cfr_sections
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37 rows where agency = "FSA" and part_number = 762 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 7:7:7.1.1.4.13.0.9.1 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | §§ 762.1-762.100 [Reserved] | FSA | |||||||
| 7:7:7.1.1.4.13.0.9.10 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.110 Loan application. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 68 FR 7695, Feb. 18, 2003; 72 FR 63297, Nov. 8, 2007; 75 FR 54013, Sept. 3, 2010; 77 FR 15938, Mar. 19, 2012; 81 FR 72691, Oct. 21, 2016; 86 FR 43391, Aug. 9, 2021] | (a) General. This paragraph (a) specifies the general requirements for guaranteed loan applications: (1) Lenders must perform at least the same level of evaluation and documentation for a guaranteed loan that the lender typically performs for non-guaranteed loans of a similar type and amount. (2) The application thresholds in this section apply to any single loan, or package of loans submitted for consideration at any one time. A lender must not split a loan into two or more parts in order to fall below the threshold in order to avoid additional documentation. (3) The Agency may require lenders with a lender loss rate in excess of the rate for CLP lenders to assemble additional documentation specified in paragraph (d) of this section. (b) EZ Guarantee loans. MLP lenders may submit an EZ Guarantee application for loans up to $50,000. All other lenders may submit EZ Guarantee applications for loans up to $100,000. Lenders must submit: (1) An EZ Guarantee application form. (2) If the loan fails to pass the underwriting criteria for EZ Guarantee approval in § 762.125(d), or the responses in the application are insufficient for the Agency to make a loan decision, the lender must provide additional information as requested by the Agency. (c) Loans up to $125,000. Lenders must submit the following items for loans up to $125,000 (other than EZ Guarantees): (1) The application form; (2) Loan narrative, including a plan for servicing the loan; (3) Balance sheet; (4) Cash flow budget; and (5) Credit report. (d) Loans over $125,000. A complete application for loans over $125,000 will require items specified in paragraph (c) of this section, plus the following items: (1) Verification of income; (2) Verification of debts exceeding an amount determined by the Agency; (3) Three years financial history; (4) Three years of production history (for standard eligible lenders only); (5) Proposed loan agreements; and, (6) If construction or development is planned, a copy of the plans, specifications, and deve… | |||||
| 7:7:7.1.1.4.13.0.9.11 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | §§ 762.111-762.119 [Reserved] | FSA | |||||||
| 7:7:7.1.1.4.13.0.9.12 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.120 Applicant eligibility. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 68 FR 62223, Nov. 3, 2003; 69 FR 5262, Feb. 4, 2004; 72 FR 63297, Nov. 8, 2007; 75 FR 54013, Sept. 3, 2010; 78 FR 65529, Nov. 1, 2013; 79 FR 60743, Oct. 8, 2014; 86 FR 43391, Aug. 9, 2021; 87 FR 13123, Mar. 9, 2022; 89 FR 65038, Aug. 8, 2024] | Unless otherwise provided, applicants must meet all of the following requirements to be eligible for a guaranteed OL, FO, or CL. (a) Agency loss. (1) Except as provided in paragraph (a)(2) of this section, the applicant, and anyone who will execute the promissory note, has not caused the Agency a loss by receiving debt forgiveness on all or a portion of any direct or guaranteed loan made under the authority of the Act by debt write-down or write-off; compromise, adjustment, reduction, or charge-off under the provisions of section 331 of the Act; discharge in bankruptcy; or through payment of a guaranteed loss claim on: (i) More than three occasions on or prior to April 4, 1996; or (ii) Any occasion after April 4, 1996. (2) The applicant may receive a guaranteed OL to pay annual farm operating and family living expenses, provided the applicant meets all other requirements for the loan, if the applicant and anyone who will execute the promissory note: (i) Received a write-down under section 353 of the Act; (ii) Is current on payments under a confirmed reorganization plan under chapter 11, 12, or 13 of title 11 of the United States Code; or (iii) Received debt forgiveness on not more than one occasion after April 4, 1996, resulting directly and primarily from a Presidentially-designated emergency for a county or contiguous county in which the applicant operates. Only applicants who were current on all existing direct and guaranteed FSA loans prior to the beginning date of the incidence period for a Presidentially-designated emergency and received debt forgiveness on that debt within three years after the designation of such emergency meet this exception. (3) If the debt forgiveness is resolved by repayment of the Agency's loss, the Agency may still consider the debt forgiveness in determining the applicant's creditworthiness. (b) Delinquent Federal debt. The applicant, and anyone who will execute the promissory note, is not delinquent on any Federal debt, other than a debt under the Internal Revenue Cod… | |||||
| 7:7:7.1.1.4.13.0.9.13 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.121 Loan purposes. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 72 FR 63297, Nov. 8, 2007; 73 FR 74345, Dec. 8, 2008; 75 FR 54014, Sept. 3, 2010; 77 FR 15938, Mar. 19, 2012; 78 FR 65529, Nov. 1, 2013; 86 FR 43391, Aug. 9, 2021] | (a) Operating Loan purposes. (1) Loan funds disbursed under an OL guarantee may only be used for the following purposes: (i) Payment of costs associated with reorganizing a farm to improve its profitability; (ii) Purchase of livestock, including poultry, and farm equipment or fixtures, quotas and bases, and cooperative stock for credit, production, processing or marketing purposes; (iii) Payment of annual farm operating expenses, examples of which include feed, seed, fertilizer, pesticides, farm supplies, repairs and improvements which are to be expensed, cash rent and family subsistence; (iv) Payment of scheduled principal and interest payments on term debt provided the debt is for authorized FO or OL purposes; (v) Other farm needs; (vi) Payment of costs associated with land and water development for conservation or use purposes; (vii) Refinancing indebtedness incurred for any authorized OL purpose, when the lender and applicant can demonstrate the need to refinance; (viii) Payment of loan closing costs; (ix) Payment of costs associated with complying with Federal or State-approved standards under the Occupational Safety and Health Act of 1970 (29 U.S.C. 655, 667). This purpose is limited to applicants who demonstrate that compliance or non-compliance with the standards will cause them substantial economic injury; and (x) Payment of training costs required or recommended by the Agency. (2) Loan funds under a line of credit may be advanced only for the following purposes: (i) Payment of annual operating expenses, family subsistence, and purchase of feeder animals; (ii) Payment of current annual operating debts advanced for the current operating cycle; (Under no circumstances can carry-over operating debts from a previous operating cycle be refinanced); (iii) Purchase of routine capital assets, such as replacement of livestock, that will be repaid within the operating cycle; (iv) Payment of scheduled, non-delinquent, term debt payments provided the debt is for authorized FO or OL purposes. (v) Pu… | |||||
