Appendix H to Subpart A - Interest Rate Buydown Agreement

USDA-FmHA or its successor agency under Public Law 103-354 Form FmHA or its successor agency under Public Law 103-354 1980-58 (Rev. 1-89) □ Loan Note Guarantee □ Contract of Guarantee Type of Loan ____ 7 CFR Part 1980 Subpart B FORM APPROVED OMB NO. 0575-0079 State County Date of Note Borrower FmHA or its successor agency under Public Law 103-354 Loan ID No. Lender Lender's IRS ID Tax No. Lender's Address Principal Amount of Loan/Line of Credit Ceiling

The principal amount of loan or line of credit is evidenced by ____ note(s) or line of credit agreement(s) described below. This instrument is attached to note or line of credit agreement dated ____ in the face amount of $ ____ and is number ____ of ____.

Copies of the lender's Loan Note Guarantee, or Contract of Guarantee for a line(s) of credit, and any Assignment Guarantee Agreement, if applicable (Loan Note Guarantee cases only) are attached to this Agreement as a part of it.

Lender's Note No.Note/Line of Credit AgreementInterest Rate (If variable calculate in accordance with Part 1980, Subpart B Exhibit D, Paragraph IV I)Lender Write DownFmHA or its successor agency under Public Law 103-354 Interest Rate Buydown

This agreement is effective beginning ____ and expires on ____.

In consideration of the subject lender's write down of interest rate on the above borrower's account by ____ percentage points, the United States of America, acting through the Farmers Home Administration or its successor agency under Public Law 103-354 of the United States Department of Agriculture (called FmHA or its successor agency under Public Law 103-354) pursuant to the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) agrees that in accordance with and subject to the conditions and requirements in this agreement it will reimburse the lender for ___ percentage points of the write down. The full amount of the interest rate buydown made by FmHA or its successor agency under Public Law 103-354 to the lender will be passed on to the borrower.

Public reporting burden for this collection of information is estimated to average 5 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to, Department of Agriculture, Clearance Officer, OIRM, Room 404-W, Washington, D.C. 20250; and to the Office of Management and Budget, Paperwork Reduction Project (OMB No. 0575-0075), Washington, D.C. 20503.

CONDITIONS OF INTEREST RATE BUYDOWN

1. Buydown Rates

The buydown rate set forth in this agreement will remain constant during the term of this agreement. If a 95 percent guarantee has been issued to the lender by FmHA or its successor agency under Public Law 103-354 under Exhibit E to 7 CFR Part 1980, Subpart B, the percentage of this interest rate reduction made by the lender will be permanent.

2. Interest Rate Buydown Payments

FmHA or its successor agency under Public Law 103-354's payments made in connection with the interest rate buydown will be calculated using 360 or 365 day year method on a declining balance. The lender will indicate on Form FmHA or its successor agency under Public Law 103-354 1980-19, “Guaranteed Loan Closing Report,” the preferred method, which may not change once established.

3. Annual Rate Buydown Claims and Payments

The intial Interest Rate Buydown claim will be prepared by the lender using form FmHA or its successor agency under Public Law 103-354 1980-24, “Request Interest Rate Buydown/Subsidy Payment to Guaranteed Loan Lender,” on or about a date 12 months from the date of this agreement, unless it is the first or last claim which may be submitted in accordance with the first and last due date on the borrower's promissory note. Subsequent claims will be filed by the lender on or about a date 12 months thereafter but no later than the anniversary date of filing of the initial interest rate buydown claim. Upon full payment of the note or line of credit agreement the lender will immediately prepare Form FmHA or its successor agency under Public Law 103-354 1980-24 and mail a copy to the FmHA or its successor agency under Public Law 103-354 serving office.

4. When Interest Rate Buydown Payments Cease

For Loan Note Guarantee cases, when FmHA or its successor agency under Public Law 103-354 purchases a portion of a loan, interest buydown payments on that portion will cease. Interest rate buydown payments will cease upon termination of the Loan Note Guarantee or Contract of Guarantee, upon reaching the expiration date set forth in this agreement or upon cancellation by the Government. Interest buydown payments shall cease upon the assumption/transfer of the loan if the transferee was not liable for the debt at the time the buydown was granted. The lender shall complete Form FmHA or its successor agency under Public Law 103-354 1980-24, “Request Interest Rate Buydown/Subsidy Payment to Guaranteed Loan Lender,” to request payment for the buydown/subsidy through the date of the transfer or assumption of the guaranteed loan.

