§ 1948.123 - Filing and processing applications for loans.

(a) Intermediaries’ contact. Intermediaries desiring FmHA or its successor agency under Public Law 103-354 assistance in this subpart may file applications with the FmHA or its successor agency under Public Law 103-354 National Office, Director, Business and Industry (B&I) Division, Washington, DC 20250. The Director, Business and Industry Division, may be contacted to discuss assembly, preparation, and processing of applications.

(b) Filing applications. Intermediaries must file the complete application, in one package. Applications received by FmHA or its successor agency under Public Law 103-354 will be reviewed and ranked quarterly and funded in the order of priority ranking. At the intermediary's direction FmHA or its successor agency under Public Law 103-354 may retain unsuccessful applications for consideration in subsequent reviews, through a total of 4 quarterly reviews.

(c) Loan priorities. Priority consideration will be given to proposed intermediaries based on the following factors. Points will be allowed only for factors indicated by well documented, reasonable plans which, in the opinion of FmHA or its successor agency under Public Law 103-354, provide assurance that the items have a high probability of being accomplished. The points awarded will be as specified in each paragraph or subparagraph. If an application does not fit one of the categories listed, it receives no points for that paragraph or subparagraph.

(1) Other funds. Points allowed under this paragraph should be based on documented successful history or written evidence that the funds are available.

(i) The intermediary will obtain non-Federal loan or grant funds to pay part of the cost of the ultimate recipients’ projects. The amount of funds from other sources will average:

(A) At least 10% but less than 25% of the total project cost—10 points.

(B) At least 25% but less than 50% of the total project cost—20 points.

(C) 50% or more of the total project cost—30 points.

(ii) The intermediary will provide loans to the ultimate recipient from its own funds (not loan or grant) to pay part of the costs of the ultimate recipients’ projects. The amount of non-FmHA or its successor agency under Public Law 103-354 derived intermediary funds will average:

(A) At least 10% but less than 25% of the total project costs—10 points.

(B) At least 25% but less than 50% of total project costs—20 points.

(C) 50% or more of total project costs—30 points.

(2) Employment. For computations under this paragraph, income data should be from the latest decennial census of the United States, updated according to changes in consumer price index (CPIU). The poverty line used will be as defined in section 673 (2) of the Community Services Block Grant Act (42 U.S.C. 9902 (2)). Unemployment data used will be that published by The Bureau of Labor Statistics, U.S. Department of Labor.

(i) The median household income in the service area of the proposed intermediary equals the following percentage of the poverty line for a family of 4:

(A) At least 100% but not more than 110%—5 points.

(B) At least 80% but less than 100%—10 points.

(C) below 80%—15 points.

(ii) The unemployment rate in the intermediary's service area equals the following percentage of the national unemployment rate:

(A) At least 100% but less than 125%—5 points.

(B) At least 125% but less than 150%—10 points.

(C) 150% or more—15 points.

(iii) The intermediary will require as a condition of eligibility for a loan to an ultimate recipient that the ultimate recipient certify in writing that it will employ the following percentage of its workforce from members of families with income below the poverty line.

(A) At least 10% but less than 20% of the workforce—5 points.

(B) At least 20% but less than 30% of the workforce—10 points.

(C) 30% of the workforce or more—15 points.

(3) Equity. All assets of the IRP fund will serve as security for the IRP loan and the intermediary will contribute funds not derived from FmHA or its successor agency under Public Law 103-354 into the IRP fund along with the proceeds of the IRP loan. The amount of non-FmHA or its successor agency under Public Law 103-354 derived funds contributed to the IRP fund will equal the following percentage of the FmHA or its successor agency under Public Law 103-354 IRP loan:

(i) At least 5% but less than 15%—15 points.

(ii) At least 15% but less than 25%—30 points.

(iii) 25% or more—50 points.

(4) Experience. The intermediary has actual experience in making and servicing commercial loans, with a successful record, for the following number of full years:

(i) At least 1 but less than 3 years—5 points.

(ii) At least 3 but less than 5 years—10 points.

(iii) At least 5 but less than 10 years—20 points.

(iv) 10 or more years—30 points.

(5) Community representation. The service area is not more than 10 counties and the intermediary utilizes local opinions and experience by including community representatives on its Board of Directors or equivalent oversight board. For purposes of this section, community representatives are people, such as civic leaders, business representatives or bankers, who reside in the service area and are not employees of the intermediary.

(i) At least 10% but less than 40% of the board members are community representatives—5 points.

(ii) At least 40% but less than 75% of the board members are community representatives—10 points.

(iii) At least 75% of the board members are community representatives—15 points.

(6) Administrative. The Administrator may assign up to 35 additional points to an application to account for items such as geographic distribution of funds and emergency conditions caused by economic problems or natural disasters. An assignment of points by the Administrator will be by memorandum stating the Administrator's reasons, and that memorandum will be appended to the calculation of the project score maintained in the case file.