DIRECTOR REVIEW DETERMINATION

UNITED STATES DEPARTMENT OF AGRICULTURE

OFFICE OF THE SECRETARY

NATIONAL APPEALS DIVISION

DIRECTOR REVIEW DETERMINATION

 

 

In the Matter of

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XXXXX

 

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     Appellant

)    Case No. 2017E000226

 

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RURAL DEVELOPMENT

 

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This appeal concerns a dispute between XXXXX (or Appellant) and Rural Development’s Rural Housing Service (or RHS) over RHS’s decision to deny Appellant’s request for a home repair grant.  RHS denied Appellant’s request for a grant because it determined that the home repairs that would have been funded by the grant would not remove any immediate health and safety hazards.  Appellant filed an appeal with the National Appeals Division (NAD), and after conducting a review of the administrative record, a NAD Administrative Judge issued a determination upholding RHS’s decision.  Appellant then filed this request for Director review of the Appeal Determination.  Based on my review of the entire record, I reverse the Appeal Determination. 

 

Issue to be Determined

 

The dispute to be resolved in this appeal is whether RHS properly denied Appellant’s request for a home repair grant in accordance with 7 C.F.R. Part 3550, Subpart C.  To resolve this dispute, I must determine whether the requested grant funds will be used to pay costs for repairs and improvements that will remove identified health or safety hazards from Appellant’s home.  See 7 C.F.R. § 3550.102(a). 

 

Background

 

The Rural Housing Service administers loans and grants under section 504(a) of Title V of the Housing Act of 1949, as amended.  7 C.F.R. § 3550.1.  The section 504 program offers grants to homeowners who are 62 years or older and cannot obtain a loan to correct health and safety hazards in their home.  See 7 C.F.R. § 3550.2; see also 7 C.F.R. § 3550.102(a).  The lifetime limit of total grant assistance to any recipient is $7,500.  7 C.F.R. § 3550.112(c).

 

Appellant is a 71-year old woman who has lived in her home in a rural area of XXXXX for the past 24 years.  In November 2016, Appellant applied for Section 504 assistance to repair the windows and the front porch of her home.  Because she met the age requirement for a Section 504 home repair grant, RHS treated her application as a request for a grant as well as for a loan.[1]

 

RHS conducted an inspection of Appellant’s home in January 2017 to determine the condition of her home and the repairs required to remove all major health and safety hazards.  On its visit, RHS completed a “Checklist for Evaluation of Existing Dwelling,”  which provides that the checklist “can be used by [RHS] staff for an assessment of an existing dwelling” and advises RHS staff to “[c]heck ‘Yes’ or ‘No’ to indicate whether each element is in satisfactory condition.”  Agency Record at 98.[2]  Among other items, the checklist covers the interior and exterior construction of a dwelling, including windows and porches.

 

With respect to the front porch, RHS checked “no” for whether the “porches/decks are sound with no deterioration,” noting that the “front porch [is] rotted.”  Agency Record at 98.  RHS also checked “no” for whether the windows “are functional and adequate and are energy efficient.  There is no broken or cracked glazing … and all windows are lockable.  Bedroom windows meet egress requirements.”  Id. at 99.  RHS made the following notation about the windows:

 

Many broken panes in windows.  Windows are original double pane, original to house (XXXXX home).  There are obviously broken seals, [and] the plain wood facings show signs of moisture.  There is no apparent reason for the broken panes, which are the inside panes.  My theory is that snow load puts pressure on window headers.  Home is in a heavy snow area [and] has the usual low-sloped roof of a mod. So, are window headers too lightweight?

 

Id. at 100. 

 

Additional notations in the administrative record show that RHS found that it was not “critical” to replace the front porch because Appellant had adequate egress from her home through an exit door in the dining room and a door through the garage.  Agency Record at 7-8.  RHS also found that “none of [Appellant’s] windows are horrible” and “none of [Appellant’s] windows is critical.”  Id.  RHS noted that the broken window panes are “a mystery,” and if due to snow load, then “replacing windows won’t help in long run [because] they’ll crack again.”  Id. at 8.

