cfr_sections
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112 rows where part_number = 3565 and title_number = 7 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 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 7:7:15.1.14.2.5.1.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.1 Purpose. | RHS | The purpose of the Guaranteed Rural Rental Housing Program (GRRHP) is to increase the supply of affordable rural rental housing, through the use of loan guarantees that encourage partnerships between the Rural Housing Service, private lenders and public agencies. | |||||
| 7:7:15.1.14.2.5.1.1.10 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.10 Conflict of interest. | RHS | (a) Objective. It is the objective within the Rural Development mission area to maintain the highest standards of honesty, integrity, and impartiality by employees. (b) Rural Development requirement. To reduce the potential for employee conflict of interest, all Rural Development activities will be conducted in accordance with 7 CFR part 1900, subpart D, or successor regulation by Rural Development employees who: (1) Are not themselves a beneficiary; (2) Are not family members or known relatives of any beneficiary; and (3) Do not have any business or personal relationship with any beneficiary or any employee of a beneficiary. (c) Rural Development employee responsibility. Rural Development employees must disclose any known relationship or association with a lender or borrower or their agents, regardless of whether the relationship or association is known to others. Rural Development employees or members of their families may not purchase a Real Estate Owned property, security property from a borrower, or security property at a foreclosure sale. (d) Loan closing agent responsibility. Loan closing agents (or members of their families) who have been involved with a particular property are precluded from purchasing such properties. (e) Lender and borrower responsibility. Lenders, borrowers, and their agents must identify any known relationship or association with a Rural Development employee. | |||||
| 7:7:15.1.14.2.5.1.1.11 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | §§ 3565.11-3565.12 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.1.1.12 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.13 Exception authority. | RHS | [64 FR 32372, June 16, 1999] | An Agency official may request and the Administrator or designee may make an exception to any requirement or provision, or address any omission of this part, if the Administrator determines that application of the requirement or provision, or failure to take action, would adversely affect the government's interest or the program objectives, and provided that such an exception is not inconsistent with any applicable law or statutory requirement. | ||||
| 7:7:15.1.14.2.5.1.1.13 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.14 Review and appeals. | RHS | Whenever RHS makes a decision that is adverse to a lender or a borrower, RHS will provide written notice of such adverse decision and of the right to a USDA National Appeals Division hearing in accordance with 7 CFR part 11 or successor regulations. The lender or borrower may request an informal review with the decision maker and the use of available alternative dispute resolution or mediation programs as a means of resolution of the adverse decision. Any adverse decision, whether appealable or non-appealable may also be reviewed by the next level RHS supervisor. Adverse decisions affecting project tenants or applicants for tenancy will be handled in accordance with 7 CFR part 1944, subpart L or successor regulations. | |||||
| 7:7:15.1.14.2.5.1.1.14 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.15 Oversight and monitoring. | RHS | The lender, borrower, and all parties involved in any manner with any guarantee under this program must cooperate fully with all oversight and monitoring efforts of the Agency, Office of Inspector General, the U.S. General Accounting Office, and the U.S. Department of Justice or their representatives including making available any records concerning this transaction. This includes the annual eligibility audit and any other oversight or monitoring activities. If the Agency implements a requirement for an electronic transfer of information, the lender and borrower must cooperate fully. | |||||
| 7:7:15.1.14.2.5.1.1.15 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.16 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.1.1.16 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.17 Demonstration programs. | RHS | To test ways to expand the availability or enhance the effectiveness of the guarantee program, or for similar purposes, the Agency may, from time to time, propose demonstration programs that use loan guarantees or interest credit. Toward this end, the Agency may enter into special partnerships with lenders, financial intermediaries, or others to carry out one or more elements of a demonstration program. Demonstration programs will be publicized by notices in the Federal Register. | |||||
| 7:7:15.1.14.2.5.1.1.17 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | §§ 3565.18-3565.49 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.1.1.18 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.50 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.1.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.2 Applicability and authority. | RHS | The regulation prescribes the policies, authorizations, and procedures for the guarantee of multifamily loans under section 538 of the Housing Act of 1949. | |||||
| 7:7:15.1.14.2.5.1.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.3 Definitions. | RHS | [63 FR 39458, July 22, 1998, as amended at 67 FR 16970, Apr. 9, 2002; 70 FR 2930, Jan. 19, 2005; 76 FR 3, Jan. 3, 2011; 84 FR 55035, Oct. 15, 2019] | Administrator. The Administrator of the Rural Housing Service, or his or her designee. Agency. The Rural Housing Service, or a successor agency. Allowable claim amount. The total losses incurred by the lender, as calculated pursuant to subpart J of this part. Applicable Federal Rate (AFR). The interest rate set by the federal government for federal financing programs pursuant to section 42 of the Internal Revenue Code. Approved lender. An eligible lender who has been authorized by the Agency to originate and service guaranteed multifamily loans under the program. Assignment. The delivery by a lender to the Agency of the note and any other security instruments securing the guaranteed loan; and any and all liens, interest, or claims the lender may have against the borrower. Assistance. Financial assistance in the form of a loan guarantee or interest credit received from the Agency. Borrower. The individuals or entities responsible for repaying the loans. Claim. The presentation to the Agency of a demand for payment for losses incurred on a loan guaranteed under the program. Conditional commitment. The written commitment by the Agency to guarantee a loan subject to the stated terms and conditions. Construction and permanent loan. A loan which provides advances during the construction period and remains in place as a permanent loan at the completion of construction. Construction contingency reserve. A cash reserve of at least two percent of the construction contract, inclusive of the contractor's fee and all hard and soft costs that must be set up and fully funded by the closing of the construction loan. This reserve will be held by the lender, and funds will only be disbursed for change order requests approved by the Agency and the lender. Unused funds from the construction contingency reserve will be held in the operating and maintenance reserve and cannot be released to the borrower until the project reaches an occupancy of 90% for 90 consecutive days. In addition the reserve accounts establ… | ||||
| 7:7:15.1.14.2.5.1.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.4 Availability of assistance. | RHS | [84 FR 55035, Oct. 15, 2019] | The Agency's authority to enter into commitments, guarantee loans, or provide interest credits is limited to the extent that appropriations are available to cover the cost of the assistance. The Agency will notify the public of the availability of assistance, changes in application requirements, or changes in the fee structure. | ||||
