[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: 7CFR762.123]



[Page 141]

 

                          TITLE 7--AGRICULTURE

 

       CHAPTER VII--FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE

 

PART 762_GUARANTEED FARM LOANS--Table of Contents

 

Sec. 762.123  Insurance and farm inspection requirements.



    (a) Insurance. (1) Lenders must require borrowers to maintain 

adequate property, public liability, and crop insurance to protect the 

lender and Government's interests.

    (2) By loan closing, loan applicants must either:

    (i) Obtain at least the catastrophic risk protection (CAT) level of 

crop insurance coverage, if available, for each crop of economic 

significance, as defined by part 402 of this title, or

    (ii) Waive eligibility for emergency crop loss assistance in 

connection with the uninsured crop. EM loan assistance under part 1945, 

subpart D, of this title is not considered emergency crop loss 

assistance for purposes of this waiver and execution of the waiver does 

not render the borrower ineligible for EM loans.

    (3) Loan applicants must purchase flood insurance if buildings are 

or will be located in a special flood hazard area as defined by FEMA 

flood hazard area maps and if flood insurance is available.

    (4) Insurance, including crop insurance, must be obtained as 

required by the lender or the Agency based on the strengths and 

weaknesses of the loan.

    (b) Farm inspections. Before submitting an application the lender 

must make an inspection of the farm to assess the suitability of the 

farm and to determine any development that is needed to make it a 

suitable farm.



[64 FR 7378, Feb. 12, 1999, as amended at 70 FR 56107, Sept. 26, 2005]