[Federal Register: July 5, 2002 (Volume 67, Number 129)]
[Notices]
[Page 44799-44804]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05jy02-27]
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DEPARTMENT OF AGRICULTURE
Farm Service Agency
Notice of Funds Availability (NOFA) Inviting Applications for the
Horse Breeder Loan Program
AGENCY: Farm Service Agency, USDA.
ACTION: Notice.
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SUMMARY: This Notice announces the availability of funding to implement
the Horse Breeder Loan Program as required by section 759 of the
Agriculture, Rural Development, Food and Drug Administration, and
Related Agencies Appropriations Act, 2002 (Act) (Pub. L. 107-76), which
was enacted November 28, 2001. The Act directed the Secretary to
implement a temporary low-interest loan program to assist horse
breeders suffering economic loss as a result of mare reproductive loss
syndrome (MRLS).
DATES: The Agency will begin accepting applications on July 1, 2002.
The deadline for receipt of an application Form FSA 410-1 is September
30, 2002. The Agency will not consider any application received after
the deadline. The application package must be completed by June 30,
2003. Authority to make Horse Breeder loans terminates September 30,
2003. Comments on the information collection associated with this
notice must be received on or before September 3, 2002, to be given
full consideration.
ADDRESSES: General information and the application form FSA 410-1 may
be obtained from the FSA Internet web site at: www.fsa.usda.gov or the
USDA, Farm Service Agency listed in your local telephone directory.
FOR FURTHER INFORMATION CONTACT: Cathy Quayle, Senior Loan Officer or
Patrick Spalding, Senior Loan Officer, USDA/FSA/DAFLP/STOP 0522, 1400
Independence Avenue, SW, Washington, DC 20250-0522; telephone (202)
720-1472; facsimile (202) 720-6797; electronic mail: Cathy--
Quayle@wdc.usda.gov or Patrick--Spalding@wdc.usda.gov.
SUPPLEMENTARY INFORMATION:
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which requires consultation with State and local officials.
During the 2001 horse breeding season, horse breeders suffered from
an overwhelming number of early and late term fetal losses. Even with
possible improvement in the coming breeding seasons, the economic
impact on breeders will present financial difficulties over an extended
period. The Agency is required by section 759(c) of the Act to make
loans available to eligible horse breeders who have suffered a
qualifying loss as a result of MRLS. Researchers have not pinpointed
the exact cause of MRLS; however, as a result of extensive studies,
common factors that are believed to have been the cause have been
identified. The Agency is adopting the definition of MRLS developed by
experts from the equine industry that is recognized and accepted by
veterinarians.
These loans will mitigate the income loss and reduction in credit
availability faced by horse breeders. Assistance is limited to only
those horse breeders who have suffered losses as a result of MRLS,
cannot obtain sufficient credit elsewhere and meet all other
requirements established in this notice. To assure that the recipients
of these loans are those most impacted by the effects of MRLS,
eligibility requirements are restrictive. As required by the Act, the
horse breeder must derive more than 70 percent of their income from
breeding, boarding, raising, training, or selling horses. The losses
must have resulted from MRLS, and at least 30 percent of the mares
owned, or boarded on a farm owned, operated, or leased by the breeder
must have failed to conceive, miscarried, aborted or otherwise failed
to produce a live, healthy foal.
All persons approved for loan assistance must execute loan
instruments and legal documents to secure the loan. For entity
applicants, the loan instruments and legal documents must be executed
in the name of the entity and all officers or partners and any board
members. Horse Breeder loans are not made under the authority of the
Consolidated Farm and Rural Development Act (CONACT), (7 U.S.C. 1961 et
seq.); therefore, the Agency will service Horse Breeder loans in
accordance with existing non-program Agency regulations in 7 CFR part
1951, subpart J, or its successor regulation. The Agency will not
provide direct farm loan program loan servicing benefits to Horse
Breeder Loan Program borrowers.
