Final Application Best Final Application Best PracticesPractices

Section 523 Self-Help Housing Section 523 Self-Help Housing Technical AssistanceTechnical Assistance

Prepared by NCALL ResearchPrepared by NCALL ResearchOctober 2007, October 2007, last updated 3/09last updated 3/09

Free Template from www.braiFree Template from www.brainybetty.comnybetty.com

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Throughout this slide Throughout this slide presentation, NCALL’s presentation, NCALL’s recommended “best practices” recommended “best practices” will be notated with a will be notated with a *BP*BP..

A. IntroductionA. Introduction

What Now?What Now?You should have:You should have: An approved Pre-application (need and capacity exists)An approved Pre-application (need and capacity exists) First group of participants ready to close their loansFirst group of participants ready to close their loans House and site plans (approved by RD)House and site plans (approved by RD) Cost estimatesCost estimates Land Land Prepared staffPrepared staff*BP*BP By the time the Final Application is approved you should be one month

away from beginning construction on the homes.

Allow 6 months to complete Final Allow 6 months to complete Final ApplicationApplication

What’s Covered?What’s Covered? Items needed for Final ApplicationItems needed for Final Application Helpful tips on accomplishing these Helpful tips on accomplishing these

itemsitems Some things to do while grant is getting Some things to do while grant is getting

approvedapproved

RD’s Expectations from grantees:RD’s Expectations from grantees: Operate within RD’s regulationsOperate within RD’s regulations Carry out the responsibilities of the Grant Carry out the responsibilities of the Grant

Agreement including:Agreement including: Recruiting low and very-low income applicants Recruiting low and very-low income applicants

and applicants from substandard housingand applicants from substandard housing Building the number of homes proposedBuilding the number of homes proposed Building the houses in a timely mannerBuilding the houses in a timely manner Keeping program costs within the required Keeping program costs within the required

limitlimit Ensuring that participants work on each others’ Ensuring that participants work on each others’

homeshomes Setting up an acceptable accounting systemSetting up an acceptable accounting system

A working relationship with Rural A working relationship with Rural Development is critical Development is critical

NCALL is available throughout the NCALL is available throughout the processprocess

*BP *BP Use NCALL as a resource ANYTIME Use NCALL as a resource ANYTIME assistance is needed!assistance is needed!

B. Final Application B. Final Application FormatFormat

Required FormatRequired Format

The format of the application is very The format of the application is very importantimportant

Rural Development Rural Development requiresrequires that that the information be in a specific orderthe information be in a specific order

A three-ring binder with table of A three-ring binder with table of contents and tabbed sections must contents and tabbed sections must be includedbe included

Tabs must correspond with item Tabs must correspond with item numbers on RD checklistnumbers on RD checklist

*BP*BP An organization can drastically reduce its chances of error by having someone that did not put the Final Application together recheck the Final Application for completion and accuracy before copying and mailing it to Rural Development.

Application Processing Application Processing Through Grant Closing Through Grant Closing Checklist (RD AN 4387)Checklist (RD AN 4387)

RD’s checklistRD’s checklist Refer to the Final Application Refer to the Final Application

Manual for actual checklistManual for actual checklist

NCALL’s Final Application NCALL’s Final Application Review ChecklistReview Checklist

Checklist NCALL uses to review Checklist NCALL uses to review applicationsapplications

It is has more detail and will help It is has more detail and will help with assembling the application and with assembling the application and meeting all of the requirementsmeeting all of the requirements

See Guide for actual checklistSee Guide for actual checklist

1. Standard Form 424, 1. Standard Form 424, version 2version 2

Standard Form 424, v. 2, Standard Form 424, v. 2, “Application for Federal Assistance” “Application for Federal Assistance” and Intergovernmental Review and Intergovernmental Review Response 1994.410 (e)Response 1994.410 (e) First thing that reviewers see, sample in First thing that reviewers see, sample in

ManualManual Provides RD will all of the pertinent Provides RD will all of the pertinent

information about the project – how information about the project – how many homes, time period, area, fundingmany homes, time period, area, funding

Must be completeMust be complete

*BP*BP There are many outdated or incorrect There are many outdated or incorrect forms out there. Use the correct form! forms out there. Use the correct form!

To ensure that you are using the most To ensure that you are using the most recent, accurate form, you can:recent, accurate form, you can:

1.1. Contact the State or Area RD office Contact the State or Area RD office

2.2. Go to Go to www.hudclips.orgwww.hudclips.org or NCALL’s or NCALL’s website, website, www.ncall.orgwww.ncall.org

Intergovernmental Intergovernmental ReviewReview

Intergovernmental review Intergovernmental review established to foster partnership established to foster partnership through coordination of Federal through coordination of Federal fundingfunding

Include response from SPOC, may be Include response from SPOC, may be on A-95on A-95

Not every state has a SPOC, refer to Not every state has a SPOC, refer to Guide for listGuide for list

1b. Survey on Ensuring Equal 1b. Survey on Ensuring Equal Opportunity for ApplicantsOpportunity for Applicants

This form helps to ensure that the This form helps to ensure that the government is fairly distributing government is fairly distributing grant fundsgrant funds

Complete this required form and Complete this required form and include it in your applicationinclude it in your application

2. Waiting List of Participants2. Waiting List of Participants

Waiting list should include:Waiting list should include: Information on potential applicants are Information on potential applicants are

interested in participating in the self-help interested in participating in the self-help programprogram

Names, addresses, number of persons in Names, addresses, number of persons in household and total annual income is requiredhousehold and total annual income is required

Date of initial contact not required but helpful Date of initial contact not required but helpful for marketing & recruitment (See sample form for marketing & recruitment (See sample form in Guide) in Guide)

*BP *BP Aim to have at least twice as many potential Aim to have at least twice as many potential participants as would be needed to complete the participants as would be needed to complete the grantgrant

