Loan and Grant Resolution (Labor Housing Loan and Grant to a Nonprofit Corporation)

Status: Original and derived artifacts are available for this document.

Download: pdf

Close

Save

Submit

FORM APPROVED
OMB NO 0575-0189
Exp. Date: MM/DD/YY

Form RD 3560-41
(02-05)

(LABOR HOUSING LOAN AND GRANT TO A NONPROFIT
CORPORATION)
LOAN AND GRANT RESOLUTION OF

, 20

RESOLUTION OF THE BOARD OF DIRECTORS OF
PROVIDING FOR OBTAINING FINANCIAL
TO AID IN FINANCING FEDERALLY
ASSISTANCE IN THE AMOUNT $
DEFINED LOW-RENT HOUSING AND RELATED FACILITIES FOR LOW-INCOME
DOMESTIC FARM LABOR, AND RELATED MATTERS.
Whereas
(herein referred to as the ''Corporation'') is organized and operating under
and the board of
(authorizing State statute)
directors of the Corporation has determined that
(a) The Corporation should provide low-rent housing and related facilities for low-income domestic farm
labor, as defined in title V of the Housing Act of 1949.
(b) The estimated total cash development cost of such housing and facilities amounts to

$

.

(c) For such purpose the Corporation is able to furnish from its own resources $

.

which the Corporation is
(d) The Corporation will need financial assistance in the amount of $
unable to obtain from other sources for such purpose upon terms and conditions which the Corporation could
reasonably be expected to fulfill.
(e) Of such amount of needed financial assistance the Corporation will be able to repay, with interest at 1%
per annum, the amount of $
over a repayment period of
years, if the balance of
is made available to the Corporation as a grant.
$
(f) The housing and related facilities will fulfill a pressing need in the area in which they are or will be
located.

(g) The housing and facilities cannot be provided without the aid of a grant in the amount stated above:
These requirements do not supersede the applicable requirements for receipt of Federal funds stated in 7 CFR parts 3015, ''Uniform
Federal Assistance Regulations,'' 3016, ''Uniform Administrative Requirements for Grants and Cooperative Agreements to State and
Local Governments,'' or 3019, ''Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher
Education, Hospitals, and other Nonprofit Organizations.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a
collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB
Control Number. The OMB Control Number for this information collection is 0575-0189. Public reporting for this collection of information is estimated to be
approximately 15 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering, and maintaining the data
needed, completing, and reviewing the collection of information. All responses to this collection of information are voluntary. However, in order to obtain or
retain a benefit, the information in this form is required under Section 515 Rural Rental Housing, which includes Congregate Housing, Group Homes, and Rural
Cooperative Housing. Rural Development has no plans to publish information collected under the provisions of this program. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Information Collection Clearance
Officer, Rural Development Innovation Center, Regulations Management Division at [email protected]

