RD Instruction 1905-A

PART 1905 - MANAGEMENT SYSTEMS

Subpart A - District and County Office Management Systems

## [TABLE OF CONTENTS]{.underline}

[Sec]{.underline}. [Page]{.underline}

1905.1 Purpose. 1

1905.2 Responsibility. 1

1905.3 Definitions. 1

\(a\) Office. 1

\(b\) Supervisor. 1

\(c\) Association. 1

\(d\) Interest credit. 1

1905.4 Composition. 2

\(a\) Management System Box. 2

\(b\) Cards and signals. 2

\(c\) Code and signal diagrams. 3

1905.5 Miscellaneous division. 3

\(a\) Work organization meeting. 4

\(b\) State Office personnel. 4

\(c\) January - December (divider for each\
month and quarter). 4

1905.6 Application and processing division. 4A

1905.7 Supervision and servicing division. 5

\(a\) \"Active Borrowers (Individual)\" section. 6

\(b\) \"Active Borrowers (Multiple Family

Housing)\" section. 7

\(c\) \"Active Borrowers (Associations)\" section. 8

\(d\) \"Liquidation pending (Individuals,

Associations and Organizations)\"

subsection. 8

\(e\) \"Collection-Only Borrowers\" section. 8

\(f\) \"Judgment Debtors\" section. 8

\(g\) \"Compliance Review\" section. 8A

\(h\) \"Interest Credit Recapture Receivables\"

section. 8A

1905.8 \"Government Inventory\" division. 8A

1905.9 \"Guaranteed Loans\" division. 9

(08-20-97) PN 280

RD Instruction 1905-A

Table of Contents

Page 2

[Sec]{.underline}. [Page]{.underline}

1905.10 Loan account status records. 9

\(a\) Form RD 389-223, \"Rural Housing Monthly

Payment Account Status Report.\" 9

\(b\) Form RD 389-401, \"Report of Annual

Payment Rural Housing Borrowers.\" 9

\(c\) Form RD 389-375 A, B, C, D, E, and F

(Quarterly Report Code 616 \"Active

Delinquent Borrowers\"). 10

\(d\) Report Code 616, \"Active Borrowers

Delinquent.\" 10

\(e\) Form RD 1951-9, \"Annual Statement of

Loan Account,\" and Form RD 1951-54,

\"Multiple Family Housing Annual

Statement of Loan Account.\" 10

\(f\) Form RD 451-26, \"Transaction Record,\"

and Form RD 1951-53, \"Multiple Family

Housing Transaction Record.\" 10

\(g\) Posting information to transaction

records for computer-based accounts. 11

1905.11 Non-Program Loan (NP) accounts. 11

\(a\) Definition. 11

\(b\) Management system. 11

1905.12 Posting to supervision and servicing section. 12

\(a\) Individuals. 12

\(b\) Associations and Multifamily Housing. 15

1905.13 Paid up or otherwise satisfied accounts. 15

1905.14 - 1905.50 \[Reserved\] 16

Exhibit A - Management System Box.

Exhibit B - Code and Signal Diagram for Form RD 1905-1.

Exhibit C - (Page 1)(Example for) Operating Type Loans Maturity
Schedule.

Exhibit C - (Page 2)(Example for) Posting Assumption Agreement and

Reamortized Note.

Exhibit D - (Page 1)Code and Signal Diagram for Form RD 1905-5.

Exhibit D - (Page 2)(Example for) Posting Rural Housing Installment\
Schedules.

Exhibit E - Code and Signal Diagram for Form RD 1905-6.

Exhibit F - Code and Signal Diagram for Form RD 1905-10.

Exhibit G - (Example for) Posting to Transaction Records and Computing\
Interest (Form RD 451-26).

## oOo 

RD Instruction 1905-A

PART 1905 - MANAGEMENT SYSTEMS

Subpart A - District and County Office Management Systems

§1905.1 [Purpose]{.underline}.

This Subpart prescribes the policies and methods for maintaining the
Management System in District and County Offices. The Management System
aids field personnel in planning and organizing District and County
Office activities and in the timely execution of such activities. It
provides for the maintenance of individual management cards on which is
recorded pertinent information relative to each borrower\'s case and for
the use of visual signals to indicate the types of assistance, certain
conditions regarding loan(s), and supervisory and servicing actions
planned. It also aids in making required reports.

§1905.2 [Responsibility]{.underline}.

District Directors and County Supervisors are responsible for the
maintenance and effective use of the Management System. They assign to
clerical personnel the duty of posting promptly the necessary
information on the cards. Office Management Assistants advise the State
Director on Management System matters covered by this Subpart. Office
Management Assistants also train the District and County Office staffs
in the application of this Subpart and will continue to evaluate the
Management System.

§1905.3 [Definitions]{.underline}. (Revised 11-7-84, PN 947.)

\(a\) [Office]{.underline}. District and/or County Office.

\(b\) [Supervisor]{.underline}. District Director and/or County
Supervisor.

\(c\) [Association]{.underline}. Group Farmer Programs.