Environmental Compliance
The environmental impacts of the loan program to be implemented by
this NOFA have been considered in accordance with the provisions of the
National Environmental Policy Act of 1969 (NEPA, 42 U.S.C. 4321, et
seq.) Based on the nature and scope of this notice, FSA has concluded
that the notice will not have any significant impacts upon the human
environment as documented through the completion of an environmental
assessment. A copy of the environmental assessment is available for
inspection and review upon request. Therefore, FSA has developed a
Finding of No Significant Impact (FONSI) pursuant to NEPA, the
regulations of the Council on Environmental Quality (40 CFR parts 1500-
1508), and FSA's regulations for compliance with NEPA, 7 CFR part 1940,
subpart G.
Paperwork Reduction Act
A request for emergency clearance of the information collections
associated with this notice has been submitted to the Office of
Management and Budget (OMB) under 5 CFR 1320.13(a)(2)(iii).
In accordance with the Paperwork Burden Reduction Act of 1995, FSA
will provide a regular submission of the information collection package
to OMB at the end of the comment period for the following notice.
Title: Horse Breeder Loans.
OMB Control Number: 0560-NEW.
Type of request: Request for review and extension.
Abstract: The collection of the information required by this notice
is
[[Page 44800]]
required in order to certify that applicants for loans are eligible to
receive benefits. The information will be collected from applicants in
paper form by Agency loan approval officials in the county office that
serves the applicant's geographic area. The information will be used
and evaluated by the loan approval official to determine if the
applicant meets the criteria established by the Agency. The information
may be viewed, used and monitored by other Agency or USDA officials,
and may be released in accordance with the Privacy Act or Freedom of
Information Act. The information will be collected on an as needed
basis. Failure to collect this information may result in persons
receiving benefits other than intended program beneficiaries.
Estimate of Burden: Public reporting for this collection of
information is estimated to average .63 hours per response.
Respondents: Farms, individuals and businesses.
Estimated number of respondents: 800.
Estimated number of responses per respondent: 1.
Estimated total annual burden on respondents: 1258 hours.
Comments are invited on (a) whether the collection of information
is necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility; (b) the
accuracy of the agency's estimate of burden; (c) ways to enhance the
quality, utility and clarity of the information to be collected; (d)
ways to minimize the burden collection on those who are to respond,
including through use of appropriate automated, electronic, mechanical,
or other technological collection techniques or other forms of
information technology. These comments should be addressed to Cathy
Quayle, Senior Loan Officer, USDA, Farm Loan Programs, STOP 0522, 1400
Independence Avenue, SW, Washington DC 20250-0522. Comments are assured
of having effect if received within 60 days of this notice. Comments
received after that date will be considered to the extent practicable.
All comments received in response to this notice, including names and
addresses, will be a matter of public record. Copies of the submission
may be obtained from Cathy Quayle by calling (202) 690-4018.
I. Definitions Applicable to Horse Breeder Loans
Additional security is property that provides security in excess of
the amount of security value equal to the loan amount.
Adequate security is property that provides a security value at
least equal to the amount of the loan.
Agency is the Farm Service Agency, its employees, and any successor
agency.
Applicant is the individual or business entity applying for the
loan.
Approval official is an Agency official who has been delegated
approval authorities within applicable loan programs.
Bred is the attempt to produce offspring by sexual union or
artificial insemination.
Business entity is a corporation, partnership, joint operation,
trust, limited liability company, or cooperative.
Cash flow budget is a projection listing all anticipated cash
inflows (including all farm income, non-farm income and all loan
advances) and all cash outflows (including all farm and non-farm debt
service and other expenses) to be incurred by the borrower during the
period of the budget. A cash flow budget may be completed either for a
12-month period, a typical production cycle, or the life of the loan,
as appropriate.
False information is information provided by an applicant,
borrower, or other source to the Agency which is known by the provider
to be incorrect, and was provided to the Agency in order to obtain
benefits for which the applicant or borrower would not otherwise have
been eligible.
Feasible plan is a plan that demonstrates that the loan will be
repaid as agreed, as determined by the Agency. The plan must
demonstrate that the applicant will meet all other credit needs and
obligations, including judgments, for which the applicant is legally
responsible.
