Special servicing actions related to loan accounts.

CFR · 2024-01-01 · US · Title 7

(a) (b) (1) Loan reamortizations will only be approved when they are in the best interest of the Federal Government and tenants and when the following conditions are met. (i) The Agency determines that the borrower will be unable to meet their obligations without a reduction in monthly payment installments; and (ii) The Agency is satisfied that the security, including the potential income for debt service, will be adequate to protect the Agency's interest over the term of the reamortization and that the reamortization will not adversely affect the Federal Government's lien priority. (2) If the Agency approves a reamortization of a loan under this section, it will be at the existing note rate, or the current interest rate at the time of reamortization closing or approval, whichever is less. (3) Loan reamortization may be used to: (i) Restructure loan repayments to prevent or correct a compliance violation or cure a default caused by circumstances beyond the borrower's control in situations where the borrower is otherwise in compliance with Agency requirements; (ii) Repay principal, outstanding interest, overage, and advances made by the Agency for recoverable cost items when less than full payments were authorized under the provisions of an Agency approved workout agreement; (iii) Restructure a borrower's loan payments in conjunction with an incentive package developed in accordance with § 3560.656 to prevent prepayment of the loan; (iv) Restructure an existing loan in conjunc

official document · source cfr-2024 · id 7:§ 3560.455