Construction and Repair

DEPARTMENT OF AGRICULTURE

Rural Housing and Community Development Service

Rural Business and Cooperative Development Service

Rural Utilities Service

Consolidated Farm Service Agency

7 CFR Part 1924

RIN 0575-AA88

Construction and Repair

AGENCIES: Rural Housing and Community Development Service, Rural

Business and Cooperative Development Service, Rural Utilities Service,

and Consolidated Farm Service Agency; USDA.

ACTION: Final rule.

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SUMMARY: The Rural Housing and Community Development Service (RHCDS) is

amending the regulation on Planning and Performing Site Development

Work. RHCDS will no longer review or approve subdivisions, but will

review and approve individual sites for its program. This action is

consistent with similar actions being proposed or promulgated by the

Department of Housing and Urban Development (HUD) and the Department of

Veterans Affairs (VA). This site approval authority will allow RHCDS to

bring into the program many low cost homes in subdivisions that have

already been developed. Many of these were not previously reached

because the seller would not, or could not afford to furnish RHCDS with

all the required data for a total subdivision approval.

To assure that eligible individuals are afforded quality sites,

subdivisions must meet the community standards and the sites must meet

RHCDS site underwriting criteria. Environmental reviews will be

required on a site by site basis and cumulative impact will be

addressed when indicated.

EFFECTIVE DATE: June 8, 1995.

FOR FURTHER INFORMATION CONTACT: Billy Chapman, Senior Loan Specialist,

Rural Housing and Community Development Service, USDA, Room 5334-S,

South Agriculture Building, 14th and Independence Avenue SW.,

Washington, D.C. 20250, Telephone (202) 720-1485. [[Page 24541]]

SUPPLEMENTARY INFORMATION:

Classification

This rule has been determined to be not-significant for purposes of

Executive Order 12866, and, therefore, has not been reviewed by the

Office of Management and Budget (OMB).

Paperwork Reduction Act

The information collection requirements contained in this

regulation have been approved by the Office of Management and Budget

(OMB) under the provisions of 44 U.S.C. chapter 35 and have been

assigned OMB control number 0575-0164, in accordance with the Paperwork

Reduction Act of 1980. This final rule does not impose any new

information collection requirements in addition to those approved by

OMB.

Environmental Impact Statement

This document has been reviewed in accordance with, 7 CFR part 1940

subpart G, ``Environmental Program.'' It is the determination of RHCDS

that this action does not constitute a major Federal action

significantly affecting the quality of the human environment, and in

accordance with the National Environmental Policy Act of 1969, Public

Law 91-190, an Environmental Impact Statement is not required.

Intergovernmental Consultation

For the reason set forth in the final rule and related notice to 7

CFR part 3015, Subpart V, 48 FR 29115, June 24, 1983, this program is

excluded from the scope of Executive Order 12372 which requires

intergovernmental consultation with state and local officials.

Program Affected

These changes affect the following RHCDS program as listed in the

Catalog of Federal Domestic Assistance: 10.410, Low Income Housing

Loans.

Civil Justice Reform

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. In accordance with this rule: (1) all state and

local laws and regulations that are in conflict with this rule will be

preempted; (2) no retroactive effect will be given to this rule; and

(3) administrative proceedings in accordance with the regulations of

the RHCDS at 7 CFR part 1900, subpart B as published by the Department

of Agriculture to implement the provisions of the National Appeals

Division as mandated by the Department of Agriculture Reorganization

Act of 1994, must be exhausted before bringing suit in court

challenging actions taken under this rule unless those regulations

specifically allow bringing suit at an earlier time.

Regulatory Reform: Less Burdensome or More Efficient Alternatives

The Department of Agriculture is committed to carrying out its

statutory and regulatory mandates in a manner that best serves the

public interest. Therefore, where legal discretion permits, the

Department actively seeks to promulgate regulations that promote

economic growth, create jobs, are minimally burdensome and are easy for

the public to understand, use or comply with. In short, the Department

is committed to issuing regulations that maximize the net benefits to

society and minimize costs imposed by those regulations. The Department

has utilized comments and suggestions from the public to develop this

regulation in accordance with these principles.

Background

The proposed rule was published in the Federal Register (59 FR

42778) on August 19, 1994, providing for a 60-day comment period. The

rule proposed that RHCDS no longer approve subdivisions and instead

approve individual lots.

Interested persons have been afforded an opportunity to participate

in the making of this rule. Due consideration has been given to the 47

comments received (including four late comments).

Twenty-seven commenters issued strong support for the rule and

requested that it be published as written.

Nine commenters applauded RHCDS for a step in the right direction.

