Updated Instruction 1944-I for Owner Occupied Rehab

By Donna Lea Brooks, RCAC Rural Development Specialist – Housing

RD has announced the RD Instruction 1944-I publication, updated through Procedural Notice 626 which includes changes to Owner Occupied Rehab Limitations and Definitions as outlined below. See the full PN here.

1944.407 (d) Limitations

Update removed the requirement on owner occupied rehab to have an average cost savings which is greater than or equal to the TA per EU cost. (Per RD National, RD had to remove the cost savings requirement from the instructions because it’s not supported by the regulation but it’s their intent to put something in the regulation.)

Recommendation from RD National is to continue with what you’ve been doing in calculating the cost savings and average versus TA cost per unit, so there’s a baseline but no one at RD has to ‘ding’ the grantee one way or the other on those numbers.)

Revised Oct. 24, 2024 language:

(d) A negotiated amount for repair and rehabilitation type proposals. At a minimum, applicants applying for repair and rehabilitation grants must include information on the proximity of the houses in a project, the typical needed repairs, and the cost savings between self-help and contractor rehabilitation and repair.

1944.403 (k) Definitions

(k) Participating Family: Update removed the requirement for rehabilitation type grants, participating families must complete a minimum of 10 labor hours for every $1,000 in project costs that are not completed by a sub-contractor.

Update specifies that for owner occupied type rehabilitation, all volunteer hours can be counted toward the family labor contribution. (This was in the PN 626 Procedure Notice cover letter but is missing from the revision in section 1944.403 (k), RD National said they will ensure it is included in the next revision, but it is in effect now.)

Exhibit M-2, page 2 (was Exhibit K-2).

RD added, “If materials, appliances, etc. come at no cost to the rehab participant, the value of those items may be included in the cost savings calculations.” (Pre RD National, as it’s written, even if another program paid for these items, the grantee can use them in their cost savings calculations.)