[Code of Federal Regulations]

[Title 7, Volume 15]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR3560.55]



[Page 484-485]

 

                          TITLE 7--AGRICULTURE

 

     CHAPTER XXXV--RURAL HOUSING SERVICE, DEPARTMENT OF AGRICULTURE

 

PART 3560_DIRECT MULTI-FAMILY HOUSING LOANS AND GRANTS--Table of Contents

 

               Subpart B_Direct Loan and Grant Origination

 

Sec. 3560.55  Applicant eligibility requirements.



    Applicants for off-farm labor housing loans and grants should also 

refer to Sec. 3560.555, and applicants for on-farm labor housing loans 

should refer to Sec. 3560.605.

    (a) General. To be eligible for Agency assistance, applicants must 

meet the following requirements:

    (1) Be a U. S. citizen or qualified alien(s); a corporation; a state 

or local public Agency; an Indian tribe as defined in Sec. 3560.11; or 

a limited liability company (LLC), nonprofit organization, consumer 

cooperative, trust, partnership, or limited partnership in which the 

principals are U.S. citizens or qualified aliens;

    (2) Be unable to obtain similar credit elsewhere at rates that would 

allow for rents within the payment ability of eligible residents;

    (3) Possess the legal and financial capacity to carry out the 

obligations required for the loan or grant;

    (4) Be able to maintain, manage, and operate the housing for its 

intended purpose and in accordance with all Agency requirements;

    (5) With the exception of applicants who are a nonprofit 

organization, housing cooperative or public body, be able to provide the 

borrower contribution from their own resources (this contribution must 

be in the form of cash, or land, or a combination thereof);

    (6) Have or be able to obtain a minimum of 2 percent of the total 

development costs for use as initial operating capital (for nonprofit 

organizations, cooperatives, or public bodies, this amount may be 

financed through Agency funds); and

    (7) Not be suspended, debarred, or excluded based on the ``List of 

Parties Excluded from Federal Procurement and Nonprocurement Programs.'' 

The list is available to Federal agencies from the U.S. Government 

Printing Office. Non-federal parties should contact the Superintendent 

of Documents, U.S. Government Printing Office, Washington, DC 20402, 

(202) 512-1800.

    (8) Not delinquent on Federal debt or a Federal judgment debtor, 

with the exception of those debtors described in Sec. 3560.55 (b).

    (b) Additional requirement for applicants with prior debt. If an 

applicant or the managing general partner of a borrower, as well as any 

affiliated entity having a 10 percent or more ownership interest, has a 

prior or existing Agency debt, the following additional requirements 

must be met.

    (1) The applicant must be in compliance with any existing loan or 

grant agreements and with all legal and regulatory requirements or must 

have an Agency-approved workout agreement and be in compliance with the 

provisions of the workout agreement. The



[[Page 485]]



Agency may require that applicants with monetary or non-monetary 

deficiencies be in compliance with an Agency-approved workout agreement 

for a minimum of 6 consecutive months before becoming eligible for 

further assistance.

    (2) The applicant must be in compliance with the Title VI of the 

Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, 

and all other applicable civil rights laws.

    (c) Additional requirements for nonprofit organizations. In addition 

to the eligibility requirements of paragraphs (a) and (b) of this 

section, nonprofit organizations must meet the following criteria:

    (1) The applicant must have received a tax-exempt ruling from the 

IRS designating the applicant as a 501(c)(3) or 501(c)(4) organization.

    (2) The applicant must have in its charter the provision of 

affordable housing.

    (3) No part of the applicant's earnings may benefit any of its 

members, founders, or contributors.

    (4) The applicant must be legally organized under state and local 

law.

    (5) In the case of off-farm labor housing loans and grants, 

nonprofit organizations must be ``broad-based'' nonprofit organizations 

(refer to Sec. 3560.555(a)(1)).

    (d) Additional requirements for limited partnerships. In addition to 

the applicant eligibility requirements of paragraphs (a) and (b) of this 

section, limited partnership loan applicants must meet the following 

criteria:

    (1) The general partners must be able to meet the borrower 

contribution requirements if the partnership is not able to do so at the 

time of loan request.

    (2) The general partners must maintain a minimum 5 percent financial 

interest in the residuals or refinancing proceeds in accordance with the 

partnership organizational documents.

    (3) The partnership must agree that new general partners can be 

brought into the organization only with the prior written consent of the 

Agency.

    (e) Additional requirements for Limited Liability Companies (LLCs). 

In addition to the applicant eligibility requirements of paragraphs (a) 

and (b) of this section, LLC loan applicants must meet the following 

criteria:

    (1) One member who holds at least a 5 percent financial interest in 

the LLC must be designated the authorized agent to act on the LLC's 

behalf to bind the LLC and carry out the management functions of the 

LLC.

    (2) No new members may be brought into the organization without 

prior consent of the Agency.

    (3) The members must commit to meet the equity contribution 

requirements if the LLC is not able to do so at the time of loan 

request.