§1484 Insurance of Loans for Housing and Related Facilities for Domestic Farm Labor

Summary

The Secretary can insure loans made by private lenders to farm owners, farmer groups, tribes, states, public or private nonprofits, certain limited partnerships, or nonprofit farmworker groups to build or fix housing and related buildings for domestic farm workers anywhere in the State where there is need. These loans follow rules like other farm loans but with limits: the insured amount cannot be more than the farm’s value minus prior liens for an individual owner or the total estimated value of the buildings for other borrowers; the loan interest rate normally cannot exceed 1 percent per year (the Secretary can waive that in special cases); the Secretary must keep a charge from the borrower’s interest equal to at least one-half of 1 percent per year of the unpaid principal; the loan can be serviced by the lender or the Secretary and the Secretary may buy the loan if it is not in default; and the Secretary can take a mortgage in the United States’ favor for the insurance fund. The Secretary uses a special farm tenant insurance fund to pay claims, protect security (for example by paying taxes or liens), buy foreclosed property, hold or sell acquired loans, and keep all collections and sale proceeds in the fund. At least one-half of 1 percent of the retained charge goes into that fund; the rest goes to the U.S. Treasury for Farmers Home Administration administrative costs. Insurance contracts are backed by the United States and cannot be challenged except for fraud or known misrepresentation. Housing means new or rehabbed homes (including furnishings) for farm workers. Related facilities means dining halls, community rooms, infirmaries, other essential service buildings, and land for the site. Domestic farm labor means people (and their families) who earn a substantial part of their income from producing, handling, or processing farm or aquaculture products; they must be U.S. citizens, lawful permanent residents, or legally admitted and authorized to work in agriculture. Retired or disabled former farm workers are included. Vacant units must be offered first to active farm workers, then to retired/disabled who were active locally, then to other retired/disabled. The Secretary may waive the 1 percent rule when nonprofit sponsors are not available, but any benefit must go to tenants and the loan rate must be at least one-eighth of 1 percent above certain comparable loan rates. Need for help must be judged only by farm labor housing needs. If farm labor need ends or drops, the housing can be used for other eligible tenants. New or rehabbed units must have carbon monoxide alarms that meet the 2018 International Fire Code chapters 9 and 11 or other Secretary-HUD standards. Smoke alarms must meet ICC or NFPA codes and NFPA 72; older units (built before December 29, 2022, and not substantially rehabbed after) must have hardwired alarms or sealed, tamper-resistant 10-year battery alarms with a hush feature and hearing loss notification; units built or rehabbed on or after December 29, 2022 must have hardwired alarms.