3. Proof of Qualified 3. Proof of Qualified ParticipantsParticipants

Proof is required that participants in Proof is required that participants in the the first groupfirst group have qualified for have qualified for assistance or been determined assistance or been determined “eligible” by RD “eligible” by RD

Proof will be letters from RDProof will be letters from RD

What Has to Happen for DE letters to What Has to Happen for DE letters to be issued:be issued: Full application must be processed and Full application must be processed and

reviewedreviewed Household income is verifiedHousehold income is verified Credit history is checkedCredit history is checked All other eligibility requirements metAll other eligibility requirements met Loan Originator determines payment Loan Originator determines payment

subsidy and maximum loan amountsubsidy and maximum loan amount Letter of eligibility is issuedLetter of eligibility is issued

*BP*BP Include a cover page to this section

Narrative should include number of families in the first group, list of family names, total cost estimates, total 502 loan amount and other loan/grant information that will be used for the participant

If RD 502 loan does not cover If RD 502 loan does not cover complete building costs, include complete building costs, include narrative indicating how gap will be narrative indicating how gap will be coveredcovered

If additional loans, advise RD’s local If additional loans, advise RD’s local office office Additional debt = increased debt to Additional debt = increased debt to

income ratiosincome ratios Proof will be needed that these funds Proof will be needed that these funds

have been securedhave been secured

4. Lot Options for First 4. Lot Options for First GroupGroup

Land for the first group must be in Land for the first group must be in controlcontrol Purchase agreementsPurchase agreements Copy of deed if ownedCopy of deed if owned Option agreements Option agreements

Include a narrative identifying Include a narrative identifying number in first group, how land is number in first group, how land is controlled, by whom, when it will be controlled, by whom, when it will be purchased and where it is locatedpurchased and where it is located

Controlling land in a timely manner is Controlling land in a timely manner is critical critical

One of the worse things that can One of the worse things that can happen is applicants are ready to happen is applicants are ready to build, full-time staff are hired and build, full-time staff are hired and subs are scheduled – but there is no subs are scheduled – but there is no land!land!

Often grantees need interim Often grantees need interim financing to obtain land financing to obtain land

Control land by purchasing or Control land by purchasing or entering into an option agreemententering into an option agreement

See sample of Option to Purchase See sample of Option to Purchase Real Estate in GuideReal Estate in Guide

Caution!! 523 Grant funds Caution!! 523 Grant funds CANNOTCANNOT be be used to option or purchase land.used to option or purchase land.

5. Evidence of Lot 5. Evidence of Lot AvailabilityAvailability

Evidence of lot availability for remaining Evidence of lot availability for remaining groups is requiredgroups is required

Lists of available lots, maps and prices are Lists of available lots, maps and prices are requiredrequired

Include a narrative summarizing what land Include a narrative summarizing what land is available, whether site development is is available, whether site development is required, timeframe for completionrequired, timeframe for completion

More information on land is available in More information on land is available in the “Land” section at the end of the the “Land” section at the end of the manualmanual

6. House Plans, Specs, 6. House Plans, Specs, Detailed Cost Estimates Detailed Cost Estimates

Certified house plans are required for Certified house plans are required for EVERY EVERY model that will be built model that will be built during the grant periodduring the grant period

Specifications are required for every Specifications are required for every model and for every family in the model and for every family in the first groupfirst group

Detailed cost estimates are requiredDetailed cost estimates are required

House PlansHouse Plans

Certified house plans are required for Certified house plans are required for EVERY EVERY model that will be built model that will be built during the grant periodduring the grant period A complete set consists of plans and A complete set consists of plans and

blueprints which have been certified by blueprints which have been certified by an architect or engineer licensed in your an architect or engineer licensed in your state state

CERTIFIED!

Blueprints need to include the Blueprints need to include the following views with mechanicals following views with mechanicals noted:noted:

Foundation planFoundation plan Floor planFloor plan Cross sectionCross section Front and rear elevationsFront and rear elevations Right and left side elevationsRight and left side elevations

Average cost per set is $500-$700Average cost per set is $500-$700 Include a statement of the square Include a statement of the square

footage of livable space for each planfootage of livable space for each plan

Codes and StandardsCodes and Standards Local and state building codes set the Local and state building codes set the

minimum standardsminimum standards Local authorities can require additional Local authorities can require additional

standardsstandards All house plans must be approved by RDAll house plans must be approved by RD Research building codes for each location Research building codes for each location

since requirements may vary since requirements may vary Each plan must conform to state and local Each plan must conform to state and local

codes codes andand comply with RD’s standards comply with RD’s standards The dwelling must also be affordable to the The dwelling must also be affordable to the

applicantapplicant

There are several ways to obtain house There are several ways to obtain house plans:plans: Local Building SupplierLocal Building Supplier House Plan BookHouse Plan Book Rural DevelopmentRural Development NCALLNCALL Other Self-Help ProvidersOther Self-Help Providers Software – Cheap ArchitectSoftware – Cheap Architect

Cost of Obtaining House PlansCost of Obtaining House Plans Take into consideration cost before Take into consideration cost before

committing to the house planscommitting to the house plans Remember, it costs on average $500 - Remember, it costs on average $500 -

$700 per set of plans$700 per set of plans

You owe me $4,200!

YOU

Standardize plansStandardize plans Limit selections to three basic plans Limit selections to three basic plans

Plans can have varying living areas and varying Plans can have varying living areas and varying number of roomsnumber of rooms

Cost estimate and use of materials will remain the Cost estimate and use of materials will remain the samesame

Construction Supervisor and participants will become Construction Supervisor and participants will become familiar with plans familiar with plans

Try to standardize the cabinet and kitchen Try to standardize the cabinet and kitchen arrangementarrangement

House plans should be prepared in advance of House plans should be prepared in advance of the formation of the first group of participantsthe formation of the first group of participants

Only one set needs to be certified original, the Only one set needs to be certified original, the rest can be copiesrest can be copies

*BP*BP Choose plans based on what is in Choose plans based on what is in demand by surveying the target area demand by surveying the target area and participants’ affordability!! and participants’ affordability!!

