[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: 7CFR3560.73]



[Page 497-498]

 

                          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. 3560.73  Subsequent loans.



    (a) Applicability. The Agency may make a subsequent loan to a 

borrower to complete, improve, repair, or make modifications to MFH 

initially financed by the Agency or for equity for preservation 

purposes. Loan requests to add units to comply with accessibility 

requirements may be processed as a subsequent loan; however, loan 

requests to add units to meet market demand will be processed as an 

initial loan request and must compete under the NOFA.

    (b) Application requirements and processing. Upon receipt of a 

subsequent loan request, the Agency will inform the applicant what 

information is required based on the nature and purpose of the loan 

request. Subsequent loan requests do not have to compete for funding 

against initial loan proposals.

    (c) Amortization and payment period. Subsequent loans will be 

amortized over a period not to exceed the lesser of the economic life of 

the housing being financed or 50 years and paid over a term not to 

exceed the lesser of the economic life of the housing or 30 years from 

the date of the loan.

    (d) Equity contribution. Applicants for subsequent loans must make 

contributions on the loans in the same proportion as outlined in Sec. 

3560.63(c). Loan applicants will not be given consideration for any 

increased equity value that the property may have since the initial 

loan.



[[Page 498]]



    (1) Excess initial investment on an initial loan may be credited 

toward the required investment on a subsequent loan.

    (2) An initial operating capital contribution to the general 

operating account as described in Sec. 3560.64 is required for a 

subsequent loan approved under the conditions set in Sec. 3560.63(f) to 

complete housing construction but is not required for a subsequent loan 

to repair or improve existing housing.

    (e) Environmental requirements. Subsequent loans are subject to the 

completion of an environmental review in accordance with 7 CFR part 

1940, subpart G.

    (f) Design requirements. All improvements, repairs, and 

modifications will be in accordance with 7 CFR part 1924, subparts A and 

C.

    (g) Architectural services. The applicant must obtain architectural 

services when any of the following conditions exist:

    (1) Enclosed space is being added,

    (2) When required by state law, and

    (3) When the Agency determines that the work being proposed requires 

architectural services.

    (h) Restrictive-use requirements. Subsequent loans are subject to 

restrictive-use provisions as outlined in Sec. 3560.662(a) and 

borrowers must execute a restrictive-use contract in accordance with 

Sec. 3560.72(a)(2).

    (i) Designation changes from rural to nonrural. If the designation 

of an area changes from rural to nonrural after the initial loan is 

made, a subsequent loan may be made only to make necessary improvements 

and repairs to the property or for equity when needed to avert 

prepayment.

    (j) Agency's discretion. The Administrator may approve a subsequent 

loan in a place that is not on the list of designated places as a 

servicing action, for example, to replace units destroyed by a natural 

disaster.