[Code of Federal Regulations]
[Title 7, Volume 7, Parts 700 to 899]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR762.122]

[Page 419]
 
                          TITLE 7--AGRICULTURE
 
                            CHAPTER VII--FARM
                SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
 
PART 762--GUARANTEED FARM LOANS--Table of Contents
 
Sec. 762.122  Loan limitations.

    (a) Dollar limits. Guaranteed loans are limited to the following:
    (1) The total outstanding combined guaranteed FO and OL principal 
balance cannot exceed $700,000 and,
    (2) The total outstanding direct and guaranteed FO principal balance 
cannot exceed $700,000 and,
    (3) The total outstanding direct and guaranteed OL principal balance 
cannot exceed $700,000 and,
    (4) The total combined outstanding direct and guaranteed FO and OL 
principal balance cannot exceed $900,000.
    (b) Line of credit advances. The total dollar amount of line of 
credit advances and income releases cannot exceed the total estimated 
expenses, less interest expense, as indicated on the borrower's cash 
flow budget, unless the cash flow budget is revised and continues to 
reflect a feasible plan.
    (c) OL term limitations. (1) No guaranteed OL shall be made to any 
loan applicant after the 15th year that a loan applicant, or any 
individual signing the promissory note, received a direct or guaranteed 
OL.
    (2) Notwithstanding paragraph (c)(1) of this section, if a borrower 
had any combination of direct or guaranteed OL closed in 10 or more 
prior calendar years prior to October 28, 1992, eligibility to receive 
new guaranteed OL is extended for 5 additional years from October 28, 
1992, and the years need not run consecutively. However, in the case of 
a line of credit, each year in which an advance is made after October 
28, 1992, counts toward the 5 additional years. Once determined 
eligible, a loan or line of credit may be approved for any authorized 
term.
    (d) Leased land. When FO funds are used for improvements to leased 
land the terms of the lease must provide reasonable assurance that the 
loan 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.
    (e) 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.
    (f) 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.

[64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999]

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