However, they along with eleven other commenters, furnished some of the

following suggestions for revisions to individual sections of the rule:

One commenter contends this rule goes through several paragraphs to

outline details to look for, but appears to wind up stating that

regardless of whether or not the subdivision is approved by a local

community RHCDS may accept the site. The commenter recommended that

RHCDS should just allow approval officials to approve any well located

site and eliminate the rule completely.

RHCDS does not concur with this request. RHCDS must ensure that

sites are developed to provide decent, safe, and sanitary living

conditions for recipients of RHCDS loans and to serve as adequate

security for these loans. In order to effectively perform its mission,

RHCDS must have guidelines for loan approval officials as well as

applicants, builders, and developers, that will give some

standardization to what is expected before financing is approved for a

particular site. However, a paragraph has been added to the rule to

make it clear that no site will be approved unless it meets all state

and local permits and approvals in connection with any proposed

development.

Two commenters suggested that RHCDS should still require that

subdivisions be developed as part of a rural community.

RHCDS does not concur with this suggestion. When this rule is

effective RHCDS will no longer approve subdivisions, and does not plan

to deny financing for individual sites to eligible applicants just

because they may be in a subdivision not associated with a town.

Section 502(f) of the Housing Act of 1949, 42 U.S.C. Sec. 1472(f),

clearly provides that RHCDS cannot deny credit on a site just because

it is in a remote rural area.

Four commenters stated that the process for an environmental review

of a site is not clear and phrases like ``important farmland'' should

be clarified. One of these commenters stated RHCDS was excluding flood

hazard areas from their loan making and eliminating entire communities

as locations for Section 502 loans in the West and Southwest.

RHCDS has not changed the final rule because of these comments.

Several sections in the rule refer to 7 CFR part 1940, subpart G, which

contains RHCDS environmental requirements. RHCDS environmental policies

on individual site reviews are not changed with the revision of this

rule. RHCDS policy on flood hazard areas, as set forth in 7 CFR part

1806, subpart B, has not been changed by this regulation.

One commenter contends that the requirements for approval of sites

for Federal Housing Administration (FHA), VA, and RHCDS guaranteed

loans are similar and the requirements for approval of sites for this

program are different.

RHCDS has not changed the final rule relating to these comments.

This rule is for the RHCDS direct loan program which is designed for

low- and very low-income applicants. RHCDS serves not as a guarantor in

this program, but as a lender. In the guaranteed loan programs the

guaranteed lender reviews the site for acceptability for loan purposes.

In this program RHCDS must ensure that sites are developed to provide

decent lots for the applicants.

Three commenters stated that if RHCDS did not approve subdivisions

and had no process to approve more than one lot in a subdivision at a

time, it was going to be very difficult for [[Page 24542]] developers

to get financing for multiple lot developments.

RHCDS has not changed the final rule relating to these comments.

There is no provision in the rule to package approvals of more than one

site at a time. However, a developer may have more than one site

approval in any time period. The funding for RHCDS housing programs is

no longer strong enough to support subdivisions developed for 100

percent RHCDS financing. The requirements for approval of a site are

specified in this rule. If a developer receives approval on one lot in

a subdivision it should be fairly simple to receive approval on other

similar sites in the same subdivision.

One commenter suggested that with reduced funding for RHCDS

programs RHCDS should use only the best sites, i.e., the ``cream of the

crop,'' for the most needy low- and very low-income applicants.

RHCDS does not concur with this suggestion. This practice would be

discriminatory by refusing to finance properties that applicants really

wanted and requiring them to find ``better'' sites.

One commenter advised that 7 CFR part 1822, subpart G (FmHA

Instruction 444.8), Site Loan Procedures, still requires a subdivision

approval and it refers to this rule for further instructions.

RHCDS agrees with the commenter and a section is added to make it

clear that individual sites financed with RHCDS site loans must comply

with the requirements in this regulation.

Two commenters stated that sections 1924.105(a)(1) and

1924.106(a)(1)(i) should be deleted. If RHCDS was not going to approve

subdivisions they should not provide developers advice on how to

develop them.

RHCDS agrees with the commenters and the sections are revised in

the final rule.

One commenter noted section 1924.105(b)(1) referred to exhibit B as

a guide while section 1924.106(a)(1) states individual water and sewer

systems must meet requirements of exhibit B. This commenter along with

another recommended this rule be revised to require that exhibit B be

referenced as a mandatory minimum instead of a guide.