Financial needs are ordinary and necessary expenses, and financial
obligations which are incurred, in connection with the horse breeder
business.
Financial obligations are the debts owed by the horse breeder that
are directly related to the horse breeder business.
Horse is any mammal in the genus Equus, to include but not limited
to ass, mule, pony and donkey.
Horse breeder is an individual or business entity who as of
November 28, 2001, derives more than 70 percent of their gross income
from the horse breeding business during the shorter of:
1. The 5-year period ending on January 1, 2001; or
2. the period the individual or business entity has been engaged in
the horse breeder business.
Horse breeder business is the business of breeding, boarding,
raising, training, or selling horses.
Losses are the verifiable damages of the interrupted horse
reproductive process resulting from MRLS.
Mare Reproductive Loss Syndrome (MRLS) is, during the period
beginning April 24, 2001, and ending June 30, 2001, the occurrence of
any of the following equine medical conditions:
1. Early- and late-term equine fetal losses;
2. Pericarditis;
3. Epicarditis;
4. Unilateral endophthalmitis; or
5. Panophthalmitis.
Ordinary and necessary expenses are the operating expenses directly
related to the horse breeder business, including, but not limited to:
taxes, feed, veterinary expenses, fixtures and farm maintenance.
Readily available is when the insurance is sold by insurance agents
in the applicant's normal trade area.
Security is property or right of any kind that is subject to a real
or personal property lien. Any reference to ``collateral'' or
``security property'' will be considered a reference to the term
``security.''
States or United States is the United States itself, any of the
fifty States, the Commonwealth of Puerto Rico, the Virgin Islands of
the United States, Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands.
United States non-citizen national is a person born in an outlying
possession of the United States (American Samoa or Swain's Island) on
or after the date the U.S. acquired the possession, or a person whose
parents are U.S. non-citizen nationals (subject to certain residency
requirements).
II. Appeals
An applicant or borrower may request an appeal or review of an
adverse decision made by the Agency in accordance with 7 CFR parts 11
and 780 or its successor regulation.
III. Eligibility Requirements
Applicants must meet all of the following requirements to be
eligible for a Horse Breeder loan:
1. Timely application. The applicant must submit a signed form FSA
410-1 completed to the best of the applicant's ability to the Agency no
later than September 30, 2002.
2. Horse breeder. The applicant must be a horse breeder as defined
by this notice.
3. Qualifying loss. During the period beginning January 1 and
ending October
[[Page 44801]]
1 of any calendar year 2000, 2001 or 2002:
(a) 30 percent or more of the mares owned by the applicant failed
to conceive, miscarried, aborted or otherwise failed to produce a live
healthy foal; or
(b) 30 percent or more of mares boarded on a farm owned, operated
or leased by the applicant failed to conceive, miscarried, aborted or
otherwise failed to produce a live healthy foal.
4. Financial need. The applicant is be unable to meet financial
obligations, or pay ordinary and necessary expenses incurred in
connection with the horse breeder business.
5. Test for credit. The applicant must be unable to obtain
sufficient credit elsewhere at reasonable rates and terms.
(a) To establish this, the applicant must obtain written denials of
credit from legally organized commercial lending institutions within
reasonable proximity of the applicant that specify the reasons for the
denial as follows:
(1) In the case of a loan request of $300,000 or more, two written
denials of credit are required.
One of these lenders must be the applicant's normal
lender.
Both lenders must typically make horse breeder business
loans.
(2) In the case of a loan request of less than $300,000, one
written denial of credit is required.
The applicant's normal lender will be contacted unless the
lender has already denied a request to continue with the applicant or
extend additional credit.
The applicant may contact another lender that makes horse
breeder business loans.
(3) In the case of a loan request of $100,000 or less, the Agency
may waive the requirement for obtaining a written denial of credit if
the Agency determines that requiring a written denial would pose an
undue burden on the applicant and based on the applicant's
circumstances credit is not likely to be available.
