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Detailed Information on the
Mutual Self-Help Housing -- Technical Assistance Grants Assessment

Program Code 10002038
Program Title Mutual Self-Help Housing -- Technical Assistance Grants
Department Name Department of Agriculture
Agency/Bureau Name Department of Agriculture
Program Type(s) Competitive Grant Program
Assessment Year 2004
Assessment Rating Moderately Effective
Assessment Section Scores
Section Score
Program Purpose & Design 80%
Strategic Planning 88%
Program Management 90%
Program Results/Accountability 75%
Program Funding Level
(in millions)
FY2007 $34
FY2008 $39
FY2009 $0

Ongoing Program Improvement Plans

Year Began Improvement Plan Status Comments
2005

Reduce the speed at which new sponsor groups can come into the program and start assisting families as a grant recipient.

Action taken, but not completed The proposed rule has been published. Comments recieved will be reviewed and addressed

Completed Program Improvement Plans

Year Began Improvement Plan Status Comments
2005

Establish ambitious targets as they relate to the baselines for all measures.

Completed Established new targets.
2005

Complete the development of an adequate efficiency measure.

Completed Common credit efficiency measure developed.

Program Performance Measures

Term Type  
Annual Outcome

Measure: The number of basis points below total RHS portfolio. RHS direct single family housing Self-Help loan delinquency. This rate is lower than the overall RHS direct single family housing loan portfolio. This differential will be accomplished while the number of Self-Help grants and the number of homes built and the number of new loans made to Self-Help participants increases.


Explanation:A measure of successful homeownership, this rate is lower than the overall RHS direct loan portfolio. This differential will be accomplished while the number of Self-Help grants and the number of homeownership opportunities to Self-Help participants increases. Number represents basis points below total RHS portfolio.

Year Target Actual
2003 Baseline 413
2004 350 317
2005 350 417
2006 350 75
2007 350 343
2008 350
2009 350
Long-term Outcome

Measure: The number of basis points below total RHS portfolio. Using default rate comparisons, this measure compares the number of Self Help borrowers who lose their homes in foreclosure to other RHS single family housing direct loan borrowers. This will gauge the long-term success of developing safe, affordable housing through the Self-Help method. This program's default rate targeted to always be lower than the regular single family housing loan program's default rate.


Explanation:This measure will compare the number of Self Help borrowers who lose their homes in foreclosure to other Rural Development borrowers. This will gauge the long-term success of developing safe, affordable housing through the Self-Help method. Number represents basis points below total RHS portfolio.

Year Target Actual
2003 Baseline 130
2004 100 115
2005 100 127
2006 100 85
2007 100 122
2009 100
2010 0
2011 0
2012 0
Long-term Output

Measure: Number of Self-Help homes built. The Agency has a goal of doubling by 2010 (from 1460 loans in FY 2002) the total number of homes built by low income rural families by the Self-Help method (under sponsorship of TA grantees), with an average annual increase of 10%. The measure will be the number of Section 502 Direct loans to Self-Help families.


Explanation:The Agency has a goal of doubling by 2010 (from 1460 loans in FY 2002) the total number of homes built by low income rural families by the Self-Help method (under sponsorship of TA grantees), with an average annual increase of 10%. The measure will be the number of Section 502 Direct loans to Self-Help families.

Year Target Actual
2003 Baseline 1,471 homes
2004 1,606homes 1,525 homes
2005 1,767 homes 1,746 homes
2006 2,138 homes 1,474 homes
2007 2,352 homes 1,277 homes
2008 1,250 homes
2009 0
2010 0
2011 0
2012 0
Long-term Output

Measure: Number of material weaknesses.


Explanation:The program will maintain its current status of no material weaknesses. Number represents how many material weaknesses sustained in that year.

Year Target Actual
2003 Baseline 0
2004 0 0
2005 0 0
2006 0 0
2007 0 0
2008 0
2009 0
2010 0
2012 0

Questions/Answers (Detailed Assessment)

Section 1 - Program Purpose & Design
Number Question Answer Score
1.1

Is the program purpose clear?