| 7:7:15.1.14.2.5.1.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.5 Ranking and selection criteria. | RHS | [63 FR 39458, July 22, 1998, as amended at 64 FR 32371, June 16, 1999; 84 FR 55036, Oct. 15, 2019; 89 FR 19499, Mar. 19, 2024] | (a) Threshold criteria. Applications for loan guarantee submitted by lenders must include a loan request for a project that meets all of the following threshold criteria: (1) The project must involve an owner and a development team with qualifications and experience sufficient to carry out development, management, and ownership responsibilities, and the owner and development team must not be under investigation or suspension from any government programs; (2) The project must involve the financing of a property located in an eligible rural area; (3) Demonstrate a readiness, for the project to proceed, including submission of a complete application for a loan guarantee and evidence of financing; (4) Demonstrate market and financial feasibility; and (5) Include evidence that the credit risk is reasonable, taking into account conventional lending practices, and factors related to concentration of risk in a given market and with a given borrower. (b) Priority projects. Priority will be given to projects in rural areas in which borrowers can best utilize and where loan guarantees are needed the most, as determined by the Agency based on information the Secretary considers appropriate. In addition, the Agency may, at its sole discretion, set aside assistance for or rank projects that meet important program goals. Assistance will include both loan guarantees and interest credits. Priority projects must compete for set-aside funds. The Agency will announce the priority criteria in an announcement in the Federal Register . | ||||
| 7:7:15.1.14.2.5.1.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.6 Inclusion of tax-exempt debt. | RHS | [64 FR 32371, June 16, 1999] | Tax-exempt financing can be used a source of capital for the guaranteed loan. | ||||
| 7:7:15.1.14.2.5.1.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.7 Environmental review requirements. | RHS | [81 FR 11050, Mar. 2, 2016] | The Agency will take into account potential environmental impacts of proposed projects by working with applicants, other federal agencies, Indian tribes, State and local governments, and interested citizens and organizations in order to formulate actions that advance the program goals in a manner that will protect, enhance, and restore environmental quality. Actions taken under this part must comply with the environmental review requirements in accordance with 7 CFR part 1970. | ||||
| 7:7:15.1.14.2.5.1.1.8 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.8 Civil rights compliance. | RHS | [64 FR 32371, June 16, 1999] | (a) All actions taken by the Agency, or on behalf of the Agency, by a lender will be conducted without regard to race, color, religion, national origin, sex, marital status, age, income from public assistance or having exercised their right under the Consumer Credit Protection Act, and in accordance with the Equal Credit Opportunity Act (ECOA). (b) Any action related to the sale, rental or advertising of dwellings; in the provision of brokerage services; or in making available residential real estate transactions involving Agency assistance, must be in accordance with the Fair Housing Act, which prohibits discrimination on the basis of race, color, religion, sex, national origin, familial status or handicap. It is unlawful for a lender or borrower participating in the program to: (1) Refuse to make accommodations in rules, policies, practices, or services if such accommodations are necessary to provide a person with a disability an opportunity to use or continue to use a dwelling unit and all public and common use areas; and (2) Refuse to allow an individual with a disability to make reasonable modifications to a unit at his or her expense, if such modifications may be necessary to afford the individual full enjoyment of the unit. (c) Any resident or prospective resident seeking occupancy or use of a unit, property or related facility for which a loan guarantee has been provided, and who believes that he or she is being discriminated against may file a complaint with the lender, the Agency or the Department of Housing and Urban Development. A written complaint should be sent to the Secretary of Agriculture or of the Department of Housing and Urban Development in Washington, DC. (d) Lenders and borrowers that fail to comply with the requirements of title VIII of the Civil Rights Act of 1968, as amended (the Fair Housing Act), are liable for those sanctions authorized by law. (e) For guaranteed loans with “interest credit,” the following additional civil rights laws will apply and be enforced by the agency de… | ||||
| 7:7:15.1.14.2.5.1.1.9 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | A | Subpart A—General Provisions | § 3565.9 Compliance with federal requirements. | RHS | [63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999; 76 FR 80731, Dec. 27, 2011] | The Agency and the lender are responsible for ensuring that the application is in compliance with all applicable federal requirements, including the following specific statutory requirements: (a) Intergovernmental review. 7 CFR part 3015, subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities”, or successor regulation, including the Agency supplemental administrative instruction, RD Instruction 1970-I, ‘Intergovernmental Review,’ available in any Agency office or on the Agency's Web site. (b) National flood insurance. The National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1973; the National Flood Insurance Reform Act of 1994; and 7 CFR part 1806, subpart B, or successor regulation. (c) Clean Air Act and Water Pollution Control Act Requirements. For any contract, all applicable standards, orders or requirements issued under section 306 of the Clean Air Act; section 508 of the Clean Water Act; Executive Order 11738; and EPA regulations at part 32, of title 40. (d) Historic preservation requirements. The provisions of 7 CFR part 1901, subpart F or successor regulation. (e) Lead-based paint requirements. The provisions of 7 CFR part 1924, subpart A, or successor regulation. | ||||
| 7:7:15.1.14.2.5.10.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.451 Preclaim requirements. | RHS | [63 FR 39458, July 22, 1998, as amended at 81 FR 11050, Mar. 2, 2016] | (a) Lender certifications. After borrower default and before filing a claim or assignment of the loan to the Agency, the lender must make every reasonable and prudent effort to resolve the default. The lender must provide the Agency with an accounting of all proposed and actual actions taken to cure the default. The lender must certify that all reasonable efforts to cure the default have been exhausted. Where the lender fails to comply with the terms of the loan guarantee agreement and the corresponding regulations and guidance with regard to liquidating the property, the Agency, at its option, may take possession of the security collateral and dispose of the property. (b) Due diligence by lender. For all loan servicing actions where a market, net recovery or liquidation value determination is required, guaranteed lenders shall perform due diligence in conjunction with the appraisal and submit it to the Agency for review. The Phase I Environmental Site Assessment published by the American Society of Testing and Materials is considered an acceptable format for due diligence. (c) Environmental review. The Agency is required to complete an environmental review under the National Environmental Policy Act, in accordance with 7 CFR part 1970. Servicing actions as defined in § 1970.6 are part of financial assistance already provided and do not require additional NEPA review. However, certain post-financial assistance actions that have the potential to have an effect on the environment, such as lien subordinations, sale or lease of Agency-owned real property, or approval of a substantial change in the scope of a project, as defined in § 1970.8, are subject to a NEPA analysis in accordance with 7 CFR part 1970. | ||||
| 7:7:15.1.14.2.5.10.1.10 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.500 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.10.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.452 Decision to liquidate. | RHS | [67 FR 16971, Apr. 9, 2002, as amended at 70 FR 2932, Jan. 19, 2005] | (a) A decision to liquidate shall be made when it is determined that the default cannot be cured through actions contained in § 3565.403 or it has been determined that it is in the best interest of the Agency and the lender to liquidate. For interest accrual purposes, interest will accrue for 90 calendar days after the date the liquidation plan is approved by the Agency. If within 20 calendar days of the Agency's receipt of the liquidation plan, the Agency fails to respond to the lender's proposal or advise the lender to make revisions to the plan that was submitted, the liquidation plan will be approved by default, and the 90 calendar day period for interest accrual will commence. (b) In the event of a default involving a loan to an Indian tribe or tribal corporation made under this section which is secured by an interest in land within such tribe's reservation (as determined by the Secretary of the Interior), including a community in Alaska incorporated by the Secretary of the Interior pursuant to the Indian Reorganization Act (25 U.S.C. 461 et seq. ), the lender shall only pursue liquidation after offering to transfer the account to an eligible tribal member, the tribe, or the Indian housing authority serving the tribe. If the lender subsequently proceeds to liquidate the account, the lender shall not sell, transfer, or otherwise dispose of or alienate the property except to one of the entities described in the preceding sentence. | ||||
