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Federal Register / Vol. 86, No. 150 / Monday, August 9, 2021 / Rules and Regulations
appurtenances that would normally pass with the property and are necessary for the proposed operation of the farm.
769.155

Loan limitations.

a For each application period:
1 Loans to intermediaries will not exceed $5,000,000 to any intermediary;
2 Loans to ultimate recipients will not exceed the loan limit for a Direct Farm Ownership loan as specified in 761.8a1i of this chapter to any ultimate recipient.
b Loans to the ultimate recipient may not be used:
1 For any land improvement, development purpose, acquisition or repair of buildings, acquisition of personal property, payment of operating costs, payment of finders fees, or similar costs;
2 For any purpose that will contribute to excessive erosion of highly erodible land or for the conversion of wetlands to produce an agricultural commodity as specified in 7 CFR part 12; or 3 To resolve heirs property issues on property that will not be used, or has traditionally not been used, for production agricultural purposes.
c The HPRP loan amount may not exceed the current market value of the land determined by an appraisal that meets the requirements specified in 761.7b1 of this chapter; and d Intermediaries who receive HPRP
funding are not permitted to charge the ultimate recipients for mediation services provided through grants received under the Agencys State Agriculture Mediation Program part 785 of this chapter.

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769.156

Rates and terms.

a For loans to intermediaries:
1 The rate of interest for an HPRP
loan will bear a fixed rate over the term of the loan of 1 percent or less as determined by the Administrator;
2 The repayment term for an HPRP
loan will not exceed 30 years; and 3 Annual payments will be established. Interest will be due annually; however, principal payments may be deferred by the Agency.
b Loans to the ultimate recipient from the HPRP revolving loan fund are required to have rates and terms clearly and publicly disclosed to qualified ultimate recipients.
1 The interest rate for loans to ultimate recipients will be set by the intermediary within the limits established by the intermediarys relending plan approved by the Agency.
The rate should normally be the lowest rate sufficient to cover the loans
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proportional share of the HPRP
revolving loan funds debt service costs, reserve for bad debts, and administrative costs.
2 Loans made by an intermediary to an ultimate recipient will be scheduled for repayment over a term negotiated by the intermediary and ultimate recipient;
but in no case will the loan term exceed 30 years, unless otherwise specified by the Agency.
769.157

Intermediarys relending plan.

a The intermediary must submit a proposed relending plan which, once approved by the Agency, will be incorporated by reference as an attachment to the HPRP loan agreement.
The relending plan will explain in sufficient detail the mechanics of how the funds will be distributed from the intermediary to the ultimate recipient.
b The intermediarys relending plan must include copies of the intermediarys proposed application forms, loan documents and security instruments, and should include information regarding:
1 The service area;
2 The proposed fees and other charges the intermediary will assess the ultimate recipients;
3 Eligibility criteria for the ultimate recipient;
4 Authorized loan purposes;
5 Loan limitations;
6 Loan underwriting methods and criteria;
7 Loan rates and terms;
8 Security requirements;
9 The method of disbursement of the funds to the ultimate recipient;
10 The process for addressing environmental issues on property to be purchased;
11 The proposed process for reviewing loan requests from ultimate recipients and making eligibility determinations;
12 A description of the established internal credit review process;
13 The monitoring and servicing of loans distributed to the ultimate recipients;
14 The amount that will be set aside to maintain a reserve for bad debts; and 15 A description of the requirements for maintaining adequate hazard insurance, life insurance for principals and key employees of the ultimate recipient, workmens compensation insurance on ultimate recipients, flood insurance, and fidelity bond coverage.
769.158

Intermediarys loan application.

a The intermediarys loan application will consist of:
1 An application form provided by the Agency;

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2 A relending plan addressing the items in 769.157;
3 A copy of the intermediarys certification as a community development financial institution;
4 A signed form, to be provided by the Agency, assuring the intermediarys compliance and continued compliance with Title IX of the Education Amendments of 1972 20 U.S.C. 1681
1688 and Title VI of the Civil Rights Act of 1964 42 U.S.C. 2000d1
2000d7;
5 Other evidence the Agency requires to determine that the intermediary satisfies the eligibility requirements in 769.152, and that the intermediarys proposed relending plan is feasible and meets the objectives of HPRP;
6 Documentation of the intermediarys ability to administer the HPRP loan funds in accordance with this subpart; and 7 The names of attorneys or any third parties involved with the application process.
b Prior to loan approval and advancing funds, the intermediary must certify that:
1 The intermediary and its officers, or agents are not delinquent on any Federal debt, including, but not limited to, federal income tax obligations, federal loan or loan guarantee, or obligation from another Federal agency.
If delinquent, the intermediary must provide in writing the reasons for the delinquency, and the Agency will take this into consideration in deciding whether to approve the loan or advance of funds;
2 The intermediary and its officers have not been convicted of a felony criminal violation under Federal law in the 24 months preceding the date of the loan application;
3 The intermediary is in compliance with the restrictions and requirements in 31 U.S.C. 1352, limitation on use of appropriated funds to influence certain Federal contracting and financial transactions;
4 The intermediary has been informed of the options by the Federal Government to collect delinquent debt;
and 5 The intermediary, its officers, or agents are not debarred or suspended from participation in Government contracts or programs.
c An intermediary that has received one or more HPRP loans may apply for and be considered for subsequent HPRP
loans provided:
1 The intermediary is relending all collections from loans made from its revolving fund in excess of what is needed for the required debt service
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