[Code of Federal Regulations]

[Title 7, Volume 7]

[Revised as of January 1, 2006]

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

[CITE: 7CFR762.101]



[Page 127]

 

                          TITLE 7--AGRICULTURE

 

       CHAPTER VII--FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE

 

PART 762_GUARANTEED FARM LOANS--Table of Contents

 

Sec. 762.101  Introduction.



    (a) Scope. This subpart contains regulations governing Operating 

Loans and Farm Ownership loans guaranteed by the Farm Service Agency. 

This subpart applies to lenders, holders, borrowers, Agency personnel, 

and other parties involved in making, guaranteeing, holding, servicing, 

or liquidating such loans.

    (b) Policy. The Agency issues guarantees on loans made to qualified 

loan applicants without regard to race, color, religion, sex, national 

origin, marital status, or age, provided the loan applicant can enter 

into a legal and binding contract, or whether all or part of the 

applicant's income derives from any public assistance program or whether 

the applicant, in good faith, exercises any rights under the Consumer 

Protection Act.

    (c) Lender list and classification. (1) The Agency maintains a 

current list of lenders who express a desire to participate in the 

guaranteed loan program. This list is made available to farmers upon 

request.

    (2) Lenders who participate in the Agency guaranteed loan program 

will be classified into one of the following categories:

    (i) Standard Eligible Lender under Sec. 762.105,

    (ii) Certified Lender, or

    (iii) Preferred Lender under Sec. 762.106.

    (3) Lenders may continue to make loans under Approved Lender Program 

(ALP) agreements until they expire; however, these agreements will not 

be renewed when they expire. All ALP agreements with farm credit 

institutions will expire on February 12, 2001.

    (d) Type of guarantee. Guarantees are available for both a loan note 

or a line of credit. A loan note is used for a loan of fixed amount and 

term. A line of credit has a fixed term, but no fixed amount. The 

principal amount outstanding at any time, however, may not exceed the 

line of credit ceiling contained in the contract. Both guarantees are 

evidenced by the same loan guarantee form.

    (e) Termination of loan guarantee. The loan guarantee will 

automatically terminate as follows:

    (1) Upon full payment of the guaranteed loan. A zero balance within 

the period authorized for advances on a line of credit will not 

terminate the guarantee;

    (2) Upon payment of a final loss claim; or

    (3) Upon written notice from the lender to the Agency that a 

guarantee is no longer desired provided the lender holds all of the 

guaranteed portion of the loan. The loan guarantee will be returned to 

the Agency office for cancellation within 30 days of the date of the 

notice by the lender.