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Destitute or low-income stranded workers' families who have in the past exhibited a capacity for self-support. (Families required to be resettled in connection with land use type projects are to be considered on their merits as are all applicants for projects of this type.)

The following statements define eligibility for obtaining farms in the farm tenant security projects. (These projects have no connection with tenant purchase or farm tenancy loans to be made under the Bankhead-Jones Farm Tenant Act, 50 Stat. 522; 7 U.S.C., Sup., 10001029.) All candidates for such homes will be referred to the projects by approved referral agencies which will nominate as candidates only families meeting the following requirements:

They must be farm tenants residing in the State in which the project is located.

Their principal occupation during the past 5 years must have been in connection with agriculture.

In general, no families should be considered whose selection would involve moving them a long distance from their present places of residence.

Families already residing on land obtained or purchased for a farm tenant security project are eligible and will be given preference provided they satisfy the criteria of selection for the particular projects. Families required to be resettled in connection with land use type projects of the Farm Security Administration are eligible for resettlement on farm tenant security projects and will be given preference, provided they satisfy the criteria of selection for the particular project. It is not necessary that any candidate be on the rehabilitation or relief rolls.* [Par. 3, A.O. 105, rev. 3, Sept. 25, 1936]

CROSS REFERENCE: For Farm Credit Administration, see Chapter I.

302.3 Same; general selection criteria. Families satisfying the above-mentioned eligibility requirements may be accepted for resettlement, and licensing or other necessary agreements may be executed with them, prior to occupancy, as far as available home or farm units permit, if:

Each family as a whole desires the opportunity being made available.

They evidence an acceptable initiative and resourcefulness.

They show promise of ability to enter into community life and profit from instruction and guidance.

They give reasonable assurance of attaining economic stability sufficient to enable them to meet the rental and other payments on the homes or farms for which they are proposing to obligate themselves. For families approved for rural community or infiltration projects, there must be a reasonable probability of the successful outcome of an acceptable Farm and Home Management Plan. Candidates for farms in farm tenant security projects should have demonstrated in the past successful farm ability and managerial capacity.

Each family has a reputation for paying its debts and meeting its responsibilities.

They have shown sufficient stability of residence. It is desirable. for rural community and infiltration projects, and it is highly important in farm tenant security projects, that the families have some *For statutory citation, see note to § 302.1.

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previous knowledge of or connection with the land they wish to occupy.

They are free from infectious diseases and disabilities that are likely to obstruct the fulfillment of obligations. For rural projects, families must pass, before final acceptance, a medical examination.

On all projects, the head of each family is at least 21 years of age. In subsistence homesteads type projects, preference will be given to heads of families under 55 years of age; in rural community and infiltration type projects, preference will be given to heads of families under 50 years of age; and in farm tenant security projects, preference will be given to heads of families who are under 55 years of age.

The applicants are married couples with one or more children or other dependents; in special cases, young married couples without children and families consisting of one spouse and older children may be accepted. For farm tenant security projects, it is preferable that the size of each family be such as to furnish an adequate labor supply without requiring hired labor.

They have occupational, agricultural, or other special experience or training required by the particular project. Such special requirements, if necessary, will be prepared by the regional director as special criteria for that project.

For farm tenant security projects, the applicants have the necessary assets in stock and equipment; that is, it is desirable that they possess, reasonably free from indebtedness, part or all of the work stock, subsistence livestock (such as cows, pigs and chickens), farming equipment, and foodstuffs needed to run them during the next sea

As this may not always be practicable, this criterion may, in the discretion of the regional director, be altered and the necessary modification set up as a special criterion for each project.

They are unable to obtain the necessary loans for homes from other Government agencies or private business concerns.