(b) Notwithstanding the applicant's submission of the required
written denial of credit, the Agency may contact other commercial
lending institutions within reasonable proximity of the applicant and
make an independent determination of the applicant's ability to obtain
credit elsewhere.
(c) When the applicant is an entity, all individuals, members,
stockholders, and partners must meet test for credit requirements.
6. Citizenship. The applicant must be a citizen of the United
States, United States non-citizen national, or a qualified alien under
applicable Federal immigration laws. For an entity applicant, the
majority of the entity must be owned by members meeting the citizenship
test or other entities that are domestically owned.
7. Legal capacity. The loan applicant must be of legal age, mental
capacity, and have the authority to enter into a legally binding
agreement. An entity applicant, and all entity members who will execute
the promissory note, must meet this requirement.
8. Federal debt. At loan closing, the applicant and anyone who will
execute the promissory note must not be delinquent on any Federal debt,
other than a debt under the Internal Revenue Code of 1986, nor be a
federal judgment debtor on a non-tax debt.
9. Unpaid judgement. At loan closing the applicant and anyone who
will execute the promissory note must not have any outstanding unpaid
judgements obtained by the United States in any court.
10. False information. The applicant, in past or present dealings
with the Agency, must not have knowingly provided the Agency with false
information.
11. Credit history. The individual or business entity applicant and
all entity members must have acceptable credit history demonstrated by
debt repayment. A history of failure to repay past debts as they came
due (including debts to the Internal Revenue Service) when the ability
to repay was within their control will demonstrate unacceptable credit
history.
12. Repayment. The applicant must submit a feasible plan as defined
in this notice.
IV. Loan Uses
Loan funds only may be used to:
1. Pay ordinary and necessary expenses for the horse breeding
business.
2. Replace mares and foals lost or disabled due to MRLS.
3. Purchase or lease additional existing pasture to replace pasture
where a veterinarian or other recognized expert has determined the
potential for MRLS exists.
4. Pay or refinance financial obligations as defined by this
notice, provided the applicant can demonstrate a need to do so.
5. Pay loan closing costs.
V. Limitations
1. The maximum cumulative loan amount any individual or business
entity may receive under this notice is limited to $500,000.
2. The amount of the loan is further limited to the lesser of; (a)
the financial needs of the applicant; or (b) the amount of loss
suffered by the applicant as measured by Section XI of this notice.
3. Outstanding loan balances from Agency Farm Loan Programs, direct
or guaranteed, will not affect the amount an applicant is eligible to
receive under this section.
VI. Prohibited Use of Loan Funds
1. Loan funds may not be used to pay expenses incurred for lobbying
or related activities.
2. Loan funds may not be used for any purpose which contributes to
excessive erosion of highly-erodible land or to the conversion of
wetlands to produce an agricultural commodity.
3. Loan funds may not be used to refinance consumer debt, such as
home equity loans, automobile loans, or credit card debt unless such
debt is directly attributable to the horse breeder business operation.
4. Loan funds may not be used to pay Federal judgments.
VII. Loans to Agency Employees
Loans may be made to Agency employees otherwise qualified for the
loans.
VIII. Federal Equal Credit Opportunity Act (ECOA)
The Agency must comply with the provisions of ECOA and the
implementing regulations of the Federal Reserve System published in 12
CFR part 202.
IX. Environmental Compliance
1. The environmental and historic preservation requirements
contained in 7 CFR part 1940, subpart G or its successor regulation
must be met prior to approval of any loan.
2. In order to minimize the financial risk associated with
contamination of real property from hazardous waste and other
environmental concerns, the Agency will complete an environmental risk
evaluation.
(a) The Agency will not accept as security any real estate which
has significant environmental risks, such as, but not limited to the
presence of known or suspected underground storage tanks or hazardous
waste.
(b) If the real estate offered as security contains significant
environmental risks, the Agency will provide the applicant with the
option of properly correcting or removing the risk, at the applicant's
expense or offering other non-contaminated property as security for the
loan.