| 7:7:7.1.1.4.13.0.9.14 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.122 Loan limitations. | FSA | [64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 72 FR 63297, Nov. 8, 2007; 73 FR 74345, Dec. 8, 2008; 75 FR 54014, Sept. 3, 2010; 79 FR 78693, Dec. 31, 2014] | (a) Dollar limits. The Agency will not guarantee any loan that would result in the applicant's total indebtedness exceeding the limits established in § 761.8 of this chapter. (b) Leased land. When FO or CL funds are used for improvements to leased land the terms of the lease must provide reasonable assurance that the applicant will have use of the improvement over its useful life, or provide compensation for any unexhausted value of the improvement if the lease is terminated. (c) Tax-exempt transactions. The Agency will not guarantee any loan made with the proceeds of any obligation the interest on which is excluded from income under section 103 of the Internal Revenue Code of 1986. Funds generated through the issuance of tax-exempt obligations may not be used to purchase the guaranteed portion of any Agency guaranteed loan. An Agency guaranteed loan may not serve as collateral for a tax-exempt bond issue. (d) Floodplain restrictions. The Agency will not guarantee any loan to purchase, build, or expand buildings located in a special 100 year floodplain as defined by FEMA flood hazard area maps unless flood insurance is available and purchased. | |||||
| 7:7:7.1.1.4.13.0.9.15 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.123 Insurance and farm inspection requirements. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 70 FR 56107, Sept. 26, 2005; 72 FR 63297, Nov. 8, 2007; 86 FR 43391, Aug. 9, 2021] | (a) Insurance. (1) Lenders must require borrowers to maintain adequate property, public liability, and crop insurance to protect the lender and Government's interests. (2) By loan closing, applicants must either: (i) Obtain at least the catastrophic risk protection (CAT) level of crop insurance coverage, if available, for each crop of economic significance, as defined by § 400.651 of this title, or (ii) Waive eligibility for emergency crop loss assistance in connection with the uninsured crop. EM loan assistance under part 764 of this chapter is not considered emergency crop loss assistance for purposes of this waiver and execution of the waiver does not render the borrower ineligible for EM loans. (3) Applicants must purchase flood insurance if buildings are or will be located in a special flood hazard area as defined by FEMA flood hazard area maps and if flood insurance is available. (4) Insurance, including crop insurance, must be obtained as required by the lender or the Agency based on the strengths and weaknesses of the loan. (b) Farm inspections. Before submitting an application the lender must make an inspection of the farm to assess the suitability of the farm and to determine any development that is needed to make it a suitable farm. | |||||
| 7:7:7.1.1.4.13.0.9.16 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.124 Interest rates, terms, charges, and fees. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 72 FR 17358, Apr. 9, 2007; 72 FR 63297, Nov. 8, 2007; 73 FR 74345, Dec. 8, 2008; 75 FR 54014, Sept. 3, 2010; 77 FR 15938, Mar. 19, 2012; 78 FR 14005, Mar. 4, 2013; 87 FR 13123, Mar. 9, 2022; 89 FR 65038, Aug. 8, 2024] | (a) Interest rates. (1) The interest rate on a guaranteed loan or line of credit may be fixed or variable as agreed upon between the borrower and the lender. The lender may charge different rates on the guaranteed and the non-guaranteed portions of the note. The guaranteed portion may be fixed while the unguaranteed portion may be variable, or vice versa. If both portions are variable, different bases may be used. (2) If a variable rate is used, it must be tied to an index or rate specifically agreed to between the lender and borrower in the loan instruments and the rate adjustments must be in accordance with normal practices of the lender for unguaranteed loans. Upon request, the lender must provide the Agency with copies of its written rate adjustment practices. (3) At the time of loan closing or loan restructuring, the interest rate on both the guaranteed portion and the unguaranteed portion of a fixed or variable rate OL or FO loan may not exceed the rates established and announced by the Agency on the FSA website ( www.fsa.usda.gov ). (4) Interest must be charged only on the actual amount of funds advanced and for the actual time the funds are outstanding. Interest on protective advances made by the lender to protect the security will be charged at the note rate but limited to paragraph (a)(3) of this section. (5) The lender and borrower may collectively obtain a temporary reduction in the interest rate through the interest assistance program in accordance with § 762.150. (b) OL terms. (1) Loan funds or advances on a line of credit used to pay annual operating expenses will be repaid when the income from the year's operation is received, except when the borrower is establishing a new enterprise, developing a farm, purchasing feed while feed crops are being established, or recovering from disaster or economic reverses. (2) The final maturity date for each loan cannot exceed 7 years from the date of the promissory note or line of credit agreement. Advances for purposes other than for annual operating… | |||||
| 7:7:7.1.1.4.13.0.9.17 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.125 Financial feasibility. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 75 FR 54014, Sept. 3, 2010; 81 FR 72691, Oct. 21, 2016] | (a) General. Except for streamlined CL guarantees (see § 762.110(f)), the following requirements must be met: (1) Notwithstanding any other provision of this section, PLP lenders will follow their internal procedures on financial feasibility as agreed to by the Agency during PLP certification. (2) The applicant's proposed operation must project a feasible plan. (3) For standard eligible lenders, the projected income and expenses of the borrower and operation used to determine a feasible plan must be based on the applicant's proven record of production and financial management. (4) For CLP lenders, the projected income and expenses of the borrower and the operation must be based on the applicant's financial history and proven record of financial management. (5) For those farmers without a proven history, a combination of any actual history and any other reliable source of information that are agreeable with the lender, the applicant, and the Agency will be used. (6) The cash flow budget analyzed to determine a feasible plan must represent the predicted cash flow of the operating cycle. (7) Lenders must use price forecasts that are reasonable and defensible. Sources must be documented by the lender and acceptable to the Agency. (8) When a feasible plan depends on income from other sources in addition to income from owned land, the income must be dependable and likely to continue. (9) The lender will analyze business ventures other than the farm operation to determine their soundness and contribution to the operation. Except for CL, guaranteed loan funds will not be used to finance a nonfarm enterprise. Nonfarm enterprises include, but are not limited to: raising earthworms, exotic birds, tropical fish, dogs, or horses for nonfarm purposes; welding shops; boarding horses; and riding stables. (10) When the applicant has or will have a cash flow budget developed in conjunction with a proposed or existing Agency direct loan, the two cash flow budgets must be consistent. (b) Estimating production. Except … | |||||
| 7:7:7.1.1.4.13.0.9.18 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.126 Security requirements. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 70 FR 56107, Sept. 26, 2005] | (a) General. (1) The lender is responsible for ensuring that proper and adequate security is obtained and maintained to fully secure the loan, protect the interest of the lender and the Agency, and assure repayment of the loan or line of credit. (2) The lender will obtain a lien on additional security when necessary to protect the Agency's interest. (b) Guaranteed and unguaranteed portions. (1) All security must secure the entire loan or line of credit. The lender may not take separate security to secure only that portion of the loan or line of credit not covered by the guarantee. (2) The lender may not require compensating balances or certificates of deposit as means of eliminating the lender's exposure on the unguaranteed portion of the loan or line of credit. However, compensating balances or certificates of deposit as otherwise used in the ordinary course of business are allowed for both the guaranteed and unguaranteed portions. (c) Identifiable security. The guaranteed loan must be secured by identifiable collateral. To be identifiable, the lender must be able to distinguish the collateral item and adequately describe it in the security instrument. (d) Type of security. (1) Guaranteed loans may be secured by any property if the term of the loan and expected life of the property will not cause the loan to be undersecured. (2) For loans with terms greater than 7 years, a lien must be taken on real estate. (3) Loans can be secured by a mortgage on leasehold properties if the lease has a negotiable value and is subject to being mortgaged. (4) The lender or Agency may require additional personal and corporate guarantees to adequately secure the loan. These guarantees are separate from, and in addition to, the personal obligations arising from members of an entity signing the note as individuals. (e) Lien position. All guaranteed loans will be secured by the best lien obtainable. Provided that: (1) Any chattel-secured guaranteed loan must have a higher lien priority (including purchase money in… | |||||
