HB-2-3550

APPENDIX 2

FORMS REFERENCED IN THIS HANDBOOK

Forms

Form RD 443-16, Assignment of Income from Real Estate Security

Form RD 465-1, Application for Partial Release, Subordination, or Consent 

Form RD 1910-5, Request for Verification of Employment

Form RD 1924-10, Release by Claimants 

Form RD 1924-12, Inspection Report

Form RD 1927-8, Agreement with Prior Lienholder 

Form RD 1940-16, Promissory Note

Form RD 1944-4, Certification of Disability or Handicap 

Form RD 1944-6, Interest Credit Agreement

Form RD 1944-14, Payment Assistance/Deferred Mortgage Assistance Agreement 

Form RD 1944-62, Request for Verification of Deposit

Form RD 1955-1, Offer to Convey Security

Form RD 1965-14, Proof of Claim of the United States of America (Individual) 

Form RD 3550-1, Authorization to Release Information

Form RD 3550-2, Request for Verification of Gift/Gift Letter 

Form RD 3550-4, Employment and Asset Certification

Form RD 3550-6, Notice of Special Flood Hazards, Flood Insurance Purchase Requirements, 

and Availability of Federal Disaster Relief Assistance

Form RD 3550-9, Initial Escrow Account Disclosure Statement 

Form RD 3550-12, Subsidy Repayment Agreement

Form RD 3550-15, Tax Information

Form RD 3550-16, Release from Personal Liability 

Form RD 3550-17, Funds Transmittal Report 

Form RD 3550-18, Reamortization Agreement

Form RD 3550-19, Transmittal-Closing Documents

Form RD 3550-20, Application for Settlement of Indebtedness 

Form RD 3550-21, Payment Subsidy Renewal Certification

Form RD 3550-22, Assumption Agreement, Single Family Housing 

Form RD 3550-27, Substitute Payment Coupon

FEMA Form 81-93, Standard Flood Hazard Determination 

IRS Form 1099-C, Cancellation of Debt

IRS Form 4506-T, Request for Transcript of Tax Return

Form SF-5510, Authorization Agreement for Preauthorized Payments

Appendix 2, Page 1 of 2

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
HB-2-3550

CERTIFICATIONS

Verification of Pensions and Annuities

Verification of Student Income and Expenses 

Verification of Medical Expenses 

Verification of Social Security Benefits 

Verification of Public Assistance 

Verification of Child/Dependent Care 

Verification of Unemployment Benefits 

Verification of Business Expenses 

Verification of Support Payments 

Certification of Disposition of Assets

Record of Oral Verification

Appendix 2, Page 2 of 2
VERIFICATION OF PENSIONS AND ANNUITIES

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

A. INCOME FROM ANNUITIES

1. $ Current monthly gross amount received. Will the applicant continue to receive 

this monthly amount for the next twelve months? Yes No If, no please explain.

2. Describe any deductions from the gross amount that are taken.

B. VERIFICATION OF ASSETS

1. $ Current market value of assets held in the retirement or pension plan.

2. Can the applicant withdraw amounts from the retirement account without retiring orterminating 

employment? Yes No. If yes, explain the terms of the withdrawal, including

any penalties.

3. Can the applicant borrow against amounts in the retirement account? Yes No 

If yes, explain the terms (maximum amount, interest rate, repayment term, purposes, etc.)

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
VERIFICATION OF STUDENT INCOME AND EXPENSES

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

1. Describe any financial assistance the above-reference student receives.

Amount Source Purpose for Which Funds May Be Used

2. Describe any expenses the above-referenced student has for:

$ Tuition

$ Housing

$ Books

$ Supplies and Equipment

$ Transportation

$ Misc. Personal Expenses

$ Total

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
VERIFICATION OF MEDICAL EXPENSES

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

1. Please list the purpose of any accumulated medical bills, identify to whom the amount is owed, and 

provide the amount to be paid during the coming 12 months.

Amount Owed To Medical Expenses for

2. Medical Insurance Premiums

$ Amount Paid Payment Period: per month, per year

Medical Insurance Premiums

$ Amount Paid Payment period: per month, per year

3. List other anticipated medical expenses

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
VERIFICATION OF SOCIAL SECURITY BENEFITS

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

Social Security Data

Date of Birth

Gross Monthly Social Security Benefit Amount, Type of Benefit

Gross Monthly Supplemental Security Income Payment Amount (including 

State Supplement) Type of Benefit

Amount of Monthly Deductions for Medicare Paid by the Applicant

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
VERIFICATION OF PUBLIC ASSISTANCE

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

Number in Family: Rate Per Month

Aid to Families with Dependent Children $

General Assistance $

Does this amount include Court Awarded Support Payments Yes No 

Amount Specifically Designated for Shelter and Utilities $

Other Assistance - Type: $

Total Monthly Grant $

Other Income - Source: $

*Maximum Allowance for Rent and Utilities $

Amount of Public Assistance given during the past 12 months $

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
VERIFICATION OF CHILD/DEPENDENT CARE

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

Name of Person or Agency Providing Care: 

Address: 

Name(s) of person or Persons Cared for: 

Specify Hours and Days of Care.

