirements of the loan agreement or loan 
resolution.
    (4) Review of annual audit and budget requirements.
    (5) Any other supervision that may be necessary to assure effective 
and successful operation of the project.
    (6) A requirement that the borrower contract with a management firm 
with proven background and/or experience

[[Page 201]]

in property management. In the case of cooperative housing, this 
stipulation will apply only when it has been determined that the 
cooperative is unable to manage itself.
    (c) Borrowers who have demonstrated ability. Supervision will 
consist of at least an annual review of budgets and other management 
reports according to Sec. 1930.122, and a triennial supervisory visit 
according to Sec. 1930.119 of this subpart when the borrower is:
    (1) Successful in completing a first full fiscal year of operation.
    (2) Current with loan payments.
    (3) In compliance with other loan or grant requirements.
    (4) Maintaining the security in a satisfactory manner.
    (5) Otherwise progressing satisfactorily.