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A key component of the Rural Development strategic plan is that all programs would develop partnerships with the other organizations involved in rural development. The purposes of these partnerships are to encourage strategic delivery of the programs of both organizations and to coordinate the delivery of technical assistance and financing to rural communities. Several performance measures relate to the leveraging of the program’s funds which is the most likely outcome of the partnerships. Leveraging of funds extends the impact of Rural Development’s limited funds and brings additional dollars into the development of rural communities.
The final indicator relates to effective management of the portfolio. Ensuring loans are repaid on time is a factor in any lending program. Since over 80 percent of RHS borrowers are first-time home owners, it is important they immediately establish a habit of paying their mortgage payment on time. The Agency pays close attention to the first-year delinquency rate to ensure that those borrowers who miss a payment are contacted immediately before they become hopelessly delinquent and no longer able to keep their home.
Means and Strategies: Achievement of the FY 2001 Performance Goals and Indicators is contingent upon receiving the program and general support resources indicated in this plan. The FY 2000 program levels and projected performance targets are based on Congressional appropriations and are not subject to changes that could impact a program’s subsidy rate, such as fluctuations in the Treasury discount rate. As required by the Balanced Budget Act of 1997, the program-specific subsidy rates utilized in the development of the President’s FY 2000 Budget will be used when establishing obligations of FY 2000 funds.
The President’s Homeownership Initiative has helped raise the number of homeowners in the United States to an all time high. Through this initiative, RHS has developed financial and technical partnerships to extend the impact of Rural Development’s limited funds and bring additional dollars into the development of rural communities.
While other Federal agencies have single family housing programs, RHS’ programs are the only ones that focus on making affordable credit available to lower income, rural residents. Long term, fixed rate mortgage credit is less available, and more costly, in rural areas than metro areas. RHS’ programs help to level the playing field for lower income families. Through its leveraging and loan guarantee programs, RHS is also helping the private sector, as well as State Housing Authorities and non-profits, reach into rural areas that they otherwise have had difficulty serving.
Verification and Validation: Data from the following systems can be used to verify and validate most performance measures:
• Program Loan Accounting System (PLAS)
• Guaranteed Loan Accounting System (GLAS)
• Dedicated Loan Origination and Servicing System (DLOS)
These systems track financial data, but generally not management data. These systems contain a variety of data edits to minimize the risk of inaccurate data being placed in the system. The systems are audited annually by OIG as a part of their development of an audited financial statement.
Section 515 Rural Rental Housing Direct Loans. The Section 515 program employs a public-private partnership by providing subsidized loans at an interest rate of 1% to limited-profit and non-profit developers to construct or renovate affordable rental complexes in rural areas. This 1 percent loan keeps the debt service on the property sufficiently low to support below-market rents affordable to low-income tenants. Many of these projects also utilize low-income housing tax credit proceeds. This program is typically used in conjunction with RHS Section 521 Rental Assistance which provides project-based rental assistance payments to property owners to subsidize the tenant’s rent at an affordable level. With rental assistance, tenants pay a maximum of 30 percent of their income towards their rent and utilities. Some 515 projects also utilize HUD's Section 8 project-based assistance which enables additional very low-income families to be served.