© Housing Assistance Council, 1999

Permission is granted ONLY to nonprofit community-based organizations to reproduce and/or adapt this document, and only for their own use.

ISBN 1-58064-049-4

I.  INTRODUCTION

A.  What is the Farm Labor Housing Program?

The Section 514/516 Farm Labor Housing (LH) Program makes loans and grants for the provision of decent, safe and sanitary rental housing and related facilities for domestic farm laborers.  It is intended to benefit farm laborers primarily where the greatest need exists.  The current shortage of more than 700,000 migrant housing units in the United States can only be eliminated if farm labor housing is planned, financed, constructed, and operated.

There are actually two distinct programs within the Section 514/516 Farm Labor Housing Program.  The on-farm program makes loans to eligible farmers (or a group of farmers) to provide housing, usually for their own laborers.  The off-farm program makes both loans and grants to organizations that assist farmworkers at off-farm locations with no restrictions that workers be employed on a particular farm.  The on-farm fund allocations are available on a first-come, first-served basis.  Under new regulations effective in 1999, the off-farm program funds are competitive and are made available through an annual Notice of Funds Availability (NOFA).  This guide provides general information on both of these programs; however, more emphasis is placed on the latter.

This guide has been revised to include the new regulation changes.  Published in the Federal Register on May 6, 1999 and effective on June 7, 1999, the changes revise RD Instruction 1944-D, “Farm Labor Housing Loan and Grant Policies, Procedures and Authorizations.”

Another recent program change was included in legislation that adds a category of eligible borrowers: nonprofit limited partnerships in which the general partner is a nonprofit entity.  Such partnerships are eligible for Low Income Housing Tax Credits – which may be used in conjunction with the Section 514 loan program – but may not utilize Section 516 grants.

B.  About This Guide

This guide is intended to familiarize the reader with the Section 514/516 Farm Labor Housing Program.  It provides guidelines and comments on the preapplication and application processes; ways to work effectively with Rural Development as well as the local community; developing successful farm labor housing; financing plans, rates and terms; and closing and post closing processes.  Extensive appendices include samples of current instructions and applications for the program.

The Rural Housing Service (RHS) is currently working on reinvention of its multifamily housing regulations.  Reinvention will include a briefer published regulation, with other procedures to be in the form of a handbook, much like that currently in use for the Section 502 direct and 504 programs.  When the regulations and handbook have been adopted, HAC will revise this guide accordingly.

The suggestions in this manual are based on the extensive experience of HAC staff in assisting applicants to secure rural housing funds.  While it may be possible to submit an application solely by studying this guide, HAC strongly advises applicants to obtain and utilize the complete RHS/Rural Development instructions to the LH program.  (For ordering information, see Section II. F)

C.  Agency Names and Acronyms

This guide refers to RHS (the agency responsible for the Section 514/516 program at the national level) and Rural Development (the designation for local, area and state offices and staff administering the program).  Both are parts of the U.S. Department of Agriculture.  Like other rural housing programs, Section 514/516 was formerly administered by the Farmers Home Administration (FmHA) and then by the Rural Housing and Community Development Service.  FmHA has been eliminated through USDA restructuring.  The FmHA farmer programs and about 30 percent of its staff were transferred to the Farm Service Agency (FSA), as part of a “one stop” center for farmers.  The remaining FmHA programs were transferred to three small agencies:  the Rural Business-Cooperative Service, the Rural Utility Service and the Rural Housing Service (originally named the Rural Housing and Community Development Service).  Field staff and most program support staff for all three agencies became Rural Development staff.  The latter are directly responsible to the Under Secretary of Agriculture for Rural Development.

Since RHS develops regulations and provides oversight to the program, this guide generally refers to RHS as the administering agency.  Rural Development is referenced when state or local roles are involved.  In some instance we use RHS/Rural Development.  This is particularly appropriate for the Section 516 grant program, which involves RHS approval of applications, or other programs involving a NOFA and national competition.  Rural Development has given notice that all forms and regulations will be designated RD instead of FmHA or RHS.  Unless the title has been changed on the available documents, however, this guide continues to show it as RHS.

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