\(d\) [Interest credit]{.underline}. The terms "interest credit" and
"interest credit assistance," as they relate to Single Family Housing
(SFH), are interchangeable with the term "payment assistance." Payment
assistance is the generic term for the subsidy provided to eligible SFH
borrowers to reduce mortgage payments. (Added 10-27-95, SPECIAL PN.)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DISTRIBUTION: WSDC Program Operations

Managements Systems

## 1

## (Revision 5)

(5-14-80) PN 726

RD Instruction 1905-A

§1905.4 [Composition]{.underline}.

The Management System consists of the following:

\(a\) [Management System Box]{.underline}. A box (or boxes) used for the
Management System. Cards are filed separately for each county, for the
unit as a whole, or in any other manner as best serves the needs of the
office. However, Form RD 1905-5, \"Management System Card - Individual
(Rural Housing Only),\" is maintained separately from all other
individual borrowers as prescribed in §1905.7 (a)(3) of this Subpart.
Labeled, one-third-cut dividers separate the Management System Box into
divisions, sections, and subsections (see Exhibit A). Alphabetical
dividers may be used in the Supervision and Servicing division, if
desired.

\(b\) [Cards and signals]{.underline}.

\(1\) Form RD 1905-1, \"Management System Card - Individual.\" (Form RD
1905-6, \"Management System Card - Multifamily Housing,\" is for
individual Multifamily Housing borrowers, except Labor Housing (LH)
borrowers with Farmer Program type loans. Form RD 1905-1 may be used for
these LH borrowers.)

\(2\) Form RD 405-A1, \"Operating Type Loans Maturity Schedule
(Cont.).\"

\(3\) Form RD 1905-4, \"Application and Processing Card - Individual.\"
(Revised 11-7-84, PN 947.)

\(4\) Form RD 1905-5, \"Management System Card - Individual (Rural
Housing Only).\"

\(5\) Form RD 1905-6, \"Management System Card - Multifamily Housing.\"

\(6\) Form RD 1905-10, \"Management System Card - Association.\" This
form will be used for all group-type loans/grants except Multifamily
Housing and Community and Business Programs.\
(Revised 11-7-84, PN 947.)

\(7\) Form RD 1905-11, \"Application and Processing Card -
Association.\" (Revised 11-7-84, PN 947.)

\(8\) Form RD 1905-12, \"Monthly Expirations.\"

## 2

## (Revision 5) 

RD Instruction 1905-A

§1905.4(b) (Con.)

\(9\) Form RD 451-26, \"Transaction Record.\" (Renumbered 08-20-97,\
PN 280.)

\(10\) Plain Cards for reports and miscellaneous memorandums.
(Renumbered 08-20-97, PN 280.)

\(11\) Colored metal signals. On positions where monthly signals are
prescribed, use the following colors: (Renumbered 08-20-97,\
PN 280.)

January\...\.....Pink July\...\...\.....Light Red

February\...\....Light Green August\...\...\...Dark Green

March\...\...\....Dark Red September\...\...Black

April\...\...\....Orange October\...\.....Light Blue

May\...\...\...\...White November\...\....Yellow

June\...\...\.....Dark Blue December\...\....Brown

NOTE: To serve as a memory aid in the use of the monthly signals,
arrange the twelve signals in order on a card with the proper months
assigned. Keep this card with the Management System Box for quick
references.

\(c\) [Code and signal diagrams]{.underline}. Exhibit B is a code and
signal diagram for Form RD 1905-1, Exhibit D for Form RD 1905-5, Exhibit
E for Form\
RD 1905-6, and Exhibit F for Form RD 1905-10. These diagrams are
provided as a training aid and to facilitate operations of the
Management System. For ready reference keep a copy of these Exhibits in
the Management System Box in a convenient place, such as the
\"Miscellaneous Division\" or the lid of the box. NOTE: A strip of matte
finish tape may be placed across the top of the Management System Card
to provide greater adherence of signals to the card. Also, if desired,
each position signaled on the card may be circled in pencil for easier
placement of lost signals.

## 2A

## (Revision 1)

(05-14-80) PN 726

RD Instruction 1905-A

§1905.5 [Miscellaneous division]{.underline}.

Plain 5\" x 8\" cards may be used to record miscellaneous information
not otherwise recorded in the Management System, such as; (1) a list of
borrowers with assignment-type payments; (2) a list of attorneys
designated for the office area with addresses and telephone numbers; (3)
names of County Committee Members with Social Security numbers,
addresses, telephone numbers, and appointment expiration dates; (4) a
list of real estate brokers who have signed a Master Listing Agreement;
(5) addresses of Secretary of State and Registry of Deeds with amount of
fees charged for recording financing statements, mortgages, and
completing lien searches; (6) a list of borrowers who have received
deferrals, and the date the deferrals were approved, and (7) a list of
borrowers who have limited resource loans. File these cards immediately
behind the Miscellaneous Division divider. This division of the
Management System is subdivided into the following sections.\
(Revised 04-12-89, PN 106.)