 

On January 25, 2017, RHS issued an adverse decision denying Appellant’s request for a home repair grant because the requested repairs “will not remove any immediate health and safety hazards.”  Agency Exhibit 1.

 

In February 2017, Appellant appealed the adverse decision to NAD.  She argued that the windows in her home would not open, which created a fire hazard.  She also argued that the condition of the windows did not allow the air to circulate inside her home.  She also contended that the front porch was completely rotted and falling off the house, which posed both a fire hazard as well as a safety hazard because a person could not safely exit the home through the front door.  She further argued that the deteriorated condition of the front porch created a hazard because a person using the front door could fall through the porch and get hurt.  Finally, Appellant stated that the damaged windows had resulted in exorbitant heating costs during the winter. 

 

Appellant requested that a NAD Administrative Judge conduct a review of the administrative record.  Because Appellant requested a record review, during the pre-hearing conference the Administrative Judge took testimony from the RHS representative about the agency’s finding that the home repairs that would have been funded by the grant would not remove any immediate health and safety hazards.  The agency representative explained that it relies on the “long term knowledge and skills” of its loan specialists to make these determinations, and that historically RHS has not used grant funds for windows or siding or items of that nature but instead has focused on “things that are immediately pressing, such as a broken furnace or a leaky roof.”  Pre-hearing Audio at 00:27:40 to 00:30:11.  Furthermore, because Appellant had two other methods of ingress into the house, RHS had decided that the porch was not an immediate hazard. 

 

After reviewing the record, the Administrative Judge issued a determination concluding that RHS’s decision was not erroneous.  Appellant then filed this request for Director review. 

 

Legal Standards and Standard of Review

 

The key legal authorities pertinent to this appeal are the agency’s regulations governing the Section 504 grant program.  Pursuant to those regulations, RHS may provide Section 504 grant funds to eligible applicants who are 62 years of age or older to make repairs and improvements that will remove identified health and safety hazards or to repair or remodel dwelling to make them accessible and useable for household members with disabilities.  See 7 C.F.R. § 3550.102(a).  A hazard is a condition of the property that jeopardizes the health or safety of the occupants or members of the community, but does not make it unfit for human habitation.  7 C.F.R. § 3550.10 (definition of hazard).

 

In response to a request for Director review, I conduct a review of the Administrative Judge’s determination using the entire case record to determine if the decision is supported by substantial evidence.  7 C.F.R. § 11.9(d)(1).  Substantial evidence has been described by the Supreme Court as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).  Based on my review, I issue a final determination notice that upholds, reverses, or modifies the Hearing Officer’s determination.  7 C.F.R. § 11.9(d)(1).  In making a determination on the appeal, I endeavor to ensure that the adverse decision is consistent with the laws and regulations of the agency, and with the generally applicable interpretations of such laws and regulations.  7 C.F.R. § 11.10(b).

 

Analysis

 

As noted above, RHS denied Appellant’s request for a home repair grant because the agency concluded that repair of Appellant’s porch and windows would not remove identified health and safety hazards. 

 

The Administrative Judge upheld RHS’s decision, but in doing so he acknowledged Appellant’s concerns  that the rotted, front porch was unsafe and posed a fire hazard, and that the windows, which cannot be opened from inside the home, also presented a fire hazard.  Ultimately, however, the Administrative Judge found that RHS “did not believe the repairs to Appellant’s porch and windows were an immediate pressing need” and that “Appellant has adequate ingress and egress into and out of her home by two other exits without the need to use her front porch.”  Appeal Determination at 3.  The Administrative Judge further found that RHS reasonably evaluated the proposed repairs and interpreted the regulation as “requiring an immediate pressing need to qualify as a health or safety hazard.”  Id.  Accordingly, the Administrative Judge agreed with RHS that “occupancy of the house, while uncomfortable and requires some ingress and egress without using the front porch, does not pose an immediate health and safety hazard.”  Id.

