§ 332.16 Real Estate loans to Indians who own land in trust or restricted status. [Revoked, 22 F. R. 9409, Nov. 26, 1957] Part 333-Processing Subsequent Sec. 333.1 General. [Amended] 333.3 Subsequent insured loans. § 333.1 General. (a) This part pre- (b) A direct Farm Ownership loan will not be made to an insured loan borrower unless prior approval is received from the National Office. (c) A subsequent direct or insured Farm Ownership loan will not be made to a borrower who is successfully established on a family-type farm and is progressing satisfactorily. (d) Ordinarily. a subsequent direct or insured Farm Ownership loan, or a Farm Housing loan to a Farm Ownership borrower, will not be processed if the amount of funds required is less than $1,000 because of the costs involved in proportion to the amount of the loan. (e) The State Director is authorized to approve or disapprove subsequent direct and insured Farm Ownership loans in accordance with this chapter. This authority may be redelegated in writing by the State Dircetor to one or more of the following State Office employees: Chief, Real Estate Loans; Chief, Program Operations; Program Loan Officer; Real Estate Loan Officer. (f) A subsequent direct or insured Farm Ownership loan may be made for the same purposes and under the same conditions as an initial Farm Ownership loan. A subsequent direct Farm Ownership loan may be made to pay equity to a transferor in connection with the transfer of a family-type farm which is security for a direct Farm Ownership loan. (g) If a reappraisal is required in connection with a subsequent insured Farm Ownership loan, an additional fee of $20 will be charged. A new appraisal report will be required in connection with a subsequent direct or insured Farm Ownership loan only when: (1) Subsequent loan funds will be used to purchase land, or to refinance debts against land not covered by the mortgage for the initial Farm Ownership loan; or (2) The latest appraisal report was made on a different basis (normal earning capacity value or normal market value) than the type of appraisal applicable to the subsequent loan; or (3) The County Committee requests a new appraisal report; or (4) The State Director or the County Supervisor determines that there have been physical changes in the farm which appear to have altered significantly the value determined in the latest appraisal report, or such changes are likely to result if the subsequent loan is made. (h) For a subsequent direct Farm Ownership loan, loan closing will be accomplished in accordance with Subpart A of Part 307 of this Chapter. For a subsequent insured Farm Ownership loan, closing instructions will be issued by the Attorney in Charge in each case. (Secs. 1, 2, 3, 4, 44, 50 Stat. 522, as amended, 523, as amended, 524, as amended, 530, as amended, sec. 12, 60 Stat. 1076, as amended, secs, 501, 502, 510, 63 Stat. 432, 433, 437, sec. 16, 69 Stat. 553, as amended, sec. 17, 70 Stat. 802; 7 U. S. C. 1001, 1002, 1003, 1004, 1018, 1005b, 42 U. S. C. 1471, 1472, 1480, 7 U. S. C. 1006c, 1006d) CODIFICATION: § 333.1 appearing at 21 F. R. 10447, Dec. 29, 1956, was amended during the period covered by this pocket supplement in the following respects: 1. Paragraph (b) was amended as follows: a. Subparagraph (1) was amended, 22 F. R. 1586, Mar. 12, 1957. b. Subparagraph (2) was amended, 22 F. R. 465, Jan. 24, 1957. 2. In paragraph (c), subparagraph (1) was amended, 22 F. R. 1586, Mar. 12, 1957. 3. Former paragraphs (d) through (1) were redesignated paragraphs (e) through (1), respectively, and a new paragraph (d) was added, 22 F. R. 465, Jan. 24, 1957. to F direct Farm Or made to pay equi onnection with: -type farm whi et Farm Owner 1 is required in uent insured ditional fee of w appraisal re onnection with - insured F -hen: funds will or to refina covered by Farm O Sal report loan; or tee requests the Count there he farm whi ficantly th t apprais kely to r nade. ect Fan will be s Subpar or a sub ip loa d by th mende 530, mende -37, S O Sta 10% S 电话 4. Paragraph (g), as redesignated, was a. Paragraphs (b) and (c) were deleted and b. Paragraph (d) as added and paragraphs (e) through (j), as redesignated, were further redesignated (b) through (h), respectively. As so amended, § 333.1 is set forth above in its entirety. § 333.2 Subsequent direct loans * ** * (b) Refinancing of existing Farm Ownership debts not required. * * * (3) Each borrower whose initial loan [Subparagraph (3) amended, 23 F. R. 3965, * § 333.3 Subsequent *** insured loans. (g) Actions prior to loan closing. * * * [Subparagraph (3) amended, 23 F. R. 10507, * (h) Loan closing actions. *** (5) When subsequent loan is made by new lender: (i) When the subsequent loan is ready for closing, the County Supervisor will request a check by use of Form FHA-971 in the same manner as for an initial insured loan. (ii) The subsequent loan check will be deposited in the borrower's supervised bank account on the day of loan closing. (iii) The borrower will be requested to draw a check to the order of the Farmers Home Administration in the amount of the unpaid balance of principal and interest on the initial loan promissory note as of the date of loan closing, plus 10 days additional interest if an initial insured loan is being refinanced, but no additional interest if a direct loan is being refinanced. In case a direct loan is being refinanced, the note, mortgage, and satisfaction or release of the mortgage, in connection with the direct loan will be handled in accordance with Subpart A of Part 366 of this chapter, except as modified by the closing instructions from the Attorney in Charge. (iv) The borrower's check will be remitted to the Finance Office as final payment of the borrower's initial note account. (v) Any overpayment of interest will be applied to the borrower's subsequent note account as a regular payment. (vi) Upon receipt of the collection in the Finance