Transfer and assumptions.

CFR · 2024-01-01 · US · Title 7

(a) (2) Except as described in paragraph (d) of this section, if a security property is transferred with the lender's knowledge without assumption of the debt, Rural Development will void the guarantee. (b) (2) Rural Development may approve a transfer with an assumption of the outstanding debt if the following conditions are met: (i) The transferee must assume the entire outstanding debt and acquire all property securing the guaranteed loan balance; however, the transferor must remain personally liable. The transferor must pay any recapture as a result of interest subsidy granted, if applicable, owed at the time of the transfer and assumption. (ii) The transferee must meet the eligibility requirements described in subpart D of this part. (iii) The property must meet the site and dwelling requirements described in subpart E of this part, or be brought to those standards prior to the transfer. Guaranteed loans secured by properties located in areas that have ceased to be rural may be assumed notwithstanding the fact that the property is located in a non-rural area. (iv) The priority of the existing lien securing the guaranteed loan must be maintained or improved. (v) Any new rates and terms must not exceed the rates and terms allowed for new loans under this part, and the interest rate must not exceed the interest rate on the initial loan. (vi) A new guarantee fee, calculated based on the remaining principal balance, must be paid to Rural Development in accordance with § 3555.1

official document · source cfr-2024 · id 7:§ 3555.256