RHCDS agrees with this recommendation, even though several

commenters disagreed and wanted all references in the rule to refer to

exhibit B as a guide. After further review RHCDS believes single family

housing should use exhibit B as a mandatory minimum for all sites

unless an exception is issued by the state director. Multiple family

housing projects are reviewed by architects and engineers and

unacceptable sites are not as likely. This rule is revised accordingly.

Two commenters pointed out that the requirement that ``sites

must...insure long-term market demand and acceptability.'' in section

1924.106(b), did not comply with the law.

RHCDS agrees with these commenters and this phrase will be removed

from the final rule.

Four commenters suggested that section 1924.106(c) was too

restrictive. Railroads and cemeteries should not be restricted as

surroundings for a multiple family complex.

RHCDS partially concurs with the commenters. RHCDS is still

responsible as a Government agency to not finance a multiple family

complex if the loan approval official observes a problem for the

residents. RHCDS is concerned that the long-term viability of an

apartment complex will be adversely impacted by the non-desirable

influences and more importantly, the quality of the life of the tenants

would be diminished. RHCDS is responsible for ensuring that the

proposed housing is located to provide a desirable place for the

tenants to reside. The final rule will be revised to remove proximity

to cemeteries and low activity railroads as unacceptable locations.

Two commenters suggested that section 1924.107(a)(1) be revised to

accept individual water systems for financing if they meet the

requirements of the state Department of Health or other comparable

reviewing and regulatory authority.

RHCDS partially concurs with these commenters and the final rule

will be revised to state that individual water or sewer systems must

meet the requirements of the state Department of Health or other

comparable reviewing and regulatory authority. However, because there

is a vast difference in local area requirements, RHCDS will still

require minimum requirements for water and sewer systems serving an

individual site unless an exception is issued by the state director.

Nine commenters thought that the rule required nearly the same

steps to approve a site as previously required to approve a

subdivision. Several of these commenters wrote that the Housing and

Community Development Act of 1992 (HCDA of 1992) allowed the Secretary

to accept subdivisions that had been approved by local, county or state

agencies. They recommended that a section be included to accept

subdivisions planned in accordance with local requirements which

generally meet or exceed those of this subpart. Several of these

commenters recommended that the state director be authorized to make

those determinations.

RHCDS does not concur with the commenters' request. The HCDA of

1992 did allow the Secretary to accept subdivisions that had been

approved by local, county or state agencies. This rule does not

authorize RHCDS to accept or reject subdivisions. RHCDS approves or

rejects individual sites. Therefore, if a subdivision had been approved

by a local, county or state agency RHCDS is still required to approve

the site. Section 1924.115 requires information on the site to be

provided by the appraiser and/or the site approval official on a form

provided by the RHCDS. Currently the form that is planned for this

purpose is Form HUD-54891, ``Appraiser/Review Appraiser Checksheet.''

The site review official must complete the proper environmental review

required by 7 CFR part 1940, subpart G for each site. The applicant or

builder will only be involved in this phase if this review exposes a

problem. The other sections of this rule describe the kind of site that

is expected, and for appropriate reasons, the state director is

authorized to waive many of the individual site requirements. The

agency anticipates that the site approval official and builders will

become familiar with these requirements and it will normally only

require a very short time for a builder to complete the required forms

for approval.

One commenter recommended that ``all weather'' streets, as

referenced in section 1924.115(b), not be allowed except under

exception authority of the state director.

RHCDS does not concur with this recommendation. The agency believes

that property constructed and maintained all weather streets provide

acceptable cost effective access to housing sites which are security

for an RHCDS loan.

``All weather'' streets are still required to be developed in full

compliance with public body requirements, dedicated for public use, and

be maintained by a public body or a Home Owners Association.

One commenter stated ``site access'' as referred to in section

1924.115(b) should be left to local governments.

RHCDS does not concur with this request. While some local

governments have ``site access'' requirements, many do not. In order to

ensure that RHCDS loans are adequately secured and that borrowers have

reasonable access to their property RHCDS requires basic, minimum site

access requirements. [[Page 24543]]

Three commenters thought that site approval authority should come

with the position of county supervisor and the state director should

not approve each one individually as required in section 1924.120.

RHCDS does not concur with these commenters. With the United States

Department of Agriculture's reorganization underway, the county

supervisor title may be changed. The state directors will have the

ability to manage the program in their state by deciding who has

adequate experience and training to approve sites.

One commenter suggested that the public should be allowed to

request an exception under section 1924.122.

RHCDS does not concur with the commenter. Section 1924.122 requires

that the state director make the exception request to the

administrator. There is no general exception authority in this rule.

Exceptions are only granted if the Administrator determines that

application of the requirement or provision would adversely affect the

Government's interest.