Average Amount Paid for Care: $ Week Month

Estimated Amount to be Paid in coming 12 months (including full-time summer care ofschool 

children, if applicable): $

Will any amount of this expense be reimbursed by an outside source: Yes No

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
VERIFICATION OF UNEMPLOYMENT BENEFITS

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

1. Are benefits being paid now? Yes No

2. If yes, what is Gross Weekly payment? $

3. Date of Initial Payment

4. Duration of Benefits weeks 

Is claimant eligible for future benefits? Yes No

5. If yes, How many weeks?

6. If no, what is termination date of benefits?

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
VERIFICATION OF BUSINESS EXPENSES

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

Based on business transacted during 19 , to 19

1. Gross Income $

2. Expenses:

(a) Interest on Loans $

(b) Cost of Goods/Materials $

(c) Rent $

(d) Utilities $

(e) Wages/Salaries $

(f) Employee Contributions $

(g) Federal Withholding Tax $

(h) State Withholding Tax $

(i) FICA $

(j) Sales Tax $

(k) Other $

(l) Straight Line Depreciation $

Total Expenses $

3. Net Income $

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
VERIFICATION OF SUPPORT PAYMENTS

REQUEST FOR INFORMATION

Federal regulations require us to verify financial information provided by applicants for housing 

assistance. We ask your cooperation in supplying the information requested. The attached Form 3550-

1, Borrower’s Certification and Authorization provides the applicant's authorization.

Your prompt return of the requested information will be appreciated. A self-addressed return envelope 

is enclosed for your convenience. If you have questions, please call at

.

APPLICANT IDENTIFICATION

Name Social Security Number

REQUESTED INFORMATION

Name of Person Paying Support: 

Address: 

For ( ) Former Spouse 

( ) Children

Children Names are:

Amount of Support

$ Week, Month, Year

VERIFIER INFORMATION: Please sign this verification form and print the name, address and 

telephone number of the verifier.

Name: Title:

Telephone Number:

(Signature)

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
CERTIFICATION OF DISPOSITION OF ASSETS

I/we certify that during the two years (24 months) period preceding the effective date of my 

certification or recertification of eligibility for program participation, I/we have have not

disposed of more than $1,000 in asset(s) for less than fair market value.

If asset(s) were disposed of for less than fair market value, describe:

Asset Date of Disposition

1.

2.

3.

The amount received for the asset(s) disposed:

1.

2.

3.

Signature of Applicant 

Signature of Spouse

Date 

Date

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
RECORD OF ORAL VERIFICATION

APPLICANT INFORMATION

Re: 

Address:

Date Received:

INFORMATION VERIFIED

Item Verified:

Person Contacted: 

Representing:

INFORMATION SUPPLIED

Signature of Person Receiving Verification Date and Time

WARNING: Knowingly and willingly making a false or fraudulent statement to any department of 

the United States Government is a felony punishable by fine and imprisonment (Title 18, Section 1001,

U.S. Code)

(12-23-96) SPECIAL PN
HB-2-3550

APPENDIX 3

LETTERS REFERENCED IN THIS HANDBOOK

Handbook Letter 101(3550), Standardized Adverse Decision Letter

Handbook Letter 102(3550), Continuation with Unreaffirmed Debt After Discharge in

Bankruptcy

Handbook Letter 103(3550), Agreement to Increase Salary Offset

Handbook Letter 104(3550), Notification of Salary Offset 

Handbook Letter 105(3550), Notification of Administrative Offset 

Handbook Letter 106(3550), Request for Administrative Offset 

Handbook Letter 107(3550), Request for Salary Offset

Handbook Letter 108(3550), Notification of IRS Offset 

Handbook Letter 109(3550), Confirmation of IRS Offset

Handbook Letter 110(3550), Notification That the Agency Will Continue With Loan 

Handbook Letter 111(3550), Request for Borrower to Refinance With Private Credit 

Handbook Letter 112(3550), Reminder Letter

Handbook Letter 113(3550), Follow up Request for Borrower to Refinance With Private

Credit 

Handbook Letter 114(3550), Unresponsive

Handbook Letter 115(3550), Response to Request to Sale for Less Than the Debt

Appendix 3, Page 1 of 1

(05-27-98) SPECIAL PN

Revised (04-20-05) PN 385
Handbook Letter 101(3550) 