Office, if the collection pays in full the outstanding balance of the borrower's initial insured note account as of the date of the U. S. Treasury check to be issued to the holder of the initial insured note, and if the amount owed the loan insurance account has been paid, the Finance Office will close the initial insured loan account as a paid-in-full account. The Finance Office will prepare Form FHA-993A, "Notice and Acknowledgment of Final Payment," and forward to the holder the original and one copy for execution and return of the original together with the canceled promissory note and any other instruments indicated on Form FHA-993A to the appropriate County Supervisor. If the collection pays in full the outstanding balance of the borrower's initial direct loan account, the final payment will be processed in accordance with Subpart A of Part 366 of this chapter. (vii) Upon receipt in the County Office [Subparagraph (5) amended, 22 F. R. 10483, AUTHORITY: §§ 334.1 to 334.4 issued under sec. 41, 50 Stat. 528, as amended; 7 U. S. C. 1015. Interpret or apply secs. 1, 21, 50 Stat. 522, as amended, 524, as amended, sec. 17, 70 Stat. 802; 7 U. S. C. 1001, 1007, 1006d. SOURCE: §§ 334.1 to 334.4 appear at 22 F. R. 3717, May 28, 1957. § 334.1 General. This part outlines additional policies and authorities for Farm Ownership loans made to owneroperators of not larger than family-type farms primarily for refinancing. Loans primarily for refinancing will include: (a) Loans which are entirely for refinancing and fees, and (b) loans for refinancing which also include funds for land purchase, or land or building development, which will not significantly improve the farming operations or housing for the family. § 334.2 Eligibility. An applicant to be eligible for a Farm Ownership loan primarily for refinancing must meet the eligibility requirements prescribed in Part 331 of this chapter, except that: (a) The sum of (1) the value of the farm, which for this purpose will be the fair and reasonable value of the applicant's farm, as determined by the County Committee, plus the value of growing crops, if any, (2) the value of any other real estate owned by the applicant, and (3) the current market value of the applicant's livestock and farm equipment must be equal to or exceed the applicant's total indebtedness. When the applicant's total indebtedness exceeds the total value of subparagraphs (1), (2), and (3) of this paragraph, the loan will not be approved unless it is determined that the applicant's debt (s) will be reduced so as not to exceed such value, and will not be closed unless the debts are so reduced at the time of loan closing. For the purpose of determining an applicant's total indebtedness, Commodity Credit Corporation loans on crops in storage will not be included in the total indebtedness. (b) An applicant who owns a farm which would be inadequate as a familytype farm for a typical family, and who confines his farming operations to such farm, whether or not he receives income from other sources, may be considered eligible for a loan primarily for refinancing, provided the total income will enable the family to have a reasonable standard of living, pay operating expenses, pay their debts, and have a reasonable reserve for unforeseen emergencies. Such an application will be processed as a loan on a less than family-type farm. (c) An applicant who owns buildings which are not considered a part of his farm, and the buildings ordinarily would not pass with the farm in a change of ownership, or an applicant who depends on rented buildings, may be considered eligible for a loan primarily for refinancing, provided the buildings are of such type and condition, and so located, that the applicant can operate his farm successfully. When the applicant depends on rented buildings, or owned buildings not considered to be a part of the farm, the County Supervisor will determine that these or other suitable buildings likely will be available for the period of the loan. Such an application will be processed as a loan on a less than familytype farm. § 334.3 Use of loan funds. Loan funds may be used to refinance secured real estate, secured non-real estate, and unsecured debts; however, in connection with a loan to the owner of a less than family-type farm, only debts incurred for agricultural purposes may be refinanced, and no funds will be included for land purchase. Otherwise, loans made primarily for refinancing also may include funds for any of the other purposes authorized in § 331.6 of this chapter. § 334.4 Special requirements. (a) Loan funds will not be used to refinance any debt until it has been determined that: The applicant is unable to meet the terms and conditions of the debt; the present creditor will not give the applicant terms and conditions on the debt that he reasonably could be expected to meet; and the applicant is unable to obtain the necessary credit from other sources. In making this determination, the County Supervisor will: (1) Request the applicant to negotiate with the present creditor(s) or other credit sources in the area if, in his opinion, the applicant likely can secure the credit he needs. If the negotiations are unsuccessful, the applicant will secure from each creditor a statement of the account showing the final due date, interest rate, annual installment, amount delinquent, unpaid principal, accrued interest, and the amount necessary to settle the account in full. (2) Contact each secured creditor, in person when practicable, to discuss the applicant's credit needs and ascertain if refinancing is necessary. Whenever a debt must be refinanced in order to obtain the priority of the Farm Ownership lien required, the County Supervisor will explain to the creditor the reasons why the debt will need to be refinanced. (b) Debts which are secured by real estate liens will not be refinanced unless such liens are against the farm to be given as