7 C.F.R. § 1940.565 – Section 502 subsidized Rural Housing loans.

(a) Amount available for allocations. See § 1940.552(a) of this subpart.
(b) Basic formula criteria, data source and weight. See § 1940.552(b) of this subpart. The criteria used in the basic formula are:
1. (1) State's percentage of the National number of rural occupied substandard units,
2. (2) State's percentage of the National rural population,
3. (3) State's percentage of the National rural population in places of less than 2,500 population,
4. (4) State's percentage of the National number of rural households between 50 and 80 percent of the area median income, and
5. (5) State's percentage of the National number of rural households below 50 percent of the area median income.
  Data source for each of these criteria is based on the latest census data available. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a basic State factor (SF)
  SF = (criterion 1 × weight of 25%) + (criterion 2 × weight of 10%) + (criterion 3 × weight of 15%) + (criterion 4 × weight of 30%) + (criterion 5 × weight of 20%)
(c) Basic formula allocation. See § 1940.552(c) of this subpart.
(d) Transition formula. See § 1940.552(d) of this subpart. The percentage range used for Section 502 subsidized RH loans is plus or minus 15.
(e) Base allocation. See § 1940.552(e) of this subpart. Jurisdictions receiving administrative allocations do not receive base allocations.
(f) Administrative allocations. See § 1940.552(f) of this subpart. Jurisdictions receiving formula allocations do not receive administrative allocations.
(g) Reserve. See § 1940.552(g) of this subpart.
(h) Pooling of funds. See § 1940.552(h) of this subpart.
1. (1) Mid-year: If used in a particular fiscal year, available funds unobligated as of the pooling date are pooled and redistributed based on the formula used to allocate funds initially.
2. (2) Year-end: Pooled funds are placed in a National Office reserve and are available as determined administratively.
(i) Availability of the allocation. See § 1940.552(i) of this subpart.
(j) Suballocation by the State Director. See § 1940.552(j) of this subpart. The State Director will suballocate funds to the District Offices and may, at his/her option, suballocate to the County Offices. The State Director will use the same basic formula criteria, data source and weight for suballocating funds within the State as used by the National Office in allocating to the States as described in § 1940.565 (b) and (c) of this section. The suballocations to District or County Offices will not be reduced or restricted unless written approval is received from the National Office in response to a written request from the State Director. The State Director's request must include the reasons for the requested action (e.g., high housing inventory and/or high housing delinquency).
(k) Other documentation. The percentage distribution of funds to the States by income levels is based on prevailing legislation.