USDA Section 514/516 Farm Labor Housing 

 December 28, 2021

By  Ashley T

 Are you thinking about your housing options for the new year ahead? Fortunately, if you’re thinking about a career in farming and agriculture, the U.S. Department of Agriculture’s Section 514/516 Farm Labor Housing Program may be an answer. This program provides individual farmers or non-profit agencies grants and low-interest loans to build, buy, repair, or improve their housing. 

Read on below to find out how you can take advantage of this great opportunity.

What is Farm Labor Housing?

According to Section 516 of the Housing Act of 1949 (42 U.S.C. 1441 et seq.), Section 516 grants are a USDA farm labor housing program. With it, qualified individuals, nonprofit organizations, public bodies, or Indian tribes may obtain grants or loans for the development costs of their farm labor housing.

A Section 514 loan may also be used at the same time as a Section 516 grant provided that the housing has a “pressing need,” and won’t be developed without help from the Rural Housing Service (RHS).

Up to 90% of the development cost of the housing may be provided by the grant, and up to 10% of the Section 516 funds will need to be used for migrant and domestic farmworker housing in the fiscal year. An applicant will need to provide at least 10% of the total development costs using their resources or from other sources, which may include Section 514 loans.

The funds from this grant can be used to purchase, improve, or build housing as well as related facilities for farmworkers. It can also be used to buy and improve land where the applicant’s housing is located. This may include:

  • Waste disposal systems
  • Water supply systems
  • Installation of streets
  • Parking areas
  • Driveways

It also includes the purchase and installation of various appliances such as:

  • Refrigerators
  • Ranges
  • Dryers
  • Clothes washers

Other facilities related to the housing project may also include the following:

  • Recreation center
  • Maintenance workshop
  • Laundry room
  • Small infirmary
  • Living quarters
  • Office
  • Daycare center

Eligibility

To be eligible for the 514 and 516 programs, an individual or a non-profit agency will need to be providing farm labor services such as:

  • Cultivating the soil for harvesting or raising any aquaculture or agriculture commodity
  • Planting, netting, catching, handling, drying, grading, storing, preserving, or packing unprocessed aquaculture or agriculture commodities
  • Delivering to market, storage, or a carrier for their transportation for processing or sale

To become eligible for a Farm Labor Housing Loan, the applicant will need to be qualified for the requirements as stated above. Applicants must also meet the requirements below to be eligible:

  • A nonprofit organization of farmworkers: If you’re applying as a nonprofit organization of farmworkers, you will need to have representation on the Board of Directors within the area where your housing will be located.
  • A broad-based nonprofit organization: To be a nonprofit organization, you must meet the requirements provided for nonprofit organizations and get a membership reflecting the interests where the housing is located.
  • A limited partnership with a nonprofit partner: This kind of partnership will need to be established under 7 CFR 3560.55(d).
  • An agency or political subdivision of local or State government.
  • A federally recognized Indian tribe.

Application Process

The application process for the farm labor housing program involves six steps that are further broken down into their own sections.

1. Initial Application

The initial application for labor housing (off-farm) has the same requirements as that of Section 515 project applications.

2. Completeness Review

A loan originator will need to review all initial applications for their completeness while following the instructions provided in Section 2 of Chapter 4.

3. Eligibility Review

When reviewing an application for its eligibility, a loan originator will need to make sure that the funds requested are compliant according to Paragraph 12.3 through 12.6 of the Section 514/516 Farm Labor Housing Program. Furthermore, they will need to be following chapter 4. A loan originator will also have to remember that applications shouldn’t be removed from processes if it fails to be within a designated area.

4. Scoring and Ranking of Initial Applications

A State Office will score and rank the initial application provided for the Farm Labor Housing loan and grant according to the requirements specified by the National Organic Farmers Association as well as the instructions provided in Chapter 4, Section 2.

5. Selection and National Ranking of Initial Applications

  • The Agency will review, rank, and score each application per the criteria published within the NOFA. When the scoring and ranking process is finished in each State, a State Office will need to forward all the qualified applications to the National Office for a more thorough selection process.
  • Off-Farm Labor Housing Applications shall be ranked on a national basis. The funds will then be given to applications with top scores. Should the applicant choose not to proceed to the next level, then the highest-ranked application will be able to use the funds allocated for the previous project.

6. Notification of Initial Applications Selection

Once the initial applications have been selected, the National Office will notify each State Office which has been selected from the State for funding. In turn, the State Office will inform the selected applicants and ask them to provide a final application.

Every applicant will have received one of each three kinds of letters:

  • A Handbook Letter 106 (3560), Notice of Pre-application Review Action
  • A Handbook Letter 107 (3560), A Letter Informing the Applicant of the Lack of Funds
  • A Handbook Letter 108 (3560), Letter Denying Funding due to Ineligibility

How is it Allocated?

On-Farm Labor housing projects have been designed to provide affordable housing for farmworkers, which are provided specifically to the location or farm where an applicant works. Loans are then given directly to farm owners or associations of farm owners who want to provide the farmworker they employ with their own homes.

Moreover, on-farm labor housing isn’t restricted by the requirements of designated areas and can be constructed in both rural or urban areas which may be on or off the farm, provided that the applicant can provide a satisfactory reason for their needs.

Every year, the Agency establishes a particular allocation to fund the development of on-farm labor housing. Field Offices are then notified and the new allocation is published in the Federal Register. To determine their likelihood of getting funded, interested applicants may submit their details to their Field Office.

Keep in mind that applications will be funded on a first-come, first-served basis from the National Office funds. Applications for on-farm facilities may also be accepted at any time during the year. Furthermore, on-farm applications need to include the On-Farm Labor Housing Loan Checklist.

Apply for Farm Labor Housing Today

The U.S. Department of Agriculture’s Section 514/516 Farm Labor Housing Program provides a great opportunity for farmers, nonprofit organizations, and other groups with the assistance they need. As a result, they can have more options to get the home they deserve while helping the economy through their contributions to the country’s agriculture. By following the guidelines above, you too can take advantage of the help that the government offers.

About the author 

Ashley T

As a professional writer, I enjoy researching Benefit Programs and writing articles and guides that are easy to follow for those who are in need of assistance.

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