Explanation: The purpose of the program is to sponsor groups which will locate and work with families who will build their own homes under the self-help method. Families earn 'sweat equity,' providing many their only homeownership opportunity. Most are very low-income, minority families and nearly all obtain Section 502 Direct loans. Participants contribute at least 65% of the labor, constructed their homes as a group; none move in until all finish. This important teamwork produces a unique, close-knit community of not just neighbors, but of co-workers -- a successful formula rooted deeply in America's pioneer spirit and not duplicated by any other home building program, such as Habitat for Humanity and similar efforts. With the strong bonds and self confidence created by participation in Self-Help, communities, families and individuals demonstrate greater pride. This leads to better loan performance (lower delinquency, fewer foreclosures and improved graduation rate) and savings to the government (versus other Section 502 loans).

Evidence: Housing Act of 1949, Section 523. Also, the objective of the program is clearly stated in 7 CFR, Part 1944, Subpart I, which states, "The primary purpose is to fund organizations that are willing to locate and work with families that otherwise do not qualify as homeowners. Generally, these are families below 50 percent of median income, living in substandard housing, and/or lacking the skills to be good homeowners."

YES 20%
1.2

Does the program address a specific and existing problem, interest or need?

Explanation: The Self-Help program continues to address the problem of lack of decent housing for all in rural areas. A consideration for financial assistance listed in Section 523(c) of the Housing Act of 1949 is the "extent to which the (Self-Help) assistance will facilitate the provision of more decent, safe, and sanitary housing conditions than presently exist in the area." The Self-Help housing program allows even the lowest income rural families to attain homeownership. Participation in the program is at a high level among minority families - those most likely to have inadequate housing, least able to afford their own home, or be blocked from homeownership because of cultural and other barriers. More than 55 percent of Self-Help families are minorities; nearly 40 percent are Hispanic. The program has been identified as one of the stars in USDA's Five-Star Initiative to increase minority homeownership, a direct response to the President's call to bridge the 'homeownership gap' that exists for American minorities.

Evidence: Section 523 of the Housing Act of 1949; In "Taking Stock: Rural People, Poverty and Housing at the Turn of the 21st Century," the Housing Assistance Council (HAC) reported in December 2002, "Minorities in rural areas are among the poorest and worst housed groups in the entire nation." According to a HUD report at the White House Conference on Minority Homeownership in October 2002, nearly three-fourths of all Americans own their home, yet this is true for less than half of minority families. Among the barriers for minority and other low-income families is affordability and lack of funds for down payment and closing costs - barriers overcome by Self-Help. The HAC report also cited affordability and lack of other housing options (rental) as significant in non-metro areas.

YES 20%
1.3

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: No other program combines the unique features which make the Self-Help program a success. The Section 523 grants provide support to Self-Help sponsors who provide technical assistance, recruiting, training, and supervising families to earn 'sweat equity.' The Section 502 Direct loans provide subsidized financing which provides affordability and minimizes loan costs. This unique construction method also promotes strong communities by building close bonds among future neighbors. The program is also unique in serving the lowest income families who have no other homeownership opportunity, yet are able to succeed at a rate higher than other Section 502 borrowers and comparable to other borrowers.

Evidence: In an effort to obtain state funding to bring Self-Help to urban areas, the California Housing Law Project reported in 2000, "The only federal funding (for technical assistance) for Self-Help is restricted to work in rural areas." The report cited numerous social and economic benefits of the self-help building method. In the Fall 2003 magazine 'Rural Voices,' HAC executive director Moises Loza wrote, "Without this opportunity (participation in Self-Help) many low income families would be unable to afford their dream of homeownership." This is because no similar program exists. "USDA's mutual self-help program has developed a structure and language of its own," a Rural Voices article states.

YES 20%
1.4

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: While the program combines government funding, community support and individual initiative in a highly effective manner, it is not free of design flaws. For instance, the program grew from $11 million in 1996 to the current level of $34 million. During that time demand for the program did not keep up with funding levels, leaving a carryover balance for several years. It is a lengthy process for a group to become an active self-help grantee. It may take 6 months or longer for a nonprofit to put together a predevelopment grant application. It must be reviewed by the Technical and Management contractor, and Rural Development at several levels before obligation. From there the predevelopment grantee has 6 months to development their full TA grant application. The entire process can take over 12 months in some cases. Other issues which often add to the delays include land acquisition problems, environmental or title clearance issues and finding adequate numbers of eligible families. In FY 2003 $9M in accumulated carryover balances were transferred to the Single Family Housing Guaranteed Loans to cover increased demand in that program. Since then the interest in the Self-Help program exploded and currently no excess funds are anticipated.