After participants choose a particular After participants choose a particular house design, copies of the blue house design, copies of the blue prints go to:prints go to: RD in the 502 applicationRD in the 502 application Local building official when applying Local building official when applying

for a building permit for a building permit Construction supervisorConstruction supervisor Participant file in the grantee’s officeParticipant file in the grantee’s office

Developing Developing SpecificationsSpecifications

After selecting house plans, develop After selecting house plans, develop a specification sheeta specification sheet

Use Form RD 1924-2, “Description of Use Form RD 1924-2, “Description of Materials” Materials”

One spec sheet should be used for One spec sheet should be used for each participant in the first groupeach participant in the first group

The “Description of Materials” Form 1924-2 The “Description of Materials” Form 1924-2 can be located at can be located at www.rurdev.usda.govwww.rurdev.usda.gov/ regs/forms/1924-02.pdf/ regs/forms/1924-02.pdf..

Contact NCALL or the local RD office if you Contact NCALL or the local RD office if you need assistance need assistance

Material identification should be detailedMaterial identification should be detailed Attach additional sheets if necessary and Attach additional sheets if necessary and

manufacturer’s specification sheets for manufacturer’s specification sheets for equipment and/or special materialsequipment and/or special materials

The design must meet RD’s The design must meet RD’s requirements which include: requirements which include:

RD’s Thermal Performance Standards RD’s Thermal Performance Standards (1924-A, Exhibit D)(1924-A, Exhibit D)

RD’s guidelines for affordabilityRD’s guidelines for affordability No income producing facilitiesNo income producing facilities No swimming poolNo swimming pool

Inspect every spec sheet for accuracy and Inspect every spec sheet for accuracy and completenesscompleteness

If questions arise, the specs and plans If questions arise, the specs and plans submitted to RD will be used by the RD submitted to RD will be used by the RD building inspector building inspector

Use the Guide for Inspection of Use the Guide for Inspection of Construction of Dwellings and Buildings Construction of Dwellings and Buildings

Construction supervisor responsible for Construction supervisor responsible for completing the specs submitted in each completing the specs submitted in each loan applicationloan application

The State and the RD State Architect must The State and the RD State Architect must approve the plans and specificationsapprove the plans and specifications

Cost EstimatesCost Estimates

One of an agency’s primary One of an agency’s primary responsibilities is to responsibilities is to accuratelyaccurately estimate the cost of each estimate the cost of each participant’s home participant’s home beforebefore it is built it is built

These cost estimates must be These cost estimates must be accurate, they eventually become accurate, they eventually become the participant’s 502 mortgagethe participant’s 502 mortgage

Avoid making estimates that are Avoid making estimates that are unrealistically lowunrealistically low

Cost estimates can range from 2% to 3% Cost estimates can range from 2% to 3% over, but never underover, but never under

Under estimating the cost of construction Under estimating the cost of construction may force the participant to seek a second may force the participant to seek a second “subsequent” mortgage“subsequent” mortgage

If the costs are overestimated, the If the costs are overestimated, the mortgage will be larger than needed and mortgage will be larger than needed and the participant might not get all of their the participant might not get all of their deserved “sweat equity”deserved “sweat equity”

*BP *BP If there is a significant time between If there is a significant time between the time of actual construction and the the time of actual construction and the time of cost estimates were obtained, time of cost estimates were obtained, update the figures to reflect the update the figures to reflect the current market prices.current market prices.

There are four types of costs:There are four types of costs: Construction materialsConstruction materials Subcontracted laborSubcontracted labor LandLand Other variable costsOther variable costs

Take-offs help to determine the Take-offs help to determine the quantity and quality of construction quantity and quality of construction materials required by a house planmaterials required by a house plan

Construction MaterialsConstruction Materials To do a take-off, the Construction To do a take-off, the Construction

Supervisor must:Supervisor must: Review the drawings of a single house planReview the drawings of a single house plan Record the materials that are called for in the Record the materials that are called for in the

drawingsdrawings Once the take-off is completed, you should Once the take-off is completed, you should

have a full listing of all materials (quantity have a full listing of all materials (quantity and quality) requiredand quality) required

To get the best price, get bids on the To get the best price, get bids on the materials. Before doing this:materials. Before doing this: The project must be described in The project must be described in

detail, including material to be used detail, including material to be used and quantityand quantity

Outline the time frame in which Outline the time frame in which materials are neededmaterials are needed

Set a bidding date deadlineSet a bidding date deadline

After obtaining the material bids, visit the After obtaining the material bids, visit the suppliersupplier

Meet the salespersonMeet the salesperson Discuss delivery format, return policy, Discuss delivery format, return policy,

service area and inquire about credit service area and inquire about credit accounts for the participants accounts for the participants

Look for discounts for bulk purchases or Look for discounts for bulk purchases or get a guarantee on prices in advanceget a guarantee on prices in advance

SubcontractorsSubcontractors The subcontracted activities are:The subcontracted activities are:

ExcavationsExcavationsLicensed electrical workLicensed electrical workPlumbingPlumbing

Use Exhibit B-2 of 1944-I as a guideUse Exhibit B-2 of 1944-I as a guide The participants’ construction tasks must The participants’ construction tasks must

equal at least 65% of construction equal at least 65% of construction activitiesactivities

When requesting bids, make sure When requesting bids, make sure that you:that you: Describe the project, materials and Describe the project, materials and

work to be donework to be done Outline the requirements and Outline the requirements and

anticipated time framesanticipated time frames Make the plans and specs available Make the plans and specs available Set a bidding deadline dateSet a bidding deadline date