\(a\) [Work organization meeting]{.underline}. This section contains
plain 5\" x 8\" cards on which notations are made of miscellaneous
activities to be reviewed at the work organization meeting. (Renumbered
08-20-97,\
PN 280.)

\(b\) [State Office personnel]{.underline}. This section contains plain
5\" x 8\" cards for recording items to be discussed with the District
Director, Office Management Assistant, or other State Office personnel.

(Renumbered 08-20-97, PN 280.)

\(c\) [January - December (divider for each month and
quarter)]{.underline}. (Renumbered 08-20-97, PN 280.)

\(1\) This section contains plain 5\" x 8\" cards for each recurring
report prepared in the District or County Office. Each card will show
(a) name of the report, (b) form used, (c) number of copies prepared,
(d) distribution of copies, (e) submission date, (f) procedure reference
for preparation, and (g) where to be filed. Office Management Assistants
will maintain a current, complete set of report cards for their use in
determining if report cards in the District and County are being kept
current. When the report is prepared, file the card behind the quarterly
and monthly divider for the month the next report is required. For
special one-time reports, note information on the desk calendar or in
any manner that will serve as a reminder to the office.

3

(Revision 8)

(05-14-80) PN 726

RD Instruction 1905-A

§1905.5(c) (Con.)

\(2\) This section may also be used for filing reminders for any
miscellaneous reports or other activities planned or requiring follow-up
action during specific months in the year.

\(3\) A record of insurance policies, financing statements, and
builder\'s warranties which will expire during the month may be
established. (Revised 08-20-97, PN 280.)

\(4\) A record will be maintained for the County Supervisor to contact
borrowers with loans secured by chattels to complete a new Form RD
1962-1, \"Agreement for the Use or Proceeds/Release of Chattel
Security,\" for the upcoming year 60 to 75 days prior to the expiration
of the form. (Revised 10-14-88, SPECIAL PN.)

§1905.6 [Application and processing division]{.underline}.

This division is used for Forms RD 1905-4 and RD 1905-11 for all types
of assistance. Establish as needed separate form for each type and
subtype of loan, grant, and guaranteed loan and those shown in the list
below. File forms for guaranteed loans in the applicable type assistance
section. This division contains sections for: (Revised 08-20-97, PN
280.)

\(a\) Operation (OL).

\(b\) Farm Ownership (FO).

\(c\) Emergency (EM) (A separate form for each emergency designation
number.)

## 4

## (Revision 8) 

§1905.6 (Con.) RD Instruction 1905-A

\(d\) Economic Emergency (EE).

\(e\) Recreation - Individual (RL).

\(f\) Soil and Water - Individual (SW-I), including Land Conservation
and Development (LCD).

\(g\) Rural Housing (RH).

\(h\) Construction Defects.

\(i\) Conditional Commitments (CC-RH). (A separate form for each
commitment applicant.)

\(j\) Multifamily Housing (MFH). (A separate form for each type of
application and preapplication received from individuals or
organizations under provisions of the RD Instruction 444 and 1944
series.)

\(k\) Rural Rental Housing (RRH).

\(l\) Labor Housing (LH).

\(m\) Rural Cooperative Housing (RCH).

\(n\) Rental Assistance (RA).

\(o\) Softwood Timber (ST). (Added 7-13-87, SPECIAL PN.)

§1905.7 [Supervision and servicing division]{.underline}.

Use only one Form 1905-1, RD 1905-5, or RD 1905-10 for each borrower
regardless of the number of loans or type of assistance received. Use a
separate Form RD 1905-6 for each multifamily housing project financed
regardless of the number of loans/grants received except individual LH
borrowers with Farmer Program type loans. Form RD 1905-1 may be used for
these LH borrowers. These forms are maintained alphabetically by name of
borrower in the applicable section of the Supervision and Servicing
Division of the Management System Box for each active borrower,
collection-only borrower, and judgment debtor owing one or more types of
FmHA loans or judgment debts, and for each grant-only case.

## 5

## (Revision 2)

(5-14-80) PN 726

RD Instruction 1905-A

§1905.7 (Con.)

\(a\) \"Active Borrowers (Individual)\" section. (Excludes individual
MFH borrowers)

\(1\) Prepare and file Form RD 1905-1 or Form RD 1905-5 in this section
when the check is delivered to the borrower or deposited in the
supervised bank account, or the loan is closed for each individual
receiving initial loan and/or grant assistance and for the transferee in
the case of an assumption agreement. For guaranteed loans, see 1905.9 of
this Subpart. For Other Real Estate (ORE) accounts see §1905.11 of this
Subpart.

\(2\) Describe each promissory note and assumption agreement on Form RD
1905-1 or Form RD 1905-5 when the check is delivered, the assumption
agreement is signed, or the loan is closed. The maturity schedule for
operating-type loans will be posted with pencil as it will be subject to
change by virtue of the collection policy set forth in RD Instruction
1951-A, or the cancellation of multiple advances. Cross out each
installment when paid. Draw a line through each promissory note and
assumption agreement when paid in full or otherwise satisfied. (See
Exhibit C.)