Evidence: Numbers of grants awarded from FY 1996 was 57 for a total of 11,330,320. In FY 2003 there were 108 grants awarded for a total of $35,729,470. This along with the transfer of funds to the Guarantee program has essentially wiped out the carryover of funds and brought the program back in balance. With the re-funding of existing grantees and funding of new grants there is little potential for large carryover balances.

NO 0%
1.5

Is the program effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: Program regulations require targeting to families below 50 percent of median income, living in substandard housing and/or lacking the skills to become good homeowners. Additionally, the Section 502 Direct loan regulations require borrowers be without suitable housing. Contractors hired by USDA carefully monitor grantees to assure Section 523 regulations are followed. Grantees are also subject to program audits and reviews, as well as all Federal grant regulations. In FY 2003, more than 52 percent of the Section 502 loans for Self-Help were to families with income below 50 percent of median. The delinquency rate of Self-Help borrowers is traditionally less than the rate of the overall RD loan portfolio.

Evidence: 7 CFR, Part 1944, Subpart I along with the statutory requirments from the Section 502 direct single family housing loan program within USDA.

YES 20%
Section 1 - Program Purpose & Design Score 80%
Section 2 - Strategic Planning
Number Question Answer Score
2.1

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The Self-Help program provides homeownership opportunities for lower income rural families that otherwise may not qualify. This program is an integral part of Rural Development's mission to improve the quality of life in rural areas by increasing homeownership, especially among low-income families. Over the long run, successful homeownership is the ability to own a home for an extended period. The best measure for this is the loan default (foreclosure) rate. RHS intends to increase the Self-Help portion of Section 502 loans while maintaining a lower delinquency and default rate. This will expand the availability of Self-Help to more communities allowing more families, currently shut-out of homeownership, to participate. USDA established the goal of doubling the number of families served by 2010, with a similar increase in the number of Self-Help sponsor groups. An expected additional benefit is an increase in the portion of RHS loans to minority families, supporting the White House Initiative on Increasing Minority Homeownership. Finally, a long term program goal is to maintain program status as being free of material weaknesses in OIG and MCR reviews.

Evidence: Self-Help Automated Report and Evaluation System (SHARES) reports on grantee and family acitivity; Centralized Servicing Center (CSC) monthly reports on RHS Self-Help and other loan performance (delinquency, foreclosure); Technical & Management Assistance (T&MA) contract reports on grantee activity and outreach; RHS quarterly progress report on its '5-Star Commitment'; and, Unifi and BRIO reports on loan and grant activity, including BRIO reports for individual grantees (delinquency rate of 502 borrowers of any grantee/sponsor group can be tracked). RHS staff works with Self-Help families and sponsor groups locally to assure loan underwriting standards and goals (especially 1st-year delinquency) are met.

YES 12%
2.2

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Based on the successful performance of Section 502 Self-Help loans and many other benefits derived from the program, Rural Development has the ambitious goal of doubling the number of Self-Help participants by 2010 (from 1460 homes in 2002). This will be accomplished while maintaining default rates for Self Help loans that are at least 100 basis points better than the overall Section 502 Direct program, and having no material weaknesses in program delivery or administration.

Evidence: Loans are recorded by the Unifi and other USDA record systems. Reports of results on specific goals (number of Self-Help loans, loan default and delinquency) are provided on a daily, monthly or quarterly basis, including reports from CSC and BRIO.

YES 12%
2.3

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: To increase the number of successful, low-income homeowners in rural areas, goals have been established to maintain a lower delinquency level for Section 502 Self-Help borrowers (in comparison to other RHS loans) while expanding the availability of Self-Help . This measure ties in with the longer term goals for successful homeownership. Additionally, RHS has a goal to increase the participation in the Self-Help program annually.

Evidence: CSC reports on delinquency of Self-Help and other Section 502 Direct borrowers; Unifi and BRIO reports on loan activity; '5-Star Commitment' progress report. The long-term and annual goal(s) are listed on the USDA Rural Development website (Self-Help participation chart, through the '5-Star' link) at www.rurdev.usda.gov.

YES 12%
2.4

Does the program have baselines and ambitious targets for its annual measures?

Explanation: RHS will maintain credit quality of Self-Help Section 502 Direct loans (delinquency rate 350 basis points or more better than all RHS loans) to assure an increase in successful homeownership. From the baseline year (FY 2002), the stated long term goal of increasing participation in the Self Help program is to be accomplished by 2010, with annual increases of about 10%.