| 7:7:7.1.1.4.13.0.9.19 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.127 Appraisal requirements. | FSA | [78 FR 65529, Nov. 1, 2013, as amended at 86 FR 43391, Aug. 9, 2021] | (a) General. The general requirements for an appraisal are: (1) Value of collateral. The lender is responsible for ensuring that the value of chattel and real estate pledged as collateral is sufficient to fully secure the guaranteed loan. (2) Additional security. The lender is not required to complete an appraisal or evaluation of collateral that will serve as additional security, but the lender must provide an estimated value. (3) Appraisal cost. Except for authorized liquidation expenses, the lender is responsible for all appraisal costs, which may be passed on to the borrower or transferee in the case of a transfer and assumption. (b) Chattel security. The requirements for chattel appraisals are: (1) Need for chattel appraisal. A current appraisal (not more than 12 months old) of primary chattel security is required on all loans except loans or lines of credit for annual production purposes secured by crops, which require an appraisal only when the guarantee is requested late in the current production year and actual yields can be reasonably estimated. An appraisal is not required for loans of $50,000 or less if a strong equity position exists. (2) Basis of value. The appraised value of chattel property will be based on public sales of the same or similar property in the market area. In the absence of such public sales, reputable publications reflecting market values may be used. (3) Appraisal form. Appraisal reports may be on the Agency's appraisal of chattel property form or on any other appraisal form containing at least the same information. (4) Experience and training. Chattel appraisals will be performed by appraisers who possess sufficient experience or training to establish market (not retail) values as determined by the Agency. (c) Real estate security. The requirements for real estate appraisals are: (1) Loans of $250,000 or less. The lender must document the value of the real estate by applying the same policies and procedures as their non-guaranteed loans. (2) Loan… | |||||
| 7:7:7.1.1.4.13.0.9.2 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.101 Introduction. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 72 FR 63297, Nov. 8, 2007; 75 FR 54013, Sept. 3, 2010; 81 FR 72690, Oct. 21, 2016] | (a) Scope. This subpart contains regulations governing Operating loans, Farm Ownership loans, and Conservation loans guaranteed by the Agency. This subpart applies to lenders, holders, borrowers, Agency personnel, and other parties involved in making, guaranteeing, holding, servicing, or liquidating such loans. (b) Lender list. The Agency maintains a current list of lenders who express a desire to participate in the guaranteed loan program. This list is made available to farmers upon request. (c) Lender classification. Lenders who participate in the Agency guaranteed loan program will be classified into one of the following categories: (1) Standard Eligible Lender under § 762.105; (2) Certified Lender; (3) Preferred Lender under § 762.106; or (4) Micro Lender under § 762.107. (d) Type of guarantee. Guarantees are available for both a loan note or a line of credit. A loan note is used for a loan of fixed amount and term. A line of credit has a fixed term, but no fixed amount. The principal amount outstanding at any time, however, may not exceed the line of credit ceiling contained in the contract. Both guarantees are evidenced by the same loan guarantee form. (e) Termination of loan guarantee. The loan guarantee will automatically terminate as follows: (1) Upon full payment of the guaranteed loan. A zero balance within the period authorized for advances on a line of credit will not terminate the guarantee; (2) Upon payment of a final loss claim; or (3) Upon written notice from the lender to the Agency that a guarantee is no longer desired provided the lender holds all of the guaranteed portion of the loan. The loan guarantee will be returned to the Agency office for cancellation within 30 days of the date of the notice by the lender. | |||||
| 7:7:7.1.1.4.13.0.9.20 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.128 Environmental and special laws. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 72 FR 63297, Nov. 8, 2007; 75 FR 54014, Sept. 3, 2010; 81 FR 51284, Aug. 3, 2016; 81 FR 72691, Oct. 21, 2016] | (a) Environmental requirements. The requirements found in part 799 of this chapter must be met for guaranteed OL, FO, and CL. CLP, PLP, and MLP lenders may certify that they have documentation in their file to demonstrate compliance with paragraph (c) of this section. Standard eligible lenders must submit evidence supporting compliance with this section. (b) Determination. The Agency determination of whether an environmental problem exists will be based on: (1) The information supplied with the application; (2) The Agency Official's personal knowledge of the operation; (3) Environmental resources available to the Agency including, but not limited to, documents, third parties, and governmental agencies; (4) A visit to the farm operation when the available information is insufficient to make a determination; (5) Other information supplied by the lender or applicant upon Agency request. If necessary, information not supplied with the application will be requested by the Agency. (c) Special requirements. Lenders will assist in the environmental review process by providing environmental information. In all cases, the lender must retain documentation of their investigation in the applicant's case file. (1) A determination must be made as to whether there are any potential impacts to a 100 year floodplain as defined by Federal Emergency Management Agency floodplain maps, Natural Resources Conservation Service data, or other appropriate documentation. (2) The lender will assist the borrower in securing any applicable permits or waste management plans. The lender may consult with the Agency for guidance on activities which require consultation with State regulatory agencies, special permitting or waste management plans. (3) The lender will examine the security property to determine if there are any structures or archeological sites which are listed or may be eligible for listing in the National Register of Historic Places. The lender may consult with the Agency for guidance on which situations will need fu… | |||||