Several commenters questioned the use of Form HUD-92541,

``Builder's Certification of Plans, Specifications, and Site'', when

the site is new construction.

RHCDS has reviewed this form and although parts of it apply to the

review process being used, it does not totally apply and would be a

source of confusion. A large part of this form applies to the

construction of the house and RHCDS has requirements in other

instructions that govern the inspection and approval of construction.

Requirement of the use of Form HUD-92541 has been deleted from the

final rule.

Discussion

RHCDS stands alone as the only Federal agency that requires

approval of a complete subdivision prior to insuring or guaranteeing a

loan for a home within the subdivision. Developers, builders, realtors,

and applicants for the programs have frequently complained that there

is too much ``red tape'' before an eligible applicant can receive an

RHCDS loan within a well-developed subdivision. Most counties and

communities now have adequate subdivision reviews, and RHCDS's

subdivision approval is not needed to assure quality sites, but is a

duplication of efforts.

This action permits the better use of existing developments and

decreases the environmental impact because not as many new developments

will be needed to meet the demand for lots that will meet RHCDS's

requirements. It fits into existing growth patterns and places more

authority with the local government.

RHCDS is committed to quality sites for its programs and therefore,

requires scrutiny of the individual site. The new site criteria

incorporate many of the prior requirements for all sites in a

subdivision and make these requirements part of the underwriting

criteria for the individual site which will be security for an RHCDS

loan. This action provides for better sites, without requiring the

cumbersome subdivision review and approval process. It provides the

loan applicant with minimum standards for a quality water supply and

waste disposal. It also requires that the property be served by

publicly owned and maintained roads. The regulation provides for an

orderly request for review and systematic process of reviewing the

site.

This regulation omits the detailed internal RHCDS administrative

guidance used by the field offices to administer the program. In the

past, RHCDS program regulations and RHCDS Instructions have been

identical. However, RHCDS has now adopted a policy of publishing

regulations which set forth only these matters which confer a benefit

or impose an obligation on the public or which are necessary for the

public to understand their responsibilities.

List of Subjects in 7 CFR Part 1924

Housing standards, Low and moderate income housing, Rural areas.

Therefore, Chapter XVIII, Title 7, Code of Federal Regulations is

amended as follows:

PART 1924--CONSTRUCTION AND REPAIR

1. The authority citation for part 1924 is revised to read as

follows:

Authority: 42 U.S.C. 1480, 5 U.S.C. 301.

Subpart C--Planning and Performing Site Development Work

2. Sections 1924.101 through 1924.150 of subpart C of part 1924 are

revised to read as follows:

Sec. 1924.101 Purpose.

This subpart establishes the basic Rural Housing and Community

Development Service (RHCDS) policies for planning and performing site

development work. It also provides the procedures and guidelines for

preparing site development plans consistent with Federal laws,

regulations, and Executive Orders.

Sec. 1924.102 General policy.

(a) Rural development. This subpart provides for the development of

building sites and related facilities in rural areas. It is designed

to:

(1) Recognize community needs and desires in local planning,

control, and development.

(2) Recognize standards for building-site design which encourage

and lead to the development of economically stable communities, and the

creation of attractive, healthy, and permanent living environments.

(3) Encourage improvements planned for the site to be the most

cost-effective of the practicable alternatives. Encourage utilities and

services utilized to be reliable, efficient, and available at

reasonable costs.

(4) Provide for a planning process that will consider impacts on

the environment and existing development in order to formulate actions

that protect, enhance, and restore environmental quality.

(5) No site will be approved unless it meets the requirements of

this part and all state and local permits and approvals in connection

with the proposed development have been obtained.

(b) Subdivisions. RHCDS does not review or approve subdivisions.

Each site approved by RHCDS must meet the requirements of

Sec. 1924.115, on a site by site basis.

(c) Development related costs. (1) Applicant. The applicant is

responsible for all costs incurred before loan or grant closing

associated with planning, technical services, and actual construction.

These costs may be included in the loan or grant as authorized by RHCDS

regulations.

(2) Developer. The developer is responsible for payment of all

costs associated with development.

Sec. 1924.103 Scope.

This subpart provides supplemental requirements for Rural Rental

Housing (RRH) loans, Rural Cooperative Housing (RCH) loans, Farm Labor

Housing (LH) loans and grants, and Rural Housing Site (RHS) loans. It

also provides a site development standard, as indicated in exhibit B of

FmHA Instruction 1924-C (available in any RHCDS field office), which

supplements this subpart to provide the minimum for the acceptability

of development. All of this subpart applies to Single Family Housing

unless otherwise noted. All of this subpart also applies to Multiple

Family Housing except Secs. 1924.115 and 1924.120, and any paragraph

specifically designated for Single Family Housing only. In addition,

RHCDS will consult with appropriate [[Page 24544]] Federal, state, and

local agencies, other organizations, and individuals to implement the

provisions of this subpart.

