[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: 7CFR1822.270]

[Page 1175-1176]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVIII--RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE 
SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF 
                               AGRICULTURE
 
PART 1822--RURAL HOUSING LOANS AND GRANTS--Table of Contents
 
      Subpart G--Rural Housing Site Loan Policies, Procedures, and 
                             Authorizations
 
Sec. 1822.270  Technical, legal, and other services.

    (a) Appraisals. The property will be appraised by an FmHA or its 
successor

[[Page 1176]]

agency under Public Law 103-354 employee authorized to make real estate 
appraisals. The appraisal will consist of a narrative statement prepared 
and signed by the authorized employee describing in detail the items 
considered in arriving at the value of the property. Two values will be 
established by the appraiser:
    (1) The fair market value of the total property ``as is''.
    (2) The aggregate fair market value of the building sites after 
development.
    (i) In determining the value of the property, the appraiser will 
consider the value and selling prices of similar building sites in the 
area. The selling prices of similar sites must be fully documented.
    (ii) [Reserved]
    (b) Title Clearance and Legal Services. For a loan to a public 
nonprofit organization, title clearance and legal services will be 
obtained in accordance with instructions from the OGC, observing the 
provisions of subpart B of part 1927 of this chapter to the extent 
feasible. For a loan to a private nonprofit organization, the provisions 
of subpart B of part 1927 of this chapter regarding title clearance and 
legal services will apply. The applicant will be encouraged to have the 
same approved closing agent, where practical, perform the title 
clearance work in connection with the purchase of the land and the sale 
of the individual sites.
    (c) Contracts for legal services. On projects requiring more legal 
services than are customarily required for title clearance alone, the 
applicant will be required to have a written contract when loan funds 
will be used for legal services. All such contracts will be subject to 
review and approval by the State director and therefore should be 
submitted to the State Director before execution by the applicant. 
Contracts will provide for the types of service to be performed and the 
amount of fees to be paid either in lump sum on the completion of all 
services or in installments as services are performed.
    (d) Engineering services. On projects requiring engineering 
services, a written contract will be required between the engineer and 
the borrower. All such contracts will be subject to review and approval 
by the State director and therefore should be submitted to the State 
Director before execution by the applicant. The form of contract must 
conform with standard professional practices and describe the types of 
services to be performed and fees to be paid.

[35 FR 16087, July 1, 1970, as amended at 51 FR 6733, Feb. 26, 1986; 56 
FR 67471, Dec. 31, 1991]