There will be no discrimination based on nationality, race or creed, but consideration will be given to the homogeneity required, in the families accepted for successful community life.* [Pars. 4a, 4b, A.O. 105, rev. 3, Sept. 25, 1936]

302.4 Same; minimizing costs. To minimize costs, the families to be examined should be assembled on definite dates and at their own expense at central points where they can be met by the physician.* [Par. 4a, A.O. 157, rev. 1, Sept. 21, 1936]

302.5 Sale and lease of land to resettlement clients. Farm Security Administration resettlement and State rural rehabilitation corporation (managed or transferred in trust) land and improvements thereon may be sold to heads of eligible farm families (as prescribed in § 302.2) for resettlement purposes where loans under § 303.116-303.121 for repairs and improvements are not made. The purpose of Form FSA-LE 207, Farm Purchase Contract, is to provide for all of the following: (a) Permit a client to purchase a farm. (b) Provide sufficient rental to pay all operating expenses. (c) Permit the client, as he is able, to make deposits toward the purchase price over and above the rental otherwise payable; the deposits toward the pur

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*For statutory citation, see note to § 302.1.

chase price to be in proportion to the income derived from the operation of the farm. (d) Provide sufficient rental to permit the payment of taxes, insurance, management, and maintenance expenses, and accumulate separately a sufficient fund to permit the repayment of the client's equity in case the Contract is canceled.* [Par. I, Adm. Instr. 141, June 4, 1938]

302.6 Same; conditions for use of Contract. (a) Form FSALE 207, Farm Purchase Contract, will be used where all of the following factors are present:

(1) It has been administratively determined that the units on a project will be sold to approved clients.

(2) Farm Management Plans and development of the unit have progressed sufficiently to permit the sale of the unit to a client.

(3) The client involved has been in occupancy under Tenure Form D-2, or other lease form, over a sufficient period of time to determine his acceptability as a client to whom a unit may be sold. The usual period of time should be 5 years. In exceptional cases a two-year period of time may be sufficient.

(4) In some cases it might be desirable to execute the Contract even though the conditions set forth in paragraph (a) (3) of this section are not present.

(5) A construction loan under §§ 303.116-303.121 will not be made to the client.

(b) The Contract may be used in cases where:

(1) A homestead association has been formed.

(2) A homestead association might be formed in the future, but will not be formed by the time the Contract is executed. In such cases the Contract may, at a later date, be assigned to a homestead association, if formed."

(c) The Contract is to be used by clients residing on a project which has been financed partially or wholly with state rural rehabilitation corporation funds but which is under the managerial or trustee supervision of the Farm Security Administration.

(d) The Contract is to be used on rural resettlement type projects and is to be executed by approved clients.

(e) The Contract is not to supersede or modify any existing Temporary Licensing Agreement, Lease or Sublease form, or Tenure form, except Tenure Form C, Form FSA-LE 79, Agreement to Purchase Land. [Par. III, Adm. Instr. 141, June 4, 1938]

302.7 Same; major provisions of Farm Purchase Contract. (a) The purchase price of the property, together with the annual rental, is payable out of agreed percentages of crops harvested by the purchaser and of livestock and poultry products sold by him.

(b) Cash payments are made by the purchaser based on predetermined percentages of the market value (at the time of harvesting of crops or sale of livestock or products) of each of the marketable farm products. These percentages may be changed by mutual consent in writing and are to be paid in cash.

(c) No time limit for the payment of the principal sum is specified.

*For statutory citation, see note to § 302.1.

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(d) There is first to be deducted from said sums an "annual rental," which is to include:

(1) Three percent of the balance of the purchase price not covered by deposits thereto at the beginning of the year.

(2) A proportionate share of the taxes or payments in lieu of taxes which the Government may make in connection with the project. (3) Insurance.

(4) A sum necessary to cover the purchaser's share of the cost of management, and for reserves.

(5) A sum necessary for maintenance and repairs.

(e) The balance of the sums received from the agreed percentages is to be applied to making deposits towards payment of the purchase price, and is to be held by the Government in trust and not deposited into the United States Treasury as miscellaneous receipts.

(f) Annual rental is to be due and owing from the purchaser regardless of the value of the crops raised by him. The Government may, in its discretion, direct that any amount of annual rental which is unpaid, shall accrue and be added to the annual rental to be paid by the purchaser for the following year.

