CFR > Title 7 - Agriculture > SUBTITLE B—Regulations of the Department of Agriculture > CHAPTER XVIII—RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE (parts 1804 to 2045) > SUBCHAPTER H—PROGRAM REGULATIONS (parts 1900 to 1981) > PART 1980—GENERAL > SUBPART D—Rural Housing Loans (§1980.301 to §1980.400) > 1980.340—Acquisition, construction, and development.

1980.340—Acquisition, construction, and development.

(a) Acquisition of property. The Lender is responsible for seeing that the property to be acquired with loan funds is acquired as planned and that the required security interest is obtained.
(b) New construction. A new dwelling financed with a guaranteed loan must:
(1) Have been built in accordance with building plans and specifications that contain approved building code certifications (eligible certifiers are listed in § 1924.5(f)(1)(iii) ).
(2) Conform to RHS thermal standards (exhibit D of subpart A of part 1924 ).
(i) The builder may certify conformance with RHS thermal standards contained in paragraph IV A of exhibit D of subpart A of part 1924.
(ii) A qualified, registered architect or a qualified, registered engineer must certify conformance with RHS thermal standards contained in paragraph IV C of exhibit D of subpart A of part 1924.
(c) Development. The Lender and borrower are responsible for seeing that the loan purposes are accomplished and loan funds are properly utilized. This includes, but is not limited to, seeing that:
(1) The applicable development standards are adhered to;
(2) Drawings and specifications are certified and complied with;
(3) Adequate water, electric, heating, waste disposal, and other necessary utilities and facilities are obtained;
(4) Equal opportunity and nondiscrimination requirements are met, (see § 1980.317 ); and
(5) A builder's warranty is issued when new construction, repair, or rehabilitation is involved, which provides for at least 1 year's warranty from the date of completion or acceptance of the work.