| 7:7:7.1.1.4.13.0.9.21 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.129 Percent of guarantee and maximum loss. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 68 FR 7695, Feb. 18, 2003; 72 FR 63297, Nov. 8, 2007; 75 FR 54014, Sept. 3, 2010; 79 FR 78693, Dec. 31, 2014; 86 FR 43391, Aug. 9, 2021 ; 87 FR 13123, Mar. 9, 2022; 90 FR 30559, July 10, 2025] | (a) Percent of guarantee. The percent of guarantee will not exceed 90 percent based on the credit risk to the lender and the Agency both before and after the transaction. The Agency will determine the percentage of guarantee. See paragraph (b) of this section for exceptions. (b) Exceptions. The guarantee will be determined by the Agency except: (1) For OLs and FOs, the guarantee will be issued at 95 percent when: (i) The sole purpose of a guaranteed FO or OL is to refinance an Agency direct farm loan and when only a portion of the loan is used to refinance a direct Agency loan, a weighted percentage of a guarantee will be provided; (ii) The purpose of a guaranteed FO is to participate in the down payment loan program; (iii) A guaranteed OL is made to a farmer who is participating in the Agency's down payment loan program. The guaranteed OL must be made during the period that a borrower has the down payment loan outstanding; (iv) A guaranteed OL is made to a farmer whose farm land is subject to the jurisdiction of an Indian tribe and whose loan is secured by one or more security instruments that are subject to the jurisdiction of an Indian tribe; or (v) A guaranteed FO or OL is made to a qualified beginning farmer. (2) For CLs, the guarantee will be issued at 80 percent; however, the guarantee will be issued at 90 percent if the applicant is a qualified beginning farmer. (c) CLP and PLP guarantees. All guarantees issued to CLP or PLP lenders will not be less than 80 percent. (d) Maximum loss. The maximum amount the Agency will pay the lender under the loan guarantee will be any loss sustained by such lender on the guaranteed portion including: (1) The pro rata share of principal and interest indebtedness as evidenced by the note or by assumption agreement; (2) Any loan subsidy due and owing; (3) The pro rata share of principal and interest indebtedness on secured protective and emergency advances made in accordance with this subpart; and (4) Principal and interest indebtedness on recapture de… | |||||
| 7:7:7.1.1.4.13.0.9.22 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.130 Loan approval and issuing the guarantee. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 72 FR 63297, Nov. 8, 2007; 73 FR 74345, Dec. 8, 2008; 75 FR 54014, Sept. 3, 2010; 76 FR 58094, Sept. 20, 2011; 79 FR 60744, Oct. 8, 2014; 79 FR 78693, Dec. 31, 2014; 86 FR 43391, Aug. 9, 2021; 87 FR 13124, Mar. 9, 2022; 90 FR 30559, July 10, 2025] | (a) Processing timeframes. (1) Standard eligible lenders. Complete applications from Standard Eligible Lenders will be approved or rejected, and the lender notified in writing, no later than 30 calendar days after receipt. (2) CLP and PLP lenders. (i) Complete applications from CLP or PLP lenders will be approved or rejected not later than 14 calendar days after receipt. (ii) For PLP lenders, if the 14 day time frame is not met, the proposed guaranteed loan will automatically be approved, subject to funding, and receive an 80 or 95 percent guarantee for FO or OL loans, and 80 or 90 percent guarantee for CL, as appropriate. (3) Complete applications. For purposes of determining the application processing timeframes, an application will be not be considered complete until all information required to make an approval decision, including the information for an environmental review, is received by the Agency. (4) The Agency will confirm the date an application is received with a written notification to the lender. (b) Funding preference. Loans are approved subject to the availability of funding. When it appears that there are not adequate funds to meet the needs of all approved applicants, applications that have been approved will be placed on a preference list according to the date of receipt of a complete application. If approved applications have been received on the same day, the following will be given priority: (1) An application from a veteran (2) An application from an Agency direct loan borrower (3) An application from a applicant who: (i) Has a dependent family, (ii) Is an owner of livestock and farm implements necessary to successfully carry out farming operations, or (iii) Is able to make down payments. (4) Any other approved application. (c) Conditional commitment. (1) The lender must meet all of the conditions specified in the conditional commitment to secure final Agency approval of the guarantee. (2) The lender, after reviewing the conditions listed on the conditional commitment,… | |||||
| 7:7:7.1.1.4.13.0.9.23 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | §§ 762.131-762.139 [Reserved] | FSA | |||||||
| 7:7:7.1.1.4.13.0.9.24 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.140 General servicing responsibilities. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 69 FR 44579, July 27, 2004; 81 FR 72692, Oct. 21, 2016] | (a) General. (1) Lenders are responsible for servicing the entire loan in a reasonable and prudent manner, protecting and accounting for the collateral, and remaining the mortgagee or secured party of record. (2) The lender cannot enforce the guarantee to the extent that a loss results from a violation of usury laws or negligent servicing. (b) Borrower supervision. The lender's responsibilities regarding borrower supervision include, but are not limited to the following: (1) Ensuring loan funds are not used for unauthorized purposes. (2) Ensuring borrower compliance with the covenants and provisions contained in the promissory note, loan agreement, mortgage, security instruments, any other agreements, and this part. Any violations which indicate non-compliance on the part of the borrower must be reported, in writing, to both the Agency and the borrower. (3) Ensuring the borrower is in compliance with all laws and regulations applicable to the loan, the collateral, and the operations of the farm. (4) Receiving all payments of principal and interest on the loan as they fall due and promptly disbursing to any holder its pro-rata share according to the amount of interest the holder has in the loan, less only the lender's servicing fee. (5) Performing an annual analysis of the borrower's financial condition to determine the borrower's progress for all term loans with aggregate balances greater than $100,000 and all line of credit loans. The annual analysis will include: (i) For loans secured by real estate only, the analysis for standard eligible lenders must include an analysis of the borrower's balance sheet. CLP lenders will determine the need for the annual analysis based on the financial strength of the borrower and document the file accordingly. PLP lenders will perform an annual analysis in accordance with the requirements established in the lender's agreement. (ii) For loans secured by chattels, all lenders will review the borrower's progress regarding business goals, trends and changes in financi… | |||||
| 7:7:7.1.1.4.13.0.9.25 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.141 Reporting requirements. | FSA | Lenders are responsible for providing the local Agency credit officer with all of the following information on the loan and the borrower: (a) When the guaranteed loan becomes 30 days past due, and following the lender's meeting or attempts to meet with the borrower, all lenders will submit the appropriate Agency form showing guaranteed loan borrower default status. The form will be resubmitted every 60 days until the default is cured either through restructuring or liquidation. (b) All lenders will submit the appropriate guaranteed loan status reports as of March 31 and September 30 of each year; (c) CLP lenders also must provide the following: (1) A written summary of the lender's annual analysis of the borrower's operation. This summary should describe the borrower's progress and prospects for the upcoming operating cycle. This annual analysis may be waived or postponed if the borrower is financially strong. The summary will include a description of the reasons an analysis was not necessary. (2) For lines of credit, an annual certification stating that a cash flow projecting at least a feasible plan has been developed, that the borrower is in compliance with the provisions of the line of credit agreement, and that the previous year income and loan funds and security proceeds have been accounted for. (d) In addition to the requirements of paragraphs (a), (b), and (c) of this section, the standard eligible lender also will provide: (1) Borrower's balance sheet, and income and expense statement for the previous year. (2) For lines of credit, the cash flow for the borrower's operation that projects a feasible plan or better for the upcoming operating cycle. The standard eligible lender must receive approval from the Agency before advancing future years' funds. (3) An annual farm visit report or collateral inspection. (e) PLP lenders will submit additional reports as required in their lender's agreement. (f) A lender receiving a final loss payment must complete and return an annual report on its collectio… | ||||||
