[Federal Register Volume 60, Number 89 (Tuesday, May 9, 1995)]
[Rules and Regulations]
[Pages 24540-24547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11309]



-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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