REFERENCE: Servicing and Asset Management Office Handbook Chapter 1

SUBJECT: Standardized Adverse Decision Letter

Date: [ insert today's date ]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Re: [ Type/Amount of Assistance Requested ]

Dear [ insert borrower last name(s) (Mr., Mrs., Ms.) ]:

Thank you for the opportunity to consider your request for Rural Development assistance. In 

reviewing your request, we considered all information submitted to the Agency and the 

regulations that govern the assistance for which you applied. After careful review, we regret to 

inform you that we were unable to take favorable action on your request. The specific reasons 

for our decision are as follows:

(The following items should be included in each adverse decision 

letter and can be presented in different formats depending upon the 

type of assistance requested and reasons for denial:

• Specific reasons for the decision;

• Regulatory basis (CFR citation) for the decision;

• If applicable, a statement of any evidence considered in making the decision such as 

credit reports, financial statements, etc.;

• If applicable, a statement of any issues presented by the customer such as those 

discussed during any meetings or phone conversations; and

If you believe our decision is incorrect, or the facts used in this case are in error, you may pursue 

your rights to challenge our decision. Please see the attached document.

Sincerely,

[ insert name of RHS Official ] 

[ insert title of RHS Official ]

Attachment [ insert Attachment 1-B or 1-C, as appropriate from Chapter 1 ]

(05-27-98) SPECIAL PN

Revised (03-31-21) SPECIAL PN 
Handbook Letter 102(3550) 

REFERENCE: Servicing and Asset Management Office Handbook Chapter 5

SUBJECT: Continuation With Unreaffirmed Debt After Discharge in Bankruptcy

Name of Borrower 

Address of Borrower 

Address of Borrower

Subject: Continuation with Unreaffirmed Debt After 

Discharge in Bankruptcy

Account No. 

Dear Homeowner:

USDA Rural Housing Service (RHS) formerly known as Farmers Home Administration (FmHA) has 

received notice that you have been discharged in a Chapter 7 bankruptcy. RHS records indicate that you 

did not surrender the property that is security for the above referenced RHS loan but have elected to retain 

the property without reaffirmation of your debt with RHS.

If your loan is in arrears all delinquent payments must be paid immediately if you plan to continue with 

the loan. You will be expected to make scheduled payments on or before the due date and to comply with 

all covenants of the Promissory Note and mortgage documents securing your loan. These requirements 

include maintaining adequate property insurance and paying taxes when they are due. Noncompliance 

with these stipulations may result in foreclosure.

RHS will continue to service your loan in accordance with governing policies and regulations even 

though you did not reaffirm the debt. This will include sending monthly billing statements and 

delinquency notices when applicable. You are entitled to all RHS program benefits for which you may be 

eligible such as payment assistance, moratorium, and applicable appeal rights. Because your debt was not 

reaffirmed, you are not legally obligated to repay the loan; however, if you intend to remain in the 

property, required payments must be made every month. In the event of default, RHS will not seek to 

collect from you personally but will look only to the security property for recovery of the debt.

For questions regarding your account, please call our Customer Service Department toll free at

1-800-414-1226 or TDD 1-800-438-1832, 7 A.M. to 5 P.M. Central Time, Monday through Friday. With 

a touch tone telephone, the Voice Response Unit (VRU) can provide automated confidential account 

information 7 days a week, outside of normal business hours. Please refer to your RHS loan number 

when you call or write us.

Sincerely,

Bankruptcy Section Head

USDA Rural Housing Service is an Equal Opportunity Lender, Provider, and Employer. Complaints of 

discrimination should be sent to: USDA, Director, Office of Civil Rights, Washington, DC 20250-9410

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 103(3550) 

REFERENCE: Servicing and Asset Management Office Handbook Chapter 7 SUBJECT:

Agreement to Increase Salary Offset

Date: [ insert today's date ]

[ insert Agency name ]

[ insert Agency street/post office/ address ] 

[ insert city, state, and zip code ]

Dear [ insert Agency Representative ]:

I, [ Name of employee ], agree to have $ [ amount employee wants withheld ] withheld from 

my salary per pay period. This amount exceeds 15 percent of my disposable pay per pay period 

which is $ [ 15 percent of disposable pay per pay period ]. If the amount is less than 15 

percent, it is based on the following reasons:

[ list reasons ]

[ Employee’s Signature ] [ Date ]

Accepted

Rejected

[ Certifying Official ] [ Date ]

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 104(3550) 

REFERENCE: Servicing and Asset Management Office Handbook Chapter 7

SUBJECT: Notification of Salary Offset

Date: [ insert today's date ]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower last name(s) (Mr., Mrs., Ms.) ]:

The Rural Housing Service (RHS) has reviewed the record relating to your [ delinquency ]

[ debt ], and determined that you owe the U.S. Government $ [ variable ]. In accordance with 

7 CFR 3550 a review has been made of the circumstances giving rise to the [ delinquency ]

[ debt ]. Based on that review, it is my judgment that the cost of collecting the debt through 

salary offset will not exceed the amount of the debt. In addition, to my knowledge, there are not 

any legal restrictions that would bar collecting that debt.