| 7:7:7.1.1.4.13.0.9.26 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.142 Servicing related to collateral. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 69 FR 44579, July 27, 2004; 89 FR 65038, Aug. 8, 2024] | (a) General. The lender's responsibilities regarding servicing collateral include, but are not limited to, the following: (1) Obtain income and insurance assignments when required. (2) Ensure the borrower has or obtains marketable title to the collateral. (3) Inspect the collateral as often as deemed necessary to properly service the loan. (4) Ensure the borrower does not convert loan security. (5) Ensure the proceeds from the sale or other disposition of collateral are accounted for and applied in accordance with the lien priorities on which the guarantee is based or used for the purchase of replacement collateral. (6) Ensure the loan and the collateral are protected in the event of foreclosure, bankruptcy, receivership, insolvency, condemnation, or other litigation. (7) Ensure taxes, assessments, or ground rents against or affecting the collateral are paid. (8) Ensure adequate insurance is maintained. (9) Ensure that insurance loss payments, condemnation awards, or similar proceeds are applied on debts in accordance with lien priorities on which the guarantee was based, or used to rebuild or acquire needed replacement collateral. (b) Partial releases. (1) A lender may release guaranteed loan security without FSA concurrence as follows: (i) When the security item is being sold for market value and the proceeds will be applied to the loan in accordance with lien priorities. In the case of term loans, proceeds will be applied as extra payments and not as a regular installment on the loan. (ii) The security item will be used as a trade-in or source of down payment funds for a like item that will be taken as security. (iii) The security item has no present or prospective value. (2) A partial release of security may be approved in writing by the Agency upon the lender's request when: (i) Proceeds will be used to make improvements to real estate that increase the value of the security by an amount equal to or greater than the value of the security being released. (ii) Security will be released outr… | |||||
| 7:7:7.1.1.4.13.0.9.27 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.143 Servicing distressed accounts. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 72 FR 63297, Nov. 8, 2007] | (a) A borrower is in default when 30 days past due on a payment or in violation of provisions of the loan documents. (b) In the event of a borrower default, SEL and CLP lenders will: (1) Report to the Agency in accordance with § 762.141. (2) Determine whether it will repurchase the guaranteed portion from the holder in accordance with § 762.144, if the guaranteed portion of the loan was sold on the secondary market. (3) Arrange a meeting with the borrower within 15 days of default (45 days after payment due date for monetary defaults) to identify the nature of the delinquency and develop a course of action that will eliminate the delinquency and correct the underlying problems. Non-monetary defaults will be handled in accordance with the lender's note, loan agreements and any other applicable loan documents. (i) The lender and borrower will prepare a current balance sheet and cash flow projection in preparation for the meeting. If the borrower refuses to cooperate, the lender will compile the best financial information available. (ii) The lender or the borrower may request the attendance of an Agency official. If requested, the Agency official will assist in developing solutions to the borrower's financial problems. (iii) The lender will summarize the meeting and proposed solutions on the Agency form for guaranteed loan borrower default status completed after the meeting. The lender will indicate the results on this form for the lender's consideration of the borrower for interest assistance in conjunction with rescheduling under § 762.145(b). (iv) The lender must decide whether to restructure or liquidate the account within 90 days of default, unless the lender can document circumstances that justify an extension by the Agency. (v) The lender may not initiate foreclosure action on the loan until 60 days after eligibility of the borrower to participate in the interest assistance programs has been determined by the Agency. If the lender or the borrower does not wish to consider servicing options under this… | |||||
| 7:7:7.1.1.4.13.0.9.28 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.144 Repurchase of guaranteed portion from a secondary market holder. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 69 FR 44579, July 27, 2004] | (a) Request for repurchase. The holder may request the lender to repurchase the unpaid guaranteed portion of the loan when: (1) The borrower has not made a payment of principal and interest due on the loan for at least 60 days; or (2) The lender has failed to remit to the holder its pro-rata share of any payment made by the borrower within 30 days of receipt of a payment. (b) Repurchase by the lender. (1) When a lender is requested to repurchase a loan from the holder, the lender must consider the request according to the servicing actions that are necessary on the loan. In order to facilitate servicing and simplified accounting of loan transactions, lenders are encouraged to repurchase the loan upon the holder's request. (2) The repurchase by the lender will be for an amount equal to the portion of the loan held by the holder plus accrued interest. (3) The guarantee will not cover separate servicing fees that the lender accrues after the repurchase. (c) Repurchase by the Agency. (1) If the lender does not repurchase the loan, the holder must inform the Agency in writing that demand was made on the lender and the lender refused. Following the lender's refusal, the holder may continue as holder of the guaranteed portion of the loan or request that the Agency purchase the guaranteed portion. Within 30 days after written demand to the Agency from the holder with required attachments, the Agency will forward to the holder payment of the unpaid principal balance, with accrued interest to the date of repurchase. If the holder does not desire repurchase or purchase of a defaulted loan, the lender must forward the holder its pro-rata share of payments, liquidation proceeds and Agency loss payments. (2) With its demand on the Agency, the holder must include: (i) A copy of the written demand made upon the lender. (ii) Originals of the guarantee and note properly endorsed to the Agency, or the original of the assignment of guarantee. (iii) A copy of any written response to the demand of the holder by the len… | |||||