Evidence: CSC loan delinquency reports; Unifi and BRIO loan activity reports; '5-Star Commitment' progress report; T&MA contract performance reports; USDA Rural Development website.

YES 12%
2.5

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The goals for increasing Self-Help participation have been widely disseminated within USDA and among partners, including grantees (sponsor groups), contractors and public interest housing groups. The program requires that the Self-Help organizations get an agreement from the families to provide 65% of "sweat equity" into the home. The Self-Help organization that is the grant recipient agrees to this and other requirements when they apply for the funds. Additionally, since RHS is the primary underwriter for the finacing of these mortgages, they along with the borrowers have a vested interest in the long term goal of homeownership.

Evidence: Section 523 of the Housing Act of 1949 (42 U.S.C. 1490c), 7 CFR, Part 1944, Subpart I and RD Instruction 1944-I, 1944.403(n); grant agreement for sponsor groups; performance-based contract for T&MA contractors. Self-Help activity is carefully monitored, with regular agency reports on progress toward the goals.

YES 12%
2.6

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: A study, funded by the Annie E. Casey Foundation and conducted by the Housing Assistance Council (HAC), is underway to determine the long-term impact of Self-Help. Publication of the findings is expected in late 2004. Follow-up studies may result. A regulation task force, which includes non-RHS employees, was recently named to evaluate the performance of the program and consider revision of Self-Help regulations to improve its ability to provide the expected impact. The National Rural Self-Help Housing Association, Partners for Successful Homeownership, and other groups (such as HAC), regularly provide input on program effectiveness and needed improvements. All grantees are subject to grant oversight, as prescribed by Federal grant regulations. This includes annual, independent audits of many grantees. As part of the expected regulation revision, comments and evaluation of the program by outside groups and individuals will be invited. Surveys of Section 502 borrowers, which included Self Help borrowers, were conducted in 1998 by the Economic Research Service, USDA, and in 2004 by a contractors. These surveys indicated that Section 502 borrowers are well satisfied and that RHS servicing compares favorably with private sector loan servicing. In addition, a Management Control Review (MCR) system oversees all facets of the Self-Help program, improving program performance and efficiency.

Evidence: RD Instructions 1944-I. review by T&MA contractors as per performance-based contract requirements; TA grant agreement; Federal grant requirements, including OMB circulars and 7 CFR 3015 & 3016; evaluation by public interest groups, including the National Rural Self-Help Housing Assoc. and HAC (which is currently completing a comprehensive study of the long-term impact of Self-Help on participant families and communities, with funding from an Annie E. Casey Foundation grant). ERS Study, "Meeting the Housing Needs of Rural Residents: Results of the 1998 Survey of USDA's Single Family Direct Loan Housing Program"; Recent Customer Satisfaction Survey and comparison with JD Power 2004 Home Mortgage Study, RD Instruction 2006-M

YES 12%
2.7

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: RHS budget requests for this program include estimates of the numbers of homeownership opportunities provided as well as the numbers of grants provided to the entities that will participate to help deliver the program. As part of the annual Budget and Performance Integration (BPI) process, the agency presents accomplishments and targets. Targets (in families provided homeownership opportunities and TA grants) are based on performance, annual and long-term goals. Input is provided by program partners and those impacted. Some of the goals are explicitly tied to the program performance, such as the numbers of homes financed, but Rural Development, as a whole is still working toward full budget and performance integration.

Evidence: Rural Development BPI documents, including agency mission statements/accomplishment reports.

NO 0%
2.8

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: To improve future performance, the Agency is actively seeking input from a variety of sources in compiling long- and short-term program goals. Significant steps include cooperating with HAC on a study of the long-term impact of Self-Help on families and communities, creation of a task force to draft performance-based regulations, soliciting input at regularly-held conferences around the country (including the National Rural Self-Help Housing Assoc.) and working with other agencies such as HUD, FDIC, and others, to better target underserved areas and groups.

Evidence: HAC/Annie E. Casey study; National Rural Self-Help Housing Assoc.; Self-Help regs task force; BPI process regulations; performance-based contact for T&MA contracotrs; MOUs with HUD and other agencies.

