WELCOME. Rural Housing Service. Multi-Family Housing. Rural Development Rural Housing Service Multi-Family Housing 514/516 Programs Overview

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1 WELCOME Rural Housing Service Multi-Family Housing Rural Development Rural Housing Service Multi-Family Housing 514/516 Programs Overview Mirna Reyes-Bible-Lead Senior Specialist Finance and Loan Analysis Multi-Family Housing Preservation and Direct Loan Division Rural Housing Service, MFH Preservation & Direct Loan Division 1

2 7 CFR 3560 Separate Subparts: Off-Farm Labor Housing - 7 CFR 3560, subpart L (pg.163) On-Farm Labor Housing - 7 CFR 3560, subpart M (pg.17)

3 Section 514/516 Farm Labor Housing Loans and Grants Purpose To supply affordable housing for farm laborers ; and To attract farm laborers by providing housing which is affordable, decent, safe and sanitary.

4 Definition of a Domestic Farm Laborer 7 CFR (page 25) A person who.receives a substantial portion of their income from farm labor.and either is a citizen of the United States or resides in the United States after being legally admitted for permanent residence. Farmworkers who are admitted under temporary visas, such as H2A workers. NOTE H2A workers are not eligible to live in Farm Labor Housing (they are not admitted for permanent residence).

5 Who Can Live In Farm Labor Housing? 7 CFR (pg.169) 1. Active farm laborer households; a. Very low-income households b. Low-income households c. Moderate-income households;

6 Who can live in Farm Labor Housing? - Continued. 2. Retired domestic farm laborer households and disabled domestic farm laborer households in the local market area; and 3. Retired domestic farm laborer households and disabled domestic farm laborer households who were not active in the local market area.

7 WHAT IS FARMLABOR Fundamentally, it consists of five stages Pg 462 Stage 1: The raising of the agricultural or aquacultural commodity on the farm; Stage 2: The transportation of the agricultural or aquacultural commodity after harvest; Stage 3: The post-harvest handling, storage, processing and packaging of the agricultural or aquacultural commodity; Stage 4: The delivery to market; and, finally, Stage 5: The market itself which may either, be a wholesale or retail market (if the commodity is a fresh market commodity) or a food processing manufacturer (if the commodity is a processing commodity). Rural Housing Service, MFH Preservation & Direct Loan Division 7

8 Stage 1. Raising the commodity on the farm Eligible activities include: Field workers hand work, field preparation, planting, irrigating, weeding, spraying, thinning, picking, pruning, loading, flagman, livestock caretakers, milkers Agricultural equipment operators tractors, sprayers (including aerial sprays), harvesters, combines Professional crop services agronomists, veterinarians, pest advisors, orchard managers Ineligible activities include: Support activities mechanics, chemical handlers, bookkeepers, farm labor contractors Agricultural suppliers seed, chemical, equipment, and supply dealers Professional support services bookkeepers, attorneys, financial consultants Rural Housing Service, MFH Preservation & Direct Loan Division 8

9 Stage 2. Transporting the commodity after harvest. Eligible activities include: Harvester/combine operators Truck drivers Loading and unloading commodities prior to processing Ineligible activities include: Fuel dealers Truck mechanics Truck dispatchers Rural Housing Service, MFH Preservation & Direct Loan Division 9

10 Stage 3. Post-harvest handling, storage, processing and packaging Eligible activities include: Boxing, crating, loading and unloading produce, hulling nuts, drying grain Working in a post-harvest commodity storage facility Ineligible activities include: Handling which constitutes marketing Rural Housing Service, MFH Preservation & Direct Loan Division 10

11 Stage 5. Processing or marketing. Eligible activities include: Processing plant workers canneries, salad mix, creameries, frozen foods, dried fruit, slaughterhouse Ineligible activities include: Grocery store workers produce department Restaurant workers Auction yard workers produce wholesalers and wholesale warehouse workers. Rural Housing Service, MFH Preservation & Direct Loan Division 11

12 Stage 4. Delivery to market or processing. Eligible activities include: Truck drivers, loading and unloading commodities prior to processing Trucking processed agricultural products (when employed by Processing Plant) Ineligible activities include: Fuel dealers Off-farm truck mechanics Truck dispatchers Rural Housing Service, MFH Preservation & Direct Loan Division 12

13 Location Requirements ( 7CFR ) (pg.45) Unlike section 515 rural rental housing properties, farm labor housing financed under section 514 and 516 may be developed in any area where a need for farm labor housing exists WA NH OR ID MT WY SD ND MN WI MI NY RI MA CT NV UT CO NB KS IA MO IL IN KY OH WV PA VA NJ DE MD DC NC AZ NM OK AR TN GA -SC MS AL TX LA FL Hawaii ALASKA Puerto Rico

14 Who Can Apply For Off-Farm Labor Housing Loans Under the NOFA? 1. A broad-based nonprofit organization; 2. Nonprofit organization of farm workers; 3. A Federally recognized Indian tribe; 4. An agency or political subdivision of State or local government; and 5. Limited partnerships which have a nonprofit entity as their sole general partner (LP s are not eligible for grants).

