Jennifer Emerling / There Is More Work To Be Done

USDA Explains Funding for Section 523 Self-Help Grantees

The National Rural Self Help Housing Association reports that the following notice regarding funding for Section 523 has been distributed by the USDA national office.

February 8, 2013

Good Morning –

With appropriations still uncertain for the remainder of Fiscal Year (FY) 2013, it is critical that we be proactive as possible in planning and funding Section 523 Technical Assistance grants. We currently have $14.2 million available for Section 523 grants ($8.3 from the Continuing Resolution and $5.9 carryover). Since there is an immediate need to process applications, we will be taking the following steps to fund grant applications for renewal of existing grantees that are performing satisfactorily:

Existing performing grantees will be limited to a grant amount not to exceed their current grant. Funding of the grant application amount will be at 40% of the total amount. The balance will be obligated when additional funding becomes available. No increases in their grant will be considered. Because this is a partial funding and future funding is uncertain the following guidelines must be utilized:

  • The grant agreement should be for two years and state the full amount of the grant request. Budgets, schedules and all other documents related to the grant should be considered as in the usual two year grant cycle.
  • The grant agreement must be modified on the first page under the terms of the agreement, item (a) with the following two conditions:
    1. (a)(1) “This is partial funding in the amount of $_____________, with the $___________balance of the grant being subject to the future availability of funds through the Section 523 Mutual Self-Help Program and grantee remaining in full compliance with the terms of this agreement.”
    2. (a)(2) “The grantee will not start more than forty percent of the homes proposed under this grant during the first year of the grant. No other starts are authorized until additional funds have been obtained. This is intended to ensure that the homes constructed under this partial funding (40%), will be completed.”

At this time we will not be funding subsequent grant requests, pre-development grants or new grant organizations.