Loan contract provisions.

CFR · 2024-01-01 · US · Title 7

Loan contracts executed pursuant to this subpart shall contain such provisions as RUS determines are appropriate to further the purposes of the RE Act and to ensure that the security for the loan will be reasonably adequate and that the loan will be repaid according to the terms of the promissory note. Such loan contracts will contain provisions addressing, but not necessarily limited to, the following matters: (a) Description of the purpose of the loan; (b) Specification of the interest to be charged on the loan, including the method for determining the interest rate if it is not fixed for the entire term of the loan; (c) Specification of the method for repaying the loan principal, including the final maturity of the loan; (d) The conditions under which the loan may be prepaid before its maturity date, including but not limited to requirements regarding the prepayment of loans made concurrently by RUS and another secured lender; (e) The method for making scheduled payments on the loan; (f) Accounting principles and system of accounts, and RUS authority to approve the accountant used by the borrower; (g) The method and time period for advancing loan funds and the conditions precedent to the advance of funds; (h) Representations and warranties by the borrower as a condition of obtaining the loan, including but not limited to: the legal authority of the borrower to enter into the loan contract and operate its system; that the loan documents will be a legal, valid and binding ob

official document · source cfr-2024 · id 7:§ 1718.103