[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1737.90]

[Page 339]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1737--PRE-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND GUARANTEED TELECOMMUNICATIONS LOANS--Table of Contents
 
                Subpart J--Final Loan Approval Procedures
 
Sec. 1737.90  Loan approval requirements.


    (a) In addition to requirements set forth in 7 CFR part 1735, 7 CFR 
part 1737 and other applicable parts of 7 CFR chapter XVII, the 
following are certain additional requirements that must be met before 
RUS will approve a loan:
    (1) If the borrower had 100 or more employees as of the prior 
December 31, it must submit the current annual Employer Information 
Report EEO-1, Standard Form 100, as required by the Department of Labor; 
see 29 CFR 1602.7 through 1602.14.
    (2) The borrower must be in compliance with regulations on 
nondiscrimination. See 7 CFR part 1790 (or RUS Bulletin 320-19).
    (3) For subsequent loans, RUS must determine whether the borrower's 
accounting records are adequate. If the records are not adequate, as 
determined by RUS based on Generally Accepted Accounting Principles or 
other accounting conventions as deemed necessary by RUS, a provision 
will be included in the loan contract requiring the borrower to improve 
its records to an adequate level.
    (4) The borrower must not have any receivables, loans, guarantees, 
investments, or other obligations that are contrary to the mortgage 
provisions or any RUS regulations including, but not limited to, 7 CFR 
part 1758 (or RUS Bulletins 320-4, 320-22, 321-2, 322-2, 323-1, or 326-
1). If the borrower has any of these items, the loan contract shall 
contain a provision requiring that they be eliminated prior to the 
release of funds. See 7 CFR part 1744 for conditions under which RUS 
will provide a shared first lien and/or a lien accommodation for non-RUS 
lenders.
    (5) RUS must make a determination on flood insurance requirements. 
In accordance with the National Flood Insurance Act of 1968, as amended 
by the Flood Disaster Protection Act of 1973, as amended (the ``Flood 
Insurance Act''), RUS shall not approve financial assistance for the 
acquisition, construction, repair or improvement of any building or any 
machinery, equipment, fixtures or furnishings contained or to be 
contained in any such building located in an area which has been 
identified by the Director of the Federal Emergency Management Agency 
(the ``Director of FEMA'') pursuant to the Flood Insurance Act as an 
area having special flood hazards unless:
    (i) Flood insurance has been made available, pursuant to the Flood 
Insurance Act, in the area in which the acquisition, construction, 
repair or improvement is proposed to occur; and
    (ii) The borrower has obtained flood insurance coverage with respect 
to such building, machinery, equipment, fixtures or furnishings as may 
be required pursuant to the Flood Insurance Act.

Accordingly, a finding shall be made on whether loan funds will be used 
to finance buildings, machinery, fixtures or furnishings located in an 
identified special flood hazard area. If loan funds are to be used in 
such a special flood hazard area, a provision will be included in the 
loan contract restricting the release of funds until all the 
requirements of the Flood Insurance Act have been satisfied.
    (6) All environmental requirements must be met (see 7 CFR part 
1794).
    (b) [Reserved]

[54 FR 13356, Apr. 3, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, 
as amended at 56 FR 26600, June 10, 1991]