[[Page 44802]]
X. Other Federal, State, and Local Requirements
Horse Breeder loan borrowers are required to comply with all
applicable:
1. Federal, State, or local laws;
2. Regulatory commission rules; and
3. Regulations which are presently in existence, or which may be
later adopted including, but not limited to, those governing the
following:
(a) Borrowing money, pledging security, and raising revenues for
repayment of debt;
(b) Accounting and financial reporting; and
(c) Protection of the environment.
4. Any construction financed by the Agency must comply with
applicable Federal, State, local, and industry building standards.
XI. Loss Calculations
1. (a) The applicant's Federal income tax and business records will
the primary source of financial information for the loss calculation.
Sales, receipts, invoices, or other official sale records will document
the sales price of individual animals as referenced in paragraph (2) of
this section.
(b) If the applicant does not have 3 complete years of business
records, the Agency will obtain the most reliable and reasonable
information available from sources such as the Cooperative Extension
Service, universities, and breed associations to document production
and expenses for those years for which the applicant does not have a
complete year of business records. To the extent such additional
information is unavailable, the Agency will use the applicant's
available business records to make realistic income and expense
calculations.
2. To determine the value of foals lost or disabled as a result of
MRLS:
(a) The average sales price of horses sold by the applicant will be
determined by adding the total proceeds from the sales of horses
including only: weanlings, yearlings and 2-year old offspring for the
previous 3 non-loss years, and dividing by the number of horses sold
during those 3 years.
(b) The average sales price will be multiplied by the number of
mares shown on the veterinarian certification that failed to conceive
or produce a live healthy foal due to MRLS.
3. To determine the value of all other losses:
(a) Calculate the average annual net income for the horse breeder
business for the previous 3 non-loss years, and subtract the horse
breeder business net income for the loss year.
(b) The annual net income for the horse breeder business will be
determined by subtracting all cash business expenses and proceeds from
sales of weanlings, yearlings, and 2 year old offspring, from all
business income reported on Schedule F and other related schedules of
the applicant's Federal income tax return. Any depreciation shown on
Schedule F is not a cash expense and must not be included as an expense
in loss calculations.
(c) The average annual net income for the horse breeder business
shall be calculated by adding the applicant's horse breeder business
annual net income from the previous 3 non-loss years and dividing by 3.
4. The results of the calculations from paragraphs 2 and 3 of this
section shall be added together to determine the total amount of loss
the applicant has suffered as a result of MRLS.
XII. Complete Loan Application
An Agency application Form FSA 410-1, completed to the best of the
applicant's ability and submitted on or before September 30, 2002, will
meet the application deadline. However, a loan decision will not be
made until a complete application is received in accordance with this
section. All forms listed are available at any Agency office. The
Agency will not consider any application that is not complete as of
June 30, 2003. A complete loan application includes all of the
following items:
1. A completed form FSA 410-1.
2. If the applicant is a business entity, all legal documents
evidencing the organization and any state recognition of the entity
such as articles of incorporation or partnership agreements. The
application must include the following information for each entity
member:
(a) Name.
(b) Address.
(c) Social Security number, or IRS tax ID number for a member that
is a business entity.
(d) Percent ownership interest in the entity.
(e) In the case of a member that is itself a business entity, legal
documents evidencing the organization and any State recognition of the
entity.
3. Verification that the applicant or individual members of an
entity applicant cannot obtain credit elsewhere including a loan
guarantee by a State or other Federal agency.
4. Income tax and business records for the lesser of the previous 3
years or the number of years in business.
5. A current balance sheet that was prepared within 90 days of the
date of application.
6. Projected production, income and expenses, and loan repayment
plan, which may be submitted on Form FSA 431-2 or other similar plan of
operation acceptable to the Agency.
7. Verification of off-farm employment, and other non-farm income,
if any. This will be required only when the applicant is relying on
off-farm income for a feasible plan.
8. A legal description of farm, real estate property securing the
loan and a copy of any lease, contract, option or agreement, or a
written statement setting forth terms or conditions of any agreement
entered into by the applicant which may be pertinent to consideration
of the application.
9. A written certification from a licensed veterinarian, see
Exhibit 1 sample, stating the number of mares:
(a) Owned or boarded that were bred.