5. Cash Flow

The lender certifies that the interest rate reduction to the borrower results in a reduced, equally amortized payment schedule for the term of this agreement so that the borrower's operation projects a positive cash flow on all income and expenses including debt service for the term of this agreement. A typical plan of operation must show that a positive cash flow can be expected during the initial 24 month buydown period. For those loans/lines of credit with terms less than 24 months, then the operation must show a positive cash flow for the term of the loan/line of credit. In cases where the term of the loan or line of credit agreement exceeds the term of this agreement, the lender certifies that the borrower is projected to have a positive cash flow on all income and expenses including debt service after this agreement expires. Cash flow and positive cash flow are defined in exhibit D or exhibit E to subpart B of 7 CFR 1980, as applicable, and must be calculated in accordance with § 1980.113(d)(8) of subpart B of part 1980.

6. Cancellation of Interest

Lender certifies that the amount of interest written down on subject borrower's account will be permanently canceled as it becomes due and no attempt will be made to collect that portion of the debt.

7. Repurchase of loans presently guaranteed by FmHA or its successor agency under Public Law 103-354 eligible for interest rate buydown. (Loan Note Guarantee Cases Only). See also item 10 of Form FmHA or its successor agency under Public Law 103-354 449-36.

In the case of converting a guaranteed loan without an interest rate buydown to one with such a buydown, the lender must obtain the holder's consent in writing. If the holder does not consent to the interest rate reduction proposed by the lender, the lender must repurchase the unpaid portion of the loan from any holder(s) before the interest rate buydown can be granted. Any repurchase will only be made after the lender obtains FmHA or its successor agency under Public Law 103-354's written approval. In the event the lender assigns the guaranteed portion of the loan to a holder(s) the Assignment Guarantee Agreement (Form FmHA or its successor agency under Public Law 103-354 449-36) will be amended as provided in 7 CFR, Part 1980, Subpart B, Exhibit D, paragraph VI B2 or Exhibit E, paragraph VI B2, as applicable, to reflect the reduced interest rate.

8. Regulatory Changes

This Agreement is subject to the present regulations of the FmHA or its successor agency under Public Law 103-354 and its future regulations not inconsistent with any provisions of this agreement.

9. Cancellation

The Interest Rate Buydown Agreement is incontestable except for fraud or misrepresentation of which the lender has actual knowledge at the time this Agreement is executed or for which the lender participates in or condones.

10. Excessive Interest Rate Buydown

The Government may amend or cancel this agreement and collect from the lender any amount of reduction granted as a result of incomplete or inaccurate information, computation errors, or other circumstances which resulted in interest rate buydown payments that the lender was not entitled to receive.

11. Access to Lender's Files

Lender agrees to allow FmHA or its successor agency under Public Law 103-354 access to audit findings by the lender's supervising agency when examining interest rate buydown claims.

Lender By Title United States of America, Farmers Home Administration or its successor agency under Public Law 103-354 Attest: [SEAL] Address: By Title Acknowledged: Borrower Attest: [SEAL] EC14SE91.016 FUNCTION OF FORM

Completed by lender to request periodic interest rate buydown payments or interest assistance payments for Farmer Program Loans or subsidy payments for EM Actual Loss Loans. This form is also used to continue or adjust interest assistance on the account.

PROCEDURE REFERENCE

FmHA or its successor agency under Public Law 103-354 Instruction 1980-B

PREPARED BY

Lender in consultation with the FmHA or its successor agency under Public Law 103-354

ADDITIONAL INFORMATION

If this form is being completed to establish a continuation of interest assistance after a year with zero percent interest assistance, items 1 through 16 should be completed as usual; item 17 will be 0.00; item 18 as usual; item 19 as 3 (no check issued); and items 21 through 33 as usual.

