§ 1980.851 - Processing applications.

(a) Preapplications. (1) The County Office may handle initial inquiries and provide basic information about the program. They are to provide Standard Form (SF) 424.1 or 424.2, “Application for Federal Assistance.” The County Supervisor will assist borrowers as needed in completing SF-424 and in filing written notice of intent and request for priority recommendations with the appropriate clearinghouse (except Federally recognized Indian tribes which will be dealt with in accordance with § 1940.453(c) of subpart J of part 1940 of this chapter). The County Supervisor will inform the borrower that if credit for the project is available from commercial sources without the guarantee at reasonable rates and terms, the borrower is not eligible for a loan guaranteed by FmHA or its successor agency under Public Law 103-354. Preapplications filed in the County Office will be forwarded immediately to the District Office. The applicant/borrower will be informed that further processing will be handled by the District Office. An information folder will be established and maintained by the County Office once a preapplication is received. In the event the preapplication is filed in the District Office, the District Director may assist the borrower in completing the preapplication requirements. The District Director will meet with the borrower/applicant, whenever appropriate, to discuss FmHA or its successor agency under Public Law 103-354 preapplication processing. The appropriate information to set up the County Office information file will be sent to the County Supervisor by the District Director. Guidance and assistance will be provided by the State Director, as needed, for orderly application processing. The District Director will determine that the preapplication is properly completed and fully reviewed. The District Director will then forward the preapplication package to the State Director. The preapplication package will contain:

(i) Eligibility determination and recommendations.

(ii) One copy of SF-424.

(iii) State intergovernmental review comments and recommendations for the borrower's project (clearinghouse comments.)

(iv) Priority recommendations.

(v) Supporting documentation necessary to make an eligibility determination, such as financial statements, audits, or copies of organizational documents or existing debt instruments. The District Director will advise borrowers/applicants on what documents are necessary. Borrowers should not be required to expend significant amounts of money or time developing supporting documentation at the preapplication stage.

(vi) Information on applicant.

(2) The State Director will review each SF-424 along with other information that is deemed necessary to determine whether financing from commercial sources at reasonable rates and terms is available without a guarantee. If credit elsewhere is indicated, the State Director will instruct the District Director to so inform the applicant.

(3) If preapplication information indicates the project is ineligible, does not have sufficient priority, or that funds or guarantee authority are not available for the project, FmHA or its successor agency under Public Law 103-354 will so inform the applicant. The applicant will be notified in writing with all reasons for the decision indicated. If it appears that the project is eligible, has sufficient priority, is economically feasible, and loan guarantee authority is available, FmHA or its successor agency under Public Law 103-354 will inform the applicant and borrower in writing and request that they complete the application. The applicant must be informed that an environmental review has not been conducted and no major commitment should be made that could affect the consideration of alternatives.

(b) Applications—(1) Application conference. When an applicant is notified to proceed with an application, the District Director should arrange for a conference with the applicant and borrower to provide copies of appropriate appendices and forms, and furnish guidance necessary for orderly application processing. The District Director will confirm decisions made at this conference by letter to the applicant and borrower. As the application is being processed, and the need develops for additional conference, the District Director will arrange with the applicant for such conferences.

(2) Content of application package. (i) Form FmHA or its successor agency under Public Law 103-354 1980-10, “Application for Loan and Guarantee.”

(ii) Form FmHA or its successor agency under Public Law 103-354 1910-11, “Applicant Certification Federal Collection Policies for Consumer or Commercial Debts.”

(iii) Form FmHA or its successor agency under Public Law 103-354 1940-20, “Request for Environmental Information.”

(iv) Preliminary architectural or engineering report as appropriate, in accordance with Guides 6, 7, and 8 of subpart A of part 1942 (available in any FmHA or its successor agency under Public Law 103-354 office).

(v) Cost estimates.

(vi) Appraisal reports (as appropriate).

(vii) Credit reports obtained by the lender or FmHA or its successor agency under Public Law 103-354 on the borrower.

(viii) Form FmHA or its successor agency under Public Law 103-354 400-1, “Equal Opportunity Agreement.”

(ix) Copies of building permits, if applicable, and any necessary certifications and recommendations of appropriate regulatory or other agencies having jurisdiction over the project.

(x) Financial feasibility study, when required.

(xi) Proposed loan agreement.

(xii) Complete environmental review.

(xiii) Any additional information as may be required.

(3) Review of decision. If at any time prior to issuance of the conditional commitment, it is decided that favorable action will not be taken on a preapplication or application, the District Director will notify the applicant in writing of the reasons why the request was not favorably considered. The notification to the applicant will state that a review of this decision by FmHA or its successor agency under Public Law 103-354 may be requested by the applicant under subpart B of part 1900 of this chapter. The following statement will also be made on all notifications of adverse action. “The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income is derived from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Federal Agency that administers compliance with this law is the Federal Trade Commission, Equal Credit Opportunity, Washington, DC 20580.”