After obtaining bids:After obtaining bids: Interview the potential subcontractorsInterview the potential subcontractors Ask for and check client referencesAsk for and check client references View their past jobsView their past jobs Determine their integrity and timelinessDetermine their integrity and timeliness Get a copy of their license and insurance Get a copy of their license and insurance

coverage – check the expiration date of bothcoverage – check the expiration date of both Include the participants in this process, Include the participants in this process,

they will be signing the contracts they will be signing the contracts Advise the participants, explain benefits Advise the participants, explain benefits

and drawbacks concerning the and drawbacks concerning the subcontractorssubcontractors

Prepare a construction contract Prepare a construction contract (samples in the book) and attach the (samples in the book) and attach the subcontractor bids subcontractor bids

Participants and subcontractors sign Participants and subcontractors sign the construction contractthe construction contract

Rural Development’s contract is Rural Development’s contract is preferredpreferred

*BP*BP If construction contracts other than If construction contracts other than RD’s are to be used, get RD approvalRD’s are to be used, get RD approval

Land and other variable Land and other variable costscosts

In addition to direct costs, the indirect costs In addition to direct costs, the indirect costs need to be determined need to be determined

Indirect construction costs include:Indirect construction costs include: LandLand Fees (permits, surveys, closing costs, etc)Fees (permits, surveys, closing costs, etc) Appliances and equipmentAppliances and equipment Site improvements (grading, fences, driveways)Site improvements (grading, fences, driveways) Landscaping Landscaping Contingency funds (3-5%)Contingency funds (3-5%)

Rural Development Rural Development ParametersParameters

““Officers, employees or Officers, employees or representatives of organization will representatives of organization will not solicit or accept gratuities, favors not solicit or accept gratuities, favors or anything of monetary value from or anything of monetary value from suppliers, contractors or others doing suppliers, contractors or others doing business with your organization.) – business with your organization.) – 1944-I, Exhibit A, Paragraph (o)1944-I, Exhibit A, Paragraph (o)

““Board members or employees for your Board members or employees for your organization shall not directly or indirectly organization shall not directly or indirectly participate for financial gain in any participate for financial gain in any transaction involving the organization or transaction involving the organization or the participants. Includes activities of the participants. Includes activities of selling real estate, building materials, selling real estate, building materials, supplies and services” – 1944-I, Exhibit A, supplies and services” – 1944-I, Exhibit A, Paragraph (q) Paragraph (q)

““While contracts are generally awarded to While contracts are generally awarded to the lowest bidder, alternative policies are the lowest bidder, alternative policies are common.” – 1924.6 (a)(10) & (11)common.” – 1924.6 (a)(10) & (11)

Attachment O of OMB Circular Attachment O of OMB Circular A-110A-110

In addition to some required In addition to some required application forms, NCALL has application forms, NCALL has included some forms that may help included some forms that may help in the management of the self-help in the management of the self-help program. See Final Application program. See Final Application Manual.Manual.

Preparing House DesignsPreparing House Designs

A General Flow of EventsA General Flow of Events

I.I. Research Building StandardsResearch Building Standards Determine local building codesDetermine local building codes Determine acceptable RD designDetermine acceptable RD design

II.II. Select House DesignsSelect House Designs *BP *BP Have the house designs approved Have the house designs approved

by RD as early as possible to ensure by RD as early as possible to ensure they meet RD standardsthey meet RD standards

III.III. Get Plans CertifiedGet Plans Certified

IV.IV. Estimate Costs for Each House DesignEstimate Costs for Each House Designa.a. Prepare material take-offsPrepare material take-offs

b.b. Determine which construction jobs to Determine which construction jobs to subcontractsubcontract

c.c. Issue request for bids, evaluate bids, select Issue request for bids, evaluate bids, select suppliers and subcontractorssuppliers and subcontractors

d.d. Issue request for bids, evaluate bids, select Issue request for bids, evaluate bids, select suppliers and subcontractorssuppliers and subcontractors

V.V. Involve Individual FamiliesInvolve Individual Families Each family selects their lot and house Each family selects their lot and house

planplan

VI.VI.Prepare House Documents for 502 Prepare House Documents for 502 DocketsDockets

For each family 502 docket, prepare -For each family 502 docket, prepare - Detailed house plans and specsDetailed house plans and specs Plot planPlot plan Water/waste disposal system (if Water/waste disposal system (if

applicable)applicable) Cost estimateCost estimate

VII. Send Docket to RD for ApprovalVII. Send Docket to RD for Approval

VIII. Send House Documents to Local OfficialsVIII. Send House Documents to Local Officials

a. Building permit obtaineda. Building permit obtained

IX. ConstructionIX. Construction

Construction ContractConstruction Contract

Sample of the RD Construction Sample of the RD Construction Contract, Form RD 1924-6, in Tab 5 Contract, Form RD 1924-6, in Tab 5 or:or:

Contact the State or Area RD office Contact the State or Area RD office www.rurdev.usda.govwww.rurdev.usda.gov NCALL’s website, NCALL’s website, www.ncall.orgwww.ncall.org

Guideline for Purchase of Bidding Guideline for Purchase of Bidding Supplies/Soliciting SubcontractorsSupplies/Soliciting Subcontractors

A guideline will need to be A guideline will need to be established established (Attachment O–OMB Circular (Attachment O–OMB Circular A-110)A-110)

Organizations may use their own Organizations may use their own procurement policies and proceduresprocurement policies and procedures They must meet the They must meet the minimumminimum

standards on page 98 in the Guidestandards on page 98 in the Guide

See samples in Guide of:See samples in Guide of: Cost estimate summaryCost estimate summary Construction task matrixConstruction task matrix Self-help family time sheetsSelf-help family time sheets

7. Staffing Needs and 7. Staffing Needs and Hiring ScheduleHiring Schedule

A self-help organization needs:A self-help organization needs:

A good programA good program A sound budgetA sound budget A committed BoardA committed Board Qualified and motivated staff!Qualified and motivated staff!