| 7:7:15.1.14.2.5.10.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.453 Disposition of the property. | RHS | [70 FR 2932, Jan. 19, 2005] | (a) Submission of the liquidation plan. The lender will, within 30 calendar days after a decision to liquidate, submit to the Agency in writing, its proposed detailed plan of liquidation. The Agency will inform the lender, in writing, whether the Agency concurs in the lender's liquidation plan. Should the Agency and the lender not agree on the liquidation plan, negotiations will take place between the Agency and the lender to resolve the disagreement. When the liquidation plan is approved by the Agency, the lender will proceed expeditiously with liquidation. The liquidation plan submitted to the Agency by the lender shall include: (1) Satisfactory proof of the lender's ownership of the guaranteed loan promissory note and related security instruments. (2) A copy of the payment ledger or equivalent which reflects the current loan balance and accrued interest to date and the method of computing the interest. (3) A full and complete list of all collateral including any personal and corporate guarantees. (4) The recommended liquidation methods for making the maximum collection possible on the indebtedness and the justification for such methods, including recommended actions for: (i) Obtaining an appraisal of the collateral; (ii) Acquiring and disposing of all collateral; (iii) Collecting from guarantors; (iv) Setting the proposed date of foreclosure; and (v) Setting the proposed date of liquidation. (5) Necessary steps for protection of the tenants and preservation of the collateral. (6) Copies of the borrower's latest available financial statements. (7) Copies of the guarantor's latest available financial statements. (8) An itemized list of estimated liquidation expenses expected to be incurred along with justification for each expense. (9) A schedule to periodically report to the Agency on the progress of liquidation. (10) Estimated protective advance amounts with justification. (11) Proposed protective bid amounts on collateral to be sold at auction and a breakdown to show how the amounts were deter… | ||||
| 7:7:15.1.14.2.5.10.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.454 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.10.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.455 Alternative disposition methods. | RHS | The Agency, in its sole discretion, may choose to obtain an assignment of the loan from the lender or conveyance of title obtained by the lender through foreclosure or a deed-in-lieu of foreclosure. (a) Assignment. In the case of an assignment of the loan, the assignment of the security instruments or the security must be in written and recordable form. Completion of the assignment will occur once the following transactions are completed to the Agency's satisfaction. (1) Conveyance to the Agency of all the lender's rights and interests arising under the loan. (2) Assignment to the Agency of all claims against the borrower or others arising out of the loan transactions, including: (i) All collateral agreements affecting financing, construction, use or operation of the property; and (ii) All insurance or surety bonds, or other guarantees, and all claims under them. (3) Certification that the collateral has been evaluated for the presence of contamination from the release of hazardous substances, petroleum products or other environmental hazards which may adversely impact the market value of the property and the results of that evaluation. (b) Conveyance of title. In the case of a conveyance of title to the property, the lender must inform the Agency in advance of how it plans to acquire title and a timetable for doing so. The Agency will accept the conveyance upon receipt of an assignment to the Agency of all claims of the lender against the property and assignment of the lender's rights to any operating funds and any reserves or escrows established for the maintenance of the property or the payment of property taxes and insurance. | |||||
| 7:7:15.1.14.2.5.10.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.456 Filing a claim. | RHS | Once the lender has disposed of the property or the Agency has agreed to accept an assignment of the loan or conveyance of title to the property, the lender may file a claim for the guaranteed portion of allowable losses. All claim amounts must be calculated in accordance with this subpart and be approved by the Agency. | |||||
| 7:7:15.1.14.2.5.10.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.457 Determination of claim amount. | RHS | [70 FR 2933, Jan. 19, 2005, as amended at 76 FR 5, Jan. 3, 2011] | In all liquidation cases, final settlement will be made with the lender after the collateral is liquidated, unless otherwise designated as a future recovery or after settlement and compromise of all parties has been completed. (a) Report of loss form. An Agency approved form will be used for calculations of all estimated and final loss determinations. Estimated loss payments will only be paid by the Agency after it has approved a liquidation plan. (b) Estimated loss. An estimated loss claim based on liquidation appraisal value will be prepared and submitted by the lender. (1) The estimated loss payment shall be applied as of the date of such payment. The total amount of the loss payment paid by the Agency will be applied by the lender on the loan debt. Such application does not release the borrower from liability. (2) The Government's written authorization is required for all protective advances in excess of $5,000. Protective advances include, but are not limited to, advances made for property taxes, annual assessments, ground rent, hazard or flood insurance premiums affecting the collateral, and other expenses necessary to preserve or protect the security. Attorney fees are not a protective advance. A protective advance claim will be paid only at the time of the final report of loss payment except in certain transfer and assumption situations with Agency approval. (c) Final loss. Within 30 calendar days after liquidation of all collateral, except for certain unsecured personal or corporate guarantees (as provided for in this section) is completed, a final report of loss on a form approved by the Agency must be prepared and submitted by the lender to the Agency. Before approval by the Agency of any final loss report, the lender must account for all funds during the period of liquidation, disposition of the collateral, all costs incurred, and any other information necessary for the successful completion of liquidation. Upon receipt of the final accounting and report of loss, the Agency may audit all ap… | ||||
| 7:7:15.1.14.2.5.10.1.8 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | § 3565.458 Withdrawal of claim. | RHS | If the lender provides timely written notice to the Agency of withdrawal of the claim, the guarantee will continue as if the default had not occurred if the borrower cures the default prior to foreclosure or prior to acceptance of a deed-in-lieu of foreclosure. | |||||
| 7:7:15.1.14.2.5.10.1.9 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | J | Subpart J—Assignment, Conveyance, and Claims | §§ 3565.459-3565.499 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.11.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | K | Subpart K—Agency Guaranteed Loans That Back Ginnie Mae Guaranteed Securities | § 3565.501 Applicability. | RHS | The provisions of this subpart apply when Agency guaranteed loans are used to back Ginnie Mae securities. In instances where this subpart applies, the provisions of this subpart prevail over any other provisions of this part. | |||||
| 7:7:15.1.14.2.5.11.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | K | Subpart K—Agency Guaranteed Loans That Back Ginnie Mae Guaranteed Securities | § 3565.502 Incontestability. | RHS | In the case of loans that back Ginnie Mae securities or loans that are acquired by Ginnie Mae as a consequence of its guaranty, the Agency guarantee under this part is incontestable except that the guarantee may not be enforced by a lender who commits fraud or misrepresentation or by a lender who had knowledge of the fraud or misrepresentation at the time such a lender acquired the guarantee or was assigned the loan. | |||||
| 7:7:15.1.14.2.5.11.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | K | Subpart K—Agency Guaranteed Loans That Back Ginnie Mae Guaranteed Securities | § 3565.503 Repurchase. | RHS | Lenders and security Holders must comply with Ginnie Mae requirements regarding the repurchase of loans from pools backing Ginnie Mae guaranteed securities. | |||||
| 7:7:15.1.14.2.5.11.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | K | Subpart K—Agency Guaranteed Loans That Back Ginnie Mae Guaranteed Securities | § 3565.504 Transfers. | RHS | (a) Loans and/or mortgage servicing on loans backing Ginnie Mae guaranteed securities may only be transferred to a Ginnie Mae issuer and may only be transferred with prior Ginnie Mae approval. (b) Agency approval shall not be required for transfer of the servicing on the guaranteed mortgages to Ginnie Mae. | |||||