\(i\) Recording Reamortized, Rescheduled or Consolidated Accounts. When
an account is reamortized, rescheduled or consolidated, draw a line
through all entries made on Form RD 1905-1 or Form RD 1905-5 for the
note(s) involved. The revised figures as reflected on the new promissory
note in the case of an insured loan or a memorandum from the Finance
Office in the case of a direct loan will be entered on a new line, and
the word \"REAMORTIZED\", \"RESCHEDULED\" or \"CONSOLIDATED\" will be
shown on the same line in the first column.

\(ii\) Recording Deferred Payments. If both principal and interest
payments have been deferred, show the word \"DEFERRED\" in the
applicable column of Form RD 1905-1 or Form RD 1905-5. If principal only
is deferred, enter \"Interest only\" and the amount. If interest only is
deferred, enter \"Principal only\" and the amount.

\(iii\) Recording Multiple Advances. If the loan being processed
provides for multiple advances, the promissory note will be described on
Form RD 1905-1 the same as any other note. In addition, for operating
type loans, the dates and the amounts of the multiple advances as
prescribed by the Supervisor may be posted to the \"Supervision and
Servicing\" section of Form RD 1905-1.

## 6

## (Revision 2) 

RD Instruction 1905-A

§1905.7 (a) (Con.)

\(3\) Section for \"Rural Housing Only\" borrowers. Maintain Form\
RD 1905-5 in this section for all Rural Housing only borrowers,
including those classified as NP. At the discretion of the County
Office, all Forms RD 1905-5 may be intermingled in the section or they
may be segregated as follows: (a) RH\--Direct (Not Monthly); and (b)
RH\--Direct (Monthly), which would include borrowers with monthly
installment notes and those with annual installment notes or assumption
agreements who must make twelve monthly payments a year. If a borrower
subsequently receives another type loan, remove Form RD 1905-5 from the
\"Rural Housing\--Individual\" section even though the rural housing
loan may continue to be on the direct payment system. Prepare a Form RD
1905-1 for borrower and file in the \"Active Borrowers\--Individual\"
section. A plain cross-reference card may be filed in the section when
an RH-only borrower receives a Farmer Program loan. (Revised 03-25-91,
SPECIAL PN.)

\(b\) \"[Active Borrowers (Multiple Family Housing)\"
section]{.underline}.

\(1\) Prepare Form RD 1905-6 for each project when Form\
RD 1944-51, \"Multiple Family Housing Obligation - Fund Analysis,\" is
entered on the computer. The staff person then verifies that the
obligation for the initial loan or grant has been entered on the
computer data base. For Nonprogram (NP) accounts see §1905.11 of this
subpart. (Revised 11-1-85, SPECIAL PN.)

\(2\) Describe each promissory note, assumption agreement and grant
agreement on Form RD 1905-6 when the loan, grant, transfer or credit
sale is closed. Flag the card if the loan is on a predetermined
amortization schedule system (PASS). Draw a line through each promissory
note or assumption agreement when paid in full or otherwise satisfied.
(Added 5-1-85, SPECIAL PN.)

\(i\) [Recording Reamortized or Converted Accounts]{.underline}. When a
loan is reamortized or converted to PASS, draw a line through all
entries made on Form RD 1905-6 for the note(s) involved. The revised
figures reflected on the Reamortization Agreement or Conversion
Agreement will be entered on a new

## 7

## (Revision 5)

(5-14-80) PN 726

RD Instruction 1905-A

§1905.7 (b)(2)(i) (Con.)

line and the words \"REAMORTIZED\" or \"CONVERTED\" will be shown on the
same line in the first column. (Added 5-1-85, SPECIAL PN.)

\(ii\) [Recording \"Maximum Debt Limit (MDL)\"]{.underline}. For
multiple advance loans record the MDL amount on the same line with the
loan in the last column in pencil. When the interest is capitalized and
the payments established the MDL may be erased. (Revised 06-19-91, PN
167.)

\(iii\) [Recording other information]{.underline}. Other items will be
completed on Form RD 1905-6 as the information becomes available. See
§1905.11 of this Subpart concerning NP accounts. (Revised 11-1-85,
SPECIAL PN.)

\(c\) [\"Active Borrowers (Associations)\" section]{.underline}. Prepare
Form\
RD 1905-10 when Form RD 440-57 indicating that loan and/or grant funds
have been obligated is received. Describe each promissory note or bond
evidencing advances made to the borrower on Form RD 1905-10. Draw a line
through each promissory note or bond when paid in full. See §1905.11 of
this Subpart concerning NP accounts. Deferred payments, reamortized
accounts and multiple advances will be recorded in the same manner as
prescribed for individual borrowers in §1905.7 (a) (2) (i), (ii) and
(iii) of this Subpart. (Revised 11-1-85, SPECIAL PN.)