Close

Save

Submit

Close

Save

Submit

THEREFORE BE IT RESOLVED:
1. Application for Loan and Grant. The Corporation shall apply to the United States of America, acting
through Rural Development, United States Department of Agriculture (herein called ''the Government'') for a
loan of $
and a grant of $
, pursuant to Title V of the Housing Act of 1949.
The loan and the grant shall be used only for the specific eligible purposes approved by the Government, in
order to provide low-rent housing and related facilities for low-income domestic farm labor. Such housing and
facilities and the land constituting the site may be referred to herein as the ''housing.''
2. Execution of Loan and Grant Instruments. To evidence the loan the Corporation shall issue a
promissory note (herein referred to as ''the Note''), signed by its President and attested by its Secretary, with
its corporate seal affixed thereto, for the amount of the loan, payable in installments over a period of
years, bearing interest at a rate not to exceed
percent per annum, and containing other
terms and conditions prescribed by the Government. To evidence the obligations of the grant, the
Corporation shall execute an instrument in the form attached hereto entitled ''Labor Housing Grant
Agreement'' and referred to herein as the ''Grant Agreement,'' evidencing terms and conditions upon which
the grant is made by the Government and the obligations of the Corporation with respect thereto. To secure
the note and/or all other obligations and agreements of the Corporation with respect to the loan as required by
the Government, the President and the Secretary are hereby authorized to execute a security instrument
giving a lien upon or security interest in the housing and such other property as the Government shall require,
including an assignment of or security interest in the rents and profits as collateral security to be enforceable
in the event of any default by the Corporation. The President and the Secretary are further authorized to
execute any other security and other instruments, agreements, and documents required by the Government
for the loan or grant. The indebtedness and other obligations of the Corporation under the note, Grant
Agreement, this resolution, the security instrument, and any other instruments and agreements related to the
loan or grant are herein called the ''loan and grant obligations.''
3. Equal Employment Opportunity under Construction Contracts and Nondiscrimination in the Use of
Occupancy and Housing and in Any Other Benefits of the Loan or Grant. The President and the Secretary
are hereby authorized and directed to execute on behalf of the Corporation (a) any undertakings and
agreements required by the Government regarding nondiscrimination in the use and occupancy of housing,
(b) Form RD 400- 1, ''Equal Opportunity Agreement,'' involving an Equal Opportunity Clause to be
incorporated in or attached as a rider to each construction contract which exceeds $ 10,000 in amount and is
paid for in whole or in part with loan or grant funds, and (c) Form RD 400-4, ''Assurance Agreement (Under
Title VI, Civil Rights Act of 1964),'' a copy of which is attached hereto and made a part hereof.
4. Supervised Bank Account. The proceeds of the loan and grant and the amount of $
to
be contributed by the Corporation from its own fund and used for approved eligible purposes shall be
deposited in a ''supervised bank account'' as required by the Government. Amounts in the supervised bank
account exceeding $100,000 shall be secured by the financial institution in advance in accordance with U. S.
Treasury Department regulations, 31 CFR part 202. As provided by the terms of the agreement creating the
supervised bank account, all funds therein shall, until duly expended, collaterally secure the loan and grant
obligations. Withdrawals from the supervised bank account by the Corporation shall be made only on checks
of the Corporation and countersigned by the County Supervisor or
signed by the
other authorized official of Rural Development, and only for the specific eligible purposes approved in writing
by the Government. The Corporation's share of any liquidated damages or other monies paid by defaulting
contractors of their sureties shall be deposited in the supervised bank account to assure completion of the
project. When all approved items eligible for payment with loan or grant funds are paid in full, any balance
remaining in the supervised bank account shall be treated as a refund of loan and grant funds in the same
ratio as that between the amounts of the loan and grant, and the supervised bank account shall be closed.