(b) That failed to conceive or otherwise produce a live healthy
foal.
10. A credit report fee of $28.00 for individual applicants, $34.00
for joint applicants and $40.00 for commercial business applicants.
11. Any other documents requested by the Agency and needed to
process the application.
XIII. Interest Rate
Loans closed in accordance with this notice will be charged
interest at the rate established for Emergency loans in 7 CFR part 764.
Current rates are available at any Agency office.
XIV. Terms
1. Repayment period. The Agency schedules repayment of Horse
Breeder loans based on the useful life of the loan security and the
applicant's repayment ability, but not to exceed 20 years. Loans
secured only by collateral other than real estate shall not exceed 7
years. If necessary to improve the repayment ability of the borrower
and real estate security is available, the term of the loan may be
extended up to a total length not to exceed 20 years from the date of
the promissory note. Balloon installments are prohibited. Balloon
installments are final installments that exceed twice the amount of the
regular amortized installment.
2. Minimum payment requirement. The repayment schedule must include
at least one payment every year. Payments must be no less than the
interest accrued on the principal balance at the time the installment
is to be paid and may not result in a prohibited balloon installment.
XV. Security Requirements
1. The applicant shall have sufficient equity to provide adequate
security for
[[Page 44803]]
the loan. In addition, the applicant shall provide additional security,
if available, not to exceed 150 percent of the loan amount.
2. Loans shall be secured by collateral that can be adequately
described in security instruments.
3. The Agency will take the best lien obtainable on the following
security, if available, as necessary to protect the Government's
interest. The security will be taken in the order of priority as
follows:
(a) Real Estate. A survey is not required if the property is
adequately described. The applicant is responsible for obtaining and
paying any costs for documentation necessary to properly identify the
security property.
(b) Chattels and crops, other than horses. Chattels consist of
equipment or livestock, other than horses. Equipment must be identified
by manufacturer, model, year, and serial number, where available.
(c) Other assets owned by the applicant. Other assets owned by the
applicant such as certificates of deposit may be taken as security. The
applicant shall provide satisfactory documentation as to the value of
the assets and their availability for Agency lien perfection.
(d) Third party pledges of property not owned by the applicant.
Interests in property not owned by the applicant (such as, but not
limited to: real estate, leases that provide a mortgageable value,
water rights, easements, mineral rights, and royalties) can be offered
as security for the loan.
(e) Horses. Horses must be identified by color, sex, and
distinguishing marks (i.e., socks, blaze, registration numbers).
(f) Repayment ability. The applicant's repayment ability may be
accepted as adequate security provided that the applicant can meet all
of the following requirements.
(1) The applicant has pledged as security for the loan all
available personal and business collateral.
(2) The feasible plan, approved by the Agency, indicates the loan
will be repaid based upon the applicant's production and income history
and addresses applicable income risks to the extent practicable through
the use of breeder's insurance, mortality insurance, or similar risk
management practices.
(3) The applicant has had positive net income from the horse
breeder business in at least 3 of the past 5 years. If the applicant
has been in the horse breeder business for fewer than 5 years, the
applicant must have had positive net income from the horse breeder
business in at least 50 percent of the years the applicant has been in
the horse breeder business.
(4) The applicant has given the Agency an assignment on any USDA
program payments, unencumbered installment sales proceeds, or other
contractually based income.
XVI. Appraisals and Valuation Requirements
Appraisals generally are required for real estate and chattel
property used to secure a Horse Breeder loan. Real estate appraisals,
however, are not required when the amount of the loan does not exceed
$50,000 and the loan approval official clearly documents that the
estimated value of security, less existing liens, exceeds the loan
amount. Real estate and chattel appraisals shall be completed in
accordance with 7 CFR 761.7.
XVII. Taking Indian Trust Lands as Security
The Agency may take a lien on Indian Trust lands as security
provided that the requirements of 7 CFR part 1943, subpart A or its
successor regulations are satisfied.
