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Federal Register / Vol. 86, No. 235 / Friday, December 10, 2021 / Rules and Regulations
guarantee agreement to be completed when the form is originally prepared.
Agency Response: The Agency reviewed this request and determined that since some lenders require this form and some do not, we did not want to add this requirement to the relevant forms and leave as a standalone form that lenders may or may not complete based on their process.
Section 5001.454

Guarantee Fee
Comment: Two commenters had an issue with 7 CFR 5001.454c and the additional 0.50 percent guarantee fee for issuing the loan note guarantee prior to construction which may not be passed on to the borrower. The commenters stated rather than invite potential conflict with the lender, why not just accept that the fee is 0.50 percent higher for construction loans. It is a benefit to the borrower as well as to the lender.
The borrower is likely not to have its project financed unless the lender obtains the guarantee during construction.
Agency Response: The Agency agrees with the lenders comment that not allowing the lender to pass the fee on to the borrower may have unintended consequences. Issuing the guarantee prior to construction completion enabling the borrower to avoid cost of construction financing is a significant benefit to the borrower, therefore the Agency has removed this restriction.
Section 5001.513
Changes
Interest Rate
Comments: Some commenters requested consideration be given to allowing a borrower to switch to a fixed interest rate even if it is higher than the variable rate in effect on the loan.
Agency response: The Agency reviewed this and has determined that if the borrower is requesting the rate change whether to a lower or a higher fixed rate, the Agency has removed the restriction of only allowing a rate change to a lower interest rate.

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III. Summary of Changes to Rule 1. The definition of affiliate is updated to further clarify what constitutes an affiliate.
2. The definition of energy efficiency improvement is updated to conform with 7 CFR 4280.
3. The definition of existing business is updated to further define what it means for an existing business to be in operation.
4. The definition of new business is updated to further define what it means for a new business to be in operation.

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5. The definition of final loss claim is updated to correct an incorrect site reference.
6. The definition of power purchase agreement is updated to conform with 7 CFR 4280.
Section 5001.8 Approvals, Regulations, and Forms Paragraph a is revised to clarify what constitutes an electronic signature.
Paragraph d is revised to update the website address where this regulation and forms referenced can be found.
Paragraph e is revised to clarify what constitutes an electronic signature for the Lender.
7 CFR 5001.104

Exception Authority
Paragraph c is revised to clarify when a utility project that is serving both rural and non-rural areas is eligible for a loan guarantee.
7 CFR 5001.105 Eligible B&I Projects and Requirements 1. The introductory paragraph is revised to clarify that the list of eligible projects is not an exhaustive list of the types of projects that will be considered as eligible B&I projects.
2. Paragraph b1 is updated to clarify that a B&I guaranteed loan may be used for the purchase and development of land, buildings, or infrastructure for public or private commercial enterprises.
3. Paragraph b8 is revised to clarify exclusion of owner-occupied housing in the B&I guarantee program.
4. Paragraphs b9 and b10 are combined and edited to clarify when B&I funds may be utilized to fund a CF
project.
5. A new paragraph b10 is added to clarify when B&I funds may be used for the development and construction of broadband and telecommunication systems, including modification of existing systems, that are not otherwise eligible under RUS, existing RUS
borrowers, or if funding is not available in the eligible RUS program, subject to the public notice filing requirements of 7 CFR 1738.106a and the additional reporting requirements of 7 CFR
1738.107.
6. Paragraph d1i is revised to clarify the length of time the minimum balance sheet equity must be maintained.
7. Paragraph d1ii is revised to clarify the length of time the minimum balance sheet equity must be maintained.
8. Paragraph d2i is revised to clarify the length of time the minimum balance sheet equity must be maintained.

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9. Paragraph d2ii is revised to clarify the length of time the minimum balance sheet equity must be maintained.
10. Paragraph d3i is revised to align it with Section 105d2i.
11. Paragraph d3ii is revised to align it with Section 105d2ii.
12. Paragraph d4i is revised to align it with Section 105d2i.
13. Paragraph d4ii is revised to align it with Section 105d2ii.
14. Paragraph d5ii is revised by removing the requirement for historical financial statements for personal loan guarantors, as this was added in error.
7 CFR 5001.115
General
Ineligible Projects-

Paragraph n is amended to clarify when owner occupied housing is considered eligible and removed paragraph s the ineligibility of selfstorage facilities.
7 CFR 5001.121
Funds
Eligible Uses of Loan
1 The introductory paragraph is updated to allow a recipient of a loan guarantee to use up to 10 percent of project funds to construct, improve, or acquire broadband infrastructure related to the project financed, to conform with the requirements of 7 CFR part 1980, subpart M.
2 Paragraph 7 CFR 5001.121 c6 is amended to revise the reference to a preliminary review.
7 CFR 5001.126

Borrower Eligibility
Paragraph e is amended to add a new subparagraph 3 End users, to conform with 7 CFR 4280. This revision brings consistency to REAP on the analysis of the eligibility of the applicant controlling interest of an enduser.
7 CFR 5001.130
Requirements
Lender Eligibility
Paragraph a is amended to include new requirements for lenders to be registered in and maintain an account in the System for Award Management SAM to conform with 2 CFR 25.
7 CFR 5001.141
Credits
New Market Tax
Paragraph a2 is amended to revise an incorrect section reference.
7 CFR 5001.202
Evaluation
Lenders Credit
Paragraph b5 is amended to clarify where to find the specific program requirements for supporting documentation.

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