§ 1945.183 - Loan approval or disapproval.

(a) Reverification before approval. Before an EM loan is approved the following actions must be taken:

(1)-(3) [Reserved]

(4) To prevent the duplication of benefits, FmHA and SBA have agreed to coordinate their respective EM and disaster loan program activities.

(i)-(ii) [Reserved]

(iii) Applicants who receive SBA physical loss loans for losses to dwellings and/or household contents may also file for Agency EM loan assistance based on farm losses other than to dwellings. In those cases where an Agency loan can be approved, Agency will either reduce the Agency EM loan by the amount of the SBA loan (which may require SBA to subordinate its lien position(s)), or refinance the SBA loan by using EM loan funds to pay SBA directly. An EM loan will not be approved until it is determined that the requirements of § 1945.163(e) of this subpart will be met. When an EM loan is approved, the Agency County Office will notify the SBA Disaster Area Office pursuant to paragraph (a)(4)(ii) of this section.

(b) Administrative determination and responsibilities. When the Agency certification has been made and the reverification has been completed, and before approving the loan, the loan approval official will determine administratively whether:

(1) The Agency has certified, in writing, that the applicant is eligible.

(2) The applicant has satisfactory tenure arrangements on the farm(s) to be operated.

(3) The proposed farm and home operations of the applicant are reasonably sound, the purposes are authorized, and the EM loan is needed.

(4) The proposed loan shows a positive cash flow based upon a realistic farm and home plan.

(5) The security requirements can be met.

(6) The certifications required of the applicant have been made and are a part of the loan docket.

(7) The loan meets all other Agency requirements.

(8) The applicant has access to any additional financing needed to continue the farming operation. In making this determination, consideration will be given to whether the applicant qualifies for OL, FO and SW loan assistance, or for a loan from other creditors with or without Agency subordination.