| 7:7:7.1.1.4.13.0.9.29 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.145 Restructuring guaranteed loans. | FSA | [64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 69 FR 44579, July 27, 2004; 70 FR 56107, Sept. 26, 2005; 72 FR 17358, Apr. 9, 2007; 75 FR 54014, Sept. 1, 2010; 77 FR 15938, Mar. 19, 2012; 78 FR 65530, Nov. 1, 2013; 86 FR 43391, Aug. 9, 2021; 89 FR 65038, Aug. 8, 2024] | (a) General. (1) To restructure guaranteed loans standard eligible lenders must: (i) Obtain prior written approval of the Agency for all restructuring actions; and, (ii) Provide the items in paragraph (b) and (e) of this section to the Agency for approval. (2) If the standard eligible lender's proposal for servicing is not agreed to by the Agency, the Agency approval official will notify the lender in writing within 14 days of the lender's request. (3) To restructure guaranteed loans CLP lenders must: (i) Obtain prior written approval of the Agency only for debt write- down under this section. (ii) Submit all calculations required in paragraph (e) of this section for debt write-down. (iii) For restructuring other than write-down, provide FSA with a certification that each requirement of this section has been met, a narrative outlining the circumstances surrounding the need for restructuring, and copies of any applicable calculations. (4) PLP lenders will restructure loans in accordance with their lender's agreement. (5) All lenders will submit copies of any restructured notes or lines of credit to the Agency. (b) Requirements. For any restructuring action, the following conditions apply: (1) The borrower meets the eligibility criteria of § 762.120, except the provisions regarding prior debt forgiveness and delinquency on a federal debt do not apply. (2) The borrower's ability to make the amended payment is documented by the following: (i) A feasible plan. (ii) Current financial statements from all liable parties. (iii) Verification of nonfarm income. (iv) Verification of all debts of exceeding an amount determined by the Agency. (v) Applicable credit reports. (vi) Financial history (and production history for standard eligible lenders) for the past 3 years to support the cash flow projections. (3) A final loss claim may be reduced, adjusted, or rejected as a result of negligent servicing after the concurrence with a restructuring action under this section. (4) Loans can be restructured usi… | |||||
| 7:7:7.1.1.4.13.0.9.3 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.102 Abbreviations and definitions. | FSA | [72 FR 63297, Nov. 8, 2007] | Abbreviations and definitions for terms used in this part are provided in § 761.2 of this chapter. | |||||
| 7:7:7.1.1.4.13.0.9.30 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.146 Other servicing procedures. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 78 FR 65530, Nov. 1, 2013] | (a) Additional loans and advances. (1) Notwithstanding any provision of this section, the PLP lender may make additional loans or advances in accordance with the lender's agreement with the Agency. (2) SEL and CLP lenders must not make additional loans or advances without prior written approval of the Agency, except as provided in the borrower's loan or line of credit agreement. (3) In cases of a guaranteed line of credit, lenders may make an emergency advance when a line of credit has reached its ceiling. The emergency advance will be made as an advance under the line and not as a separate note. The lender's loan documents must contain sufficient language to provide that any emergency advance will constitute a debt of the borrower to the lender and be secured by the security instrument. The following conditions apply: (i) The loan funds to be advanced are for authorized operating loan purposes; (ii) The financial benefit to the lender and the Government from the advance will exceed the amount of the advance; and (iii) The loss of crops or livestock is imminent unless the advance is made. (4) Protective advance requirements are found in § 762.149. (b) Release of liability upon withdrawal. An individual who is obligated on a guaranteed loan may be released from liability by a lender, with the written consent of the Agency, provided the following conditions have been met: (1) The individual to be released has withdrawn from the farming operation; (2) A divorce decree or final property settlement does not hold the withdrawing party responsible for the loan payments; (3) The withdrawing party's interest in the security is conveyed to the individual or entity with whom the loan will be continued; (4) The ratio of the amount of debt to the value of the remaining security is less than or equal to .75, or the withdrawing party has no income or assets from which collection can be made; and (5) Withdrawal of the individual does not result in legal dissolution of the entity to which the loans are made. Indiv… | |||||
| 7:7:7.1.1.4.13.0.9.31 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.147 Servicing shared appreciation agreements. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 75 FR 54014, Sept. 3, 2010; 89 FR 63058, Aug. 8, 2024] | (a) Lender responsibilities. The lender is responsible for: (1) Monitoring the borrower's compliance with the shared appreciation agreement; (2) Notifying the borrower of the amount of recapture due; and, (3) Beginning October 1, 1999, a notice of the agreement's provisions not later than 12 months before the end of the agreement; and (4) Reimbursing the Agency for its pro-rata share of recapture due. (b) Recapture. (1) Recapture of any appreciation of real estate security will take place at the end of the term of the agreement, or sooner if the following occurs: (i) On the conveyance of the real estate security (or a portion thereof) by the borrower. (A) If only a portion of the real estate is conveyed, recapture will only be triggered against the portion conveyed. Partial releases will be handled in accordance with § 762.142(b). (B) Transfer of title to the spouse of the borrower on the death of such borrower will not be treated as a conveyance under the agreement. (ii) On repayment of the loan; or (iii) If the borrower ceases farming. (2) Calculating recapture. (i) The amount of recapture will be based on the difference between the value of the security at the time recapture is triggered and the value of the security at the time of write-down, as shown on the shared appreciation agreement. (ii) Security values will be determined through appraisals obtained by the lender and meeting the requirements of § 762.127. (iii) All appraisal fees will be paid by the lender. (iv) The amount of recapture will not exceed the amount of write-down shown on the shared appreciation agreement. (v) If recapture is triggered within 4 years of the date of the shared appreciation agreement, the lender shall recapture 75 percent of any positive appreciation in the market value of the property securing the loan or line of credit agreement. (vi) If recapture is triggered after 4 years from the date of the shared appreciation agreement, the lender shall recapture 50 percent of any positive appreciation in the marke… | |||||
| 7:7:7.1.1.4.13.0.9.32 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.148 Bankruptcy. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 71 FR 43957, Aug. 3, 2006; 73 FR 32637, June 10, 2008; 75 FR 54014, Sept. 3, 2010] | (a) Lender responsibilities. The lender must protect the guaranteed loan debt and all collateral securing the loan in bankruptcy proceedings. The lender's responsibilities include, but are not limited to: (1) Filing a proof of claim where required and all the necessary papers and pleadings; (2) Attending, and where necessary, participating in meetings of the creditors and court proceedings; (3) Protecting the collateral securing the guaranteed loan and resisting any adverse changes that may be made to the collateral; (4) Seeking a dismissal of the bankruptcy proceeding when the operation as proposed by the borrower to the bankruptcy court is not feasible; (5) When permitted by the bankruptcy code, requesting a modification of any plan of reorganization if it appears additional recoveries are likely. (6) Monitor confirmed plans under chapters 11, 12 and 13 of the bankruptcy code to determine borrower compliance. If the borrower fails to comply, the lender will seek a dismissal of the reorganization plan; and (7) Keeping the Agency regularly informed in writing on all aspects of the proceedings. (i) The lender will submit a default status report when the borrower defaults and every 60 days until the default is resolved or a final loss claim is paid. (ii) The default status report will be used to inform the Agency of the bankruptcy filing, the reorganization plan confirmation date and effective date, when the reorganization plan is complete, and when the borrower is not in compliance with the reorganization plan. (b) Bankruptcy expenses. (1) Reorganization. (i) Expenses, such as legal fees and the cost of appraisals incurred by the lender as a direct result of the borrower's chapter 11, 12, or 13 reorganization, are covered under the guarantee, provided they are reasonable, customary, and provide a demonstrated economic benefit to the lender and the Agency. (ii) Lender's in-house expenses, which are those expenses which would normally be incurred for administration of the loan, including in-house law… | |||||
