[Code of Federal Regulations]

[Title 7, Volume 15]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR3560.71]



[Page 496]

 

                          TITLE 7--AGRICULTURE

 

     CHAPTER XXXV--RURAL HOUSING SERVICE, DEPARTMENT OF AGRICULTURE

 

PART 3560_DIRECT MULTI-FAMILY HOUSING LOANS AND GRANTS--Table of Contents

 

               Subpart B_Direct Loan and Grant Origination

 

Sec. 3560.71  Construction financing.



    (a) Construction financing plan. Prior to loan approval, applicants 

must submit to the Agency for its concurrence a plan for the 

construction financing and securing of the loan.

    (b) Interim financing. Interim financing is required by the Agency 

for any construction, except as noted in paragraph (c) of this section.

    (1) The Agency reserves the right to review and approve the interim 

financing arrangements proposed by the applicant.

    (2) When interim financing is used, the Agency will obligate the 

funds and provide an interim financing letter to the lender that will 

confirm the procedures and conditions for the construction financing. 

The take-out loan will be closed and the interim lender paid off when 

the conditions of the interim financing letter have been met.

    (3) The applicable provisions of 7 CFR part 1924, subpart A will be 

used to monitor the construction.

    (4) An environmental review must be completed in accordance with 7 

CFR part 1940, subpart G, prior to issuance of the interim financing 

letter.

    (c) Multiple advances. When interim financing is not available or 

when it is in the best interest of the Federal Government, the Agency 

may provide for multiple advances of the funds to cover the cost of 

construction.

    (1) The Agency will review and approve the multiple advances 

proposed by the borrower.

    (2) When multiple advances are used, the Agency will close the loan 

prior to any advancement of funds and the relevant provisions of 7 CFR 

part 1924, subpart A will be used to monitor the construction.

    (3) The loan check will be handled in accordance with 7 CFR part 

1902, subpart A.