YES 12%
Section 2 - Strategic Planning Score 88%
Section 3 - Program Management
Number Question Answer Score
3.1

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: RHS collects extensive, timely information on all aspects of Self-Help. Data on individual loans enable the agency to track demographic information and loan delinquency in the program. Contractors and RHS field staff use this info to make program improvements, advise grantees on improving performance and anticipate program funding needs. A recent example: A performance-based T&MA contract was issued for the first time after records of past performance and partner comments showed effectiveness of contract funds was not maximized. The new contract targets funds to better acheive the program mission of creating successful homeowners (e.g., contractors must provide outreach to unserved areas and conduct regular meetings with program partners to obtain input on program performance). Similar changes are expected following publication of results of the HAC study of Self-Help impact. This and other partner input will be used by the Self-Help regs task force to revise regulations to improve program performance and effectiveness.

Evidence: UniFI and BRIO activity reports, CSC loan delinquency reports, SHARES; T&MA Contractor reports; RD Instruction 1944-I; OMB circulars; TA Grant Agreements; outside input, from HAC and partner groups; HAC/Annie E. Casey study.

YES 10%
3.2

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: T&MA contractors are paid with a performance-based contract. Tasks include those which are tied directly to the program mission of increasing accessibility to homeownership by low-income rural families. Successful completion will result in improved loan performance and other benefits to the participating families, the agency and rural communities. The performance elements of National Office officials, State Directors and State program directors were recently modified to include specific goals tied to expansion of the Self-Help program (through the '5-Star Commitment') and portfolio management (use of funds and loan delinquency). Grantees are scrutinized by the contractors and local Rural Development staff. Failure to meet grant goals, including those related directly to expanding successful homeownership through Self-Help, can result in numerous 'servicing actions,' inclucing high-risk designation, greater oversight and termination of the grant.

Evidence: TA Grant Agreements; Performance-based T&MA contract; RD Instruction 2060 (Performance Ratings).

YES 10%
3.3

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: All grant obligations are completed through the Automated Discrepancy Processing System (ADPS) at the National Office level after extensive reviews by T&MA contractors and Rural Development Staff. Grants are typically obligated within three days of approval. Reimbursements or advances are made to grantee within seven to ten days of request. This process has improved with greater use of Automatic Funds Transfer (AFT) of payment directly to grantee's bank. Payment for performance to contractors is made in accordance with the Prompt Payment Act. On-going funds management at all levels (grantee, contractor and Rural Development) assures that funds are spent for intended purposes. On a program level, all appropriated funds and most carry-over funds were used in FY 2003 with similar performance expected in FY 2004 -- the program has grown to equal or exceed the level of funding, which had increased in the last decade.

Evidence: 7 CFR 3550 (Section 502 Direct Loans); RD Instruction 1940-L (Annual Funding Notice); RD Instruction 1902-A (Supervisied Bank Accounts); RD Instruction 2006-M (Management Control Review); T&MA contracts; RD Instruction 1944-I; OMB circulars regarding federal grant administration.

YES 10%
3.4

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Grantees agree to meet proposed goals for number of homes built/families assisted (efficiency measures) by signing grant agreement. Progress is monitored closely with SHARES reports and quarterly/monthly reports to USDA and contractors, with appropriate action taken based on results compared to cost efficiencies goals (timely completion of homes, number of homes completed and completion within grant and loan amounts budgeted). Instituting a performace-based contract for the groups that provide technical and supervisory assistance to the grantees has resulted in improved efficiencies -- the contract has requirements for outreach and recruiting of new grantees in underserved areas, cost containments on travel and administrative expenses, and strict oversight (resulting in improved communication) by USDA. While these things have added to the Agencies ability to measure cost effectiveness, improvements can be made. The USDA Task Force on Common Efficiency is currently meeting to design and develop meaningful common efficiency measures.

Evidence: SHARES reports; T&MA contractor monthly and quarterly reports; TA Grant Agreements

NO 0%
3.5

Does the program collaborate and coordinate effectively with related programs?

Explanation: At the agency level, the primary 'related program' is the Section 502 Direct loan program. Management of the 502 program is conducted by the same staff that oversees the Self-Help grant program. Self-Help home loans are a 'subset' of all 502 loans. The program is designed to assure that 502 funding is available (through a priority system) for Self-Help loans. Similarly, Section 523 Site Loans with favorable terms are made available to grantees needing such assistance. On a larger scale, Self-Help partners (grantees, contractors, related interest groups and other funding sources, such as HUD and State and local agencies) meet regularly on a regional and national basis to exchanges ideas and assure best practices. These conferences have led to numerous program improvements. Agency personnel also meet regularly with partners, such as Habitat for Humanity, Intl., HAC and local housing groups.