| 7:7:15.1.14.2.5.11.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | K | Subpart K—Agency Guaranteed Loans That Back Ginnie Mae Guaranteed Securities | § 3565.505 Liability. | RHS | (a) Ginnie Mae shall not be liable for the actions of the lender including, but not limited to, negligence, fraud, abuse, misrepresentation or misuse of funds, property condition, or violations of usury laws. (b) Ginnie Mae's rights under the guarantee shall be fully enforceable notwithstanding the actions of the lender. | |||||
| 7:7:15.1.14.2.5.11.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | K | Subpart K—Agency Guaranteed Loans That Back Ginnie Mae Guaranteed Securities | §§ 3565.506-3565.549 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.11.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | K | Subpart K—Agency Guaranteed Loans That Back Ginnie Mae Guaranteed Securities | § 3565.550 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.2.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | § 3565.51 Eligible loans and advances. | RHS | [76 FR 3, Jan. 3, 2011] | Upon approval of an application from an eligible or approved lender, the Agency will commit to providing a guarantee for a permanent loan or a construction and permanent loan, subject to the availability of funds. | ||||
| 7:7:15.1.14.2.5.2.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | § 3565.52 Conditions of guarantee. | RHS | [70 FR 2930, Jan. 19, 2005, as amended at 76 FR 3, Jan. 3, 2011] | A loan guarantee under this part will be evidenced by a Loan Note Guarantee issued by the Agency. Each lender will execute a Lender's Agreement. If a valid Lender's Agreement already exists, it is not necessary to execute a new Lender's Agreement with each loan guarantee. (a) Rights and liabilities. A guarantee under this part is backed by the full faith and credit of the United States and is incontestable except for fraud or misrepresentation of which the lender had knowledge at the time the lender acquired the guarantee or assigned the loan, or in which a lender participates or condones. The guarantee will be unenforceable by the lender to the extent any loss is occasioned by a violation of usury laws, negligent servicing or origination by the lender, including a failure to acquire required security, or as a result of a use of loan funds for purposes other than those authorized by the Agency. The acts in the previous sentence constitute grounds for the refusal to make full payment under the guarantee to the lender, and will not be taken until the Agency gives the lender notice of the acts or omissions that it considers to constitute such grounds, specifying the applicable provisions of the Statute, Regulations, Loan Note Guarantee, or Lender's Agreement; the lender has not cured the acts or omissions within 90 calendar days after such notice; and the acts or omissions can reasonably be expected to have a material adverse effect on the credit quality of the guaranteed mortgage or the physical condition of the property securing the guaranteed mortgage. If such acts or omissions cannot be cured within a 90 calendar day period, the 90 calendar day cure period automatically shall be extended so long as curative activities are commenced during the 90 calendar day period. At no time shall the curative period extend more than 270 calendar days from the expiration of the original 90 calendar day cure period. When a guaranteed portion of a loan is sold to a Holder, the Holder shall succeed to all rights of the lender … | ||||
| 7:7:15.1.14.2.5.2.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | § 3565.53 Guarantee fees. | RHS | [63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999; 73 FR 11812, Mar. 5, 2008; 84 FR 55036, Oct. 15, 2019; 85 FR 77986, Dec. 3, 2020] | As a condition of receiving a loan guarantee, the Agency will charge the following guarantee fees to the lender. Changes to the initial and annual guarantee fees will be established by the Agency and will be published in a notice in the Federal Register. (a) Initial guarantee fee. The Agency will establish and charge an initial guarantee fee of up to one percent of the guarantee amount. For purposes of calculating this fee, the guarantee amount is the product of the percentage of the guarantee times the initial principal amount of the guaranteed loan. (b) Annual guarantee fee. An annual guarantee fee will be charged, as established by the Agency, each year or portion of a year that the guarantee is in effect. This fee is due no later than February 28, of each calendar year. (c) Surcharge for guarantees on construction advances. The Agency may, at its sole discretion, charge an additional fee on the portion of the loan advanced during construction. If applicable, this fee will be charged in advance at the start of construction. | ||||
| 7:7:15.1.14.2.5.2.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | § 3565.54 Transferability of the guarantee. | RHS | A lender must receive the Agency's approval prior to any sale or transfer of the loan guarantee. | |||||
| 7:7:15.1.14.2.5.2.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | § 3565.55 Participation loans. | RHS | Loans involving multiple lenders are eligible for a guarantee when one of the lenders is an approved lender and agrees to act as the lead lender with responsibility for the loan under the loan guarantee agreement. | |||||
| 7:7:15.1.14.2.5.2.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | § 3565.56 Suspension or termination of loan guarantee agreement. | RHS | A guarantee agreement will terminate when one of the following actions occurs: (In accordance with subpart H of this part, use restrictions on the property will remain if the following actions take place prior to the term of the loan and RHS determines the restrictions apply.) (a) Voluntary termination. A lender and borrower voluntarily request the termination of the loan guarantee. (b) Agency withdrawal of guarantee. The Agency withdraws the loan guarantee in the event of fraud, misrepresentation, abuse, negligence, or failure to meet the program requirements. (c) Mortgage pay-off. The loan is paid. (d) Settlement of claim. Final settlement of the claim. | |||||
| 7:7:15.1.14.2.5.2.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | § 3565.57 Modification, extension, reinstatement of loan guarantee. | RHS | To protect its interest or further the objectives of the program, the Agency may, at its sole discretion, modify, extend, or reinstate a loan guarantee. In making this decision the Agency will consider potential losses under the program, impact on the tenants and the public reaction that may be received regarding the action. Further, the Agency may authorize a guarantee on a new loan that is originated as a part of a workout agreement. | |||||
| 7:7:15.1.14.2.5.2.1.8 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | §§ 3565.58-3565.99 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.2.1.9 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | B | Subpart B—Guarantee Requirements | § 3565.100 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.3.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.101 Responsibility of lenders. | RHS | A participating lender must originate and service a guaranteed loan in accordance with the regulation and program requirements throughout the life of a loan or guarantee, whichever is less. When it is in the best interests of the Agency, the Agency may permit the transfer of servicing from the originating lender to a servicer. | |||||
| 7:7:15.1.14.2.5.3.1.10 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.110 Insolvency of lender. | RHS | The Agency may require a lender to transfer a guaranteed loan or loans to another approved lender prior to a determination of insolvency by the lender. If the lender fails to transfer a loan when required, the guarantee will be considered null and void. | |||||
| 7:7:15.1.14.2.5.3.1.11 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.111 Lobbying activities. | RHS | An approved lender must comply with RD Instruction 1940-Q (available in any Rural Development Office) regarding lobbying activities. | |||||
| 7:7:15.1.14.2.5.3.1.12 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | §§ 3565.112-3565.149 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.3.1.13 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.150 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.3.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.102 Lender eligibility. | RHS | [63 FR 39458, July 22, 1998, as amended at 70 FR 2931, Jan. 19, 2005] | An eligible lender must be a licensed business entity or HFA in good standing in the state or states where it conducts business; be approved by the Agency; and meet at least one of the criteria contained below. Lenders who are not eligible may participate in the program if they maintain a correspondent relationship with a lender who is eligible. An eligible lender must: (a) Meet the qualifications of, and be approved by, the Secretary of HUD to make multifamily housing loans that are to be insured under the National Housing Act; (b) Meet the qualifications and be approved by Fannie Mae, Freddie Mac or Ginnie Mae to make multifamily housing loans that are to be sold to or securitized by such corporations; (c) Be a state or local HFA, or a member of the Federal Home Loan Bank system, with a demonstrated ability to underwrite, originate, process, close, service, manage, and dispose of multifamily housing loans in a prudent manner; (d) Be a lender who meets the requirements for Agency approval contained in this subpart and has a demonstrated ability to underwrite, originate, process, close, service, manage, and dispose of multifamily housing loans in a prudent manner; or (e) Be a lender who meets the following requirements in addition to the other requirements of this subpart and of subpart I of this part: (1) Have qualified staff to perform multifamily housing servicing and asset management; (2) Have facilities and systems that support servicing and asset management functions; and (3) Have documented procedures for carrying out servicing and asset management responsibilities. | ||||