XVIII. Insurance for Loan Security
An applicant must obtain insurance, consistent with this section,
equal to the lesser of the value of the security at the time of loan
closing, or the principal of the loan.
1. Hazard insurance. All security (except growing crops) must be
covered by hazard insurance if it is readily available and economically
feasible.
2. Flood or mudslide insurance. Real estate security located in a
special Flood Hazard Area as determined by the Federal Emergency
Management Agency, must be covered by flood or mudslide insurance.
3. Crop insurance. Growing crops used to provide adequate security
must be covered by crop insurance if such insurance is readily
available and economically feasible.
4. Mortality insurance. All horses used as security for the loan
must be covered by mortality insurance if it is readily available and
economically feasible.
5. Indemnities. An applicant must:
(a) List the Agency as loss payee for the insurance indemnity
payment or as a beneficiary of a mortgagee loss payable clause; and
(b) In the case of crop and mortality insurance, execute an
assignment of indemnity in favor of the Agency.
XIX. Funding Applications
Loan requests will be funded based on the date the Agency receives
the complete application. Loan approval is subject to the availability
of Emergency loan funds.
XX. Loan Closing
The loan approval official, or designee, shall close the loan
according to the following.
1. The applicant must meet all conditions specified in this notice
prior to loan closing.
2. There must have been no significant changes in the plan of
operation or the applicant's financial condition since the loan was
approved and less than 90 days has passed since financial information
has been updated.
3. The applicant shall execute all loan instruments and legal
documents required by the Agency to evidence the debt, perfect the
required security position in property, and protect the Government's
interests in accordance with applicable State and Federal laws.
4. Horse Breeder loans with security other than real estate shall
be closed in accordance with 7 CFR part 1941, subpart B, or its
successor regulation.
5. Horse Breeder loans secured by real estate shall be closed in
accordance with 7 CFR part 1927, subpart B, or its successor
regulation. Loans with real estate security will be closed by a closing
agent, selected by and paid for by the applicant.
(a) For loans over $25,000, title clearance is required when real
estate is taken as security.
(b) For loans of $25,000 or less, when real estate is taken as
security, a certification of ownership in real estate is required.
Certification of ownership may be in the form of an affidavit which is
signed by the applicant, naming the record owner of the real estate in
question and listing the balances due on all known debts against the
real estate. Whenever the loan approval official is uncertain of the
record owner or debts against the real estate security, a title search
is required.
XXI. Fees
The applicant will pay all loan closing fees including but not
limited to fees for title clearance, recording any legal instruments
determined to be necessary, and all notary, lien search, attorney fees
and similar fees incident to loan transactions. No fees will be
assessed for work performed by Agency employees.
XXII. Reporting
The borrower must notify the Agency of any adverse actions related
to the loan, including but not limited to, anticipated default on the
loan.
[[Page 44804]]
XXIII. Loan Servicing
If any installment is not paid according to the terms of the loan
agreement, the loan is not fully satisfied at expiration of the loan
agreement, or the borrower is in default on any term of the loan
agreement or security instruments, the loan will be serviced in
accordance with 7 CFR 1951.468 or its successor regulation, during the
term of the loan.
Signed at Washington, DC, on June 28, 2002.
James R. Little,
Administrator, Farm Service Agency.
Exhibit 1.--Sample Veterinary Certification
Woodside Veterinary Clinic, P.O. Box 29, Alexandria, Virginia 45207
William A. Doctor, D.V.M.
Tanya J. Thoms, D.V.M.
Equine and Companion Animals
Medicine and Surgery
Telephone: 303-233-4455
FAX 303-233-4456
Name of Client: Circle K Farms.
Address of Client: 123 Shade Tree Lane, Alexandria, Virginia
45207.
Period covered by this Certification: 2000 and 2001 Breeding and
Foal Seasons.
The number of mares owned that were bred ------
The number of mares boarded that were bred ------
As a result of MRLS:
The number of mares that failed to conceive or produce a live
healthy foal.------
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Signature of Veterinarian
[FR Doc. 02-16827 Filed 7-3-02; 8:45 am]
BILLING CODE 3410-05-P
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