Evidence: TA Grant Agreements; T&MA service contract; 7 CFR 3550; RD Instruction 1940-L; RD Instruction 444.8 (Site Loans). There are funds in contract for conferences and training while grant may be used for approved travel to meetings/coordination with other groups. Section 523 of the Housing Act of 1949 (42 U.S.C. 1490c), and RD Inst. 1944-I, 1944.403(n) require grantees to recruit and work with families by providing construction supervision, providing counseling (to assure successful homeownership), and assisting in obtaining RHS loans and other funding. RHS has MOU's with HUD, FDIC, other agencies through the Southwest Border Initiative, and numerous state and local agencies to better target Federal funds, improve borrower performance and improve rural areas.

YES 10%
3.6

Does the program use strong financial management practices?

Explanation: Grantees must submit audits annually. Audits must be completed in accordance with Generally Accepted Government Auditing Standards (GAGAS) and in accordance with Rural Development regulations. Program financial management requirements are also detailed in the grant agreement and enforced by a web of oversight by the agency and its representatives.

Evidence: RD Instruction 2006-M (Management Control Review); GAGAS regulations; 7CFR Parts 3015 and 3016, RD Instruction 1944-I.

YES 10%
3.7

Has the program taken meaningful steps to address its management deficiencies?

Explanation: As noted, grantees are carefully monitored on multiple levels. When weaknesses are recognized or problems anticipated, appropriate steps are taken to correct or avoid problems. This can be designation as 'high risk' (require more frequent reporting and increased oversight), institution of a plan to address weaknesses (specific actions a grantee must take), or termination of a grant. Administrative Notices may be issued to address widespread problems and provide guidance as issues arise and circumstances change. Based on review of the program by USDA and Self-Help partners, a re-write of regulations to improve program efficiency (cost and focus of resources) is underway.

Evidence: RD Instruction 2006-M (Management Control Review); T&MA service contracts; OMB circulars on federal grant management; and, RD Instruction 1944-I.

YES 10%
3.CO1

Are grants awarded based on a clear competitive process that includes a qualified assessment of merit?

Explanation: Because of the past availability of sufficient funds to meet need, an 'open application' process is used. To receive a grant, the applicant must be a private nonprofit corporation or a public body. They must have the financial, legal, administrative, and actual capacity to assume and carry out the responsibilities imposed by the Grant Agreement. And have the necessary background and experience with proven ability to perform responsibly in the mutual self-help program. Regional Technical & Management Assistance Contractors and agency staff perform regular outreach in underserved areas and to potential new grantees. These contractors work closely with new and existing groups to train staff and develop applications. A pre-development grant is available to cover costs of the detailed 'marketing plan' and application preparation. This 'weed out' process eliminates the vast majority of unqualified applicants and assures grants are awarded only to qualified applicants. With increased interest in the program, the Agency is in the process of revising the grant award procedure to include a NOFA process with scoring of applications to include efficiency measures, which lays the foundation for a competitive process for grant funding should demand exceed available funds in the future.

Evidence: RD Instructions 1940-L and 1944-I. Basic eligibility requirements are contained in RD Inst. 1944-I at 1944.404. The draft regulation replacing RD Instruction 1944-1 is 7 CFR-3551 and the Work Plan number is 99-001 dated 3-10-1999. The anticipated release date of proposed rule regulation is spring 2005.

YES 10%
3.CO2

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: Participants (families, grantees and contractors) are carefully monitored at multiple levels. Building progress and 502 loan funds expenditure is monitored by the automated SHARES system, which is updated regularly and is designed to provide detailed information on every borrower in the system. Grantees provide monthly/quarterly (depending on high-risk status) reports to USDA on progress toward performance goals and fund usage. Contractors are paid monthly on a task basis for performance, a process requiring on-going monitoring by USDA. Inspections of homes by local USDA staff assure homes are built according to plan and are made prior to paying for work, amounting to close USDA oversight of both families and the grantee. All familiy work is done under the supervision and guidance of the grantee's construction supervisor.

Evidence: SHARES reports; contractor reports; quarterly/montlhy progress reports; RD Instruction 2006-M (MCR); OMB circulars on federal grant management; and, RD Instruction 1944-I.

YES 10%
3.CO3

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: Detailed information on all aspects of the Self-Help program is collected by USDA. This information is summarized and made available to the public in a variety of methods, including publication of annual progress reports, release to other groups (including the Housing Assistance Council) for publication, reporting to USDA public information staff for use in news releases, etc. This information presents an accurate picture of program activity and a basis for comparison to past performance and future plans. Some information about individual grants may be restricted, but is generally available from the grantee in audit reports and annual performance reports.

