**SEL & CLP**

**RESCHEDULING, REAMORTIZATION,**

**CONSOLIDATION & DEFERRAL CHECKLIST**

For rescheduling, reamortization, and deferral review Instructions 2-FLP
Par.312A through Par.327C \[7 CFR 762.145\].

For consolidation of debt review Instructions 2-FLP Par.286 \[7 CFR
762.146(e)\].

  -------------------------- ------------ --------------------------------
  Name of Borrower:                       Type of Loan(s):      

  Lender:                    CLP SEL      Type of Restructuring:      

  Date Restructuring                      Date Approved/Rejected:      
  Received:                               
  -------------------------- ------------ --------------------------------

**(Notify lender, in writing, within 14 days of lender's request)**

The FSA Loan Approval Official [certifies]{.underline} that the borrower
meets the following restructuring requirements as per 7 CFR 762.145
(2-FLP Par.312 A, General Requirements).

1.  Borrower currently meets the loan eligibility requirements of 7 CFR
    762.120. The provisions regarding prior debt forgiveness and
    delinquency on a Federal debt do not apply to restructuring.

-   does not have any outstanding recorded Federal US judgments

-   US citizen

-   has the legal capacity to incur the obligations of the loan

-   has an acceptable credit history

-   is not able to obtain sufficient credit elsewhere without a
    guarantee

-   has not had a controlled substance conviction within the last 5
    years

-   still meets family farm definition (OL's - operator & FO's -
    owner/operator)

-   entity borrowers cannot be owned by another entity

2.  Lender security position will not be adversely affected.

3.  A feasible cash flow cannot be developed with the existing repayment
    schedule, but can be developed with the revised repayment terms.

4.  If applicable and if loan sold on secondary market, Holder and FSA
    must concur with the proposal.

Signature Date

(Loan Approval Official Certification of Restructuring Requirements)

***NOTE TO LENDER: As per Par.312A, even if the Agency concurs with the
restructuring action, a final loss claim may be reduced, adjusted, or
rejected as a result of negligent servicing.***

**FORMS/DOCUMENTS REQUIRED for a RESTRUCTURING ACTION**

**[SEL Lenders]{.underline}**: As per Par.313A SEL lenders must request
and obtain Agency prior written approval for all restructuring actions.
SEL lenders must provide a copy of the following items for Agency
review:

+-----+----------------------------------------------------------------+
|     | Did the lender provide a [cover letter]{.underline} describing |
| Yes | the specific loan servicing request?                           |
+-----+----------------------------------------------------------------+
|     | Did the lender provide a copy of a current [financial          |
| Yes | statement]{.underline}(s) from all liable parties?             |
|     |                                                                |
|     | Yes No Did it include both farm and non-farm assets and        |
|     | liabilities?                                                   |
|     |                                                                |
|     | Yes No Is it dated and signed by the borrower(s)?              |
+-----+----------------------------------------------------------------+
|     | If an [entity]{.underline}, did the lender provide a copy of a |
| Yes | current financial statement and income/expense information     |
|     | from all members that are liable for the debt.                 |
| N/A |                                                                |
+-----+----------------------------------------------------------------+
|     | Did the lender provide a [cash flow]{.underline} prepared in   |
| Yes | accordance with Par.151 -- Par.153B?                           |
|     |                                                                |
|     | Yes No Did the cash flow reflect a feasible plan?              |
+-----+----------------------------------------------------------------+
|     | Was interest assistance required to achieve a feasible plan?   |
| Yes |                                                                |
|     | If yes, has the requirements of 2-FLP Par.230D been met. Yes   |
| N/A | No                                                             |
+-----+----------------------------------------------------------------+
|     | Did the lender provide a copy of a [credit bureau              |
| Yes | report]{.underline}?                                           |
|     |                                                                |
|     | Yes No Are there any CBR debts not reflected on the financial  |
|     | statement?                                                     |
+-----+----------------------------------------------------------------+
|     | Did the lender provide a [verification of nonfarm              |
| Yes | income]{.underline}?                                           |
|     |                                                                |
| N/A | \[FSA-2014, lenders own form, W-2, pay stub, earnings          |
|     | statement from employer, or any other verification.\]          |
+-----+----------------------------------------------------------------+
|     | Did the lender provide a v[erification of all                  |
| Yes | debts]{.underline} of \$1,000 or more?                         |
|     |                                                                |
|     | \[FSA-2015, lender's own form, credit bureau report, or any    |
|     | other documented verification. It is recommended that written  |
|     | verification be obtained when verifying prior liens on primary |
|     | security.\]                                                    |
+-----+----------------------------------------------------------------+
|     | Did the lender provide [financial records]{.underline} for the |
| Yes | past 3-years to support cash flow projections? \[Actual farm & |
|     | non-farm income and expense history data and/or a complete set |
|     | of Federal and State income tax records with supporting        |
|     | schedules.\]                                                   |
+-----+----------------------------------------------------------------+
|     | ([SEL only]{.underline}) - Did the lender provide [production  |
| Yes | records]{.underline} for the past 3-years to support cash flow |
|     | projections? \[Actual production records/yields of crops and   |
| N/A | livestock\]                                                    |
+-----+----------------------------------------------------------------+