Sec. 1924.104 Definitions.

As used in this subpart:

Applicant. Any person, partnership, limited partnership, trust,

consumer cooperative, corporation, public body, or association that has

filed a preapplication, or in the case of RHCDS programs that do not

require a preapplication, an official application, with RHCDS in

anticipation of receiving or utilizing RHCDS financial assistance.

Community. A community includes cities, towns, boroughs, villages,

and unincorporated places which have the characteristics of

incorporated areas with support services such as shopping, post office,

schools, central sewer and water facilities, police and fire

protection, hospitals, medical and pharmaceutical facilities, etc., and

are easily identifiable as established concentrations of inhabited

dwellings and private and public buildings.

Developer. Any person, partnership, public body, or corporation who

is involved with the development of a site which will be financed by

RHCDS.

Development. The act of building structures and installing site

improvements on an individual dwelling site, a subdivision, or a

multiple family tract.

Multiple Family Housing. RHCDS RRH loans, RCH loans, LH loans and

grants, and RHS loans.

Single Family Housing. RHCDS Rural Housing loans for individuals

for construction of, repair of, or purchase of a dwelling to be

occupied by one household.

Site. A parcel of land proposed as a dwelling site, with or without

development.

Site approval official. The RHCDS making the determination that a

site meets the requirements in this subpart to be acceptable for site

loans. (See Sec. 1924.120.)

Street surfaces. Streets may be hard or all-weather surfaced.

(1) Hard surface--a street with a portland cement concrete,

asphaltic concrete, or bituminous wearing surface or other hard

surfaces which are acceptable and suitable to the local public body for

use with local climate, soil, gradient, and volume and character of

traffic.

(2) All-weather--a street that can be used year-round with a

minimum of maintenance, such as the use of a grader and minor

application of surface material, and is acceptable and suitable to the

local public body for use with local climate, soil, gradient, and

volume and character of traffic.

Subdivision. Five or more contiguous (developed or undeveloped)

lots or building sites. Subdivisions may be new or existing.

Sec. 1924.105 Planning/performing development.

(a) General. Planning is an evaluation of specific development for

a specific site. Planning must take into consideration topography,

soils, climate, adjacent land use, environmental impacts, energy

efficiency, local economy, aesthetic and cultural values, public and

private services, housing and social conditions, and a degree of

flexibility to accommodate changing demands. All planning and

performing development work is the responsibility of the applicant or

developer. All development will be arranged and completed according to

applicable local, state, or Federal regulations including applicable

health and safety standards, environmental requirements, and

requirements of this subpart. When a public authority requires

inspections prior to final acceptance, written assurance by the

responsible public authority of compliance with local, city, county,

state or other public codes, regulations, and ordinances is required

prior to final acceptance by RHCDS.

(1) [Reserved]

(2) Technical Services. [Reserved]

(i) [Reserved]

(ii) An applicant or developer for a Multiple Family Housing

project or a Single Family Housing site which requires technical

services under Sec. 1924.13(a), must contract for the technical

services of an architect, engineer, land surveyor, landscape architect,

or site planner, as appropriate, to provide complete planning,

drawings, and specifications. Such services may be provided by the

applicant's or developer's ``in house'' staff subject to RHCDS

concurrence. Technical services must be performed by professionals who

are qualified and authorized to provide such services in the state in

which the project would be developed. All technical services must be

provided in accordance with the requirements of professional

registration or licensing boards. At completion of all construction or

completion of a phase or phases of the total project, the persons

providing technical services under this section must notify the RHCDS

field office in writing that all work has been completed in substantial

conformance with the approved plans and specifications.

(iii) For developments not specifically required to have technical

services under paragraph (a)(2)(ii) of this section, such services may

be required by the state director when construction of streets or

installation of utilities is involved.

(3) Drawings, specifications, contract documents, and other

documentations. Adequate drawings and specifications must be provided

by the applicant or developer to RHCDS in sufficient detail to fully

and accurately describe the proposed development. Contract documents

must be prepared in accordance with Sec. 1924.6 or, in the case of more

complex construction, Sec. 1924.13.

(b) Single Family Housing. Proposals for development of individual

dwelling sites must meet the following requirements:

(1) Site development design requirements. Exhibit B (available in

any RHCDS field office) will be used as a minimum by applicants or

developers in preparing proposals and supporting documents for Single

Family Housing loans, in addition to specific requirements made in this

subpart.

