§ 1980.61 - Issuance of Lender's Agreement, Loan Note Guarantee, and Assignment Guarantee Agreement.

(a) Lender's Agreement. If FmHA or its successor agency under Public Law 103-354 finds that all requirements have been met:

(1) The lender and FmHA or its successor agency under Public Law 103-354 will execute Form FmHA or its successor agency under Public Law 103-354 449-35. The original will be delivered to FmHA or its successor agency under Public Law 103-354 and a signed duplicate original will be retained by the lender. There will be a Form FmHA or its successor agency under Public Law 103-354 449-35 executed for all loans and lines of credit guaranteed by FmHA or its successor agency under Public Law 103-354.

(2) In all cases, the lender's agreement will be executed no later than the time the Loan Note Guarantee is signed.

(b) Loan Note Guarantee. (1) Upon receipt of the Form FmHA or its successor agency under Public Law 103-354 449-35, and after all requirements have been met, FmHA or its successor agency under Public Law 103-354 will execute Form FmHA or its successor agency under Public Law 103-354 449-34. All original(s) will be provided to the lender and attached to the note(s). A conformed copy with copies of notes attached will be retained by FmHA or its successor agency under Public Law 103-354.

(2) In the event a lender has made a loan guaranteed by FmHA or its successor agency under Public Law 103-354 under previous regulations and has obtained a Form FmHA or its successor agency under Public Law 103-354 449-17, “Contract of Guarantee,” the lender may request the State Director to substitute a Loan Note Guarantee governed in all respects by these regulations for the previously issued Contract of Guarantee. The State Director will review the lender's written request for substitution of guarantees and may authorize the issuance of the new Loan Note Guarantee in exchange for the Contract of Guarantee. The lender will:

(i) Prepare and submit to FmHA or its successor agency under Public Law 103-354 a written request for such substituted guarantee.

(ii) Certify to FmHA or its successor agency under Public Law 103-354 that there is no adverse change in the borrower's financial situation, the collateral and terms of the loan remain the same as under the original guarantee, and the loan is in good standing.

(iii) Pay the required guarantee fee.

(iv) Certify to FmHA or its successor agency under Public Law 103-354 the outstanding principal amount of the loan.

(v) Execute Form FmHA or its successor agency under Public Law 103-354 449-35.

(3) If a lender has selected the multi-note system as provided in paragraph III A 2 of Form FmHA 449-35, a Loan Note Guarantee will be prepared and attached to each note the borrower issues. All the notes will be listed on Form FmHA or its successor agency under Public Law 103-354 449-34.

(4) If the lender requests a series of new notes to replace previously issued guaranteed notes as provided in paragraph III A (b) of Forms FmHA 449-35 the County Supervisor may reissue the new Loan Note Guarantee in exchange for the original Loan Note Guarantee.

(c) Assignment Guarantee Agreement. In the event the lender assigns the guaranteed portion of the loan to a holder(s) in accordance with the provision of the applicable subpart, the lender, holder, and FmHA or its successor agency under Public Law 103-354 will execute Form FmHA or its successor agency under Public Law 103-354 449-36. The original of the agreement(s) will be provided to the holder with conformed copy(s) to the lender and FmHA or its successor agency under Public Law 103-354. If the lender desires to assign a part(s) of the guaranteed loan to a holder(s), an Assignment Guarantee Agreement will be executed for each assigned portion. Attached to the Assignment Agreement will be a copy of the borrower's note(s) and a copy of the Loan Note Guarantee.

(d) Refusal to execute contract. If FmHA or its successor agency under Public Law 103-354 determines that it cannot execute the Loan Note Guarantee because all requirements have not been met, it will promptly inform the lender on Form FmHA or its successor agency under Public Law 103-354 449-13, “Denial Letter,” of the reasons, and give the lender a reasonable period within which to satisfy FmHA or its successor agency under Public Law 103-354 objections. If the lender is unable to satisfy FmHA or its successor agency under Public Law 103-354 objections, then the lender will be informed of the appeal rights as set out in § 1980.80 of this subpart. If the lender writes FmHA or its successor agency under Public Law 103-354 within the period allowed requesting additional time to satisfy the objections, FmHA or its successor agency under Public Law 103-354 may, in writing, grant such additional time as it considers necessary and reasonable under the circumstances. If the lender satisfies the objections with the time allowed and otherwise complies with these regulations, the guarantee will be issued.

(e) Cancellation of obligations. If the conditions for the loan or line of credit are rejected or cannot be met after completion of any appeal, FmHA or its successor agency under Public Law 103-354 will prepare and submit to the Finance Office, Form FmHA or its successor agency under Public Law 103-354 1940-10, “Cancellation of U.S. Treasury Check and/or Obligation.”

(f) Payment of guarantee fee. The lender will prepare and deliver a Form FmHA or its successor agency under Public Law 103-354 1980-19, “Guaranteed Loan Closing Report,” for each loan or line of credit to be guaranteed and deliver the guarantee fee to the FmHA or its successor agency under Public Law 103-354 representative who concurrently delivers the Loan Note Guarantee(s).

(g) Authorized FmHA or its successor agency under Public Law 103-354 representatives to execute forms. State Directors, District Directors, State Program Loan Chiefs, and County Supervisors are authorized to execute the Lender's Agreement (Form FmHA or its successor agency under Public Law 103-354 449-35, the Loan Note Guarantee, and/or the Assignment Guarantee Agreement.