 

On Director review, Appellant argues that she is eligible for the grant because the funds will be used to pay for repairs that will remove health and safety hazards in her home.  She has submitted a report from a licensed home inspector explaining that there are three points of ingress/egress in Appellant’s home.  Two of these points are in Appellant’s kitchen and the third is Appellant’s front door.  The inspector opined that the current conditions present a safety hazard because if there is a fire in Appellant’s kitchen, the front porch exit is unsafe.  Appellant also submitted photos of her windows and front porch.[3] 

 

As noted above, under the Section 504 grant program, funds may only be used to pay for repairs or improvements that will remove identified health and safety hazards.  7 C.F.R. § 3550.102(a).  A hazard is a condition of the property that jeopardizes the health or safety of the occupants or members of the community.  7 C.F.R. § 3550.10 (definition of hazard).  In its adverse decision, RHS stated that the repairs would not remove any immediate health and safety hazards.  In other words, RHS did not dispute that the repairs would remove health and safety hazards; instead, it argued that the hazards were not “immediate.” 

 

While I question whether the regulations require a showing of immediacy, I find that the facts in this case support Appellant’s claim that the conditions in her home present an immediate hazard.  The record demonstrates that the rotting wood on Appellant’s front porch is a hazard to her and to anyone coming to her house as the floor could collapse at any time.  RHS argued that the hazard caused by the rotting front porch could be mitigated by using the two other points of ingress/egress in the kitchen to enter or leave the house.  However, Appellant’s home inspector found that the current conditions present a safety hazard because if there is a fire in her kitchen, the front porch exit is unsafe.  The agency’s suggested mitigation also does not resolve the hazardous condition for any member of the community who may access Appellant’s home using the front door. 

 

The same is true of Appellant’s broken and rotting windows that no longer open.  During its inspection of Appellant’s home, RHS noted on its checklist that the windows were not in satisfactory condition.  Although RHS could not determine what caused the condition of the windows, it concluded that “none of [the] windows is critical.”  Agency Record at 7-8.  The record simply does not support that conclusion.  The agency’s checklist criteria provides, among other things, that windows deemed to be in satisfactory condition are “functional and adequate” and “bedroom windows meet egress requirements.”  Agency Record at 98-99.  Appellant’s windows present a hazard within the meaning of the agency’s regulations and Handbook because they cannot be opened and do not provide a means of egress in the event of an emergency. 

 

In sum, I find that RHS’s decision to deny Appellant a Section 504 grant on the basis of no immediate safety hazard is erroneous and is not supported by the record.  Accordingly, I reverse the Administrative Judge on this issue.

 

Conclusion

 

Based on the discussion above, I reverse the Appeal Determination.

 

 

 

 

/S/

 

06/21/2017

Steven C. Silverman

 

Date

Director 

 

 

 


[1] RHS denied Appellant’s request for a loan because her monthly budget showed “a negative monthly balance of $31” and, therefore, she did not demonstrate adequate ability to repay a loan.  See Agency Exhibit 1 at 1; 7 C.F.R. § 3550.103(h) (stating that a loan applicant “must demonstrate adequate repayment ability as supported by a budget”).  The NAD Administrative Judge found that RHS properly calculated Appellant’s monthly budget and that Appellant’s budget “shows her expenses exceed her income even without including the additional expense of a loan payment.”  Appeal Determination at 3.  On Director review, Appellant does not challenge the loan denial and; therefore, I focus solely on whether RHS properly denied Appellant’s request for a grant. 

[2] The checklist is contained in RHS’s Handbook, HB-1-3550, Chapter 12: Section 504 Loans and Grants, Attachment 12-D. 

[3] The NAD Director may accept new evidence in order to determine if the Administrative Judge’s decision is supported by substantial evidence.  See 7 C.F.R. § 11.9(d)(1).  In this case, I accept the new evidence submitted by Appellant because I find it to be both probative and relevant to the dispute in this appeal.