(2) [Reserved]

(c) Multiple Family Housing. Exhibit C (available in any RHCDS

office) should be used as a guide by the applicant or developer in

preparing a proposal and supporting documents for multiple family

housing projects.

Sec. 1924.106 Location.

(a) General. It is RHCDS's policy to promote compact community

development and not to approve sites located in floodplains, on

wetlands, or on important farmlands, unless there is no practical

alternative. Furthermore, RHCDS will not finance development on

locations that adversely affect properties which are listed or are

eligible for listing on the National Register of Historic Places,

located within the Coastal Barrier Resource System, or on a barrier

island. (Environmental requirements are found in 7 CFR part 1940,

subpart G.) In order to be eligible for RHCDS participation:

(1) The site must be located in an eligible area as defined in the

program regulations under which the development is being funded or

approved.

(2) The site must comply with the applicable environmental laws,

regulations, Executive Orders, and subpart G of part 1940.

(b) Single Family Housing. In addition to the general requirements

in paragraph (a) of this section, sites must provide a desirable, safe,

functional, convenient, and attractive living environment for the

residents. [[Page 24545]]

(c) Multiple Family Housing. Multiple family housing projects shall

be located in accordance with the requirements in paragraph (r) of

Sec. 1944.215. Locating sites in less than desirable locations of the

community because they are in close proximity to undesirable influences

such as high activity railroad tracks; adjacent to or behind industrial

sites; bordering sites or structures which are not decent, safe, or

sanitary; or bordering sites which have potential environmental

concerns such as processing plants, etc., is not acceptable. Screening

such sites does not make them acceptable. Sites which are not an

integral part of a residential community and do not have a reasonable

access, either by location or terrain, to essential community

facilities such as water, sewerage, schools, shopping, employment

opportunities, medical facilities, etc., are not acceptable.

Sec. 1924.107 Utilities.

All development under this subpart must have adequate, economic,

safe, energy efficient, dependable utilities with sufficient easements

for installation and maintenance.

(a) Water and wastewater disposal systems--(1) Single Family

Housing. If sites are served by central water or sewer systems, the

systems must meet the requirements of paragraphs (a)(2) (i) and (ii) of

this section. If sites have individual water or sewer systems, they

must meet the requirements of the state department of health or other

comparable reviewing and regulatory authority and the minimum

requirements of exhibit B (available in any RHCDS field office),

paragraphs V and VI. Sites in subdivisions of more than 25 dwelling

units on individual systems, or sites that do not meet the requirements

of exhibit B, paragraphs V and VI, must have state director

concurrence.

(2) Multiple Family Housing. Proposals processed under this

paragraph shall be served by centrally owned and operated water and

wastewater disposal systems unless this is determined by RHCDS to be

economically or environmentally not feasible. All central systems,

whether they are public, community, or private, shall meet the design

requirements of the state department of health or other comparable

reviewing and regulatory authority. The regulatory authority will

verify in writing that the water and wastewater systems are in

compliance with the current provisions of the Safe Drinking Water Act

and the Clean Water Act, respectively.

(i) Sites which are not presently served by a central system, but

are scheduled for tie-in to the central system within 2 years, should

have all lines installed during the initial construction. Such sites

must have an approved interim water supply or wastewater disposal

system installed capable of satisfactory service until the scheduled

tie-in occurs.

(ii) In addition to written assurance of compliance with state and

local requirements, there must be assurance of continuous service at

reasonable rates for central water and wastewater disposal systems.

Public ownership is preferred whenever possible. In cases where interim

facilities are installed pending extension or construction of permanent

public services, the developer must assume responsibility for the

operation and maintenance of the interim facility or establish an

entity for its operation and maintenance which is acceptable to the

local governing body. If a system is not or will not be publicly owned

and operated, it must comply with one of the following:

(A) Be an organization that meets the ownership and operating

requirements for a water or wastewater disposal system that RHCDS could

finance under 7 CFR part 1942, subpart A or be dedicated to and

accepted by such an organization.

(B) Be an organization or individual that meets other acceptable

methods of ownership and operation as outlined in HUD Handbook 4075.12,

``Ownership and Organization of Central Water and Sewerage Systems.''

RHCDS should be assured that the organization has the right, in its

sole discretion, to enforce the obligation of the operator of the water

and sewerage systems to provide satisfactory continuous service at

reasonable rates.

(C) Be adequately controlled as to rates and services by a public

body (unit of Government or public services commission).

(iii) Multiple family developments of more than 25 units with

individual system must have national office concurrence.