| 7:7:15.1.14.2.5.3.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.103 Approval requirements. | RHS | [63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999; 70 FR 2931, Jan. 19, 2005; 76 FR 4, Jan. 3, 2011] | The Agency will establish and maintain a “list of approved lenders”. To be an approved lender, eligible lenders must meet the following requirements and maintain them on a continuing basis at a level consistent with the nature and size of their portfolio of guaranteed loans. (a) Commitment. A lender must have a commitment for a guaranteed loan or an agreement to purchase a guaranteed loan. (b) Audited statement. A lender must provide the Agency with an annual audited financial statement conducted in accordance with generally accepted government auditing standards. (c) Previous participation. A lender may not be delinquent on a federal debt or have an outstanding finding of deficiency in a federal housing program. (d) Ongoing requirements. A lender must meet the following requirements at initial application and on a continuing basis thereafter: (1) Overall financial strength, including capital, liquidity, and loan loss reserves, to have an acceptable level of financial soundness as determined by a lender rating service (such as Sheshunoff, Inc.); or to be an approved Fannie Mae, Freddie Mac, Ginnie Mae or HUD Federal Housing Administration multifamily lender; or, if a state housing finance agency, to have a top tier rating by a rating agency (such as Standard and Poor's Corporation); (2) Bonding and insurance to cover business related losses, including directors and officers insurance, business income loss insurance, and bonding to secure cash management operations; (3) A minimum of two years experience in originating and servicing multifamily loans; (4) A positive record of past performance when participating in RHS or other federal loan programs; (5) Adequate staffing and training to perform the program obligations; the head underwriter must have 3 years of experience and all staff must receive annual multifamily training; (6) Demonstrated overall financial stability of the business over the past five years; (7) Evidence of reasonable and prudent business practices for management of the progra… | ||||
| 7:7:15.1.14.2.5.3.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.104 Application requirements. | RHS | [63 FR 39458, July 22, 1998, as amended at 84 FR 55036, Oct. 15, 2019] | Eligible lenders must submit a lender approval application, in a format prescribed by the Agency. The lender approval application submission must occur at the time the lender submits its first application for a loan guarantee, or its first application to purchase a guaranteed loan. The application must include documentation of lender compliance with § 3565.103. A non-refundable application fee will be charged for each review of a lender's application. | ||||
| 7:7:15.1.14.2.5.3.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.105 Lender compliance. | RHS | A lender will remain an approved lender unless terminated by the Agency. To maintain approval, the lender must comply with the following requirements. (a) Maintain eligibility in accordance with §§ 3565.102 and 3565.103; (b) Comply with all applicable statutes, regulations, and procedures; (c) Inform the Agency of any material change in the lender's staffing, policies and procedures, or corporate structure; (d) Cooperate fully with all program or Agency monitoring and auditing policies and procedures, including the Agency's annual audit of approved lenders; and (e) Maintain active participation in the multifamily guaranteed loan program by initiating a new loan guarantee or holding a loan guaranteed under this program. | |||||
| 7:7:15.1.14.2.5.3.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.106 Construction lender requirements. | RHS | [63 FR 39458, July 22, 1998, as amended at 76 FR 4, Jan. 3, 2011] | A lender making a construction loan, as part of a construction and permanent loan, must demonstrate an ability to originate and service construction loans, in addition to meeting the other requirements of this subpart. | ||||
| 7:7:15.1.14.2.5.3.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.107 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.3.1.8 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.108 Responsibility for actions of agents and mortgage brokers. | RHS | An approved lender is responsible for the actions of its agents and mortgage brokers. | |||||
| 7:7:15.1.14.2.5.3.1.9 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | C | Subpart C—Lender Requirements | § 3565.109 Minimum loan prohibition. | RHS | A lender must not establish a minimum loan amount for loans under this program. | |||||
| 7:7:15.1.14.2.5.4.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | D | Subpart D—Borrower Eligibility Requirements | § 3565.151 Eligible borrowers. | RHS | Guaranteed loans must be made to an eligible borrower whose intention is to provide and maintain rural rental housing. The ownership entity must be a valid entity in good standing under the laws of the jurisdiction in which it is organized. Eligible borrowers shall include individuals, corporations, state or local public agencies or an instrumentality thereof, partnerships, limited liability companies, trusts, Indian tribes, or any organization deemed eligible by the Agency. Eligible borrowers must be U.S. citizens or permanent legal residents; a U.S. owned corporation, or a limited liability company, or partnership in which the principals are U.S. citizens or permanent legal residents. | |||||
| 7:7:15.1.14.2.5.4.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | D | Subpart D—Borrower Eligibility Requirements | § 3565.152 Control of land. | RHS | At time of application, the lender must have evidence of site control by the borrower (option to purchase, lease, deed or other evidence acceptable to the Agency). At the time of loan closing, the lender's closing docket must provide documentary evidence that the borrower owns or has a long-term lease on the land on which the housing is or will be located. The form of ownership or the leasehold agreement must meet Agency requirements. Notwithstanding any investment in the site, the site may not be accepted based on the Agency's environmental assessment. | |||||
| 7:7:15.1.14.2.5.4.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | D | Subpart D—Borrower Eligibility Requirements | § 3565.153 Experience and capacity of borrower. | RHS | At the time of application, the lender must certify that the borrower: (a) Has the ability and experience to construct or rehabilitate multifamily housing that meets the requirements established by the Agency, the lender and the loan agreement; (b) Has the legal and financial capacity to meet all of the obligations of the loan; and (c) Has the ability and experience to meet the property management requirements established by the Agency, the lender, and the loan agreement. | |||||
| 7:7:15.1.14.2.5.4.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | D | Subpart D—Borrower Eligibility Requirements | § 3565.154 Previous participation in state and federal programs. | RHS | Loans to borrowers who are delinquent on a federal debt may not be guaranteed. Furthermore, borrowers or principals thereof who have defaulted on state or local government loans will not be eligible for a guarantee unless the Agency determines that the default was beyond the borrower's control, and that the identifiable reasons for the default no longer exist. At the time of application, the lender must obtain from the borrower a certification that the borrower is not under any state or federal order suspending or debarring participation in state or federal loan programs and that the borrower is not delinquent on any non-tax obligation to the United States. | |||||
| 7:7:15.1.14.2.5.4.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | D | Subpart D—Borrower Eligibility Requirements | § 3565.155 Identity of interest. | RHS | At the time of application, the lender must certify that it has disclosed any and all identity of interest relationships and preexisting conditions with respect to its relationships and that of the borrower, or that no identity of interest relationships exists. Identity of interest relationships include any financial or other relationship that exists or will exist between a lender, borrower, management agent, supplier, or any agent of any of these entities, that could influence, give the appearance of influencing or have the potential to influence the actions of the parties in carrying out their responsibilities under the program. Disclosure will be in a form and manner established by the Agency. | |||||