Staffing / PersonnelStaffing / Personnel

Personnel issues include determining Personnel issues include determining staffing needs, developing job staffing needs, developing job descriptions, developing personnel policies descriptions, developing personnel policies and recruiting staffand recruiting staff

The regulations require:The regulations require: Proposed hiring scheduleProposed hiring schedule Availability of prospective employeesAvailability of prospective employees Board’s signed statement that authorizes the Board’s signed statement that authorizes the

Executive Director to hire the necessary staffExecutive Director to hire the necessary staff

Rural Development regulations do not Rural Development regulations do not allow allow nepotismnepotism in the self-help program in the self-help program

Individuals that work for a grantee that are Individuals that work for a grantee that are related must disclose the nature of the related must disclose the nature of the relationship relationship

1944-I does not allow relatives working 1944-I does not allow relatives working together in the same line of commandtogether in the same line of command

Hiring ScheduleHiring Schedule

A hiring schedule should be included A hiring schedule should be included in the Final Applicationin the Final Application

Include all of the positions that will Include all of the positions that will be paid out of the self-help housing be paid out of the self-help housing grant fundsgrant funds

*BP*BP See page 110 for a sample See page 110 for a sample

Indicate:Indicate: Which positions are filledWhich positions are filled The anticipated hiring date of the The anticipated hiring date of the

remaining positionsremaining positions Which positions will be full-time? Which positions will be full-time?

Part-time?Part-time? What percentage of their time will be What percentage of their time will be

charged to the self-help programcharged to the self-help program

Availability of Prospective Availability of Prospective EmployeesEmployees

To prove the existence of potential To prove the existence of potential candidates, include a resume’ and candidates, include a resume’ and letter of commitment from the letter of commitment from the candidatecandidate

If waiting until grant approval, If waiting until grant approval, include a description of how needed include a description of how needed staff will be located and a brief report staff will be located and a brief report on available personnel in the area on available personnel in the area

Identifying the availability of Identifying the availability of personnel in the area will require:personnel in the area will require:

the number of applications received for the number of applications received for the job advertisedthe job advertised

a narrative describing the expected a narrative describing the expected hiring process hiring process

Job DescriptionJob Description

Job descriptions are required, typical staffing for Job descriptions are required, typical staffing for the self-help program are:the self-help program are: Executive Director/Project Director:Executive Director/Project Director:

Responsible for running and managing the self-help housing Responsible for running and managing the self-help housing programprogram

Group Coordinator/Loan Packager:Group Coordinator/Loan Packager: Works directly with the participants, screens, counseling, Works directly with the participants, screens, counseling,

training, helping them fill out the required forms, etc.training, helping them fill out the required forms, etc. Secretary/Bookkeeper:Secretary/Bookkeeper:

Keeps records for 523 grant funds and 502 participant loan Keeps records for 523 grant funds and 502 participant loan accountsaccounts

Construction Supervisor:Construction Supervisor: Responsible for constructionResponsible for construction

See Guide for sample job See Guide for sample job descriptionsdescriptions

*BP*BP We recommend that new grantees We recommend that new grantees use the traditional SH positionsuse the traditional SH positions

Rural Development needs to be Rural Development needs to be notified for prior approval notified for prior approval priorprior to to hiring changes occurringhiring changes occurring

Salary Ranges and Fringe Salary Ranges and Fringe BenefitsBenefits

Develop salary ranges and fringe Develop salary ranges and fringe benefits for each positionbenefits for each position

Both must be justified as being Both must be justified as being reasonable in the proposed area reasonable in the proposed area (OMB (OMB Circular A-112, Attachment B, Paragraph Circular A-112, Attachment B, Paragraph 6(2))6(2))

A good salary survey can help A good salary survey can help establish fair and competitive ratesestablish fair and competitive rates

*BP*BP See Guide for sample surveySee Guide for sample survey

8. Authorized Representative 8. Authorized Representative of Applicantof Applicant

Provide the name, address and Provide the name, address and official position of the applicant’s official position of the applicant’s representative that is authorized to representative that is authorized to act for the applicant and work with act for the applicant and work with Rural DevelopmentRural Development

9. Budget Information – 9. Budget Information – Non ConstructionNon Construction

Requirements:Requirements: 424-A424-A Detailed BudgetDetailed Budget Detailed Budget NarrativeDetailed Budget Narrative RD LetterRD Letter Method of TA CostMethod of TA Cost

Authorized expenses:Authorized expenses: Personnel salariesPersonnel salaries Reasonable office expenses and suppliesReasonable office expenses and supplies Employment benefit costsEmployment benefit costs Purchase or lease of power toolsPurchase or lease of power tools InsuranceInsurance Reasonable fees for trainingReasonable fees for training Consultant and legal fees Consultant and legal fees Annual auditsAnnual audits

Prohibited use of funds:Prohibited use of funds: Paying for labor on the housesPaying for labor on the houses Purchasing real estate or building materials for the familiesPurchasing real estate or building materials for the families Paying any debts, expenses or costs to the participantsPaying any debts, expenses or costs to the participants Any lobbying activities prohibited in OMB Circular A-122Any lobbying activities prohibited in OMB Circular A-122

424-A424-A Budget must be on form SF-424A, Budget must be on form SF-424A,

“Budget Information (Non-“Budget Information (Non-Construction Programs)Construction Programs)

Complete it using the example in the Complete it using the example in the GuideGuide

See NCALL’s website for the most See NCALL’s website for the most recent versionrecent version

Detailed budgetDetailed budget Include a Include a detaileddetailed budget budget See sample in GuideSee sample in Guide Remember to include funds for NRSHHA duesRemember to include funds for NRSHHA dues

Detailed budget narrativeDetailed budget narrative Include a Include a detaileddetailed budget narrative budget narrative See sample in GuideSee sample in Guide