security for the loan. (c) Generally, when Farm Ownership loan funds are used to refinance a debt, the total amount of the debt will be refinanced. Exceptions to this general rule may be justified in the following cases, provided the lien is otherwise satisfactory: (1) Farm Ownership loan funds may be used to pay a delinquency on a debt secured only by a lien on the farm to be given as security for the loan. Farm Ownership loan funds will not be used to pay a portion of a real estate debt that is current unless the entire debt is refinanced. (2) When a debt is secured by both real estate and chattel liens, a portion of the debt may be refinanced provided the real estate is released from the lien held by the creditor. (3) With respect to non-real estate debts, Farm Ownership loan funds may be used to pay a portion of such a debt when refinancing of a portion of the debt will assist the applicant to place himself in a position to meet his obligations and obtain necesary operating credit. (d) When an applicant owns buildings which are not considered to be part of the farm, but which will be used by the applicant in accordance with § 334.2 (c), such buildings will not be considered in determining the fair and reasonable value of the farm. (e) Farm Ownership loan funds will not be used to repair, improve or refinance indebtedness against buildings which are not considered to be a part of the farm. (f) When an applicant owns buildings considered to be a part of the farm, the buildings essential to the farming operation must be of such type and condition as to enable the family to operate the farm successfully. Any repairs or improvements made to such buildings with Farm Ownership funds should conform to minimum construction standards. AUTHORITY: §§ 341.1 to 341.34 issued under sec. 41, 50 Stat. 528, as amended; 7 U. S. C. 1015. Interpret or apply secs. 21, 44, 50 Stat. 524, as amended, 530, as amended; 7 U. S. C. 1007, 1018. SUBPART A-OPERATING LOANS TO FULL-TIME FAMILY-TYPE FARMERS SOURCE: §§ 341.1 to 341.12 appear at 23 F. R. 10394, Dec. 30, 1958. Prior Amendments 1957: 22 F. R. 685, Feb. 2; 22 F. R. 7629, Sept. 26; 22 F. R. 9409, Nov. 26. 1958: 23 F R. 5542, July 22. § 341.1 General. (a) This subpart prescribes the policies and authorities for making operating loans to full-time operators of family-type farms as authorized under Title II of the BankheadJones Farm Tenant Act, as amended. The terms "full-time operator" and "family-type farm" as used in this subpart are defined in § 341.4. The making of such loans to Indians, and permittees and lessees on Indian trust lands is subject to the additional policies and procedures contained in Part 392 of this chapter. (b) Preference will be given to eligible veteran applicants in making operating loans. There is no difference in the eligibility and loan requirements for veterans and nonveterans. § 341.2 Supervisory assistance. Borrowers will receive supervisory assistance and assistance in developing long-time and annual farm and home plans, keeping records, and analyzing their farm and home business to the extent deemed necessary by the Farmers Home Administration. § 341.3 Relationship with production emergency loans. Initial operating loans will not be made to applicants in areas designated for production emergency loans when the credit needed is primarily for annual operating expenses and can be scheduled for payment in full from the first year's operations, provided such applicant's credit needs can be met adequately with such emergency loans. § 341.4 Eligibility - (a) Applicant. The applicant must: (1) Be a citizen of the United States. (2) Possess legal capacity to contract for the loan. (3) Be unable to obtain sufficient credit to finance his actual needs at rates (but not exceeding the rate of five per cent per annum) and terms prevailing in or near his community for loans of similar size and character. (4) Be able to meet his major needs for operating credit within the indebtedness limitation prescribed in § 341.11, except for the financing of special enterprises such as some livestock feeding operations, and sugar beets where financing on a contractual or equally definite basis is available. (5) Be an individual who possesses the character, ability, and industry necessary to carry out successfully the proposed farming operations and who will endeavor honestly to carry out the undertakings and obligations required of him in connection with the loan. (6) Have had farm experience or training sufficient to indicate reasonable prospects of conducting successful family-type farming operations. He may be an individual who has recently been engaged in farming, and whose background and normal means of livelihood in the past have been farming, but who may not have farmed during the past few years. (7) After the loan is made, be the operator of a family-type farm as an owner or tenant. (8) Derive, after the loan is made, the major portion of his income from farming or stock raising and spend the major portion of his time in carrying on his farming or stock raising operations. Under this policy, an applicant who will be seasonably employed off the farm during the early years of his loans may qualify for assistance. However, a loan will not be made to an applicant who will carry on a type of farming which will require substantial income from other employment during the term of the loan, or to an applicant who will be regularly employed off the farm. Payments to a veteran for pensionable disabilities and other veterans' benefits will not be considered in determining whether an applicant will derive the major portion of his income from farming operations. (9) The provisions of subparagraphs (7) and (8) of this paragraph are modified to the extent that loans to fulltime family-type farmers in Hawaii for the purpose of establishing such crops as coffee, sugar cane, and pineapple or any similar crop which requires 18 |