(g) The purchaser may make prepayments towards the purchase price, but the final payment may not be prepaid without the written consent of the Government.

(h) The purchaser is to plant such crops, conduct his farming operations in such manner, and keep the property in such condition, as are in accord with approved farm organization and good husbandry and with a Farm and Home Management Plan approved by the Government.

(i) The purchaser may not sell, lease, and so forth, the property or any interest under the Contract, without the written consent of the Government.

(j) The Government does not plan to take security, but may demand it on any chattels including crops at any time if circumstances so warrant.

(k) The law (of testacy or intestacy, as the case may be) of the state in which the property is situated, is to govern in determining the person who shall succeed to the interests of the purchaser in the event of his death.

(1) In the event the Contract is terminated, the purchaser is not to be obligated to pay annual rental and to make deposits towards the purchase price. Alternative methods are specified for compensating him for his interest in the property.

(m) Upon the payment by the purchaser of all sums due the Government under the Contract, the Government is to deliver to the purchaser a quitclaim deed conveying the property. The deed is to recite the reservation of mineral rights set forth in paragraph 1 of the Contract. That paragraph provides that all mineral rights are reserved to the Government, except that the purchaser is given the right to mine coal in an amount reasonable for his own use, but not for the purpose of selling the same.* [Pars. V, VI, and Exhibit A, Adm. Instr. 141, June 4, 1938]

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*For statutory citation, see note to 8 302.1.

SUBPART TENURE AGREEMENTS AND LEASES FOR RESETTLEMENT TYPE PROJECTS

302.25 Limitations in use of Tenure Forms. (a) Form FSA-LE 161, Tenure Form D-1, will be executed between the Government and the lessee only after the United States has acquired title to the land, and:

(1) Where a farm management plan has not yet been evolved and it is necessary or desirable to have the farm operated in the meantime by a client who has been selected for permanent tenure; or

(2) Where a farm management plan has been evolved but no selected client is available and it is desirable to have the farm operated by a farmer who has not been selected for permanent tenure.

(3) Whether or not a farm management plan has been evolved but where construction plans or construction has not sufficiently progressed to permit the execution of Tenure Form D-2.

(b) Form FSA-LE 161, Tenure Form D-1, may be modified and used:

(1) Where the lessee is a client or a person otherwise entitled to rural rehabilitation and where the regional director finds that the rural rehabilitation of such lessee will be promoted by providing that the lessee shall clear, terrace, or otherwise perform minor improvements and repairs upon the leased lands and the buildings and structures thereon. In no case should the modification, hereinafter provided for, be used when the sole purpose is to avoid the expenditure of appropriated or allotted funds for the improvements in question. Where the modification provided for is used, the value of such repairs, clearing, terracing or other improvements shall be taken into account in fixing the rent. In this situation, the following paragraph will be substituted for paragraph 5, page 4, of Form FSA-LE 161: 5. The Lessee shall utilize the pasture and woodland, and plant, cultivate, and harvest such crops and conduct such livestock, dairy and poultry enterprises on said Property as are in accordance with approved farm organization, management and practices of good husbandry. In order to further the rehabilitation of the lessee and maintain the property for efficient farming operations, the lessee agrees to conduct such farming operations and make such improvements on said property in accordance with the provisions of such farm management plans as may be prescribed by the Government.

(c) Form FSA-LE 162, Tenure Form D-2, will be executed between the Government and the lessee only after the United States has acquired title to the land and for a term of approximately five years:

(1) Where a farm management plan has been evolved and an approved client has been selected; and

(2) Where construction plans or construction is sufficiently advanced to permit the execution of a lease for a term of approximately five years.

(d) Form FSA-LE 163, Tenure Form D-3, will be executed between the vendor and the lessee only where the United States has not yet acquired title to the land and for a term running to the end of the crop year, or until such time as title to the property is acquired by the United States, whichever period is the shorter, and:

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