DISTRIBUTION

Original to Finance Office; Copy to Servicing Office; and Copy to Lender.

INSTRUCTIONS FOR PREPARATION

Item 1. Enter the Borrower's Case Number. Show the state and county code and the borrower's Social Security or Internal Revenue Service Tax Identification Number.

Example: 2 9 0 3 7 0 9 8 7 6 5 4 3 2 8

Item 2. Enter Borrower's Name (Last Name First)—abbreviate when necessary.

Example: T H O M P S O N R O B E R T L

Item 3. Enter the Lender's Internal Revenue Service Tax Identification Number.

Example: 0 7 6 5 4 3 2 4 5 6

Item 4. Enter Lender's Name—abbreviate when necessary.

Example: F I R S T N A T I O N A L B A N K

Item 5. Enter the FmHA or its successor agency under Public Law 103-354 assigned branch number.

Example: 0 3

Item 6. Enter FmHA or its successor agency under Public Law 103-354 assigned loan number.

Example: 0 2

Item 7. Enter the original loan amount.

Example: $ 5 6 0 0 0. 0 0

Item 8. Enter the beginning date of the current buydown, interest assistance or subsidy period.

Example: The loan/buydown/interest assistance/subsidy closing date is 05-04-88; initial request beginning date is 05-04-88; subsequent requests will begin with the ending date submitted on the previous request for payment.

Item 9. Enter the ending date of the current buydown, interest assistance, or subsidy period. The ending date on this request equals the beginning date on the next request.

NOTE: Interest rate buydown and interest assistance claims may only be submitted for a 12 month period unless it is the first or last claim.

Subsidy payments on EM Actual Loss Loans may be submitted for a 6 or 12 month period only.

If the Contract of Guarantee or Loan Note Guarantee is or becomes void or unenforceable, or terminates, or a transfer and assumption occurs, the subsidy/buydown/interest assistance should be claimed up to that date. In the case of assumptions to eligible transferees, the beginning date on the transferred loan is the assumption date; and the inital claim may be at anytime with future claims at 12-month intervals, except as described above.

Item 10. Enter the principal balance of the loan at the beginning of the subsidy period. If this is the first claim on a new loan, this amount will match the amount advanced on Form FmHA or its successor agency under Public Law 103-354 1980-19, Loan Closing Report. If this loan was a buydown or interest assistance on an existing loan, this amount will match the loan amount on Form FmHA or its successor agency under Public Law 103-354 1980-19. For subsequent claims the principal balance must equal the ending principal balance on the previous claim.

ALL INTEREST CALCULATIONS ON THIS FORM ARE BASED ON THE BORROWER'S EFFECTIVE INTEREST RATE.

Item 11. Enter the borrower's accrued interest at the beginning of the subsidy period. This accrued interest must equal the ending accrued interest shown on the previous claim.

Item 12. Enter the amount of principal disbursed during the current subsidy period. This amount does not include protective advances. If zero, enter 0.00.

Item 13. Enter the total amount of interest payments recevied from the borrower during the current claim period. If zero, enter 0.00.

Item 14. Enter the total amount of principal payments received from the borrower during the current claim period. If zero, enter 0.00.

Item 15. Enter the accrued interest balance at the end of the current claim period. If zero, enter 0.00. (This amount is the beginning accrued interest balance on the next claim.)

Item 16. Enter the principal balance at the end of the current claim period. If zero, enter 0.00. (This amount is the beginning principal balance on the next claim.)

Item 17. Enter the amount of interest rate buydown/interest assistance/subsidy payable.

BUYDOWN PAYMENT CALCULATION (Item 13+15−11)×Buydown Rate Paid by FmHA or its successor agency under Public Law 103-354÷Borrower's Effective Rate EM ACTUAL LOSS SUBSIDY CALCULATION (Item 13+15−11)×Loan Subsidy Rate÷Interest Rate on Note or Assumption Agreement INTEREST ASSISTANCE PAYMENT CALCULATION (Item 13+15−11)×Interest Assistance Rate÷Borrower's Effective Rate

Item 18. Enter the applicable code to identify if this is the final payment.