\(d\) [\"Liquidation pending (Individuals, Associations and
Organizations)\" subsection]{.underline}. When the County Supervisor or
District Director enters the statement of facts in the \"Running
Record\" indicating the borrower\'s account is to be liquidated, Forms
RD 1905-1, RD 1905-5, RD 1905-6, or RD 1905-10 will be moved from the
\"Active Borrowers (Individual),\" \"Active Borrowers (Association),\"
or \"Active Borrowers (Multifamily Housing)\" sections and filed in the
\"Liquidations Pending\" section.

\(e\) [\"Collection-Only Borrowers\" section]{.underline}. File Forms RD
1905-1,\
RD 1905-5, RD 1905-6 or RD 1905-10 in the \"Collection-Only Borrowers\"
section whenever a borrower is classified Collection-Only. When
segregation of Collection-Only borrowers will facilitate servicing
activities, \"Servicing Actively,\" \"Deceased\" or Addressee Unknown,\"
and \"Other\" sections may be used.

\(f\) [\"Judgment Debtors\" section]{.underline}. Whenever a borrower\'s
total indebtedness to FmHA is reduced to judgment, including deficiency
judgments defined in RD Instruction 1955-A, pertinent information
regarding

## 8

## (Revision 5) 

RD Instruction 1905-A

§1905.7 (f) (Con.)

the judgment account will be entered on Forms RD 1905-1,\
RD 1905-5, RD 1905-6 or RD 1905-10 and the card will be filed in the
\"Judgment Debtors\" section.

\(g\) [\"Compliance Review\" section]{.underline}. Form RD 1905-10 for
water and waste disposal development grants \"only\" will be removed
from the \"Active Borrowers (Associations)\" section when the case is
considered closed in accordance with RD Instruction 2033-A and will be
refiled and retained in the \"Compliance Review\" section until the
association is no longer subject to compliance review in accordance with
RD Instruction 1901-E.

\(h\) [\"Interest Credit Recapture Receivables\" section]{.underline}.
When an RH borrower pays their loan in full, but does not pay interest
credit recapture at the time of payoff, Form RD 1905-5 will be removed
from the \"Active Borrowers (Individual)\" section, attached to a new
Form RD 1905-5 and filed in the \"Interest Credit Recapture
Receivables\" section. Type \"INTEREST CREDIT RECAPTURE RECEIVABLE\" on
the top of the new card and fill in the top section of the card with the
borrower\'s name, address, and case number. Use the \"AMOUNT OF NOTE\"
field to record the interest credit recapture receivable due and use the
\"MONTHLY INSTALLMENT\" field to record payments on the receivable.
(Added 08-19-92, PN 190.)

§1905.8 [\"Government Inventory\" division]{.underline}.

Whenever the Government acquired title to real property the Management
System Card for the previous borrower will be maintained in this
division, EXCEPT for \"collection-only\" or \"judgment\" cases. The card
for a collection-only borrower or judgment debtor will be filed as
prescribed in §1905.7 (e) or (f). Prepare a dummy card showing the name
of the borrower and cross-referenced to the \"Collection-Only
Borrowers\" or \"Judgment Debtors\" section, and file in this division.
When property in Government inventory is leased, prepare a new card for
the lessee (NP debtor) and file in the \"active\" borrowers section of
the box. On the card filed in the \"Government Inventory\" division,
enter in pencil the name of the lessee immediately below the name of the
previous borrower. Upon receipt from the Finance Office, enter the
advice number to the right of \"Type of Assistance\" on

## 8A

## (Revision 2)

(5-14-80) PN 726

§1905.8 (Con.) RD Instruction 1905-A

all cards in this division. Other information such as the date
acquisition, how acquired, inventory value, when advertised for sale,
and inquiries received concerning property may be recorded on the card.
When property in Government inventory is sold, remove and file the card
in the previous borrower\'s case folder. (Revised 11-1-85, SPECIAL PN)

§1905.9 [\"Guaranteed Loans\" division]{.underline}.

Unless there is an existing card for the borrower, Form RD 1905-1 (for
individuals and associations) will be established in the name of the
borrower no later than the date of issuance of the Conditional
Commitment for Guarantee or Letter of Conditions and will be maintained
in this division. Any information that may be helpful to the office will
be recorded on Form RD 1905-1, such as: (a) name and address of the
lender, (b) purpose of the loan, (c) terms and conditions of the
guarantee, including the number of years the Contract of Guarantee will
be outstanding, if applicable, (d) guarantee fee and date paid, (e)
inspections, (f) reports, and (g) annual audits due or periodic
financial statements. No signaling of this card is required except the
\"Activity\" positions which should be signaled as needed. The
Management System cards for guaranteed loans will be removed from the
box and placed in the case folder upon notification from the lender that
the loan has been paid in full. If a borrower has both an insured and
guaranteed loan, a plain 5\" X 8\" card with pertinent information may
be kept in this section as a cross-reference.

§1905.10 [Loan account status records]{.underline}.

The official record of loan account balances is maintained in a
computer-based system in the Finance Office. Forms RD 1905-1, RD 1905-5,
RD 1905-6, and RD 1905-10 will serve as a record of loan advances,
maturities and reamortized installments. Offices will use the following
documents furnished by the Finance Office for loan status and other
detailed information. Office Management Assistants are responsible for
training all District and County Office personnel in the interpretation
and use of all information shown on these documents.

