General real estate security requirements.

CFR · 2024-01-01 · US · Title 7

(a) (1) The prior lien does not contain any provisions that may jeopardize the Agency's interest or the applicant's ability to repay the FLP loan; (2) Prior lienholders agree to notify the Agency prior to foreclosure; (3) The applicant must agree not to increase an existing prior lien without the written consent of the Agency; and (4) Equity in the collateral exists. (b) (1) The applicant must provide a security interest in the real estate; (2) The applicant and the purchase contract holder must agree in writing that any insurance proceeds received for real estate losses will be used only for one or more of the following purposes: (i) To replace or repair the damaged real estate improvements which are essential to the farming operation; (ii) To make other essential real estate improvements; or (iii) To pay any prior real estate lien, including the purchase contract. (3) The purchase contract must provide the applicant with possession, control and beneficial use of the property, and entitle the applicant to marketable title upon fulfillment of the contract terms. (4) The purchase contract must not: (i) Be subject to summary cancellation upon default; (ii) Contain provisions which jeopardize the Agency's security position or the applicant's ability to repay the loan. (5) The purchase contract holder must agree in writing to: (i) Not sell or voluntarily transfer their interest without prior written consent of the Agency; (ii) Not encumber or cause any liens to be levied against

official document · source cfr-2024 · id 7:§ 764.104