Close

Save

Submit

Close

Save

Submit

5. Accounts for Housing Operations and Loan Servicing. The Corporation shall establish on its books the
following accounts, which shall be maintained so long as the loan or grant obligations continue: A General
Fund Account, an Operation and Maintenance Account, a Debt Service Account, and a Reserve Account.
Funds in said accounts shall be deposited in a bank or banks insured by the Federal Deposit Insurance
Corporation, except for any portion invested in readily marketable obligations of the United States as
authorized by section 9. The Treasurer of the Corporation shall execute a fidelity bond, with a surety
company approved by the Government, in an amount not less than the estimated maximum amount of such
funds to be held in said accounts at any one time. The United States of America shall be named as coobligee, and the amount of the bond shall not be reduced without the prior written consent of the
Government. The Corporation in its discretion may at any time establish and utilize additional accounts to
handle any funds not covered by the provisions of this resolution.
6. General Fund Account. By the time the loan and grant are closed the Corporation shall from its own
All income and revenue from
funds deposit in the General Fund Account the amount of $
the housing shall upon receipt be immediately deposited in the General Fund Account. The Corporation may
also in its discretion at any time deposit therein other funds, not otherwise provided for by this resolution, to
be used for any of the purposes authorized in section 7, 8, or 9. Funds in the General Fund Account shall be
used only as authorized in said sections and, until so used, shall be held by the Corporation in trust for the
Government as security for the loan and grant obligations.
7. Operation and Maintenance Account. Not later than the 15th of each month, out of the General Fund
Account shall be transferred to the Operation and Maintenance Account, sufficient amounts to enable the
Corporation to pay from the Operation and Maintenance Account the actual, reasonable, and necessary
current expenses, for the current month and the ensuing month, of operating and maintaining the housing not
otherwise provided for. Current expenses may include, in addition to expenses occurring or becoming due
monthly, monthly accumulations of proportionate amounts for the payment of items which may become due
either annually or at irregular intervals, such as taxes and insurance and normal repair and replacement of
furnishings and equipment reasonably necessary for operation of the housing. Current expenses may also
include initial purchase and installation of such furnishings and equipment with any funds deposited in and
transferred from the General Fund Account which are not proceeds of the loan and, unless the Government
gives prior written consent, are not income or revenue from the housing.
8. Debt Service Account. Each month, immediately after the transfer to the Operation and Maintenance
Account provided for in section 7, or after it is determined that no such transfer is called for, any balance
remaining in the General Fund Account, or so much thereof as may be necessary, shall be transferred to the
Debt Service Account until the amount in the Debt Service Account equals the amount of the next
installment due on the loan. Funds in the Debt Service Account shall be used only for payments on the loan
obligations while they continue and, until so used, shall be held by the Corporation in trust for the
Government as security for the loan and grant obligations.
9. Reserve Account. (a) Immediately after each transfer to the Debt Service Account as provided in
Section 8, any balance in the General Fund Account shall be transferred to the Reserve Account. Funds in
the Reserve Account may be used only as authorized in this resolution and until so used shall be held by the
Corporation in trust as security for the loan and grant obligations. Transfers at a rate not less than
$
annually shall be made to the Reserve Account until the amount in the Reserve
and shall be resumed at any time when necessary, because
Account reaches the sum of $
of disbursements from the Reserve Account, to restore it to said sum. Of such sum, at least 50 percent shall
be maintained on a cash basis, referred to herein as the "cash reserve". After the cash reserve reaches the
required 50 percent of said sum, all or any portion of the balance of said sum may, at the option of the
Corporation, consist of an amount, referred to herein as the ''prepayment reserve,'' by which the Corporation

Close

Save

Submit

Close

Save

Submit

is ''ahead of schedule'' as defined in the regulations of Rural Development. Funds in the cash reserve shall be
deposited in a separate bank account or accounts insured by the Federal Deposit Insurance Corporation or
invested in readily marketable obligations of the United States, the earnings on which shall accrue to the
Reserve Account.
(b) With the prior consent of the Government, funds in the Reserve Account may be used by the Corporation
(1) To meet payments due on the loan obligations in the event the amount in the Debt Service
Account is not sufficient for the purpose.
(2) To pay costs of repairs or replacements to the housing caused by catastrophe or long-range
depreciation which are not current expenses under section 7.
(3) To make improvements or extensions to the housing.
(4) For other purposes desired by the Corporation which in the judgment of the Government likely
will promote the loan or grant purposes without jeopardizing collectability of the loan or
impairing the adequacy of the security, or will strengthen the security, or will facilitate, improve,
or maintainthe orderly collectability of the loan.
(c) Any amount in the Reserve Account which exceeds the sum specified in section 9 (a), and is not agreed
between the Corporation and the Government to be used for purposes authorized in section 9 (b) shall be
applied promptly on the loan obligations.
10. Regulatory Covenants. So long as the loan or grant obligations continue, the Corporation shall - (a) Impose and collect such fees, assessments, rents, and charges that the income of the Corporation will be
sufficient at all times for operation and maintenance of the housing payments on the loan obligations, and
maintenance of the accounts herein provided for.
(b) Maintain complete books and records relating to the Corporation's financial affairs, cause such books
and records to be audited at the end of each fiscal year, promptly furnish the Government without request a
copy of each audit report, and permit the Government to inspect such books and records at all reasonable
times.
(c) If required or permitted by the Government, revise the accounts herein provided for, or establish new
accounts, to cover handling and disposition of income from and payment of expenses attributable to the
housing or to any other property securing the loan or grant obligations, and submit to the Government regular
and special reports concerning the housing or the Corporation's financial affairs, including any information
required by the Government regarding income of the occupants of the housing.
(d) Not charge rents to domestic farm labor that exceed the rents approved by the Agency after
considering the income of the occupants, Agency and non-Agency rental assistance available and the
necessary costs of operation, debt service, and adequate maintenance of the housing.
(e) Maintain the housing at all times in a safe and sanitary condition in accordance with standards
prescribed by state and local law, and Agency requirements.
(f) When making occupancy decisions, ensure that domestic farm labor applicants will always receive
priority.