| 7:7:7.1.1.4.13.0.9.33 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.149 Liquidation. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 67 FR 44016, July 1, 2002; 69 FR 44580, July 27, 2004; 71 FR 43957, Aug. 3, 2006; 73 FR 32637, June 10, 2008; 78 FR 65530, Nov. 1, 2013] | (a) Mediation. When it has been determined that default cannot be cured through any of the servicing options available, or if the lender does not wish to utilize any of the authorities provided in this part, the lender must: (1) Participate in mediation according to the rules and regulations of any State which has a mandatory farmer-creditor mediation program; (2) Consider private mediation services in those States which do not have a mandatory farmer-creditor mediation program; and (3) Not agree to any proposals to rewrite the terms of a guaranteed loan which do not comply with this part. Any agreements reached as a result of mediation involving defaults and or loan restructuring must have written concurrence from the Agency before they are implemented. (b) Liquidation plan. If a default cannot be cured after considering servicing options and mediation, the lender will proceed with liquidation of the collateral in accordance with the following: (1) Within 150 days after the payment due date, all lenders will prepare a liquidation plan. Standard eligible and CLP lenders will submit a written liquidation plan to the Agency which includes: (i) Current balance sheets from all liable parties or, if the parties are not cooperative, the best information available, or in liquidation bankruptcies, a copy of the bankruptcy schedules or discharge notice; (ii) A proposed method of maximizing the collection of debt which includes specific plans to collect any remaining loan balances on the guaranteed loan after loan collateral has been liquidated, including possibilities for judgment; (A) If the borrower has converted loan security, the lender will determine whether litigation is cost effective. The lender must address, in the liquidation plan, whether civil or criminal action will be pursued. If the lender does not pursue the recovery, the reason must be documented when an estimated loss claim is submitted. (B) Any proposal to release the borrower from liability will be addressed in the liquidation plan in acco… | |||||
| 7:7:7.1.1.4.13.0.9.34 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.150 Interest assistance program. | FSA | [72 FR 17358, Apr. 9, 2007, as amended at 78 FR 14005, Mar. 4, 2013; 78 FR 65530, Nov. 1, 2013; 89 FR 65038, Aug. 8, 2024] | (a) Requests for interest assistance. In addition to the loan application items required by § 762.110, to apply for interest assistance the lender's cash flow budget for the guaranteed applicant must reflect the need for interest assistance and the ability to cash flow with the subsidy. Interest assistance is available only on new guaranteed Operating Loans (OL). (b) Eligibility requirements. The lender must document that the following conditions have been met for the applicant to be eligible for interest assistance: (1) A feasible plan cannot be achieved without interest assistance, but can be achieved with interest assistance. (2) If significant changes in the borrower's cash flow budget are anticipated after the initial 12 months, then the typical cash flow budget must demonstrate that the borrower will still have a feasible plan following the anticipated changes, with or without interest assistance. (3) The typical cash flow budget must demonstrate that the borrower will have a feasible plan throughout the term of the loan. (4) The borrower, including members of an entity borrower, does not own any significant assets that do not contribute directly to essential family living or farm operations. The lender must determine the market value of any such non-essential assets and prepare a cash flow budget and interest assistance calculations based on the assumption that these assets will be sold and the market value proceeds used for debt reduction. If a feasible plan can then be achieved, the borrower is not eligible for interest assistance. (5) A borrower may only receive interest assistance if their total debts (including personal debts) prior to the new loan exceed 50 percent of their total assets (including personal assets). An entity's debt to asset ratio will be based upon a financial statement that consolidates business and personal debts and assets of the entity and its members. Beginning farmers § 761.2(b) of this chapter, as defined in § 762.102, are excluded from this requirement. (c) Maximu… | |||||
| 7:7:7.1.1.4.13.0.9.35 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | §§ 762.151-762.158 [Reserved] | FSA | |||||||
| 7:7:7.1.1.4.13.0.9.36 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.159 Pledging of guarantee. | FSA | [70 FR 56107, Sept. 26, 2005] | A lender may pledge all or part of the guaranteed or unguaranteed portion of the loan as security to a Federal Home Loan Bank, a Federal Reserve Bank, a Farm Credit System Bank, or any other funding source determined acceptable by the Agency. | |||||
| 7:7:7.1.1.4.13.0.9.37 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.160 Assignment of guarantee. | FSA | [70 FR 56107, Sept. 26, 2005] | (a) The following general requirements apply to assigning guaranteed loans: (1) Subject to Agency concurrence, the lender may assign all or part of the guaranteed portion of the loan to one or more holders at or after loan closing, if the loan is not in default. However, a line of credit cannot be assigned. The lender must always retain the unguaranteed portion in their portfolio, regardless of how the loan is funded. (2) The Agency may refuse to execute the Assignment of Guarantee and prohibit the assignment in case of the following: (i) The Agency purchased and is holder of a loan that was assigned by the lender that is requesting the assignment. (ii) The lender has not complied with the reimbursement requirements of § 762.144(c)(7), except when the 180 day reimbursement or liquidation requirement has been waived by the Agency. (3) The lender will provide the Agency with copies of all appropriate forms used in the assignment. (4) The guaranteed portion of the loan may not be assigned by the lender until the loan has been fully disbursed to the borrower. (5) The lender is not permitted to assign any amount of the guaranteed or unguaranteed portion of the loan to the applicant or borrower, or members of their immediate families, their officers, directors, stockholders, other owners, or any parent, subsidiary, or affiliate. (6) Upon the lender's assignment of the guaranteed portion of the loan, the lender will remain bound to all obligations indicated in the Guarantee, Lender's Agreement, the Agency program regulations, and to future program regulations not inconsistent with the provisions of the Lenders Agreement. The lender retains all rights under the security instruments for the protection of the lender and the United States. (b) The following will occur upon the lender's assignment of the guaranteed portion of the loan: (1) The holder will succeed to all rights of the Guarantee pertaining to the portion of the loan assigned. (2) The lender will send the holder the borrower's executed note attached … | |||||
| 7:7:7.1.1.4.13.0.9.4 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.103 Full faith and credit. | FSA | (a) Fraud and misrepresentation. The loan guarantee constitutes an obligation supported by the full faith and credit of the United States. The Agency may contest the guarantee only in cases of fraud or misrepresentation by a lender or holder, in which: (1) The lender or holder had actual knowledge of the fraud or misrepresentation at the time it became the lender or holder, or (2) The lender or holder participated in or condoned the fraud or misrepresentation. (b) Lender violations. The loan guarantee cannot be enforced by the lender, regardless of when the Agency discovers the violation, to the extent that the loss is a result of: (1) Violation of usury laws; (2) Negligent servicing; (3) Failure to obtain the required security; or, (4) Failure to use loan funds for purposes specifically approved by the Agency. (c) Enforcement by holder. The guarantee and right to require purchase will be directly enforceable by the holder even if: (1) The loan guarantee is contestable based on the lender's fraud or misrepresentation; or (2) The loan note guarantee is unenforceable by the lender based on a lender violation. | ||||||