| 7:7:15.1.14.2.5.4.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | D | Subpart D—Borrower Eligibility Requirements | § 3565.156 Certification of compliance with federal, state, and local laws and with Agency requirements. | RHS | At the time of application, the lender must obtain from the borrower a certification of compliance with all applicable federal, state, and local laws, and with Agency requirements regarding discrimination and equal opportunity in housing, including title VIII of the Civil Rights Act of 1968, and the Fair Housing Amendments Act of 1988. The borrower must also certify that it is not the subject of any federal, state, or local sanction or punitive action. | |||||
| 7:7:15.1.14.2.5.4.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | D | Subpart D—Borrower Eligibility Requirements | §§ 3565.157-3565.199 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.4.1.8 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | D | Subpart D—Borrower Eligibility Requirements | § 3565.200 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.5.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.201 General. | RHS | To be eligible for a guarantee, a loan must comply with the provisions of this subpart and be originated by an approved lender. | |||||
| 7:7:15.1.14.2.5.5.1.10 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.210 Maximum interest rate. | RHS | [84 FR 55036, Oct. 15, 2019] | The interest rate for a guaranteed loan must not exceed the maximum allowable rate specified by the Agency. This interest rate must be fixed over the term of the loan. | ||||
| 7:7:15.1.14.2.5.5.1.11 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.211 Interest credit. | RHS | (a) Limitation. For at least 20 percent of the loans made during each fiscal year, the Agency will provide assistance in the form of interest credit, to the extent necessary to reduce the agreed-upon rate of interest to the AFR as such term is used in section 42(I)(2)(D) of the Internal Revenue Code of 1986, 26 U.S.C. 7805, § 1.42-1T. (b) Selection criteria. The Agency will select projects to receive interest credits using any of such criteria as the Agency may establish for priority projects as contained in subpart A of this part. | |||||
| 7:7:15.1.14.2.5.5.1.12 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.212 Multiple guaranteed loans. | RHS | [63 FR 39458, July 22, 1998, as amended at 70 FR 2931, Jan. 19, 2005] | The Agency may guarantee more than one loan on any project if all guaranteed loans, in the aggregate, comply with these regulations, including without limitation: (a) In the aggregate, loans do not exceed the maximum guaranteed loan amount and loan-to-value limits, as contained in § 3565.204; (b) In the aggregate, loans are all to be secured equally by a first lien as the Agency may, at its sole discretion, determine necessary to ensure repayment of the loans; and (c) If different lenders originate the loans, each lender has executed an intercreditor agreement in form and substance acceptable to the Agency. | ||||
| 7:7:15.1.14.2.5.5.1.13 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.213 Geographic distribution. | RHS | The Agency may refuse to guarantee a loan in an area where there is undue risk due to a concentration in the market of properties subject to a Agency guaranteed loan. The Agency will consider the credit quality of the loan and overall market conditions in making a determination of undue risk. If any of the Agency guaranteed loans in the market are experiencing vacancy rates in excess of 15% and the vacancy is due to market conditions, the Agency will invoke this provision and not guarantee the loan. | |||||
| 7:7:15.1.14.2.5.5.1.14 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.214 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.5.1.15 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.215 Special conditions. | RHS | (a) Use of third party funds. As a condition of receiving a guaranteed loan, the Agency, or the lender if designated by the Agency, must review the terms and conditions of any secondary financing or funding of projects, including loans, capital grants or rental assistance. (b) Recourse. If required by the lender, loans guaranteed under this program may be made on a recourse or nonrecourse basis, or with any personal or special borrower guarantees on collateralization. | |||||
| 7:7:15.1.14.2.5.5.1.16 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | §§ 3565.216-3565.249 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.5.1.17 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.250 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.5.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.202 Tenant eligibility. | RHS | (a) Limits on income of tenants. The housing units subject to a guaranteed loan must be available for occupancy only by low or moderate-income families or individuals whose incomes at the time of initial occupancy do not exceed 115 percent of the area median income. After initial occupancy, a tenant's income may exceed these limits. (b) Citizenship status. A tenant must be a United States citizen or a noncitizen who is a qualified alien as defined in § 3565.3. | |||||
| 7:7:15.1.14.2.5.5.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.203 Restrictions on rents. | RHS | The rent for any individual housing unit, including any tenant-paid utilities, must not exceed an amount equal to 30 percent of 115 percent of area median income, adjusted for family size. In addition, on an annual basis, the average rent for a project, taking into account all individual unit rents, must not exceed 30 percent of 100 percent of area median income, adjusted for family size. | |||||
| 7:7:15.1.14.2.5.5.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.204 Maximum loan amount. | RHS | [63 FR 39458, July 22, 1998, as amended at 69 FR 69176, Nov. 26, 2004] | (a) Section 207(c) limits and exceptions. For that part of the property that is attributable to dwelling use, the principal obligation of each guaranteed loan must not exceed the applicable maximum per-unit limitations under section 207(c) of the National Housing Act. (b) Loan-to-value limits. (1) In the case of a borrower that is a nonprofit organization or an agency or body of any State, local or tribal government, each guaranteed loan must involve a principal obligation that does not exceed the lesser of 97 percent of: (i) The development costs of the housing and related facilities, or (ii) The lender's determination of value not to exceed the appraised value of the housing and facilities. (2) In the case of a borrower that is a for-profit entity or other entity not referred to in paragraph (b)(1) of this section, each guaranteed loan must involve a principal obligation that does not exceed the lesser of 90 percent of: (i) The development costs of the housing and related facilities, or (ii) The lender's determination of value not to exceed the appraised value of the housing and facilities. (3) To protect the interest of the Agency or to further the objectives of the program, the Agency may establish lower loan-to-value limits or further restrict the statutory maximum limits based upon its evaluation of the credit quality of the loan. (c) Necessary assistance review. (1) A lender requesting a loan guarantee must review all loans to determine the appropriate amount of assistance necessary to complete and maintain the project. The lender shall recommend to the Agency an adjustment in the loan amount if appropriate as a result of this review. (2) Where the project financing combines a guaranteed loan with Low-Income Housing Tax Credits or other Federal assistance, the project must conform to the policies regarding necessary assistance in 7 CFR 3560.63 (d) or successor provision. | ||||