Item 19. Completed by FmHA or its successor agency under Public Law 103-354 servicing office or Finance Office.

1=System Generated Check 2=Manual Check (Finance Office Only) 3=No Check Issued

Item 20. Completed by Finance Office Only. The Finance Office will enter the check issue date for manual checks only (item 19 equals 2).

ITEMS 21 THROUGH 26 ARE COMPLETED ONLY IF THE BORROWER IS AN INTEREST ASSISTANCE BORROWER.

Item 21. Enter the beginning date of the next interest assistance period.

Item 22. Enter the ending date of the next interest assistance period.

Item 23. Enter the percent of assistance requested for the next period. IF THIS PERCENT IS GREATER THAN THE PERCENT ON THE MASTER INTEREST ASSISTANCE AGREEMENT, FUNDS MUST BE OBLIGATED PRIOR TO SIGNING THIS FORM. If the borrower will need zero percent next year, enter 00.0000.

Item 24. Enter the applicable code.

1=Yes 2=No IF CODE 1 (YES) IS ENTERED, THE ASSISTANCE FUNDS FOR THE REMAINING LIFE OF THE AGREEMENT ARE DEOBLIGATED; THEREFORE, THERE ARE NO FUTURE PAYMENTS.

Item 25. Enter the effective date of the interest assistance termination. Complete only if item 24 equals 1.

Item 26. Enter the reason for termination code. Complete only if item 25 is complete.

01—Borrower is no longer eligible for interest assistance. 02—Loan is paid in full.

Item 27. THIS FORM WILL BE RETURNED IF IT IS NOT SIGNED. Enter the authorized lender's signature.

Item 28. Enter the title of the person authorized to sign this form.

Item 29. Enter the date signed by the lender's representative.

Item 30. Enter the percent of interest assistance approved. TO BE COMPLETED BY FmHA or its successor agency under Public Law 103-354 SERVICING OFFICE ONLY. This amount may not exceed the Maximum Rate of Interest Assistance which was obligated and is stated on the Interest Assistance Agreement.

Item 31. Enter the authorized FmHA or its successor agency under Public Law 103-354 representative signature for approval.

Item 32. Enter the title of the authorized FmHA or its successor agency under Public Law 103-354 representative.

Item 33. Enter the date signed by FmHA or its successor agency under Public Law 103-354 representative.

EC14SE91.017 Conditions of Interest Assistance 1. Interest Rates

The lender may charge a fixed or variable interest rate which is specified in this agreement during the term of the Interest Assistance Agreement. The type of rate must be the same as the type of rate in the underlying note or line of credit agreement.

The interest rate that the lender will charge will be clearly indicated in the Request for Interest Assistance. If a variable rate will be charged, the base rate, basis points and adjustment interval not only will be clearly set forth in the Request for Interest Assistance, but also will comply with § 1980.175(e) of 7 CFR part 1980, subpart B. If the lender uses a variable rate note or line of credit agreement, the rate may only be changed once each year. During the term of the Interest Assistance Agreement, variable interest rates may not be increased by more than a total of 3 percent above the effective note rate of interest at the time this agreement is entered into. This cap on interest increases will be clearly spelled out in the note/line of credit agreement or in an allonge attached to the note/line of credit agreement or other legally effective amendment of the interest rate; however, no new note or line of credit agreement may be issued. The date of interest rate adjustment shall coincide with the annual payment date on loans/lines of credit with annual payments. On other loans/lines of credit the annual review date will be clearly set out in the note/line of credit agreement and has been set out on this agreement as the ending date of the initial period of Interest Assistance.

2. Interest Assistance Payments

FmHA or its successor agency under Public Law 103-354 payments made in connection with Interest Assistance will be calculated using a 360 or 365 day year method on a declining balance. The lender will indicate on Form FmHA or its successor agency under Public Law 103-354 1980-19. “Guaranteed Loan Closing Report,” the preferred method, which may not change once established.