Close

Save

Submit

Close

Save

Submit

(g) Unless the Government gives prior consent:
(1) Not use or permit use of the housing for any purpose other than as low-rent housing and related
facilities for low-income domestic farm labor, as those terms are defined by the Government.
(2) Not enter into any contract or agreement for improvements or extensions to the housing or other
property securing the loan or grant obligations.
(3) Not cause or permit voluntary dissolution of the Corporation, nor merge or consolidate with any
other organization, nor transfer or encumber title to the housing or any part thereof or interest
therein, by sale, mortgage, lease, or other conveyance or encumbrance, nor engage in any other new
business, enterprise, or venture than operation of the housing.
(4) Not borrow any money, nor incur any liability aside from current expenses as defined in
Section 7.
(h) Submit the following to the Government for prior review not less than
days before the effective dates:
(1) Annual budgets and operating plans.
(2) Statements of management policy and practice including eligibility criteria and implementing
rules for occupancy of the housing.
(3) Proposed rents and charges and other terms of rental agreements for occupancy of the housing.
(4) Rates of compensation to officers and employees of the Corporation payable from or chargeable
to any account provided for in this resolution.
(i) If required by the Government, modify and adjust any matters covered by section 10 (e).
(j) Comply with all its agreements and obligations in or under this resolution, the note, Grant Agreement,
security instrument, and any related agreement executed by the Corporation in connection with the loan or
grant.
(k) Not alter, amend, or repeal without the Government's consent this resolution or the bylaws or articles of
incorporation of the Corporation, which shall constitute parts of the total contract between the Corporation
and the Government relating to the loan and grant obligations.
(l) Do other things as may be required by the Government in connection with the operation of the housing,
or with any of the Corporation's operations or affairs which may affect the housing, the loan or grant
obligations, or the security.
11. Refinancing of Loan. If at any time it appears to the Government that the Corporation is able to obtain
a loan upon reasonable terms and conditions to refinance the loan obligations then outstanding, upon request
from the Government, the Corporation will apply for, take all necessary actions to obtain, and accept such
refinancing loan and will use the proceeds for said purpose.

Close

Save

Submit

Close

Save

Submit

12. General Provisions.
(a) It is understood and agreed by the Corporation that any loan or grant will be administered subject to the
limitations of the authorizing act of Congress and related regulations, and that any rights granted to the
Government herein or elsewhere may be exercised by it in its sole discretion to carry out the purposes of the
loan and grant, enforce such limitations, and protect the Government's financial interest in the loan and grant
and the security.
(b) The provisions of this resolution are representations of the Corporation to induce the Government to make or
insure a loan or make a grant to the Corporation as aforesaid. If the Corporation should fail to comply with
or perform any of its loan or grant obligations, such failure shall constitute default as fully as default in payment
of amounts due on the loan obligations. In the event of default, the Government at its option may declare the
entire amount of the loan and grant obligations immediately due and payable and, if such entire amount is not
paid forthwith, may take possession of and operate the housing and proceed to foreclose its security and
enforce all other available remedies.
(c) Upon request by the Government the corporation will permit representatives of the Government to inspect
and make copies of any of the records of the corporation pertaining to the financial assistance. Such inspection
and copying may be made during regular office hours of the corporation, or any other time the corporation and
the Government finds convenient.
(d) Any provisions of this resolution may be waived by the Government in its sole discretion, or changed by
agreement between the Government and the Corporation, after this resolution becomes contractually binding, to
any extent such provisions could legally have been foregone, or agreed to in amended form, by the Government
initially.
(e) Any notice, consent, approval, waiver, or agreement must be in writing.
(f) This resolution may be cited in the security instrument and elsewhere as the ''Loan and Grant Resolution of
, 20
."
(date of this resolution)

CERTIFICATE

The undersigned,
, the Secretary of the corporation
identified in the foregoing resolution, hereby certifies that the foregoing is a true copy of a resolution duly
adopted by the board of directors on
, 20
, which has not been altered, amended, or repealed.

(Date)

(Secretary)

(SEAL)

Close

Save

Submit