§ 1822.278 - Special requirements for RHS section 523 loans (loans to organizations providing sites for self-help housing).

§ 1822.278 Special requirements for RHS section 523 loans (loans to organizations providing sites for self-help housing).

Loans to organizations which will provide sites for self-help housing (RHS sec. 523 loans) will be made under the provisions of this subpart with the following exceptions:

(a) Eligibility. The applicant must be a nonprofit organization engaged in assisting self-help projects.

(b) Interest. The interest rate will be 3 percent per annum on the unpaid principal balance.

(c) Source of funds. These will be direct loans made from the self-help fund.

(d) Evidence of need. Loans to newly formed organizations will be made on the basis of the applicant's providing firm information as to the number of sites to be developed and the names of eligible bona fide prospective purchasers who are assured of available home financing. Loans to organizations currently involved in mutual self-help housing projects may be made without submitting a list of the names of prospective site purchasers. There must, however, be definite evidence that enough families are available who are eligible and who will buy the sites when they are developed.

(e) Multiple advances. These loans may be disbursed over a period not to exceed 18 months from the date of the first advance.

(f) Note forms. Form RD 3560-52, “Multiple Family Housing Promissory Note,” will be used. See § 1822.274 (c).

(g) Mortgage. Unless the OGC determines the Form to be inappropriate, real estate mortgage Form RD 3550-14, “Real Estate Mortgage or Deed of Trust for (state),” will be used modified as prescribed by or with the advice of the OGC with respect to the name, address, and other identification of the borrower, the style of execution, and the acknowledgement. Additional paragraphs will be included in the mortgage to read as follows:

The borrower agrees not to discriminate in the sale of the dwelling financed under this mortgage due to a prospective purchaser's race, color, national origin, sex, religion, age, marital status, or handicap. The borrower further agrees to comply with all Federal, State, or local laws and ordinances prohibiting discrimination in the sale of housing. The borrower's failure or refusal to comply with this agreement will be a basis for Rural Development to deny future requests for participation in its rural housing programs and activities.

This instrument also secures the obligations and covenants of borrower set forth in Borrower's Loan Resolution of ________ (date), which is hereby incorporated herein by reference.

[35 FR 16087, July 1, 1970, as amended at 42 FR 4408, Jan. 25, 1977; 50 FR 8584, Mar. 4, 1985; 56 FR 67472, Dec. 31, 1991; 69 FR 69104, Nov. 26, 2004; 80 FR 9866, Feb. 24, 2015]