Code of Federal Regulations (Last Updated: July 5, 2024) |
Title 7 - Agriculture |
Subtitle B - Regulations of the Department of Agriculture |
Chapter XVIII - Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, Department of Agriculture |
SubChapter H - Program Regulations |
Part 1902 - Supervised Bank Accounts |
Subpart A - Supervised Bank Accounts of Loan, Grant, and Other Funds |
§ 1902.3 - Procedures to follow in fund disbursement.
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§ 1902.3 Procedures to follow in fund disbursement.
(a) The Servicing Official will determine during loan approval the amount(s) of loan or grant disbursement(s) - full or partial - and will process the request to the appropriate automated system in accordance with 7 CFR part 2018, subpart D.
(b) When Treasury check(s) are delivered to the Servicing Official, the Servicing Official will make sure that the name of the borrower and the amount(s) of check(s) coincide with the request on file. The Servicing Official should be sure that the check is properly endorsed to ensure payment to the intended recipient. Examples of such restrictive endorsements are:
(1) “For Deposit only to Account No. (Number of Construction Account) of (Name of Borrower) in (Name of Financial Institution).”
(2) “Pay to the order of (3rd party payee)” - (Contractor, Developer, Sub-Contractor, Building Supply House, etc.) for the purpose of __________.
(c) When necessary, and only under the circumstances listed in § 1902.2, the Servicing Official will establish, or cause to be established, a supervised bank account. Funds deposited in a supervised bank account are to be recorded and accounted for on Form RD 402-2, “Statement of Deposits and Withdrawals”.
[46 FR 36106, July 14, 1981, as amended at 53 FR 26588, July 14, 1988; 53 FR 35670, Sept. 14, 1988; 54 FR 39727, Sept. 28, 1989; 70 FR 59226, Oct. 12, 2005]