• Using RHS Rural Housing Programs

  RHS rural housing programs are relatively easy to use. While land and housing development are complicated processes with complex governmental involvement, use of the RHS programs as financing vehicles should not add roadblocks to a project's success. They are very close to "do it yourself" programs for which the informed person or organization can apply without extensive use of expensive consultants.

  There are five "basics" to understanding and properly using RHS housing programs:

  1. Know what they do. Know the programs' purposes, as defined by law.

  2. Know how they do it. Know the programs' processing procedures, as established by RD Instructions, which are used by Rural Development and RHS loan processing and approval officials.

  3. Know why they do it a particular way. Know how much authority Rural Development officials have. Variations from national instructions may occur because of state or local law or because of misinterpretation by individual officials.

  4. Follow RD instructions. Provide what is asked for in the manner requested. Consult with the RD office prior to developing an application.

  5. Obtain information on the current and future availability of funds. This has become essential recently as funds for RHS programs have been reduced. One should also obtain information on priority for accessing those funds.

  Given a working knowledge in these basics, anyone can become reasonably proficient in using the RHS programs.

• RHS Service Area

  RHS rural housing programs are available to eligible applicants (see RD regulations and handbooks, or HAC's guides, regarding eligibility for each program) in places considered to be "rural areas" under the agency's unique statutory definition of "rural." The definition is explained below, but the easiest way to know whether a particular place is "rural" is to consult the map on display in each Rural Development Field Office showing eligible rural areas within its jurisdiction. Political boundaries (boundaries of counties, incorporated towns, and the like) are not necessarily relevant.

  "Rural" areas include open country that is not part of or associated with an urban area. Also included are any town, village, city or place, including places which are not part of or associated with an urban area but immediately adjacent to densely settled areas, with a population not in excess of 10,000 and rural in character. Areas with populations in excess of 10,000 but not in excess of 20,000 that are not contained within a Metropolitan Statistical Area (MSA), and have a serious lack of mortgage credit as determined by the Departments of Agriculture and Housing and Urban Development, are eligible.

  Areas presently classified as rural or areas classified as rural prior to October 1, 1990, and areas determined not rural in character as a result of the 1990 decennial Census will continue to be eligible if they have a population between 10,000 and 25,000, are rural in character, and have a serious lack of mortgage credit for low- and moderate-income families.

  A determination that open country or any town, village, city, or place is not part of or associated with an urban area must include a finding that any densely populated section of the area in question is separated from the densely populated section of any adjacent urban area by open spaces. These open spaces must be undeveloped, agricultural, or sparsely settled. These spaces may not be due to physical barriers, commercial or industrial developments, public parks, areas reserved for recreation, or similar open spaces. This determination should also consider such other factors as the existence of known plans for development within the near future (three to five years) of a substantial portion of the intervening land between the area in question and an urban area. The latest official Bureau of the Census data or more recent official population counts (U.S. Census of Population or other governmental official counts) are used in determining population.

  Two or more towns, villages, cities, and places may have contiguous boundaries and still be considered separately provided they are not otherwise associated with each other and their densely populated areas are not contiguous. The Rural Development State Director is responsible for determining boundaries of rural areas and will issue an appropriate State Supplement to identify such areas by list and maps. Areas in excess of 10,000 population will be identified as "rural areas" in a State Supplement only after written authorization by the National Office.

  When a change of designation from rural to nonrural is anticipated, the general public in the affected area is notified. If any area designation is changed from rural to nonrural, loans may be made there only in the following instances: applications received by Rural Development prior to the designation change may be processed; new conditional commitments may be issued and existing conditional commitments will be honored only in conjunction with the approval of loan applications received prior to the date the area was designated nonrural; credit sales and transfers with assumptions may be processed; and subsequent loans may be made on property in an area where the designation was changed from rural to nonrural after the initial loan was made where the subsequent loan will be used to make necessary repairs, or to pay equity in connection with an assumption and transfer of a Section 502 direct loan.

• RHS/Rural Development Organization

  RHS is a federal agency and is part of the Rural Development mission area within the U.S. Department of Agriculture. Most of its loan programs are processed directly by Rural Development or RHS employees. Its organization is as follows:

  1. The RHS National Office sets policy and develops regulations.

  2. Rural Development State Offices administer programs in a state or multistate area.

  3. Rural Development Regional Offices provide administrative supervision for a number of local offices. They process and service organizational loan and grant applications.

  4. Rural Development Field or Local Offices receive and process RHS housing applications, provide counseling and supervision, and provide back-up service to the central servicing center for single-family loans. They also provide assistance to the Regional Offices with organizational loans and grants.

  Recently, Rural Development State Directors have been given considerable authority and discretion on organizational make-up and location of offices.

  The field office staffing situation was also affected during Fiscal Year 1997 by Rural Development/RHS's implementation of a new computerized centralized servicing system, known as DLOS, which will include escrow for taxes and insurance. Establishing DLOS involved transfer of 600 staff from field positions to DLOS positions.

  The decentralization of authority often provides local (including Regional) offices with the flexibility to consider unique local factors. The best way to insure success with RHS programs is to be well informed.

• Locating Rural Development Field Offices

  Rural Development maintains more than 1,000 Field Offices serving all rural areas of the United States, Puerto Rico, the Virgin Islands, Guam, American Samoa and the Western Pacific Territories. Offices are usually located in county seats, with many offices serving several counties. Field Offices serving large areas may maintain sub-offices in other locations, where Rural Development staff interview applicants during scheduled office hours.

  To locate the Rural Development Field Office serving a particular area:

  • visit http://www.rurdev.usda.gov/recd_map.html

  • Look for the local Rural Development office in the telephone book under U.S. Government, Department of Agriculture, Rural Development. If not under Rural Development, it may still be listed under the Farmers Home Administration.

  • Contact the local Cooperative Extension Service.

  • Write or call the Rural Development State Office.

  • Contact the National RHS Office for the current office address of any Rural Development office in the nation. Write to Rural Housing Service, U.S. Department of Agriculture, Washington, DC 20250, or call 202-720-9725.

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