§ 1948.126 - Loan closing.

(a) After the letter of conditions has been issued and proposed closing documents have been prepared, FmHA or its successor agency under Public Law 103-354 will forward the loan docket to the Regional OGC in the region in which the borrower is located for review. For the purpose of this paragraph, the District of Columbia is considered to be in Maryland. After an administrative review, FmHA or its successor agency under Public Law 103-354 will include with the docket a letter with recommendations and indicating any special items, documents, or problems that need to be addressed specifically which may have a significant impact upon the loan or may be contrary to the regulation. The docket will be assembled for OGC review and indexed and tabbed. The OGC will review the docket and furnish advice to FmHA or its successor agency under Public Law 103-354 on noted deficiencies. Upon receipt of the OGC's advice, FmHA or its successor agency under Public Law 103-354 will correct or cause to be corrected any noted deficiencies. Loans will be closed by FmHA or its successor agency under Public Law 103-354 with the assistance of the OGC Regional Attorney who will issue closing instructions detailing the requirements and any actions necessary to proceed with the loan closing.

(b) In all cases, the Administrator or designee will conduct a review before the loan is closed to assure that all requirements of the application, letter of conditions, and Loan Agreement have been met including required certifications, and will provide such verification in the loan file, including arrangements for annual audit reports. The intermediary's certifications will include the following:

(1) No major changes have been made in the intermediary's work plan except those approved in the interim by FmHA or its successor agency under Public Law 103-354.

(2) All requirements of the letter of conditions have been met.

(3) Equity requirements have been met. A reconciliation of the intermediary's assets and net worth from the latest financial statement to the date of loan closing will be provided with this certification.

(4) There has been no material adverse change in the intermediary's financial condition nor any material adverse change in the intermediary since the issuance of the letter of conditions. If there have been adverse changes, they must be explained by the intermediary. They may be waived, at the sole discretion of FmHA or its successor agency under Public Law 103-354. Financial data must not be more than 60 days old at loan closing.

(c) FmHA or its successor agency under Public Law 103-354 personnel shall not sign any documents other than those specifically provided for in this subpart.

(d) The National Office will review any requests for changes to the letter of conditions. The National Office will approve only minor changes which do not materially affect the project, its capacity, employment, original projections or credit factors. Changes in legal entities or where tax considerations are the reason for change will not be approved.

(e) At loan closing the intermediary will provide sufficient evidence to enable FmHA or its successor agency under Public Law 103-354 to ascertain that no claim or liens of laborers, materialmen, contractors, subcontractors, suppliers of machinery and equipment, or other parties are against the security of the intermediary, and that no suits are pending or threatened that would adversely affect the security of the intermediary when the security instruments are filed.

(f) When the loan has been closed, the administrator or designee will submit the security instruments, other documents used in closing, and a statement that administrative requirements have been met to the Regional Attorney. The Regional Attorney will review the submitted material and determine whether all legal requirements have been met.