Term length, loan schedule, and repayment.

CFR · 2024-01-01 · US · Title 7

(a) (b) (1) Both the guaranteed and unguaranteed portions of the loan must be amortized over the same term. (2) Guaranteed loans must require a periodic payment schedule that will retire the debt over the term of the loan without a balloon payment. (3) If the promissory note provides for an interest-only period, interest must be paid at least annually starting on a date that is no more than one year from the date of the promissory note. Scheduling of the first payment of principal and interest will be subject to consideration of whether the facility is operational and generates adequate income. However, the scheduling of the first full principal and interest payment must commence not more than 3 years from the date of the promissory note and be paid at least annually thereafter. (4) There must be no “due-on-demand” clauses without cause. Regardless of any “due-on-demand” with cause provision in a lender's promissory note, the Agency must concur in any acceleration of the guaranteed loan unless the basis for acceleration is monetary default.

official document · source cfr-2024 · id 7:§ 5001.402