RD LetterRD Letter Include a letter from RD identifying the Include a letter from RD identifying the

equivalent value of comparable contractor-built equivalent value of comparable contractor-built 502 homes, less than 12 months502 homes, less than 12 months

Include total square feet and total living areaInclude total square feet and total living area Should include the actual or projected cost of Should include the actual or projected cost of

an acceptable site and site developmentan acceptable site and site development

Method of TA Cost CalculationMethod of TA Cost Calculation Include the calculation of how the total Include the calculation of how the total

grant amount was calculatedgrant amount was calculated Indicate which allowable method was Indicate which allowable method was

usedused See sample calculation in GuideSee sample calculation in Guide

10. Indirect or Direct Cost10. Indirect or Direct Cost

RequirementsRequirements Transmittal LetterTransmittal Letter Response Response ProposalProposal

Indirect Cost Indirect Cost Mechanism used by federal governmentMechanism used by federal government Recommended when shared costs become Recommended when shared costs become

impractical to be charged directly to various impractical to be charged directly to various funding sourcesfunding sources

Direct Cost Allocation Direct Cost Allocation Used by single funded organizations or those Used by single funded organizations or those

which can track costs consistentlywhich can track costs consistently

RD has a contract with Department of RD has a contract with Department of Interior’s National Business Center to Interior’s National Business Center to approve cost policiesapprove cost policies

An approved direct or indirect cost An approved direct or indirect cost policy must be submittedpolicy must be submitted Document the indirect cost rate or the Document the indirect cost rate or the

lack thereoflack thereof If a new policy is needed:If a new policy is needed:

Prepare proposal for submission to DOI for Prepare proposal for submission to DOI for approval and include proposal in applicationapproval and include proposal in application

DOI will not review proposal until grant is DOI will not review proposal until grant is approvedapproved

11. Monthly Activities 11. Monthly Activities Schedule Schedule

A finalized monthly activity schedule is A finalized monthly activity schedule is necessarynecessary

Monthly activities schedules allow for:Monthly activities schedules allow for: Setting specific goalsSetting specific goals Identifying time targetsIdentifying time targets Identifying person’s responsible for tasksIdentifying person’s responsible for tasks Letting everyone know what he/she is suppose Letting everyone know what he/she is suppose

to do and whether they are on target or notto do and whether they are on target or not Identifying potential problems and Identifying potential problems and

opportunitiesopportunities Improving decision-making processImproving decision-making process Focusing on grant activities to resultsFocusing on grant activities to results

*BP*BP When planning, estimate a time range When planning, estimate a time range instead of a specific date, this keeps your instead of a specific date, this keeps your schedule more realisticschedule more realistic

The four most significant time elements The four most significant time elements are:are:

Duration of each stepDuration of each step Earliest time each step may be startedEarliest time each step may be started Latest time each step may be startedLatest time each step may be started Latest time each step may be completedLatest time each step may be completed

It takes everyone’s commitment to It takes everyone’s commitment to implement the SH projectimplement the SH project

The activity schedule should not be The activity schedule should not be created and forgottencreated and forgotten

Use it to stay on trackUse it to stay on track Adjust if necessaryAdjust if necessary See Guide for samples See Guide for samples

12. Personnel Practices and 12. Personnel Practices and Procedures Procedures

A copy of the most recent personnel A copy of the most recent personnel policies is requiredpolicies is required Or new policies for a new organizationOr new policies for a new organization Must be in compliance with federal, Must be in compliance with federal,

state and local laws that effect state and local laws that effect employeesemployees

See Guide for sample personnel See Guide for sample personnel policy policy

Personnel forms also need to be Personnel forms also need to be included in the application and included in the application and should include:should include: Time SheetsTime Sheets Travel Advance RequestsTravel Advance Requests Mileage FormsMileage Forms Leave RequestsLeave Requests Employment applicationEmployment application

See Guide for sample formsSee Guide for sample forms

What are personnel policies?What are personnel policies? A written guide the defines the A written guide the defines the

relationship between the organization relationship between the organization and the staffand the staff

Describes expectations and proceduresDescribes expectations and procedures Must be thorough, specific and legal as Must be thorough, specific and legal as

well as acceptable by RDwell as acceptable by RD Board’s personnel committee should Board’s personnel committee should

review the planreview the plan

*BP *BP It is strongly recommended that an It is strongly recommended that an attorney versed in labor laws review attorney versed in labor laws review the policies. Check your community for the policies. Check your community for pro bonopro bono services to nonprofits. services to nonprofits.

How should personnel policies be How should personnel policies be written? written? Keep the sentences shortKeep the sentences short Avoid complex termsAvoid complex terms Drop all unnecessary wordsDrop all unnecessary words Stay gender-neutral whenever possibleStay gender-neutral whenever possible

How should personnel policies be used?How should personnel policies be used? To provide guidance to the managersTo provide guidance to the managers In an orientation of a new employeeIn an orientation of a new employee

When should it be revised? When should it be revised? Review annually and revise as neededReview annually and revise as needed Changes in the laws, regulations, employee Changes in the laws, regulations, employee

benefits, and other areas may prompt a benefits, and other areas may prompt a review and revisionreview and revision

This responsibility may be given to the This responsibility may be given to the Board’s personnel committee or the Board’s personnel committee or the program staffprogram staff

Ensure that the Board approves themEnsure that the Board approves them See Guide for sample policiesSee Guide for sample policies

13. Authorizing Resolution13. Authorizing Resolution

A resolution must be adopted by the A resolution must be adopted by the Board of Directors:Board of Directors: Authorizing one or more specified persons Authorizing one or more specified persons

are authorized to act on organization’s behalfare authorized to act on organization’s behalf It must state that they are able to:It must state that they are able to:

Sign the Grant Agreement, 1994-I, Exhibit ASign the Grant Agreement, 1994-I, Exhibit A Sign Form RD 400-4 “Assurance Agreement”Sign Form RD 400-4 “Assurance Agreement” Work with RD on the self-help programWork with RD on the self-help program

Must include authorized person’s name, title, Must include authorized person’s name, title, addressaddress

14. Assurance 14. Assurance AgreementAgreement

RD Form 400-4RD Form 400-4 Include a signed copy of this formInclude a signed copy of this form Sample form in GuideSample form in Guide

15. Fidelity Bond 15. Fidelity Bond CoverageCoverage

Read Subpart C of 7 CFR 3015, deals with Read Subpart C of 7 CFR 3015, deals with “Bonding and Insurance”“Bonding and Insurance” Determine how it applies to youDetermine how it applies to you Review it with a lawyer and accountantReview it with a lawyer and accountant

Complete form RD 440-24 “Position Fidelity Complete form RD 440-24 “Position Fidelity Schedule Bond Declarations” to Schedule Bond Declarations” to demonstrate compliancedemonstrate compliance

All staff who have authority to make All staff who have authority to make purchases, execute contracts or sign checks purchases, execute contracts or sign checks should be covered should be covered

*BP*BP Amount of the coverage should be at Amount of the coverage should be at least equal to the maximum amount of least equal to the maximum amount of funds and property the organization will funds and property the organization will have at anytimehave at anytime

16. Evidence of Interest Bearing 16. Evidence of Interest Bearing Checking Account and Statement Checking Account and Statement

of Repayment of Interestof Repayment of Interest Submit a copy of the account agreement Submit a copy of the account agreement

of your two-signature interest-bearing of your two-signature interest-bearing checking account checking account

Include a signed statement saying that the Include a signed statement saying that the organization will return, on a quarterly organization will return, on a quarterly basis, any interest earned in excess of basis, any interest earned in excess of $250 per year$250 per year If the grantee is a public body, interest in If the grantee is a public body, interest in

excess of $100 must be repaid. excess of $100 must be repaid.

17. Group Agreement 17. Group Agreement (including Exhibit B-2)(including Exhibit B-2)

Include a copy of your group agreementInclude a copy of your group agreement It must include Exhibit B-2, indicating the It must include Exhibit B-2, indicating the

breakdown of construction breakdown of construction *BP*BP Each member of the group must read Each member of the group must read

the document or have the document read the document or have the document read to him/her, thoroughly understand it, and to him/her, thoroughly understand it, and sign itsign it

*BP *BP The enforcement of the membership The enforcement of the membership agreement is key to the success of each agreement is key to the success of each groupgroup

18. Request for Obligation of 18. Request for Obligation of Funds Form RDFunds Form RD

Include this completed form, RD Include this completed form, RD 1940-11940-1

At item 45, on the back, have the At item 45, on the back, have the authorized representative sign and authorized representative sign and date two copies of the formdate two copies of the form

See Guide for sampleSee Guide for sample

19. Self-Help TA Grant 19. Self-Help TA Grant AgreementAgreement

Include a signed, but not dated, copy Include a signed, but not dated, copy of the grant agreementof the grant agreement

20. Certification Regarding 20. Certification Regarding Drug Free WorkplaceDrug Free Workplace

Include a signed and dated AD 1049Include a signed and dated AD 1049 See Guide for formSee Guide for form

21. Certification Regarding 21. Certification Regarding DebarmentsDebarments

Include a signed and dated AD 1047Include a signed and dated AD 1047 See Guide for formSee Guide for form

22. Certification Regarding 22. Certification Regarding LobbyingLobbying

Include a signed and dated RD 1940-Include a signed and dated RD 1940-Q, Exhibit A-1Q, Exhibit A-1

See Guide for formSee Guide for form

23. Statement of Compliance23. Statement of Compliance

Include a statement that the Include a statement that the organization complies with the organization complies with the requirements of the appropriate 7CFRrequirements of the appropriate 7CFR

7 CFR establishes uniform requirements 7 CFR establishes uniform requirements for the administration of grantsfor the administration of grants

The organization’s authorized The organization’s authorized representative must sign and date itrepresentative must sign and date it

See sample letter in GuideSee sample letter in Guide

24. Assurances – Non-24. Assurances – Non-Construction ProgramsConstruction Programs

Complete SF 424B “Assurances -- Complete SF 424B “Assurances -- Non-Construction Programs”Non-Construction Programs”

Certifies to Rural Development the Certifies to Rural Development the organization’s accounting system is organization’s accounting system is certifiable by a CPA as meeting the certifiable by a CPA as meeting the Grant AgreementGrant Agreement

Signed and dated by authorized Signed and dated by authorized representativerepresentative

25. RD Managers’ or Area 25. RD Managers’ or Area Managers’ Managers’

RecommendationRecommendation Hold a section for this to be added Hold a section for this to be added

later by RDlater by RD

26. T&MA Contractor’s Review 26. T&MA Contractor’s Review and Recommendationand Recommendation

Hold a section for this to be added Hold a section for this to be added later by RDlater by RD

Required under National Office Required under National Office ContractContract

27. National Office 27. National Office ReviewReview

Hold a section for this to be added Hold a section for this to be added later by RDlater by RD

C. Putting the Final C. Putting the Final Application TogetherApplication Together

Use the Rural Development checklist for Use the Rural Development checklist for order and formatorder and format

Include a Table of Contents and tab the Include a Table of Contents and tab the sectionssections

*BP*BP Check every page for completeness, Check every page for completeness, signatures and datessignatures and dates

*BP*BP Send the application to NCALL first for Send the application to NCALL first for a draft reviewa draft review

Make 2 copies of the applicationMake 2 copies of the application Submit applications in an original and one Submit applications in an original and one

copy to the designated RD officecopy to the designated RD office

D. Monthly D. Monthly ActivitiesActivities

*BP*BP See Guide for a monthly See Guide for a monthly breakdown of activities to keep on breakdown of activities to keep on schedule for completing the schedule for completing the applicationapplication