**[CLP Lenders]{.underline}**: As per Par.313B a CLP lender is not
required to obtain prior written approval of the Agency when
restructuring. CLP lenders are required to have the above
forms/documents in their loan file, but are not required to provide FSA
with a copy. However, at a CLP lender file review, an agency official
should check to see that all of the required restructuring
forms/documents are in the lender's file.

**COUNTY OFFICE PROCESSING REQUIREMENTS:**

1.  [Approval Authority]{.underline}: ALL restructuring proposals will
    be reviewed/approved in writing by the appropriate agency loan
    approval official based on the total outstanding (direct and/or
    guaranteed) principal in accordance with the loan approval
    authorities as set forth in 1-FLP Handbook Par.29D.

Total Outstanding Principal = \$       Yes No SED approval required?

> **When the restructuring proposal is within the Farm Loan Manager's
> approval authority [AND]{.underline} the guaranteed loan became
> delinquent during the first year of the loan [OR]{.underline} if it
> has been previously restructured, the AREA FARM LOAN SPECIALIST OR
> DISTRICT DIRECTOR must concur with the restructuring proposal before
> the SEL lender is given written approval to restructure.** Yes No AFLS
> or DD concurrence required?

2.  [14-day Restructuring Approval]{.underline}: The Agency approval
    official must respond to the lender, in writing, within 14 days of
    the lender's request. (**Par. 314B**)

3.  [Restructuring Terms]{.underline}: Are the proposed restructured
    terms acceptable? Yes No

> The guaranteed loan should be restructured over the
> **[MINIMUM]{.underline}** number of years necessary to obtain a
> positive cash flow. (**Par.326B**)

-   OL/LOC: repaid over a period up to, but not to exceed 7-years or
    10-years from the date of the original note, whichever is less.

-   OL/LN: repaid over a period up to, but not to exceed fifteen (15)
    years.

-   FO/LN: repaid over a period up to, but not to exceed forty (40)
    years.

4.  [Security Requirements]{.underline}: The guarantee loan doesn\'t
    need to be fully secured at the time of restructuring, but the new
    proposed annual principal and interest payment must include enough
    principal to offset the annual depreciation of the remaining
    security.

5.  [Balloon or Unequal Installments]{.underline}: Yes N/A Loans can be
    restructured with balloon or unequal installments under certain
    circumstances. (**Par.312A**). When using balloon installments, the
    restructured loan must be:

-   Fully secured when the balloon payment becomes due. Current
    appraisal required. When note balloons, must project value adjusted
    for depreciation.

-   Under no circumstances can crops and/or livestock be used as
    security.

