Rd instruction 1924-a table of Contents

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(5-12-87) SPECIAL PN

RD Instruction 1924-A

§1924.11 District Director's review of incomplete development.

During monthly District Office work organization meetings and during regular visits to the County Office, the District Director will review the progress that is being made in completing development financed with loans within the district Director's and County Supervisor's responsibility.
(a) Once each year the District Director will make a comprehensive review of all development work not completed within the time scheduled. For incomplete development financed with loan or grant funds within the responsibility of the District Director, the District Director will take the necessary actions to assure that the borrower or grantee completes the planned development. For incomplete development financed with loan or grant funds within the responsibility of the County Supervisor, the District Director will give the necessary direction to the County Supervisor to assure completion of the work. In connection with these responsibilities, the District Director will consider:
(1) The current farm and home operations with respect to the need for the development as originally planned.
(2) Revisions to the development plan.
(3) Funds remaining in the supervised bank account.
(4) Need for additional funds.
(5) Personal funds that could be furnished by the borrower.
(6) Estimated completion dates.
(7) The borrower's attitude with respect to completing the development.
(b) After a complete review of the status of development in both the district and County Offices has been made, the District Director will make a written report to the State Director which will include observations and recommendations regarding incomplete development. The report may be included in the District Director's regular report, and will include:
(1) The number of cases in which borrowers have not completed their development within 9, 15 or 24 months when authorized, and also the number of cases in which funds have been exhausted and the work is incomplete.


RD Instruction 1924-A

§1924.11 (b) (Con.)

(2) The number of borrowers who have not completed their development within 3 years from the loan closing, and indicate the action that was taken in each such case.
(c) If the borrower has not completed development work within 3 years after the date of loan closing and the District Director has determined that the borrower cannot or will not complete the development, the District Director will so indicate on Form RD 1924-1 and request the State Director to withdraw, for application on the loan, any unused development funds remaining in the borrower's supervised bank account, if the borrower will not sign a check for a refund to the loan account.
§1924.12 Warranty of development work.
(a) Form RD 1924-19, "Builder's Warranty," or an insured 10-year home warranty as described in Exhibit L of this subpart, and normal trade warranties on items of equipment will be issued to the borrower at the completion of new building construction, dwelling rehabilitation by the contract method, all cases of newly completed and previously unoccupied dwellings or construction under conditional commitments issued to builders and sellers.
(b) If the warranty is not an insured 10-year warranty, a completed Form RD 1924-19 with warranty protection for 1 year, must be provided by the builder upon final acceptance of the work by the owner and Rural Development. If an insured 10-year warranty is provided, the requirements of Exhibit L of this subpart apply, and a copy of the warranty insurance policy or a binder must have been received by Rural Development prior to disbursement of the final payment to the builder.
(c) If, for some reason, the warranty insurance policy cannot be issued, the contractor will be required to execute Form RD 1924-19 and the case will be forwarded to the State Director for consideration of debarment under the provisions of Subpart M of Part 1940 (available in any Rural Development office). The County Supervisor will assist the borrower to the extent necessary under the provisions of the warranty and Subpart F of Part 1924 of this chapter. (Revised 4-11-89, SPECIAL PN)
(d) The County Supervisor will take the following action prior to the expiration of the first year of the warranty period:


(Revision 1)

(5-12-87) SPECIAL PN

RD Instruction 1924-A

§1924.12 (d) (Con.)

(1) As soon as the warranty has been executed, the follow-up date for sending Form RD 1924-21, "Notice of Expiration of First Year of Warranty," which will be used for the 1 year warranty or the first year of the insured 10-year warranty, will be posted to the "Servicing and Supervision" section of the Management System card.
(2) Form RD 1924-21, is provided for use in notifying the borrower of the expiration date of the first year of the warranty. This letter will be mailed to the borrower early in the second month preceding the expiration date of the first year of the warranty period.
(3) If the County Supervisor or District Director does not hear from the borrower within 30 days, it can reasonably be assumed that no complaint exists or that any complaint has been satisfied unless information to the contrary has been received.
(4) If the borrower notifies Rural Development that any complaint has not been satisfied, an onsite inspection shall be made as early as possible, but not later than 1 month preceding the expiration date of the first year of the warranty. The results of the inspection will be recorded on Form RD 1924-12. If the borrower has complaints, the case should be handled in accordance with the provisions of Subpart F of Part 1924 of this chapter, or as otherwise provided in this subpart.
§1924.13 Supplemental requirements for more complex construction.
This section includes additional provisions that apply to planning and conduct of construction work on all multiple family housing projects and other projects that are more extensive in scope and more complex in nature than individual housing units or farm buildings. This section will apply in addition to all other requirements contained elsewhere in this subpart.
(a) Architectural services. Complete architectural services, as defined in §1924.4 (o)(l) of this subpart are recommended on all projects. They are required for projects involving an LH grant and for all loans for RRH, RCH, and LH projects consisting of more than 4 units unless prior consent to making an exception to the requirements for complete architectural services is obtained from the National Office. If the applicant or contractor is an architect or organization with architectural capability, the applicant must, nevertheless, hire an independent qualified architect or architectural firm to inspect the construction work and perform other needed services during the construction and warranty phases. See Guide 4, Attachment 1, "Attachment to AIA Document - Standard Form of Agreement Between Owner and Architect," for further information (available in any Rural Development office).

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