Collections, payments and refunds.

CFR · 2024-01-01 · US · Title 7

Payments and refunds are handled in accordance with the following: (a) (2) Regular payments for Community and Insured Business Programs borrowers are all payments other than extra payments and refunds. Such payments are usually derived from facility revenues, and do not include proceeds from the sale of security. They also include payments derived from sources which do not decrease the value of Rural Development's security. (i) Distribution of such payments is made as follows: (A) First, to the Rural Development loan(s) in proportion to the delinquency existing on each. Any excess will be distributed in accordance with paragraphs (a)(2)(i) (B) and (C) of this section. (B) Second, to the Rural Development loan or loans in proportion to the approximate amounts due on each. Any excess will be distributed according to paragraph (a)(2)(i)(C) of this section. (C) Third, as advance payments on Rural Development loans. In making such distributions, consider the principal balance outstanding on each loan, the security position of the liens securing each loan, the borrower's request, and related circumstances. (ii) Unless otherwise established by the debt instrument, regular payments will be applied as follows: (A) For amortized loans, first to interest accrued (as of the date of receipt of the payment), and then to principal. (B) For principal-plus-interest loans, first to the interest due through the date of the next scheduled installment of principal and interest and then to princip

official document · source cfr-2024 · id 7:§ 1951.221