[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: 7CFR1930.117]

[Page 201-202]
 
                          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. 1930.117  Agency responsibilities.

    Effective supervision requires FmHA or its successor agency under 
Public Law 103-354 employees to be familiar with the various types of 
borrowers and their management plan; to communicate effectively with 
borrowers and their management agent, when applicable; and to provide 
guidance in the operation and management of MFH projects.
    (a) Servicing Official. Servicing Officials are responsible for 
effective borrower supervision. Servicing Officials will:
    (1) Organize their work and the work of their staffs in order that 
time is used effectively in providing borrower supervision and place 
emphasis on supervisory visits and review of borrower management 
reports.
    (2) Emphasize to the borrower and/or the borrower's management agent 
that they, not FmHA or its successor agency under Public Law 103-354, 
are responsible for managing the project, planning and following budgets 
within acceptable tolerance, collecting rents or occupancy charges, 
repaying the loan on schedule, budgeting for adequate project operations 
and maintenance; and for compliance with any loan or grant agreement or 
resolution, State laws, and other FmHA or its successor agency under 
Public Law 103-354 requirements.
    (3) Monitor all provisions or conditions of the FmHA or its 
successor agency under Public Law 103-354 approval documents to ensure 
that they are fully complied with throughout the life of the project.
    (4) Monitor the borrowers' compliance with FmHA or its successor 
agency under Public Law 103-354 regulations concerning real property 
tax, insurance, bonding, security, budgeting, and reporting 
requirements.
    (5) Systematically monitor response to OIG report findings at 
specific intervals and/or during routine supervisory visits, compliance 
reviews, and physical inspections.
    (6) Assure that borrower financing statements are continued and not 
allowed to lapse.
    (7) Have each borrower designate a representative to serve as its 
contact source for Agency communication on project related matters.
    (8) Become familiar with the borrower's bylaws or other rules and 
regulations when necessary to assure compliance with FmHA or its 
successor agency under Public Law 103-354 program civil rights and Fair 
Housing Act requirements.
    (9) Provide borrower governing bodies with suggestions for 
information distribution that may be helpful in keeping the membership 
in touch with activities to increase and maintain membership interest.
    (10) Provide informed advice and guidance to borrowers as needed.
    (11) Identify problem borrower accounts and initiate servicing plans 
including workout agreements with the borrower according to exhibit F of 
subpart B of part 1965 of this chapter.
    (12) Gather, maintain, analyze, and distribute a database of actual 
MFH operation and maintenance expense for determination of expense 
reasonableness that reflects variables of project operation and 
characteristics.
    (13) Avoid doing any of the following:

[[Page 202]]

    (i) Try to run the borrower's business.
    (ii) Take charge of the borrower's meetings.
    (iii) Attempt to supervise the borrower only through its attorney, 
architect, or management agent.
    (iv) Presume that projects without adverse complaints do not require 
monitoring and/or supervision by FmHA or its successor agency under 
Public Law 103-354.
    (b) State Director. State Directors will:
    (1) Coordinate and direct supervisory activities related to 
borrowers and perform other functions as prescribed by this subpart.
    (2) Provide guidance and leadership to assure that the State staff 
and Servicing staff thoroughly understand and carry out their 
responsibilities.
    (3) Develop and conduct training programs necessary to assure that 
FmHA or its successor agency under Public Law 103-354 personnel are kept 
up-to-date regarding the most effective supervisory methods, that the 
proper time is allotted to supervision, and that borrowers receive 
adequate supervision and financial counseling.
    (4) Establish and maintain a system to monitor followup to findings 
in OIG reports, supervisory visits, compliance reviews, physical 
inspections, or other factual sources.
    (5) Maintain necessary liaison with the OGC.
    (6) Maintain necessary liaison with State and local authorities, 
agencies, and other organizations. For example, in the case of projects 
benefiting the elderly, it is essential that liaison be maintained with 
the aging network such as State and Area Agencies on Aging to assure 
that available support services are offered to or accessible by the 
tenants.
    (7) Maintain and update State Office records for effective program 
supervision and evaluation.
    (8) Assist the Servicing Official in developing a realistic plan to 
resolve project operational problems.
    (c) State staff. State staff members who are designated by the State 
Director as MFH Servicing Officials responsible for supervision of 
borrowers covered by this subpart will:
    (1) Continuously monitor supervisory and account servicing 
activities and borrower status to assure that each project is receiving 
timely and effective supervision.
    (2) Train staff to effectively perform the required supervisory and 
account servicing activities, and to provide informed guidance in sound 
operation and management policies. The assistance of the aging network 
such as State and Area Agencies on Aging should be sought in connection 
with training which pertains to the management of services to the 
elderly.
    (3) Post review closing of loans and grants to determine that they 
have been properly closed.
    (4) Visit a sufficient number of projects to assure that proper 
supervision and account servicing is being provided.
    (5) Assemble, analyze, and distribute a statewide database of actual 
MFH operation and maintenance costs for determination of cost 
reasonableness that reflects variable characteristics of project 
operation.