| 7:7:15.1.14.2.5.5.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.205 Eligible uses of loan proceeds. | RHS | [63 FR 39458, July 22, 1998, as amended at 81 FR 11050, Mar. 2, 2016] | Eligible uses of loan proceeds must conform with standards and conditions for housing and facilities contained in 7 CFR part 1924, subpart A or successor provision, except that the Agency, at its sole discretion, may approve, in advance, a higher level of amenities, construction, and fees for projects proposed for a guaranteed loan provided the costs and features are reasonable and customary for similar housing in the market area. (a) Use of loan proceeds. The proceeds of a guaranteed loan may be used for the following purposes relating to the project. (1) New construction costs of the project; (2) Moderate or substantial rehabilitation of buildings and acquisition costs when related to the rehabilitation of a building as described in paragraph (b) of this section; (3) Acquisition of existing buildings, when approved by the Agency, for projects that serve a special housing need; (4) Acquisition and improvement of land on which housing will be located; (5) Development of on-site and off-site improvements essential to the use of the property; (6) Development of related facilities such as community space, recreation, storage or maintenance structures, except that any high cost recreational facility, such as swimming pools and exercise clubs or similar facilities, must be specifically approved in advance by the Agency; (7) Construction of on-site management or maintenance offices and living quarters for operating personnel for the property being financed; (8) Purchase and installation of appliances and certain approved decorating items, such as window blinds, shades, or wallpaper; (9) Development of the surrounding grounds, including parking, signs, landscaping and fencing; (10) Costs associated with commercial space provided that: (i) The project is designed primarily for residential use; (ii) The commercial use consists of essential tenant service type facilities, such as laundry rooms, that are not otherwise conveniently available; (iii) The commercial space does not exceed 10 percent of the gross … | ||||
| 7:7:15.1.14.2.5.5.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.206 Ineligible uses of loan proceeds. | RHS | Loan proceeds must not be used for the following: (a) Specialized equipment for training and therapy; (b) Housing in military impact areas; (c) Housing that serves primarily temporary and transient residents; (d) Nursing homes, special care facilities and institutional type homes that require licensing as a medical care facility; (e) Operating capital for central dining facilities or for any items not affixed to the real estate, such as special portable equipment, furnishings, kitchen ware, dining ware, eating utensils, movable tables and chairs, etc.; (f) Payment of fees, salaries and commissions or compensation to borrowers (except developers' fees); or (g) Refinancing of an outstanding debt, except in the case of an existing guaranteed loan where the Agency determines that the refinancing is in the government's interest or furthers the objectives of the program. The term and amount of any loan for refinancing must not exceed the maximum loan amount or term limits. | |||||
| 7:7:15.1.14.2.5.5.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.207 Form of lien. | RHS | The loan originated by the lender for a guarantee must be secured by a first lien against the property. | |||||
| 7:7:15.1.14.2.5.5.1.8 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.208 Maximum loan term. | RHS | (a) Statutory term limit. The lender may set the term of the loan, but in no instance may the term of a guaranteed loan exceed the lesser of 40 years or the remaining economic life of the project. (b) Prepayment of loans. A guaranteed loan may be prepaid in whole or in part at the determination of the lender, and upon the lender's written notice to the Agency at least 30 days prior to the expected date of prepayment. The Agency will not pay any lockout or prepayment penalty assessed by the lender. The lender must certify the following in the notice of prepayment: (1) The lease documents used by the borrower or its agent prohibit the abrogation of tenant leases in the event of prepayment; and (2) The borrower has notified tenants of the request to prepay the loan, including notice of the prohibition against abrogation of the lease and the policy and procedure for handling complaints regarding compliance with the long-term use restriction as contained in subpart H of this part. | |||||
| 7:7:15.1.14.2.5.5.1.9 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | E | Subpart E—Loan Requirements | § 3565.209 Loan amortization. | RHS | [67 FR 16970, Apr. 9, 2002] | Each guaranteed loan shall be made for a period of not less than 25 nor greater than 40 years from the date the loan was made and may provide for amortization of the loan over a period of not to exceed 40 years with a final payment of the balance due at the end of the loan term. | ||||
| 7:7:15.1.14.2.5.6.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | § 3565.251 Eligible property. | RHS | To be eligible for a guaranteed loan, a property must be used primarily for residential dwelling purposes and must meet the following requirements or the requirements of this subpart: (a) Property location. All the property must be located in a rural area. (b) Minimum size of development. The property must consist of at least five rental dwelling units. (c) Non-contiguous sites. For a loan secured by two or more non-contiguous parcels of land, all sites must meet each of the following requirements: (1) Located in one market area; (2) Managed under one management plan with one loan agreement or resolution for all of the sites; and (3) Consist of single asset ownership. (d) Compliance with statutes. All properties must comply with the applicable requirements in section 504 of the Rehabilitation Act of 1973, the Fair Housing Act, the Americans with Disabilities Act, and other applicable statutes. | |||||
| 7:7:15.1.14.2.5.6.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | § 3565.252 Housing types. | RHS | [84 FR 55036, Oct. 15, 2019] | The property may include new construction or rehabilitation of existing structures. The units may be attached, detached, semi-detached, row houses, modular or manufactured houses, or multifamily structures. Manufactured housing must meet Agency requirements contained in 7 CFR part 1924, subpart A. The Agency will guarantee proposals for new construction or acquisition with moderate or substantial rehabilitation of at least $6,500 per dwelling unit. The portion of guaranteed funds available for acquisition with rehabilitation may be limited. | ||||
| 7:7:15.1.14.2.5.6.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | § 3565.253 Form of ownership. | RHS | The property must be owned in fee simple or be subject to a ground lease or other legal right in land acceptable to the Agency. | |||||
| 7:7:15.1.14.2.5.6.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | § 3565.254 Property standards. | RHS | (a) Housing quality and site and neighborhood standards. The property must meet the site and neighborhood requirements established by the state or locality, and those standards contained under 7 CFR part 1924, subparts A and C or any successor regulations. (b) Third party assessments. As part of the application for a guaranteed loan, the lender must provide documentation of qualified third parties' assessments of the property's physical condition and any environmental conditions or hazards which may have a bearing on the market value of the property. These assessments must include: (1) An acceptable property appraisal. (2) A Phase I Environmental Site Assessment (American Society of Testing and Materials). (3) A Standard Flood Hazard Determination. (4) In the case of the purchase of an existing structure, rehabilitation or refinancing, a physical needs assessment. | |||||
| 7:7:15.1.14.2.5.6.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | § 3565.255 Environmental review requirements. | RHS | [81 FR 11050, Mar. 2, 2016] | Under the National Environmental Policy Act, the Agency is required to assess the potential impact of the proposed actions on protected environmental resources. Measures to avoid or mitigate adverse impacts to protected resources may require a change in site or project design. A site will not be approved by the Agency until the Agency has completed the environmental review process in accordance with 7 CFR part 1970. | ||||
| 7:7:15.1.14.2.5.6.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | § 3565.256 Architectural services. | RHS | Architectural services must be provided for the project in accordance with 7 CFR part 1924, subpart A or successor regulation, including plan certifications. | |||||
| 7:7:15.1.14.2.5.6.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | § 3565.257 Procurement actions. | RHS | All construction procurement actions, whether by sealed bid or by negotiation, must be conducted in a manner that provides maximum open and free competition. | |||||
| 7:7:15.1.14.2.5.6.1.8 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | §§ 3565.258-3565.299 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.6.1.9 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | F | Subpart F—Property Requirements | § 3565.300 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.7.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | G | Subpart G—Processing Requirements | § 3565.301 Loan standards. | RHS | An approved lender must originate and underwrite the loan and appraise the subject property in accordance with prudent lending practices and Agency criteria addressing the following factors: (a) Borrower qualifications and creditworthiness; (b) Property, vacancy, market vacancy or collection loss; (c) Rental concessions and rent levels; (d) Tenant demand and housing supply; (e) Property operating and maintenance expense; (f) Property requirements as contained in subpart F of this part; (g) Debt coverage ratio; (h) Operating and long-term capital requirements; (i) Loan-to-value ratio; (j) Return on borrower equity; and (k) Estimated long-term marketability of the project. | |||||
