Are you considering your housing prospects for the upcoming year? If you’re leaning towards a career in farming and agriculture, the U.S. Department of Agriculture’s Section 514/516 Farm Labor Housing Program could be just what you need.

This initiative offers grants and low-interest loans to individual farmers or non-profit organizations for the purposes of building, purchasing, repairing, or enhancing housing.

Continue reading to learn how you can take advantage of this exceptional opportunity.

What is Farm Labor Housing?

Under Section 516 of the Housing Act of 1949 (42 U.S.C. 1441 et seq.), Section 516 grants form part of the USDA’s farm labor housing program. This system allows qualified individuals, nonprofit entities, public bodies, or Indian tribes to secure grants or loans for the development costs of their farm labor housing.

A Section 514 loan can also be utilized concurrently with a Section 516 grant, provided that the housing has a “pressing need” and cannot be developed without assistance from the Rural Housing Service (RHS).

Up to 90% of the development costs for the housing may be covered by the grant, while up to 10% of Section 516 funds must be allocated specifically for migrant and domestic farmworker housing within the fiscal year. Applicants must contribute a minimum of 10% of the total development costs from their own resources or other sources, including Section 514 loans.

Grant funds can be utilized for purchasing, improving, or constructing housing and related facilities for farmworkers. This can also include buying and enhancing land where the proposed housing will be situated. Eligible expenditures may consist of:

• Waste disposal systems
• Water supply systems
• Installation of roads
• Parking lots
• Driveways

Additionally, funds may be used for purchasing and installing various appliances, such as:

• Refrigerators
• Ranges
• Dryers
• Clothes washers

Other facilities associated with the housing project may include:

• Recreation center
• Maintenance workshop
• Laundry facilities
• Small infirmary
• Living accommodations
• Office space
• Daycare center

Eligibility

To qualify for the 514 and 516 programs, an individual or a non-profit entity must be providing farm labor services such as:

• Tilling the soil for harvesting or cultivating any aquaculture or agricultural product
• Planting, netting, catching, handling, drying, grading, storing, preserving, or packing unprocessed agricultural or aquaculture commodities
• Transporting to market, storage, or a carrier for their processing or sale

To qualify for a Farm Labor Housing Loan, applicants must meet the previously mentioned requirements as well as the following:

• A nonprofit organization of farmworkers: If applying as a nonprofit entity for farmworkers, you must have representation on the Board of Directors in the area where the housing is intended.
• A broad-based nonprofit organization: To qualify, your organization must adhere to requirements set forth for nonprofit entities and signify membership that reflects the interests in the housing location.
• A limited partnership with a nonprofit partner: This must be established according to 7 CFR 3560.55(d).
• A local or State government agency or political subdivision.
• A federally recognized Indian tribe.

Application Process

The application process for the farm labor housing initiative follows a six-step procedure that is further elaborated in its own sections.

1. Initial Application

The initial application for off-farm labor housing has the same criteria as that of Section 515 project applications.

2. Completeness Review

A loan originator must evaluate all initial applications for completeness, following the guidelines outlined in Section 2 of Chapter 4.

3. Eligibility Review

When assessing an application for eligibility, a loan originator must ensure that the requested funds adhere to the regulations specified in Paragraph 12.3 through 12.6 of the Section 514/516 Farm Labor Housing Program, while also following Chapter 4 guidelines. Importantly, applications should not be dropped from consideration solely due to their location.

4. Scoring and Ranking of Initial Applications

A State Office will score and rank the initial application submitted for the Farm Labor Housing loan and grant in accordance with the criteria defined by the National Organic Farmers Association and the instructions in Chapter 4, Section 2.

5. Selection and National Ranking of Initial Applications

• The Agency will assess, rank, and score each application based on the criteria published in the NOFA. Once the scoring and ranking are completed for each State, a State Office must forward all qualified applications to the National Office for further evaluation.
• Off-Farm Labor Housing Applications will be ranked nationally. Awarded funds will then support the highest-scoring applications. Should an applicant opt not to advance to the subsequent level, the next highest-ranked application will be able to utilize the funds set aside for the previous project.

6. Notification of Initial Applications Selection

After the initial applications have been selected, the National Office will notify each State Office of their funded selections. Subsequently, the State Office will inform the successful applicants and request them to submit a final application.

Every applicant will receive one of three types of letters:

• A Handbook Letter 106 (3560), Notice of Pre-application Review Action
• A Handbook Letter 107 (3560), A Letter Informing the Applicant of Insufficient Funds
• A Handbook Letter 108 (3560), Letter Denying Funding due to Ineligibility

How is it Allocated?

On-Farm Labor housing projects are specifically designed to offer affordable housing to farmworkers at the site of their employment where the applicant works. Loans are directly allocated to farm owners or groups of owners wishing to provide housing for their employed farmworkers.

Additionally, the construction of on-farm labor housing is not constrained by specific area requirements and can be established in both rural and urban settings, whether on or off the farm, provided that the applicant demonstrates a valid rationale for their needs.

Each year, the Agency outlines a specific allocation to support the development of on-farm labor housing. Field Offices are subsequently informed, and the new allocation is published in the Federal Register. Interested applicants can learn about their chances of securing funding by submitting their information to their local Field Office.

Remember, applications will be funded on a first-come, first-served basis from the National Office’s resources. Applications for on-farm facilities can also be submitted anytime throughout the year. Additionally, on-farm applications must include the On-Farm Labor Housing Loan Checklist.

Apply for Farm Labor Housing Today

The U.S. Department of Agriculture’s Section 514/516 Farm Labor Housing Program offers a valuable opportunity for farmers, nonprofit organizations, and various groups seeking assistance. As a result, they are afforded greater options in securing the housing they need while contributing positively to the economy through their role in the agricultural sector. By adhering to the aforementioned guidelines, you too can benefit from the support available through this government initiative.