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Federal Register / Vol. 86, No. 150 / Monday, August 9, 2021 / Rules and Regulations reserve and approved administrative costs;
2 The outstanding loans of the intermediarys HPRP revolving loan fund are performing; and 3 The intermediary is following all regulatory requirements and is complying with the terms and conditions of its HPRP loan agreements and the intermediarys relending plans approved by the Agency.
d The Agency may require the intermediary to provide information relating to applications from ultimate recipients the intermediary has in process.

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769.159

Processing loan applications.

a Application dates. The opening and closing dates for the HPRP
applications submission will be announced in Federal Register.
b Intermediary loan application review. After the closing date, the Agency will review applications from intermediaries for compliance with the provisions of this subpart.
c Loan approval. Loan approval is subject to the availability of funds. The loan will be considered approved for the intermediary on the date the Agency signs the obligation of funds confirmation.
d Preferences for loan funding. The Agency will fund eligible applications from intermediaries:
1 First, to those with not less than 10 years experience serving socially disadvantaged farmers and ranchers that are located in states that have adopted a statute consisting of an enactment or adoption of the Uniform Partition of Heirs Property Act, as approved and recommended for enactment in all States by the National Conference of Commissioners on Uniform State Laws in 2010, that relend to owners of heirs property as defined by the Uniform Partition of Heirs Property Act;
2 Second, to those that have applications from ultimate recipients already in process, or that have a history of successfully relending previous HPRP
funds; and 3 Multiple applications in the same priority tier, will be processed based by date of application received; and 4 Any remaining applications, after priority tiers 1 and 2 have be funded, will be funded in order of the date the application was received.
e Current information required.
Information supplied by the intermediary in the loan application must be updated by the intermediary if the information is more than 90 days old at the time of loan closing.

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769.160

Letter of conditions.

769.162

a If the Agency approves a loan application, the Agency will provide the intermediary with a letter of conditions listing all requirements for the loan.
b Immediately after reviewing the conditions and requirements in the letter of conditions, the intermediary should complete, sign, and return the form provided by the Agency indicating the intermediarys intent to meet the conditions.
1 If certain conditions cannot be met, the intermediary may propose alternative conditions to the Agency.
2 The Agency loan approval official must concur with any changes made to the initially issued or proposed letter of conditions prior to loan approval.
c The loan request will be considered withdrawn if the intermediary does not respond within 15 calendar days from the date the letter of conditions was sent.
769.161

Loan agreements.

a The HPRP loan agreement will specify the terms of each loan, such as:
1 The amount of the loan;
2 The interest rate;
3 The term and repayment schedule;
4 Any provisions for late charges;
5 The disbursement procedure;
6 Provisions regarding default; and 7 Fidelity insurance.
b As a condition of receiving HPRP
loan funds, the intermediary will agree:
1 To obtain written approval from the Agency prior to making any changes in the intermediarys articles of incorporation, charter, or by-laws;
2 To maintain a separate ledger and segregated account for the HPRP
revolving loan fund;
3 To comply with the Agencys annual reporting requirements in 769.164g;
4 To obtain prior written approval from the Agency regarding all forms to be used for relending purposes, as well as the intermediarys policy with regard to the amount and security to be required;
5 To obtain written approval from the Agency prior to making any significant changes in the proposed forms, security policy, or the intermediarys relending plan;
6 To maintain the collateral pledged as security for the HPRP loan; and 7 To request demographics data from ultimate recipients on race, ethnicity, and gender. The response to the data request will be voluntary. The intermediary will maintain the information when voluntarily submitted by the ultimate recipient. The intermediary agrees to make this information available when requested by FSA.

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Security.

a Loans to intermediaries. Security pledged to the Agency by intermediaries must be sufficient to reasonably assure repayment of the loan, while taking into consideration the intermediarys financial condition, the intermediarys relending plan, and the intermediarys management ability. The Agency will require adequate security, as determined by the Agency, to fully secure the loan:
1 Primary security for HPRP loan will be in the form of a first lien upon the intermediarys revolving loan fund and such accounts must be fully covered by Federal deposit insurance or fully collateralized with other securities in accordance with normal banking practices and all applicable State laws.
The form of the control agreement with the depository bank that will be used to perfect the Agencys security interest in the depository accounts used by the intermediary to maintain HPRP funds must be approved by the Agency. The control agreement will not require the Agencys signature for withdrawals.
Among other things, the intermediary must use a depository bank that agrees to waive its offset and recoupment rights against the depository account and subordinate any liens it may have against the HPRP depository account in favor of the Agency;
2 Additional security as needed, which includes, but is not limited to:
i Assignments of assessments, taxes, levies, or other sources of revenue as authorized by law;
ii Financial assets of the intermediary and its members; and ii Capital assets or other property of the intermediary and its members.
b Loans to the ultimate recipient.
The intermediary is responsible for obtaining adequate security for all loans made to ultimate recipients from the HPRP revolving loan funds as specified in the HPRP loan agreement and intermediarys relending plan. The Agency will only require concurrence with the intermediarys proposed security for a loan to an ultimate recipient from the HPRP revolving loan fund if the proposed security will also serve as security for an unrelated Agency loan.
769.163

Loan closing.

a HPRP loan documents and security instruments. At loan closing, the intermediary will execute the HPRP
loan agreement or supplemental loan agreement, HPRP promissory note, the HPRP security agreement, the control agreement, and any other security instruments required by the Agency.

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