\(a\) [Form RD 389-223, \"Rural Housing Monthly Payment Account Status
Report]{.underline}.\" This form is used for servicing delinquencies of
Rural Housing monthly payment borrowers. It should be filed in a
convenient place and then destroyed upon receipt of the next Form RD
389-223 or when Form RD 1951-9, \"Annual Statement of Loan Account,\" is
received. (Revised 11-23-88, PN 99)

\(b\) [Form RD 389-401, \"Report of Annual Payment Rural Housing
Borrowers]{.underline}.\" Use this form in servicing delinquencies of
borrowers with other than 12 monthly payments. Form RD 389-401 lists all
borrowers by county, separating the behind schedule borrowers, and is

## 9

## (Revision 3)

(5-14-80) PN

RD Instruction 1905-A

1905.10 (b) (Con.)

furnished monthly by the Finance Office. It shows the minimum amount due
by January 1, the amount ahead or behind schedule, and the regular
annual installment. For each borrower behind schedule, review Form RD
1905-5 and the latest transaction record to determine the account status
[based on the borrower\'s Supplementary Payment Agreement]{.underline}.
Cross out from Form RD 389-401 those loans determined to be current. Any
contact with the borrower based on this report should take into
consideration any payment the borrower may have made which is in
transit. Form RD 389-401 should be filed in a convenient place and then
destroyed upon receipt of the next Form RD 389-401 or when Form RD
1951-9 is received. (Revised 11-23-88, PN 99)

\(c\) [Form RD 389-375 A, B, C, D, E, and F (Quarterly Report Code 616
\"Active Delinquent Borrowers\"]{.underline}). These reports show the
percent and number of delinquent borrowers by State and National totals.
The reports also reflect other account status information that may be
useful in analyzing and reviewing multiple family housing delinquencies.
The report should be filed in a convenient place and then destroyed upon
receipt of the next Form RD 389-375.

\(d\) [Report Code 616, \"Active Borrowers Delinquent]{.underline}.\"
This report is for servicing delinquencies of multiple family housing
borrowers. It should be filed in a convenient place and then may be
destroyed. (Revised 5-1-85 SPECIAL PN.)

\(e\) [Form RD 1951-9, \"Annual Statement of Loan Account and Form RD
1951-54, \"Multiple Family Housing Annual Statement of Loan
Account]{.underline}.\" By approximately January 14 each year, this form
will be furnished to the District or County Office and each borrower
(including those with no activity). Forms RD 1951-9 and RD 1951-54 show
all charges and credits made during the calendar year. They also show
interest paid for income tax purposes. This form will be filed in
Position 2 of the borrower case folder. (Revised

\(f\) [Form RD 451-26, \"Transaction Record,\" and Form RD 1951-53,
\"Multiple Family Housing Transaction Record]{.underline}.\" Except for
direct monthly payments made for Single Family Housing loans, Form RD
451-26 will be sent to the office each time a transaction is processed
to a borrower\'s account which involves payments, interest credits,
recoverable cost items, rental assistance and Transaction Code 4M to
mature installments and to reflect advances from the insurance fund. For
interest credit borrowers, the reduced interest rate is also shown. In
\"scanning\" the transaction records, upon receipt, any obvious
discrepancies will immediately be brought to the attention of the
Finance Office. Form RD 1951-53 will be sent for all Multiple Family
Housing loans and grants. Transaction records will be retained in the
fold of the Management System card (in the project servicing file for
Form RD 1944-53) until Forms RD 1951-9, RD 1951-54, RD 451-26, and RD
1944-53 (Code 4M) for the current year are received. All transaction
records for the year just ended will then be destroyed, except Form RD
451-26 or Form RD 1944-53 (Code 1L) which may be filed in position 2 of
the borrower case file when the recoverable cost charge has been repaid.
11-23-88, PN 99)

## 

## 10

## (Revision 3) 

§1905.10 (Con.) RD Instruction 1905-A

\(g\) [Posting information to transaction records for computer-based
accounts]{.underline}.

\(1\) When it is anticipated that additional payments may be made prior
to receipt of all of the transaction records for those borrowers making
frequent payments, the clerical personnel may post such payment(s), as
received, on the latest transaction record in the \"Application of
Credit\" block. (See Exhibit G.)

\(2\) When funds loaned for capital expenditures are used for operating
expenses, enter on the latest transaction record for the loan account
concerned the amount to be collected in addition to the amount shown in
the \"Minimum Amount Due by Date Shown\" block of the transaction
record. Continue to record the additional amount on the transaction
record(s) until it is paid. As payments are received, Form RD 451-2,
\"Schedule of Remittances,\" will identify this amount as an \"extra
payment\" to be deducted from the final installment due, except when
payments must be applied as prescribed in RD Instruction 1951-A,
§1951.10. This additional amount will also be posted on the Supervision
and Servicing section of the Management System Card for followup
purposes. (See Exhibit C, example (5).)

