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Federal Register / Vol. 86, No. 92 / Friday, May 14, 2021 / Rules and Regulations
be ranked accordingly in the quarterly competitions. Failing applications under this section will be scored 0 and experienced MDOs may be required to complete the application requirements of paragraph b of this section.

d Closing. Awardees unable to complete closing for an approved obligation within 90 days or an extended date approved by the Agency will forfeit their funding award in accordance with 4280.311e9.

4280.317
funding.

4280.3184280.319

Selection of applications for
All eligible applications received will be scored using the scoring criteria specified in 4280.316 and funded in descending order from the highest total score to applications receiving 60
points, subject to the authorization of appropriations for the Federal FY. If two or more applications have the same score and available funds cannot fund the individual projects, the Administrator may prioritize such applications to help the program achieve overall geographic diversity.
a Timing and submission of applications. 1 All applications must be submitted as a complete application in one package of materials. Packages must be in the order of appearance in 4280.315. Applications that are disorganized or otherwise not ready for evaluation will be returned to the applicant and not considered for funding.
2 Applications will be accepted on a continuing basis at any Rural Development State Office and will compete nationally for available funds on a quarterly basis using Federal fiscal quarters.
3 Applications received will be reviewed, scored, and ranked quarterly.
Unless withdrawn by the applicant, the Agency will retain unsuccessful applications that score 60 points or more for consideration in subsequent reviews, through a total of four quarterly reviews. Applications unsuccessful after competing for funds in four quarters will be returned to the applicant.
b Availability of funds. If an Application is received, scored, and ranked, but insufficient funds remain to fully fund the project, the Agency may elect to fund an Application requesting a smaller amount that has a lower score.
Before this occurs, the Agency, as applicable, will provide the higher scoring applicant the opportunity to reduce the amount of its request to the amount of funds available. If the applicant agrees to lower its request, it must certify that the purposes of the project can be met, and the project is financially feasible at the lower amount.
c Applicant notification. The Agency will notify applicants regarding their selection or non-selection, provide appeal rights of unsuccessful applicants, and provide closing procedures for the loan and/or grant awardees.

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4280.320

Reserved
Grant administration.

a Oversight. Any MDO receiving a grant under this program is subject to Agency oversight, with site visits and inspection of records occurring at the discretion of the Agency. In addition, MDOs receiving a grant under this subpart must submit reports, as specified in paragraphs a1 through 3 of this section.
1 On a quarterly basis, within 30
days after the end of each Federal fiscal quarter, the microlender will provide to the Agency an Agency-approved quarterly report containing such information as the Agency may require to ensure that funds provided are being used for the purposes for which the grant was made, including:
i Narrative reporting information as required by Office of Management and Budget OMB circulars and successor regulations. This narrative will include information on the MDOs TA, training, and/or enhancement activity, and grant expenses, milestones met, or unmet, explanation of difficulties, observations and other such information;
ii If requesting grant funds at the time of reporting, an executed SF270
form and a brief description of the proposed activity-based expenditures are required.
2 If a microlender has more than one grant from the Agency, a separate report must be made for each grant.
3 Other reports may be required by the Agency from time to time in the event of poor performance or other such occurrences that require more than the usual set of reporting information.
b Payments. The Agency will make grant payments not more often than quarterly. The first grant payment may be made in advance and will equal no more than one fourth of the grant award.
Other payment requests must be submitted on Standard Form 270 and will only be paid if the MDOs reports are up to date and approved.
4280.321

Grant and loan servicing.

In addition to the ongoing oversight of the participating MDOs, all grants will be serviced in accordance with applicable regulations, including 7 CFR
part 1951, subparts E and O, 7 CFR part 3, and the Office of Management and Budget OMB regulations including, but not limited to, 2 CFR parts 200, 215,
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220, 230, and OMB Circulars A110 and A133. Loans to microlenders will be serviced in accordance with 7 CFR part 1951, subparts E, O, and R, and OMB
Circular A129.
4280.322 Loans from the microlenders to microentrepreneurs.

The primary purpose of making a program loan to a microlender is to enable that microlender to make microloans to rural microenterprises and microentrepreneurs. It is the responsibility of each microlender to make microloans in such a fashion that the terms and conditions of the microloan will support microborrower success while enabling the microlender to repay its loan from the Agency. It is the responsibility of each microborrower to repay the microlender in accordance with the terms and conditions agreed to with the microlender. The microlender is responsible for full repayment to the Agency of its loan regardless of the performance of its microloan portfolio.
a Maximum microloan amount. The maximum amount of a microloan made under this program will be $50,000. The total outstanding balance of microloans to any microborrower may not exceed $50,000.
b Microloan terms and conditions.
The terms and conditions for microloans made by microlenders will be negotiated between the prospective microborrower and the microlender, with the following limitations:
1 No microloan may have a term of more than 10 years;
2 The interest rate charged to the microborrower will be established at or before the microloan closing and at such a rate that the microloan is affordable to the microborrower and provides a reasonable margin of earnings to the microlender.
c Microloan insurance requirements.
The microlender has full discretion to require reasonable hazard, key person, and other insurance coverage from the microborrower as part of the loan transaction.
d Credit elsewhere test.
Microborrowers will be subject to a credit elsewhere test so that the microlender will make loans only to those borrowers that cannot obtain business funding of $50,000 or less at affordable rates and on acceptable repayment terms. Each microborrower file must contain evidence that the microborrower has sought credit elsewhere or that the rates and terms available within the community at the time were outside the range of the microborrowers affordability. Evidence may include a comparison of rates, loan
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