| 7:7:15.1.14.2.5.7.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | G | Subpart G—Processing Requirements | § 3565.302 Allowable fees. | RHS | [63 FR 39458, July 22, 1998, as amended at 84 FR 55036, Oct. 15, 2019] | (a) Lender fees. The lender is authorized to charge reasonable and necessary fees in connection with a borrower's application for a guaranteed loan. (b) Agency fees. The Agency will charge one or more types of fees deemed appropriate as reimbursement for reasonable and necessary costs incurred in connection with applications received from lenders. Agency fees may include, but are not limited to, the following: (1) Site assessment and market analysis or preliminary feasibility fee. A fee for review of an application for a determination of preliminary feasibility. (2) Application fee. A fee submitted in conjunction with the application for a loan guarantee. (3) Inspection fee. A fee for inspection of the property in conjunction with a loan guarantee. (4) Transfer fee. A fee in connection with a request for approval of a transfer of physical assets or a change in the composition of the ownership entity. (5) Extension or reopening fees. A fee to extend the guarantee commitment or to reopen an application when a commitment has expired. | ||||
| 7:7:15.1.14.2.5.7.1.3 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | G | Subpart G—Processing Requirements | § 3565.303 Issuance of loan guarantee. | RHS | [63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999; 76 FR 4, Jan. 3, 2011; 81 FR 11050, Mar. 2, 2016] | (a) Preliminary feasibility review. During the initial processing of a loan, the lender may request a preliminary feasibility review by the Agency when required loan documentation is submitted. (b) Conditional commitment to guarantee a loan. The Agency will issue a conditional commitment to guarantee a loan. This commitment will be good for such time frame as the Agency deems appropriate based on project requirements. The commitment to guarantee a loan, will specify any conditions necessary to obtain a determination by the Agency that all program requirements have been met. A conditional commitment can be issued, subject to the availability of funds, after : (1) Completion of environmental review requirements in accordance with 7 CFR part 1970; and (2) Selection of the proposed project for funding by the Agency in accordance with ranking and selection criteria. (c) Guarantee during construction. When requesting a guarantee on construction loan advances under § 3565.52(c)(2) and (c)(3), Options 2 and 3, the Agency will only issue a guarantee to an approved lender that the Agency determines is eligible under § 3565.106 of this part. (1) This guarantee will be subject to the limits contained in subpart B of this part and in the loan closing documentation. (2) In all cases, the lender must obtain one of the following protections: (i) Surety bonding or performance and payment bonding acceptable to the Agency; (ii) An irrevocable letter of credit acceptable to the Agency; or (iii) A pledge to the lender of collateral that is acceptable to the Agency. (3) The lender must verify amounts expended prior to each payment for completed work and certify that an independent inspector has inspected the property and found it to be in conformance with Agency standards. The lender must provide verification that all subcontractors have been paid and no liens have been filed against the property. (d) Permanent loan guarantee. The guarantee of a permanent loan provided under § 3565.52(c)(1) or (c)(2) will be issued… | ||||
| 7:7:15.1.14.2.5.7.1.4 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | G | Subpart G—Processing Requirements | § 3565.304 Lender loan processing responsibilities. | RHS | (a) Application. The lender will be responsible for submitting an application for a loan guarantee in a format prescribed by the Agency. Lenders may submit an application at the feasibility stage or when they request a conditional commitment. (b) Project servicing, management and disposition. Unless otherwise permitted by the Agency, the originating lender must perform all loan functions during the period of the guarantee. These functions include servicing, asset management, and, if necessary, property disposition. The lender must maintain and service the loan in accordance with the provisions of subpart I of this part and Agency servicing procedures. | |||||
| 7:7:15.1.14.2.5.7.1.5 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | G | Subpart G—Processing Requirements | § 3565.305 Mortgage and closing requirements. | RHS | It is the lender's responsibility to ensure that the loan closing statement and required loan documents are in a form acceptable to the Agency and included in the closing docket. The lender is responsible for resolving any underwriting and loan closing deficiencies that are found. The Agency's review of the lender's loan closing documentation does not constitute a waiver of fraud, misrepresentation, or failure of judgment by the lender. | |||||
| 7:7:15.1.14.2.5.7.1.6 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | G | Subpart G—Processing Requirements | §§ 3565.306-3565.349 [Reserved] | RHS | ||||||
| 7:7:15.1.14.2.5.7.1.7 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | G | Subpart G—Processing Requirements | § 3565.350 OMB control number. | RHS | According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0174. | |||||
| 7:7:15.1.14.2.5.8.1.1 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | H | Subpart H—Project Management | § 3565.351 Project management. | RHS | [63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999; 69 FR 69176, Nov. 26, 2004] | As a condition of the guarantee, the lender is to obtain borrower certification that the project is in compliance with local, state, federal laws and program requirements. (a) Regulatory agreement. A regulatory agreement between the borrower and lender must be executed at the time of loan closing and contain the following covenants: (1) That it is binding upon the borrower and any of its successors and assigns, as well as upon the lender and any of its successors and assigns, for the duration of the guaranteed loan; (2) That the borrower makes all payments due under the note and to the required escrow and reserve accounts; (3) That the borrower maintains the project as affordable housing in accordance with the purposes and for the duration defined in the statute; (4) That the borrower maintains the project in good physical and financial condition at all times; (5) That the borrower obtains and maintains property insurance and any other insurance coverage required to protect the security; (6) That the borrower maintains complete project books and financial records, and provides the Agency and the lender with an annual audited financial statement after the end of each fiscal year; (7) That the borrower makes project books and records available for review by the Office of Inspector General, Rural Development staff, General Accounting Office, and the Department of Justice, or their representatives or successors upon appropriate notification; (8) That the borrower prepares and complies with the Affirmative Fair Housing Marketing Plan and all other Fair Housing requirements; (9) That the borrower operates as a single asset ownership entity, unless otherwise approved by the Agency; (10) That the borrower complies with applicable federal, state and local laws; and (11) That the borrower provides management satisfactory to the lender and to the Agency and complies with an approved management plan for the project. (b) Management plan. The lender must approve the borrower's management plan and assure that t… | ||||
| 7:7:15.1.14.2.5.8.1.2 | 7 | Agriculture | XXXV | 3565 | PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM | H | Subpart H—Project Management | § 3565.352 Preservation of affordable housing. | RHS | (a) Original purpose. During the period of the guarantee, owners are prohibited from using the housing or related facilities for any purpose other than an approved program purpose. (b) Use restriction. For the original term of the guaranteed loan, the housing must remain available for occupancy by low and moderate income households, in accordance with subpart E of this part. This requirement will be included in a deed restriction or other instrument acceptable to the Agency. The restriction will apply unless the housing is acquired by foreclosure or an instrument in lieu of foreclosure, or the Agency waives the applicability of this requirement after determining that each of the following three circumstances exist. (1) There is no longer a need for low-and moderate-income housing in the market area in which the housing is located; (2) Housing opportunities for low-income households and minorities will not be reduced as a result of the waiver; and (3) Additional federal assistance will not be necessary as a result of the waiver. |
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chapter TEXT,
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