(A) [Reserved]

(B) Supporting information for the proposed individual water

systems, covering the following points:

(1) In areas where difficulty is anticipated in developing an

acceptable water supply, the availability of a water supply will be

determined before closing the loan.

(2) Documentation must be provided that the quality of the supply

meets the chemical, physical, and bacteriological standards of the

regulatory authority having jurisdiction. The maximum contaminant

levels of U.S. EPA shall apply. Individual water systems must be tested

for quantity and bacteriological quality. Where problems are

anticipated with chemical quality, chemical tests may be required.

Chemical tests would be limited to analysis for the defects common to

the area such as iron and manganese, hardness, nitrates, pH, turbidity,

color, or other undesirable elements. Polluted or contaminated water

supplies are unacceptable. In all cases, assurance of a potable water

supply before loan closing is required.

(C) Supporting information for individual wastewater disposal

systems with subsurface discharge provided by a soil scientist,

geologist, soils engineer, or other person recognized by the local

regulatory authority. This data must include the following:

(1) Assurance of nonpollution of ground water. The local regulatory

authority having jurisdiction must be consulted to ensure that

installation of individual wastewater systems will not pollute ground

water sources or create other health hazards or otherwise violate State

water quality standards.

(2) Records of percolation tests. Guidance for performing these

tests is included in the EPA design manual, ``Onsite Wastewater

Treatment and Disposal Systems'' and the minimum RHCDS requirements are

in exhibit B, paragraph VI. (These may be waived by the state director

when the state has established other acceptable means for allowing

onsite disposal.)

(3) Determination of soil types and description. The assistance of

the SCS or other qualified persons should be obtained for soil type

determination and a copy of its recommendations included in the

documentation.

(4) Description of ground water elevations, showing seasonal

variations.

(5) Confirmation of space allowances. An accurate drawing to

indicate that there is adequate space available to satisfactorily

locate the individual water and wastewater disposal systems; likewise,

documented assurance of compliance with all local requirements.

Structures served by wastewater disposal systems with subsurface

discharge require larger sites than those structures served by another

type system.

(6) Description of exploratory pit observations, if available.

(D) Supporting information for individual wastewater disposal

systems with surface discharge covering the following points:

(1) Effluent standards issued by the appropriate regulatory agency

that controls the discharge of the proposed individual systems.

Assurance from this regulatory agency that the effluent standards will

not be exceeded by the [[Page 24546]] individual systems being proposed

must be included.

(2) Program of maintenance, parts, and service available to the

system-owner for upkeep of the system.

(3) A plan for local inspection of the system by a responsible

agency with the authority to ensure compliance with health and safety

standards.

(b) Electric service. The power supplier will be consulted by the

applicant to assure that there is adequate service available to meet

the needs of the proposed site. Underground service is preferred.

(c) Gas service. Gas distribution facilities, if provided, will be

installed according to local requirements where adequate and dependable

gas service is available.

(d) Other utilities. Other utilities, if available, will be

installed according to local requirements.

Sec. 1924.108 Grading and drainage.

(a) General. Soil and geologic conditions must be suitable for the

type of construction proposed. In questionable or unsurveyed areas, the

applicant or developer will provide an engineering report with

supporting data sufficient to identify all pertinent subsurface

conditions which could adversely affect the structure and show proposed

solutions. Grading will promote drainage of surface water away from

buildings and foundations, minimize earth settlement and erosion, and

assure that drainage from adjacent properties onto the development or

from the development to adjacent properties does not create a health

hazard or other undesirable conditions. Grading and drainage will

comply with exhibit B, paragraphs III and IV, of this subpart.

(b) Cuts and fills. Development requiring extensive earthwork, cuts

and fills of 4 feet or more shall be designed by a professional

engineer. Where topography requires fills or extensive earthwork that

must support structures and building foundations, these must be

controlled fills designed, supervised, and tested by a qualified soils

engineer.

(c) Slope protection. All slopes must be protected from erosion by

planting or other means. Slopes may require temporary cover if exposed

for long periods during construction.

(d) Storm water systems. The design of storm water systems must

consider convenience and property protection both at the individual

site level and the drainage basin level. Storm water systems should be

compatible with the natural features of the site. In areas with

inadequate drainage systems, permanent or temporary storm water storage

shall be an integral part of the overall development plan. Design of

these facilities shall consider safety, appearance, and economical

maintenance operations.

Secs. 1924.109-1924.114 [Reserved]

Sec. 1924.115 Single Family Housing site evaluation.

(a) Site review. The site approval official will evaluate each site

(developed or undeveloped) to determine acceptance for the program.