\(3\) Payment(s) made by a borrower to repay a recoverable cost charge
may be posted to the transaction record (Transaction Code IL) reflecting
the charge until it is repaid, and then may be filed in Position 2 of
the borrower case folder.

§1905.11 [Non-Program Loan (NP) accounts]{.underline}. (Revised 11-1-85,
SPECIAL PN.)

\(a\) [Definition]{.underline}. A Non-Program loan results when credit
is extended to ineligible applicants and/or transferees in connection
with sale of inventory Properties and loan assumptions. As such, these
loans are only approved when it is in the best interest of the
government.

\(b\) [Management system]{.underline}. Maintain Form RD 1905-1 in the
Management System for all NP accounts EXCEPT Rural Housing only. Form RD
1905-5 will be maintained for Rural Housing only accounts. When real
property in Government inventory is sold or transferred to an ineligible
applicant, or is leased, Form RD 1905-1 or Form RD 1905-5 will be
established in the name of the lessee or purchaser. Management System
cards for NP accounts will be maintained in the District or County
Office responsible for making and servicing the type loan for which real
property had previously served as security.

## 11

## (Revision 1)

(5-14-80) PN 726

RD Instruction 1905-A

§1905.11 (Con.)

\(i\) For NP loans or assumption agreements which provide for amortized
installments including both principal and interest, the annual
installments will be entered in the \"Real Estate Type Loans Installment
Schedule\" section of Form RD 1905-1 of Form RD 1905-5 in accordance
with the schedule in the promissory note or assumption agreement.

\(ii\) When a [nonfarm]{.underline} tract in Government inventory is
leased, enter the payment schedule reflected in the lease in the \"Real
Estate Type Loans Installment Schedule\" section of Form RD 1905-5. In
the case of [farm]{.underline} lease, post the terms of the lease to the
\"Supervision and Servicing\" section of Form RD 1905-1 for servicing
purposes.

§1905.12 [Posting to supervision and servicing section]{.underline}.

\(a\) [Individuals]{.underline}. (For individuals with multifamily
housing assistance see §1905.12 (b).) [Any information that would be
helpful in account servicing, such as Statute of Limitations date, date
of deposit agreement, etc., may be recorded in this
section]{.underline}. Notations should be brief and sufficiently
specific to enable personnel to determine the [primary]{.underline}
purpose of the action. Enter the date when each action is planned to be
taken in the \"Date for Follow-Up\" column. The date on which followup
action is completed may be entered in the \"Date Completed\" column for
those items on which this information should be retained. Followup
actions of a temporary nature recorded in this section are erased when
the action is completed.

\(1\) [Sources of information for posting to the Supervision and
Servicing section of Form RD 1905-1 or Form RD 1905-5]{.underline}.
Clerical personnel will, when applicable:

\(i\) Group and record on Form RD 1905-1 (see Forms Manual Insert) those
major improvements and practices which the Supervisor has indicated for
followup on Table D of Form RD 431-2, \"Farm and Home Plan.\"

\(ii\) Group and record for followup from Table K of Form RD 431-2 the
planned debt repayment(s) to be made to FmHA, including any increase in
payments due to loan funds originally set up for capital expenditures
which are used for operating expenses.

\(iii\) Record any actions designated for followup on Table E of Form RD
431-4, \"Business Analysis - Nonagricultural Enterprises.\"

\(iv\) Transfer those [underlined]{.underline} activities from the
running record which require followup actions.

## 12

## (Revision 1) 

§1905.12 (Con.) RD Instruction 1905-A

\(v\) Record any needed followup action on borrowers requested to
refinance as reflected on Form RD 1951-24, \"Results of Borrower
Graduation Review by County Committee and County Supervisor.\" (Revised
8-28-83, SPECIAL PN.)

## 12A

## (Added 11-1-85, SPECIAL PN) 

§1905.12 (a)(1) (Con.) RD Instruction 1905-A

\(vi\) Record planned analysis.

\(vii\) Record any needed followup action on delinquent borrowers as
determined on the annual review of delinquent borrowers with the
District Director.

\(viii\) Record followup action required prior to expiration of a
moratorium period for Section 502 and 504 RH borrowers.

\(ix\) Record any needed followup actions noted through work
organization meetings, correspondence, or through contacts in person or
by telephone.

\(2\) [Recording expiration and due dates]{.underline}. Show in column
headed \"Date\":

\(i\) Delinquent taxes - When it becomes known that a real estate type
loan borrower is delinquent in paying taxes, show the date the taxes
officially became delinquent or record expiration date of a tax lien.

\(ii\) Insurance - For Farmer Program and Section 502 RH borrowers,
enter the date the insurance policy is to be returned to the borrower.
Form RD 1905-12 may be used for this purpose. For other type loans,
enter the expiration date of each policy. Form RD 1905-12 may be used
for this purpose. If the policy is continuous, show the letter \"C\" and
this borrower will not be shown on Form RD 1905-12.