| 7:7:7.1.1.4.13.0.9.5 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.104 Appeals. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 72 FR 63297, Nov. 8, 2007] | (a) A decision made by the lender adverse to the borrower is not a decision by the Agency, whether or not concurred in by the Agency, and may not be appealed. (b) The lender or Agency may request updated information from the borrower to implement an appeal decision. (c) Appeals will be handled in accordance with parts 11 and 780 of this title. | |||||
| 7:7:7.1.1.4.13.0.9.6 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.105 Eligibility and substitution of lenders. | FSA | [64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 81 FR 72690, Oct. 21, 2016] | (a) General. To participate in FSA guaranteed farm loan programs, a lender must meet the eligibility criteria in this part. The standard eligible lender must demonstrate eligibility and provide such evidence as the Agency may request. (b) Standard eligible lender eligibility criteria. (1) A lender must have experience in making and servicing agricultural loans and have the capability to make and service the loan for which a guarantee is requested; (2) The lenders must not have losses or deficiencies in processing and servicing guaranteed loans above a level which would indicate an inability to properly process and service a guaranteed agricultural loan. (3) A lender must be subject to credit examination and supervision by an acceptable State or Federal regulatory agency; (4) The lender must maintain an office near enough to the collateral's location so it can properly and efficiently discharge its loan making and loan servicing responsibilities or use Agency approved agents, correspondents, branches, or other institutions or persons to provide expertise to assist in carrying out its responsibilities. The lender must be a local lender unless it: (i) Normally makes loans in the region or geographic location in which the applicant's operation being financed is located, or (ii) Demonstrates specific expertise in making and servicing loans for the proposed operation. (5) The lender, its officers, or agents must not be debarred or suspended from participation in Government contracts or programs or be delinquent on a Government debt. (c) Substitution of lenders. A new eligible lender may be substituted for the original lender, upon the original lender's concurrence, under the following conditions: (1) The Agency approves of the substitution in writing by executing a modification of the guarantee to identify the new lender, the amount of debt at the time of the substitution and any new loan terms if applicable. (2) The new lender agrees in writing to: (i) Assume all servicing and other responsibilities o… | |||||
| 7:7:7.1.1.4.13.0.9.7 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.106 Preferred and certified lender programs. | FSA | [64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 70 FR 56107, Sept. 26, 2005; 71 FR 43957, Aug. 3, 2006; 75 FR 54013, Sept. 3, 2010; 77 FR 41256, July 13, 2012] | (a) General. (1) Lenders who desire PLP or CLP status must prepare a written request addressing: (i) The States in which they desire to receive PLP or CLP status and their branch offices which they desire to be considered by the Agency for approval; and (ii) Each item of the eligibility criteria for PLP or CLP approval in this section, as appropriate. (2) The lender may include any additional supporting evidence or other information the lender believes would be helpful to the Agency in making its determination. (3) The lender must send its request to the Agency State office for the State in which the lender's headquarters is located. (4) The lender must provide any additional information requested by the Agency to process a PLP or CLP request if the lender continues with the approval process. (b) CLP criteria. The lender must meet the following requirements to obtain CLP status: (1) Qualify as a standard eligible lender under § 762.105; (2) Have a lender loss rate not in excess of the maximum CLP loss rate established by the Agency and published periodically in a Federal Register Notice. The Agency may waive the loss rate criteria for those lenders whose loss rate was substantially affected by a disaster as defined in § 761.2(b) and part 759 of this chapter. (3) Have proven an ability to process and service Agency guaranteed loans by showing that the lender: (i) Submitted substantially complete and correct guaranteed loan applications; and (ii) Serviced all guaranteed loans according to Agency regulations; (4) Have made the minimum number of guaranteed OL, FO, CL, or SW loans established by the Agency and published periodically in a Federal Register Notice. (5) Not be under any regulatory enforcement action such as a cease and desist order, written agreement, or an appointment of conservator or receiver, based upon financial condition; (6) Designate a qualified person or persons to process and service Agency guaranteed loans for each of the lender offices which will process CLP loans. To be … | |||||
| 7:7:7.1.1.4.13.0.9.8 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | § 762.107 Micro Lender Program. | FSA | [81 FR 72690, Oct. 21, 2016] | (a) General. The lenders must submit the following items: (1) To request MLP Status, a lender must submit an application form to any local FSA office. (2) The lender must provide any additional information requested by the Agency to process an MLP request, if the lender continues with the approval process. (3) MLP lender authorities are limited to originating and servicing EZ Guarantee loans. (b) MLP criteria. An MLP lender must satisfy the following requirements to obtain MLP Status: (1) Have experience in making and servicing business loans. (2) Have the staff and resources to properly and efficiently discharge its loan making and loan servicing responsibilities that may include use of Agency approved agents. (3) Be subject to oversight as established and announced by the Agency on the FSA Web site ( www.fsa.usda.gov ). (4) Have a loss rate not in excess of the maximum MLP loss rate established and announced by the Agency on the FSA Web site ( www.fsa.usda.gov ). (5) Have made the minimum number of loans as established and announced by the Agency on the FSA Web site ( www.fsa.usda.gov ). (6) Not be debarred or suspended from participation in Government contracts or programs or be delinquent on a Government debt. This includes the lender's officers and agents. (c) Renewal of MLP Status. MLP Status will expire within a period not to exceed 5 years from the date the lender's agreement is executed, unless a new lender's agreement is executed. (1) Renewal of MLP Status is not automatic. A lender must submit a new application for renewal. (2) MLP Status will be renewed if the applicable eligibility criteria under this section are met, and no cause exists for denying renewal under paragraph (d)(1) of this section. (d) Revocation of MLP Status. The Agency may revoke the lender's MLP Status at any time during the 5 year term for cause as specified in paragraph (d)(1) of this section. (1) Any of the following instances constitutes cause for revoking or not renewing MLP Status: (i) Violation of the… | |||||
| 7:7:7.1.1.4.13.0.9.9 | 7 | Agriculture | VII | D | 762 | PART 762—GUARANTEED FARM LOANS | §§ 762.108-762.109 [Reserved] | FSA |
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title_number INTEGER,
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chapter TEXT,
subchapter TEXT,
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