[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: 7CFR1806.1]

[Page 1149-1150]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVIII--RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE 
SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF 
                               AGRICULTURE
 
PART 1806--INSURANCE--Table of Contents
 
                   Subpart A--Real Property Insurance
 
Sec. 1806.1  General.

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 42 U.S.C. 2942; 5 U.S.C. 
301; delegation of authority by the Sec. of Agri., 7 CFR 2.23; 
delegation of authority by the Asst. Sec. for Rural Development, 7 CFR 
2.70; delegations of authority by Dir., OEO 29 FR 14764, 33 FR 9850.


    (a) Authority. This subpart sets forth the policies and procedures 
regarding insurance requirements on real property which serves as 
security for a debt under the Farm Credit Programs of the Farm Service 
Agency (FSA) or the Multi-Family Housing Programs of the Rural Housing 
Service (RHS). Any references herein to the Farmers Home Administration 
(FmHA) or its employees are intended to mean FSA or RHS, as applicable, 
and their employees.
    (b) Borrower to furnish insurance. The real estate mortgage executed 
by the borrower provides that he will furnish and continually maintain 
and pay for insurance on buildings situated or constructed on the 
property with companies, in amounts, and on terms and conditions 
satisfactory to the FmHA or its successor agency under Public Law 103-
354 until the loan is repaid.
    (c) Borrower's selection of company. The borrower may select the 
insurance company provided that the company and insurance policy comply 
with all the requirements set forth in this Instruction.
    (d) Responsibility. The County Supervisor is responsible for taking 
all actions in connection with insurance as may be necessary to protect 
the security interest of the FmHA or its successor agency under Public 
Law 103-354. Any unusual situation that may arise with respect to 
obtaining or servicing insurance should be referred to the State 
Director. The State Director will refer any questions of a legal nature 
to the Office of the General Counsel (OGC).
    (e) Use of Form FmHA or its successor agency under Public Law 103-
354 426-1, ``Valuations of Buildings.'' The minimum insurance required 
will be indicated in the appraisal report by the employee who makes the 
appraisal of property that includes insurable buildings. In the case 
where no real estate appraisal is required or the appraisal report does 
not indicate the minimum insurance coverage, Form FmHA or its successor 
agency under Public Law 103-354 426-1 will be prepared by the County 
Supervisor. Reevaluation of the buildings will not be done on appraisal 
reports; however, when new buildings are constructed or values increase 
or decrease materially and reevaluation is necessary to properly reflect 
the buildings' security interest of the FmHA or its successor agency 
under Public Law 103-354, the County Supervisor will prepare or revise 
Form FmHA or its successor agency under Public Law 103-354 426-1 as 
appropriate. Changes made on an existing Form FmHA or its successor 
agency under Public Law 103-354

[[Page 1150]]

426-1 will be dated and initialed. The reason for any deletion will be 
noted on the Form.

[41 FR 34571, Aug. 16, 1976, as amended at 61 FR 59777, Nov. 22, 1996]