Subordination of liens.

CFR · 2024-01-01 · US · Title 7

(a) (1) Completed Agency application for subordination form; (2) A current financial statement, including, in the case of an entity, financial statements from all entity members; (3) Documentation of compliance with the Agency's environmental regulations contained in part 799 of this chapter; (4) Verification of all non-farm income; (5) The farm's operating plan, including a projected cash flow budget reflecting production, income, expenses, and debt repayment plan; and (6) Verification of all debts. (b) (1) If a lender requires that the Agency subordinate its lien position on the borrower's existing property in order for the borrower to acquire new property and the request meets the requirements in paragraph (b)(3) of this section, the request may be approved. The Agency will obtain a valid mortgage and the required lien position on the new property. The Agency will require title clearance and loan closing for the property in accordance with § 764.402 of this chapter. (2) If the borrower is an entity and the Agency has taken real estate as additional security on property owned by a member, a subordination for any authorized loan purpose may be approved when it meets the requirements in paragraph (b)(3) of this section and it is needed for the entity member to finance a separate farming operation. The subordination must not cause the unpaid principal and interest on the FLP loan to exceed the value of loan security or otherwise adversely affect the security. (3) The Agency wi

official document · source cfr-2024 · id 7:§ 765.205