E. Grant Closing E. Grant Closing and Drawdownsand Drawdowns

Request for Advance or Reimbursement, Request for Advance or Reimbursement, Form SF-270Form SF-270 Form completed monthly and submitted to the Form completed monthly and submitted to the

RDM, original and two copiesRDM, original and two copies Used to notify RD of the grant funds used during Used to notify RD of the grant funds used during

the previous month, the unspent funds on hand, the previous month, the unspent funds on hand, and the projected need for the next monthand the projected need for the next month

Written justification should be forwarded if Written justification should be forwarded if amount exceeds the projected need for the next amount exceeds the projected need for the next 30 days30 days

Must be in the RDM’s office 15 days prior to the Must be in the RDM’s office 15 days prior to the beginning of the monthbeginning of the month

If in order, RD will try to have advance check If in order, RD will try to have advance check delivered on the first of the next monthdelivered on the first of the next month

This is normally the only report of grant This is normally the only report of grant expenditures that RD will require during the grant expenditures that RD will require during the grant periodperiod

Rural Development can establish an Rural Development can establish an electronic transfer for the fundselectronic transfer for the funds They will need the routing and account They will need the routing and account

numbers numbers The first grant draw can be for the The first grant draw can be for the

month in which the grant was closed, month in which the grant was closed, the following month and can include the following month and can include funds for tool and equipment funds for tool and equipment purchasespurchases

F. LandF. Land

Land Survey CriteriaLand Survey Criteria Land must be in a rural areaLand must be in a rural area Lot size – can not be subdividedLot size – can not be subdivided Roads – contiguous to and must have direct Roads – contiguous to and must have direct

access to a street, maintained road or access to a street, maintained road or driveway, must be paved or all weatherdriveway, must be paved or all weather

Water – approved well or public central water Water – approved well or public central water systemsystem *BP*BP Public water is preferable Public water is preferable

Sewer – approved public sewer or septic Sewer – approved public sewer or septic systemsystem *BP*BP Public sewer is preferablePublic sewer is preferable

Site approval – State Director delegate site Site approval – State Director delegate site approval responsibility to appropriate personapproval responsibility to appropriate person

Land DevelopmentLand Development Key ingredient to the programKey ingredient to the program Approach the search in an organized Approach the search in an organized

and systematic mannerand systematic manner Controlling land is criticalControlling land is critical Many other activities depend on itMany other activities depend on it Interim financing may be necessaryInterim financing may be necessary 523 funds may not be used to option or 523 funds may not be used to option or

purchase landpurchase land *BP*BP Contact RD for ideas on where to Contact RD for ideas on where to

looklook

Land Survey ResourcesLand Survey Resources 7CFR Part 35507CFR Part 3550 1924-A1924-A 1924-C1924-C RD Community Development ManagerRD Community Development Manager Health DepartmentHealth Department County or City planner, engineer, or city County or City planner, engineer, or city

plannerplanner Soil Conservation Service Soils BookSoil Conservation Service Soils Book County Court House, Tax Office, Recorder County Court House, Tax Office, Recorder

of Deedsof Deeds Utility CompaniesUtility Companies

Land Survey ProcessLand Survey Process Preparing a site search mapPreparing a site search map

Identify land that is completely ineligibleIdentify land that is completely ineligible Identify and plot locations with desirable Identify and plot locations with desirable

featuresfeatures Plot drawbacksPlot drawbacks Talk to county governments or local Talk to county governments or local

universities to help with survey processuniversities to help with survey process Windshield survey – review sites for:Windshield survey – review sites for:

Topography, flood plains, erosionTopography, flood plains, erosion Access to public roads, vegetation, existing Access to public roads, vegetation, existing

structuresstructures Unique featuresUnique features

Land analysis formLand analysis form Investigate ownershipInvestigate ownership Check into tax recordsCheck into tax records Assume that every parcel is for saleAssume that every parcel is for sale See Form in GuideSee Form in Guide

Selecting the siteSelecting the site Assess suitability of the locationAssess suitability of the location Check zoningCheck zoning Look for community facilitiesLook for community facilities Make sure it fits RD guidelinesMake sure it fits RD guidelines Would you want to live there? Why or why Would you want to live there? Why or why

not?not? Assess physical characteristicsAssess physical characteristics Determine acquisition and development costsDetermine acquisition and development costs

Optioning vs. PurchasingOptioning vs. Purchasing Option agreementsOption agreements

Contract between seller and potential buyer Contract between seller and potential buyer Buyer not obligated to buy, seller obligated to sellBuyer not obligated to buy, seller obligated to sell Options should be between seller and participantOptions should be between seller and participant See Option language in GuideSee Option language in Guide

Purchasing landPurchasing land Grantees can purchase land for later resale to Grantees can purchase land for later resale to

participantsparticipants Can be beneficial when purchasing multiple lotsCan be beneficial when purchasing multiple lots 523 funds cannot be spent for this purpose523 funds cannot be spent for this purpose Interim financing necessaryInterim financing necessary

Interim financingInterim financing No single pot of money availableNo single pot of money available Seller financing may be an optionSeller financing may be an option AHP, CRA, CDBG, HOME, Housing Trust AHP, CRA, CDBG, HOME, Housing Trust

FundsFunds HACHAC Other private corporations or Other private corporations or

foundationsfoundations See NCALL’s Funding Sources Guide for See NCALL’s Funding Sources Guide for

more informationmore information

G. Personnel G. Personnel IssuesIssues

There are many personnel issues There are many personnel issues that must be handled that must be handled

*BP See the Guide for helpful See the Guide for helpful information on:information on: Developing job descriptionsDeveloping job descriptions Creating a salary surveyCreating a salary survey Interviewing, selecting, and hiring Interviewing, selecting, and hiring

personnel personnel

The End The End