3. Annual Interest Assistance Claims and Payments

The initial Interest Assistance claim will be prepared by the lender using Form FmHA or its successor agency under Public Law 103-354 1980-24. “Request Interest Assistance/Interest Rate Buydown/Subsidy Payment to Guaranteed Loan Lender,” within 60 days after the ending date of the initial period specified in this agreement. Subsequent claims will be filed by the lender on or after the same date each year thereafter but no later than 60 days after the anniversary of the ending date of the initial Interest Assistance claim. Upon full payment of the note or line of credit agreement the lender will immediately prepare Form FmHA or its successor agency under Public Law 103-354 1980-24 and mail a copy to the FmHA or its successor agency under Public Law 103-354 servicing office.

4. Request for Adjustment/Continuation of Interest Assistance

For all loans which extend beyond the ending date of the initial review period, the lender will analyze the borrower's need for continued Interest Assistance in accordance with the methodology defined in Exhibit D to supart B of 7 CFR, part 1980. The lender will then submit the Request for Continuation/Adjustment of Interest of Assistance by completing the applicable section of Form FmHA or its successor agency under Public Law 103-354 1980-24. The request for payment of the claim from the previous period will not be processed until the analysis of the borrower's need and request for Continuation/Adjustment has been made by the lender.

5. When Interest Assistance Payments Cease

For Loan Note Guarantee cases, when FmHA or its successor agency under Public Law 103-354 purchases a portion of a loan, Interest Assistance payments on that portion will cease. Interest Assistance payments will cease upon termination of the Loan Note Guarantee or Contract of Guarantee, upon reaching the expiration date set forth in this agreement or upon cancellation by the Government. Interest Assistance payments shall cease upon the assumption/transfer of the loan if the transferee was not liable for the debt at the time the assistance was granted. The lender shall complete Form FmHA or its successor agency under Public Law 103-354 1980-24, “Request Interest Assistance/Interest Rate Buydown/Subsidy Payment to Guaranteed Loan Lender,” to request payment for the Interest Assistance through the date of the transfer or assumption of the guaranteed loan.

6. Cash Flow

A cash flow budget of operation must show that a positive cash flow can be expected during the initial 24-month period of assistance. For those loans/lines of credit with terms less than 24 months, the operation must show a positive cash flow for the term of the loan/line of credit. Cash flow budget and positive cash flow are defined in exhibit D to supart B of 7 CFR, part 1980, as applicable, and must be calculated in accordance with 1980.113(d)(8) of subpart B of part 1980.

7. Cancellation of Interest

Lender certifies that the amount of interest reduction on the subject borrower's account will be permanently cancelled as it becomes due and no attempt will be made to collect that portion of the debt which will be paid by FmHA or its successor agency under Public Law 103-354.

8. Regulatory Changes

This agreement is subject to the present regulations of the FmHA or its successor agency under Public Law 103-354 and its future regulations not inconsistent with any provisions of this agreement.

9. Cancellation

The Interest Assistance Agreement is incontestable except for fraud or misrepresentation of which the lender has actual knowledge at the time this agreement is executed or for which the lender participates in or condones.

10. Excessive Interest Assistance

The Government may amend or cancel this agreement and collect from the lender any amount of reduction granted as a result of incomplete or inaccurate information, computation errors, or other circumstances which resulted in Interest Assistance payments that the lender was not entitled to receive.

11. Access to Lender's Files

Upon request by FmHA or its successor agency under Public Law 103-354, the lender will permit representatives of FmHA or its successor agency under Public Law 103-354 (or other agencies of the U.S. Department of Agriculture authorized by that Department) to inspect and make copies of any of the records of the lender pertaining to FmHA or its successor agency under Public Law 103-354 guaranteed loans. Such inspection and copying may be made during regular office hours of the lender, or any other time the lender and FmHA or its successor agency under Public Law 103-354 find convenient.

To the extent permitted by law and the supervisory agency, the lender agrees to allow FmHA or its successor agency under Public Law 103-354 access to audit findings by the lender's supervising agency when examining Interest Assistance claims.

ATTEST: ______(SEAL) Address: ATTEST: ______(SEAL) LENDER: By Title UNITED STATES OF AMERICA FARMERS HOME ADMINISTRATION By Title ACKNOWLEDGED Borrower