Sale or exchange of security property.

CFR · 2024-01-01 · US · Title 7

A cash sale of all or a portion of a borrower's assets or an exchange of security property may be approved subject to the conditions set forth below. (a) (2) The State Director is authorized to approve real estate transactions except as noted in the following paragraph. (3) Approval of the Administrator must be obtained when a substantial loss to the Government will result from a sale; one or more members of the borrower's organization proposes to purchase the property; it is proposed to (b) (1) The consideration is adequate; (2) The release will not prevent carrying out the purpose of the loan; (3) The remaining property is adequate security for the loan or the transaction will not adversely affect Rural Development's security position; (4) If the property to be sold or exchanged is to be used for the same or similar purposes for which the loan or grant was made, the purchaser will: (i) Execute Form RD 400-4, “Assurance Agreement.” The covenants involved will remain in effect as long as the property continues to be used for the same or similar purposes for which the loan or grant was made. The instrument of conveyance will contain the covenant referenced in § 1951.204 of this subpart; and (ii) Provide to Rural Development a written agreement assuming all rights and obligations of the original grantee if grant funds were provided. See § 1951.215 of this subpart for additional guidance on grant agreements. (5) The proceeds remaining after paying any reasonable and necessary se

official document · source cfr-2024 · id 7:§ 1951.226