-   Minimum terms 5-years if real estate and 3-years if equipment
    secured.

6.  [OL/LOC Loans]{.underline}: Yes N/A Advances can no longer be made
    against any OL/LOC loan that had any portion of the loan
    restructured. The OL/LOC must be termed out. (**Par.326B**)

7.  [Deferrals]{.underline}: Yes N/A The following conditions apply to
    deferrals (**Par.327**).

-   Payments up to 5-years may be deferred, but cannot exceed the
    maturity date.

-   Principal can be deferred either in whole or in part.

-   Interest may be deferred only in part. For multi-year deferrals,
    annual payment of a reasonable portion of accruing interest must be
    paid as indicated by the borrower's cash flow projections.

-   A feasible plan must be developed at the end of the deferral period.

8.  [Consolidations]{.underline}: Yes N/A The following conditions apply
    to consolidations (**Par.286**). Only OL's of the same type (OL/LN
    to OL/LN and OL/LOC to OL/LOC) can be consolidated.

-   Cannot consolidate a FO/LN and/or OL's secured by real estate, OL's
    with IA, or SAA.

-   Cannot consolidate an OL closed before 10/1/91 with an OL closed
    after 10/1/91.

-   If consolidating OL/LOC's loans, loan conditions/maturity dates must
    be the same.

-   Consolidated loan principal cannot exceed statutory loan limits in
    §7 CFR 762.122.

-   Consolidation cannot adversely affect the value of the security and
    security position.

-   A new note will be taken. The new note will describe the OL notes
    being consolidated and state that the indebtedness is not satisfied.
    The original OL notes must be retained.

-   Use FSA-22-45 to provide the lender with a Modification of Guarantee
    form to identify the new loan amount, new terms, and % of guarantee.
    FSA-2245 will be attached to the original Guarantee.

9.  [Capitalized Interest]{.underline}: Yes N/A Lender may capitalize
    outstanding interest when restructuring the loan. (**Par.326D**)
    When restructuring a guaranteed loan with capitalized interest:

-   As a result of capitalization of interest, the new principal amount
    cannot exceed the statutory loan limits contained in 7 CFR 762.122.
    Excess interest above the statutory limit cannot be capitalized, but
    can be scheduled for repayment as non-capitalized interest over the
    term of the restructured note.

-   When the new principal/guaranteed portion is greater than the
    original loan amount, use FSA-2245 to provide the lender with a
    \"Modification of Guarantee.\" FSA-2245 will be attached to the
    original Loan Guarantee. In all other restructuring situations where
    capitalized interest is not involved, FSA-2245 is not required.

-   **Prior to the loan approval official approving capitalized interest
    on a restructured guaranteed loan with an active [Interest
    Assistance Agreement]{.underline}, contact the Farm Loan Section of
    the State Office for guidance and ultimate concurrence/approval.**

10. [Environmental Evaluation Required]{.underline}: Yes No Form
    1940-22, \"Environmental Checklist for Categorical Exclusions,\"
    must be completed **[only if]{.underline}**, as a result of the
    restructuring, it alters the purpose, location, or design of the
    project as originally approved. \[Reference 1940.310(e)(2)\].

11. [Restructuring Proposal Evaluation]{.underline}: Discuss with the
    lender any problems with the proposal, inform if the borrower is
    eligible for interest assistance, request corrections, or suggest
    revisions to the lender. If corrections are significant, put in
    writing and establish a time frame to respond.

Can the restructuring proposal be approved?

> Yes If yes or a favorable decision, [send lender written authorization
> to proceed with the restructuring]{.underline}. The letter must state
> all items that the lender needs to provide after the loan(s) have been
> restructured and can also include any additional loan requirements
> that you wish to impose.
>
> No If no or an unfavorable decision, notify both lender and borrower,
> in writing, with appeal rights according to 1-APP.

