(a) General. For applications submitted by water or waste disposal systems or other eligible entities to benefit individuals, the amount of loan and grant funds approved by the Agency will be based on the need documented in the executed loan and grant documents between the Agency and the entity. The loan and grant documents include but are not limited to items such as the purpose, how funds will be used, proposed application process for individuals, construction requirements, and the control and disbursement of funds. Construction requirements must meet applicable building codes, statutes and regulations.

(b) Review. The loan and grant documents executed between RUS and the entity will set forth the procedures and regulations for making and servicing loans and grants made by the water or waste disposal systems, or other eligible entity, to individuals. The entity is responsible for:

(1) Understanding all provisions of the loan and grant documents; and

(2) Servicing loans and grants in the manner outlined in the executed loan and grant documents.

(c) Scoring. For applications submitted by water or waste disposal systems or other eligible entities to benefit individuals, the criteria in paragraphs (c)(1) through (9) of this section will be used to rank applications and in selecting projects for funding.

(1) Lending experience. Degree of expertise and successful experience in making and servicing loans to individuals. Up to 15 points.

(2) Operational experience. Degree of expertise and experience in operating and maintaining water or waste disposal system. Up to 15 points.

(3) Work plan. Extent to which the work plan demonstrates a well thought out, comprehensive approach to accomplishing the objectives of this part, clearly defines who will be served by the project, and appears likely to be sustainable. Up to 15 points.

(4) Population. The system after the proposed project will primarily serve a rural area having a population:

(i) Not in excess of 1,000—25 points.

(ii) Between 1,001 and 2,500—15 points.

(iii) Between 2,501 and 5,500—5 points.

(5) Income. The median household income of population to be served by the proposed project is:

(i) Not in excess of 50 percent of the SNMHI—30 points.

(ii) More than 50 percent and not in excess of 60 percent of the SNMHI income—20 points.

(iii) More than 60 percent and not in excess of 70 percent of the SNMHI—15 points.

(6) Joint financing. The amount of funds, other than RUS funds, committed to the proposed project is:

(i) Fifty percent or more—15 points.

(ii) Twenty to forty-nine percent—10 points.

(iii) Five to nineteen percent—5 points.

(7) Colonia. (See definition in § 1777.4). The proposed project will provide water or waste disposal services to the residents of a recognized Colonia—25 points.

(8) Access and health risks. (i) A service area that lacks access to both water and waste disposal facilities, resulting in a significant health risk—50 points.

(ii) A service area that lacks access to either water or waste disposal facilities, resulting in a significant health risk—40 points.

(iii) A service area that has access to water and waste disposal facilities but has a significant health risk—20 points.

(9) Discretionary. (i) State Director or designee with loan and grant approval authority in certain cases, and when a written justification is prepared, may assign up to 15 points for administrative and programmatic priorities for items including, but not limited to, natural disasters, funding or priority coordination between RUS and other agencies, including leveraged funding, for award to applicants under this program, to assist those projects that are the most cost effective, or to projects located in areas experiencing high unemployment and poverty rates and severe health risks.

(ii) RUS Administrator may assign up to 15 additional points that will be considered in the total points for items including, but not limited to, the geographic distribution of funds nationally and within the state, and the severity of health risks. Any funds transferred to RHS for individual assistance will be administered following the provisions established in their governing statutes, regulations or policy. However, funds cannot be used to make improvements to the residence, except for the improvements authorized by § 1777.32. Funds cannot be used to pay individuals for their own labor. RUS transferred funds to RHS that remain after providing individual loans and grants will be returned to RUS or its successors.