[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: 7CFR762.122]



[Page 140-141]

 

                          TITLE 7--AGRICULTURE

 

       CHAPTER VII--FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE

 

PART 762_GUARANTEED FARM LOANS--Table of Contents

 

Sec. 762.122  Loan limitations.



    (a) OL term limitations. (1) No guaranteed OL shall be made to any 

loan applicant after the 15th year that a loan applicant, or any 

individual signing the promissory note, received a direct or guaranteed 

OL.

    (2) Notwithstanding paragraph (c)(1) of this section, if a borrower 

had any combination of direct or guaranteed OL closed in 10 or more 

prior calendar years prior to October 28, 1992, eligibility to receive 

new guaranteed OL is extended for 5 additional years from October 28, 

1992, and the years need not run consecutively. However, in the case of 

a line of credit, each year in which an advance is made after October 

28, 1992, counts toward the 5 additional years. Once determined 

eligible, a loan or line of credit may be approved for any authorized 

term.

    (b) Leased land. When FO funds are used for improvements to leased 

land the terms of the lease must provide



[[Page 141]]



reasonable assurance that the loan applicant will have use of the 

improvement over its useful life, or provide compensation for any 

unexhausted value of the improvement if the lease is terminated.

    (c) Tax-exempt transactions. The Agency will not guarantee any loan 

made with the proceeds of any obligation the interest on which is 

excluded from income under section 103 of the Internal Revenue Code of 

1986. Funds generated through the issuance of tax-exempt obligations may 

not be used to purchase the guaranteed portion of any Agency guaranteed 

loan. An Agency guaranteed loan may not serve as collateral for a tax-

exempt bond issue.

    (d) Floodplain restrictions. The Agency will not guarantee any loan 

to purchase, build, or expand buildings located in a special 100 year 

floodplain as defined by FEMA flood hazard area maps unless flood 

insurance is available and purchased.



[64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 66 

FR 7567, Jan. 24, 2001]