AFTER THE LOAN(S) HAVE BEEN RESTRUCTURED the LENDER MUST PROVIDE the
FOLLOWING TO FSA:

+-----+----------------------------------------------------------------+
|     | ([SEL only]{.underline}) - Did the SEL lender meet all of the  |
| Yes | requirements in the agency approval letter?                    |
|     |                                                                |
| N/A |                                                                |
+-----+----------------------------------------------------------------+
|     | (SEL & CLP) - Did the lender provide a copy of the             |
| Yes | restructured promissory note and/or allonge/modification       |
|     | agreement?                                                     |
|     |                                                                |
|     | \[The existing note must be modified by attaching an allonge   |
|     | or any other legally effective amendment evidencing the        |
|     | revised terms or a new note must be taken. However, if a new   |
|     | note then the note must describe the loan being restructured,  |
|     | state that the indebtedness was not satisfied, and then retain |
|     | the original promissory note as an attachment.\]               |
+-----+----------------------------------------------------------------+
|     | (SEL & CLP) -- [Is the loan reflected as being "Delinquent" on |
| Yes | GLS]{.underline}? If so, FSA-2248, \"Guaranteed Loan Borrower  |
|     | Default Status,\" must be completed if the loan was previously |
| N/A | reported to Finance Office as delinquent and the *Delinquency  |
|     | Code* field on the GLS \"LD\" screen is anything other than    |
|     | blank.                                                         |
+-----+----------------------------------------------------------------+
|     | (CLP only) - Did the CLP lender provide a written              |
| Yes | certification that all of the forms/documents have been        |
|     | obtained and are in the file and all restructuring             |
| N/A | requirements have been met in accordance with 2-FLP?           |
+-----+----------------------------------------------------------------+
|     | (CLP only) - Did the CLP lender provide a narrative outlining  |
| Yes | the circumstances surrounding the need for the restructuring   |
|     | and any applicable calculations?                               |
| N/A |                                                                |
+-----+----------------------------------------------------------------+

**COUNTY OFFICE REQUIREMENTS AFTER the LENDER HAS CLOSED the
RESTRUCTURING and RETURNED ALL of the REQUIRED ITEMS.**

1.  [Finance Office Notification]{.underline}: FSA-2249, \"Request for
    Restructuring Guaranteed Loans,\" in most instances should be
    completed and submitted via fax to Finance Office for all guaranteed
    loans restructured. A separate form is required for each loan.

2.  [Delinquent Loan on GLS]{.underline}: Yes N/A If the loan was
    previously reported to Finance Office as delinquent (*Delinquency
    Code* field on the GLS \"LD\" screen is anything other than blank),
    process the FSA-2248 in the Guaranteed Loan System (GLS).

3.  [Interest Assistance]{.underline}: Yes N/A If new interest
    assistance is being extended on the existing interest assistance
    guaranteed loan which has been restructured (**Par 230 D**):

-   Make a [copy]{.underline} of FSA-2231, "Request For Obligation Of
    Funds Guaranteed Loans," and the "GLS Obligation Request" screen.
    Write \'CORRECTED\' in red at the top of both copies. On the copy of
    the FSA-2231 write in red "This loan has been restructured. The term
    of the IA is being modified from \_\_\_years to \_\_\_years."
    Approval official to date and sign the corrected form. On the "GLS
    Obligation Request" screen copy write in red the new number of IA
    years in the field *Term of Interest Asst*.

-   Make a copy of FSA-2221, Interest Assistance Agreement. On the copy,
    at the top in red write \'CORRECTED\'. Correct the expiration date
    of the Interest Assistance Agreement, and have the lender, borrower,
    and FSA initial the change.

-   FSA-2249, \"Request for Restructuring Guaranteed Loans,\" must be
    completed for all guaranteed loans restructured.

-   Provide a copy of the original promissory note and of the
    restructuring "Allonge".

-   Forward all of the above items attached to a cover letter to the
    Farm Loan Programs Section of the state office for review. State
    Office will forward to Finance Office.