Evidence: SHARES reports; BRIO data warehouse of funding reports for Section 502 loans and Section 523 grants and contracts; annual reports; outreach to local media. The Agency maintains an internal list of grantees.

YES 10%
Section 3 - Program Management Score 90%
Section 4 - Program Results/Accountability
Number Question Answer Score
4.1

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: Loan default will measure long-term successful homeownership among Self-Help participants. In the first year of the long term goal of an expanded Self-Help program, TA fund usage increased -- to a record level in FY 2003 -- with more Self-Help sponsors across the U.S. This is expected to continue. A significant increase in pre-development grants and increased work by contractors (with groups inquiring about the program) indicates progress toward long-term goals (increasing successful homeownership in rural areas by expanding availability of Self-Help while maintaining credit standards) will continue. As the grants are for two-year periods, an increase in TA usage will convert to more Self-Help loans in future years, though the increase in FY 2003 was less than goal.

Evidence: SHARES reports; CSC reports (Self-Help and other loan performance); T&MA contract reports; '5-Star' progress reports; Unifi and BRIO reports on loan and grant activity, including BRIO reports for individual grantees (delinquency rate of 502 borrowers of any grantee/sponsor group can be tracked); and, outside reports, such as the Annie E. Casey/HAC study. These tools have been actively used to adjust program requirements. Future revisions are planned, with input from a task force and others, to assure program design is sufficient to assure attainment of the agency mission to improve the qulaity of life in rural America.

LARGE EXTENT 17%
4.2

Does the program (including program partners) achieve its annual performance goals?

Explanation: Annual goals have been established as milestones towards meeting the long-term goal of expanding availability of Self-Help while maintaining high rates of successful homeownership for Self Help families. In the FY 2003 (first year, base year of FY 2002), the number of families participating and amount of Section 502 Self-Help loans increased while Self-Help loan delinquency remained at nearly the same level (10.57% in May 2004 v. 10.46% in May 2003). Through its performance based contract, the Agency measures inquiries from potential grantees to T&MA contractors. The number of pre-development grants also indicates progress towards expanding the availability of the Self-Help program. These goals include active participation by partners. In FY 2003, the number of grantees increased by more than the 10 percent needed to acheive the long-term goal of doubling the number of participants by 2010.

Evidence: SHARES reports; CSC reports (Self-Help and other loan performance); T&MA contract reports; '5-Star' progress reports; Unifi and BRIO reports on loan and grant activity; and, other agency tracking reports.

YES 25%
4.3

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: Section 523 fund usage was at an all-time high in FY 2003, which should result in more Section 502 Self-Help loans in coming years. The number of Section 502 Self-Help loans increased in each of the last three years and four of the past five. From FY 2001-2003, the average amount of Section 502 Self-Help loans (homes are typically 100% financed) increased 6.3% while other Section 502 loans increased by 15.7%. Additionally, USDA Rural Development as a whole is developing a common efficiency measure for loan programs.

Evidence: Funds usage reports; RD Instruction 2006-M (MCR)

LARGE EXTENT 17%
4.4

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: There is no other major government or private programs with families working together to build their own homes and communities.

Evidence: The HUD Self-Help Housing program (SHOP), while similar in name, is very different and does not have the level of "sweat equity" requirements that the USDA program does. This has been confirmed through the Housing Assistance Council.

NA 0%
4.5

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: As explained above, the program is structured to have on-going evaluations by participants at all levels. There is currently a private study being completed of the program's long-term effect on families and communities. This should measure whether the program effectively increases the standard of low-income rural Americans who participated in Self-Help or live in affected communities. Surveys conducted by the Economic Research Service, USDA, and more recently by a contractor indicated that Section 502 borrowers are well satisified and that RHS servicing compares favorably with private sector loan servicing.

Evidence: HAC/Annie E. Casey study of long-term impact of Self-Help on participating families and communities will be released this fall. ERS Study, "Meeting the Housing Needs of Rural Residents: Results of the 1998 Survey of USDA's Single Family Direct Loan Housing Program"; Recent Customer Satisfaction Survey and comparison with JD Power 2004 Home Mortgage Study

LARGE EXTENT 17%
Section 4 - Program Results/Accountability Score 75%


Last updated: 09062008.2004SPR