\(iii\) Security Agreement - For indebtedness secured by a chattel
and/or crop lien, insert the date of the latest Security Agreement, or
expiration date if applicable.

\(iv\) Financing Statement - For indebtedness not secured by a lien
enter \"Note only.\" For indebtedness secured by chattel and/or crop
lien, enter expiration date of the Financing Statement. The expiration
date in most States will be [five]{.underline} years from the date of
filing. Opposite \"Financing Statement\" in the \"Date for followup\"
column, enter the first month, day, and year of the 6-month period in
which continuation of the Financing Statement must be accomplished. Each
continuation statement keeps the related Financing Statement in effect
an additional five years from the date the Financing Statement (NOT the
continuation statement) was filed. In the \"Supervisory and Servicing
Actions Planned\"

## 13

## (Revision 2)

(5-14-80) PN 726

RD Instruction 1905-A

§1905.12 (a)(2) (Con.)

column, enter the place of filing, the number assigned to the statement
by the recording official and the date filed. Form RD 1905-12 may be
adapted for listing all borrowers with financing statements and their
continuation dates. Head columns by year. Enter parenthetically beside
name of borrower the date the financing statement is initially filed.
Enter continuation dates under appropriate year column. Place card in
the miscellaneous division behind the first month of the 6-month period
in which the next continuation falls due.

\(v\) Inspection - For annual inspections, show date 12 months from date
of last annual inspection of security. For borrowers with RH loans on
nonfarm tracts, inspections ordinarily will be made only if foreclosure
action is likely to be taken, the property is abandoned, or when
necessary to protect the interest of the Government.

\(vi\) Builder\'s Warranty - Show the 1-year expiration date of the
builder\'s warranty. In the \"Date for followup\" column enter date two
months before the expiration of the warranty period for followup for
notifying the borrower of the expiration date by use of Form RD 1924-21,
\"Notice of Expiration of First Year of Warranty.\" Subsequent followup
actions will be posted only if needed. Form RD 1905-12 may be used for
this purpose. (Revised 5-12-87, SPECIAL PN.)

\(vii\) Development - Show date 15 months from date of loan closing or
the date scheduled for completion beyond 15 months. For regular
inspection visits for development and major construction, enter opposite
\"Development\" in the \"Date for followup\" column the next scheduled
visit, until final inspection has been made.

\(viii\) Other - Space is provided for expiration dates or other
pertinent due dates which need followup action such as: (a) expiration
date of 3-year 504 Grant Agreement; (b) expiration date of 502 and 504
moratorium granted. (Revised 7-13-87, SPECIAL PN.)

## 14

## (Revision 2) 

§1905.12 (Con.) RD Instruction 1905-A

\(b\) [Associations and Multifamily Housing]{.underline}. Supervisory
and servicing actions and expiration and due dates of these loans are
entered in the \"Servicing and Management Assistance\" section of Forms
RD 1905-6 and 1905-10. Followup and completion dates will be used in the
same manner as for individual borrowers as prescribed in §1905.12 (a) of
this Subpart. Supervisory and servicing actions in addition to those
identified on the form will be entered under \"Actions Planned.\"
Entries will include information relating to:

\(1\) Major improvements in operation and maintenance which the borrower
or grantee should make during the ensuing year (determined by the County
Supervisor or District Director and borrower or grantee as part of the
annual analysis of association operations).

\(2\) Servicing actions shown in the running record as requiring
specific followup action. This information will normally be obtained
during the annual inspection of facilities and services, review of
annual analysis, contacts with association officials, and attendance at
the annual meeting, as well as meetings of the board of directors.

\(3\) Development-completion dates will be established and maintained
while development is in process.

\(4\) Any other pertinent due, followup and/or completion dates in
connection with needed supervisory actions.

§1905.13 [Paid up or otherwise satisfied accounts]{.underline}.

\(a\) Remove Form RD 1905-1, RD 1905-5, RD 1905-6 or RD 1905-10 from the
Management System and place in position 2 of the borrower\'s case folder
when all accounts have been paid in full or otherwise satisfied, EXCEPT
as follows:

\(1\) Form RD 1905-1 or RD 1905-5 for Section 504 Rural Housing
loans/grants will be removed from the Management System and filed in
position 2 of the borrower\'s case folder when considered closed in
accordance with RD Instruction 2033-A.

\(2\) Form RD 1905-10 for associations which received Industrial
Development grants, Rural Development Assistance grants, or Self-Help
Technical Assistance funds will be removed from the Management System
and filed in position 2 of the borrower\'s folder when considered closed
in accordance with RD Instruction 2033-A. (Revised 11-7-84, PN 947.)

## 15

## (Revision 1)

(5-14-80) OB 726

RD Instruction 1905-A

§1905.13 (a) (Con.)

\(b\) Form RD 1905-1 may be reused for paid-up borrowers who
subsequently receive another loan.

Attachments: Exhibits A, B, C, D, E, F, and G

## oOo

## 16

## (Revision 1) 

1905-A Exhibits A through G not automated see manual