15 What is a broad-based organization? A broad-based nonprofit organization is an organization that has a membership that reflects a variety of interests in the area where the housing will be located.

16 Off-Farm LH NOFA Loan funds available: $ Grant funds available: $ Rental Assistance (RA) $

17 Off-Farm LH NOFA (continued) Applications that will use leveraged funding must provide written commitments from the funding source at pre-application. If leveraged funds are in the form of tax credits, the applicant must document that it has received tax credits or has applied and been approved to receive tax credits

18 Off-Farm LH NOFA (continued)...for the construction of new off-farm FLH units and related facilities for domestic farm laborers. The intended purpose of these loans and grants is to increase the number of available housing units for domestic farm laborers. If an existing borrower plans on renovating their 514/516 complex and rebuilding it, they should apply for repair/rehab funds.

19 Can funds from the NOFA be used for repair/rehab? Unlike the section 515 Rural Rental - Housing Program, FLH appropriated dollars are no year monies. No year monies mean that unused funds can be carried forward into the next fiscal year; The unused portion is transferred into the Administrator s Reserve Account and used for repair/rehab of FLH properties.

20 Operating Assistance 7 CFR (pg.167) Unlike the Section 515 Rural Rental Housing Program, Off-farm labor housing may be used to serve migrant farmworkers; In lieu of Rental Assistance in Off-Farm LH projects that serve migrant farmworkers; and Unlike Rental Assistance, Operating Assistance provides assistance even when the housing is vacant.

21 Restrictive Use Provision (RUP) for Off-Farm LH Loans 7 CFR (a)(2)(i) (pg.57-58) requires a specific Restrictive Use Provision (RUP) to be included in the mortgage and deed of trust when making Off-Farm LH loans. The RUP period is for 20 years.

22 Section 516 Grant Eligibility 7 CFR (b) (pg.164) Applicant to contribute at one-tenth of the total farm labor housing development cost from its own or other resources. An off-farm labor housing loan financed by Rural Rental Housing (RHS) may be used to meet this requirement.

23 The Term (length) of a LH Grant 7 CFR (c) (pg.166) The LH grant term was changed from a 50-year term to so long as there is a need for farm labor housing. This is consistent with the LH Grant Agreement.

24 On-Farm vs. Off-Farm On-Farm housing owned by the farm owner Workers may only work on this one farm Only eligible for loan funds Loan applications are on a first come first served basis Rent may not be charged. Project must be operated on a nonprofit basis. Off-Farm owned by a nonprofit organization Workers may work on any farm Eligible for loan and grant funds Loan/grant applications are selected thru a nationwide competition Agency approved rent may be charged. Project must be operated on a nonprofit basis.

25 On-Farm Labor Housing Eligibility 7 CFR (172) Individual Farmers, Family Farm Corporations, Partnerships, Association of Farmers. Borrower entity must be engaged in agricultural or aqua cultural farming operations and must operate housing on a non-profit basis. Borrower entity must intend to use the housing for labor employed in its farming operations or the farming operations of its members. Applicant must be unable to provide the necessary housing from the applicant s own resource and be unable to obtain credit from any other source upon terms and conditions that the applicant could reasonably be expected to fulfill.

26 Who cannot live in on-farm labor housing? 7 CFR (pg.176) Immediate family members of the applicant cannot live in an on-farm labor property. Immediate family includes: mother, father, brothers, sisters, sons, and daughters of the applicant and spouse.

27 Accessibility Requirements for On-Farm LH 7 CFR (d) (pg.173) On-Farm LH that consist of buildings with less than three units, need not meet the requirement that 5% of the units be constructed as fully accessible units. Other accessibility requirements are still applicable (i.e., reasonable accommodations)

28 On-FLH Training Guide and Loan Analysis Training Guide Rural Housing Service, MFH Preservation & Direct Loan Division 28

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