Information on the site will be provided by the appraiser or site

approval official on a form provided by RHCDS and available in any

RHCDS field office.

(b) Site access. Each site must be contiguous to and have direct

access from:

(1) A hard surfaced or all weather road which is developed in full

compliance with public body requirements, is dedicated for public use,

and is being maintained by a public body or a home owners association

that has demonstrated its ability or can clearly demonstrate its

ability to maintain the street; or

(2) An all weather extended driveway which can serve no more than

two sites connecting to a hard surface or all weather street or road

that meets the requirements of paragraph(b)(1); or

(3) A hard surfaced street in a condominium or townhouse complex

which:

(i) Is owned in common by the members or a member association and

is maintained by a member association that has demonstrated its ability

or can clearly demonstrate its ability to maintain the street; and

(ii) Connects to a publicly owned and dedicated street or road.

(c) Exceptions to street requirements. A site not meeting the

conditions in paragraph (b) of this section will be acceptable if:

(1) The applicant is a builder for a conditional commitment (a loan

will not be approved until the site meets the conditions in paragraph

(b) of this section), or the builder posts an irrevocable performance

and payment bond (or similar acceptable assurance) that assures the

site approval official that the site will be developed to meet the

conditions in paragraph (b) of this section; or

(2) The site is recommended by the site approval official and

approved by the state director. A request for state director approval

must justify that it is in the best interest of both the government and

the applicant to approve the site.

(d) Site layout. (1) Sites shall be surveyed and platted. Permanent

markers shall be placed at all corners.

(2) Sites shall meet all requirements of state and local entities

and RHCDS.

(e) Covenants, conditions and restrictions. Sites in subdivisions

shall be protected by covenants, conditions, and restrictions (CC&Rs)

to preserve the character, value, and amenities of the residential

community and to avoid or mitigate potential environmental impacts

unless, an exception is granted by RHCDS after considering the

suitability of local ordinances, zoning, and other land use controls.

(1) CC&Rs shall be recorded in the public land records and

specifically referenced in each deed.

(2) The intent of the CC&Rs is to assure the developers that the

purchasers will use the land in conformance with the planned objectives

for the community. In addition, the CC&Rs should assure the purchasers

that the land covered by the CC&Rs will be used as planned and that

other purchasers will use and maintain the land as planned to prevent

changes in the character of the neighborhood that would adversely

impact values or create a nuisance.

Secs. 1924.116-1924.118 [Reserved]

Sec. 1924.119 Site Loans.

Subdivisions approved under subpart G of part 1822 (FmHA

Instruction 444.8) or exhibit F of subpart I of part 1944 (available in

any RHCDS field office), will meet the general requirements of this

subpart to insure lots in the subdivision will meet the requirements of

Sec. 1924.115.

Secs. 1924.120-1924.121 [Reserved]

Sec. 1924.122 Exception authority.

The Administrator of RHCDS may in individual cases, make an

exception to any requirement or provision of this subpart or address

any omission of this subpart which is not inconsistent with the

authorizing statute or other applicable law if the Administrator

determines that application of the requirement or provision would

adversely affect the Government's interest. The Administrator will

exercise this authority upon the written request of the state director

or the appropriate program assistant administrator. Requests for

exceptions must be supported with documentation to explain the adverse

effect on the Government, proposed alternative courses of action, and

show how the adverse effect will be eliminated or minimized if the

exception is granted. [[Page 24547]]

Secs. 1924.123-1924.149 [Reserved]

Sec. 1924.150 OMB Control Number.

The reporting requirements contained in this subpart have been

approved by the Office of Management and Budget (OMB) and have been

assigned OMB control number 0575-0164. Public reporting burden for this

collection of information is estimated to vary from 5 minutes to 10

minutes per response, with an average of .13 hours per response,

including time for reviewing instructions, searching existing data

sources, gathering and maintaining the data needed, and completing and

reviewing the collection of information. Send comments regarding this

burden estimate or any other aspect of this collection of information,

including suggestions for reducing this burden to the Department of

Agriculture, Clearance Officer, OIRM, Ag Box 7630, Washington, D.C.

20250; and to the Office of Management and Budget, Paperwork Reduction

Project (OMB #0575-0164), Washington, D.C. 20503.

Exhibit A of Subpart C [Removed and Reserved]

3. Exhibit A of subpart C is removed and reserved.

Dated: April 14, 1995.

Michael V. Dunn,

Acting Under Secretary for Rural Economic and Community Development.

[FR Doc. 95-11309 Filed 5-8-95; 8:45 am]

BILLING CODE 3410-07-U