We intend to collect this amount by offsetting your salary until the [ delinquency ] [ debt ] and 

all accumulated interest and other costs are paid in full. Deductions of 15 percent of your 

disposable income will begin with the first pay period occurring 30 days from the date you 

receive this letter and will continue until the delinquency or other debt is paid. You may 

voluntarily agree to a higher percentage. If you agree to RHS collecting more than 15 percent of 

your disposable pay, please let us know immediately in writing.

Interest and other costs may be assessed in accordance with Department Regulation 2520-1, 

Interest on Delinquent Debt, and 4 CFR 102.13.

As a Federal employee, you have the following rights:

1. The right to copy the records relating to the [ delinquency ] [ debt ]. Charges will be 

assessed for copying;

2. The right to enter into a written agreement for a repayment schedule different from that 

proposed so long as your terms of repayment are agreeable to RHS;

3. The right to a hearing conducted by a USDA Administrative Law Judge or a hearing 

official from outside USDA. The hearing will consider the existence of the

[ delinquency ] [ debt ], the amount of the [ delinquency ] [ debt ], and/or percentage 

of disposable pay to be deducted each pay period. The timely filing of a petition or a 

hearing will stop collection proceedings;

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
1. The right to a final decision on a hearing at the earliest practical date, but not later than 

60 calendar days after you file your hearing petition;

2. The right to request a waiver of salary overpayment. You may also question the amount 

or validity of a salary overpayment or general delinquency or other debt by submitting a 

claim to the Comptroller General in accordance with General Accounting Office 

procedures;

3. The right to have any monies paid on or deducted for the [ delinquency ] [ debt ] 

which are later waived or found not owed to the United States to be promptly refunded to 

you unless there are applicable contractual or statutory provisions to the contrary.

(Use this paragraph only for collection-only accounts or other delinquent accounts for which 

there is no security)

RHS has a debt settlement procedure which might allow your debt to be canceled or charged off. 

If you would like to know more about this, contact the Customer Service Department.

Submitting false or frivolous statement, representations, or evidence may subject you to 

disciplinary proceedings or civil or criminal penalties.

If you wish to file a petition for a hearing, we must receive the petition within 30 days from the 

date you receive this letter. The petition should be mailed to:

[ Insert address ]

You must sign the petition and must indicate your knowledge of whether you are [ delinquent ] 

[ liable for the debt ], or any part of the [ delinquency ] [ debt ]. You should fully identify 

and explain all the information and evidence that supports your position. If you would like 

reconsideration of the percentage of disposable income to be deducted, you should state your 

reasons.

Sincerely.

[ insert name of RHS Official ] 

[ insert title of RHS Official ]
Handbook Letter 105(3550) 

REFERENCE: Servicing and Asset Management Office Handbook Chapter 7

SUBJECT: Notification of Administrative Offset

Date: [ insert today's date ]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower last name(s) (Mr., Mrs., Ms.) ]:

The Rural Housing Service (RHS) intends to use administrative offset to collect the debt or debts 

you owe them. This notice advises of your rights concerning administrative offset as given by 

the Debt Collection Act, 31 U.S.C. 3716; the Federal Claims Collection Standards, 4 CFR 101-

105; and the Rural Housing Service’s Administrative Offset Regulations, 7 CFR 3550.

The RHS intends to begin taking, by administrative offset, money you are owed by (Insert the 

name of the Federal Agency where RHS will send the offset request) up to the full amount of the 

debt or debts you owe RHS.

RHS records show that you owe a total amount of $ [ amount past due ], as of [ date ], and 

that interest is accumulating, after this date, at $ per .

The RHS will start offsetting this money in not less than 30 days after you receive this notice. 

RHS will not start offsetting this money, however, if you pay your debt in full within 30 days 

after you receive this notice.

Your Right To A Meeting Before Administrative Offset Begins

You also have the right to a conference with an RHS official before RHS begins using 

administrative offset. At this conference you can:

• present any information on whether you really owe the debt or debts mentioned in the notice 

you received with this one, and whether the amounts RHS claims that you owe are correct or 

not, and/or

• give reasons why it would create an extreme hardship for you, or would be unfair for some 

other reason, if RHS uses administrative offset to collect the debt or debts you owe.

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Is in the discretion of RHS to decide whether special circumstances do or do not justify a 

decision not to use administrative offset to collect the debt or debts you owe RHS.

You can also, either at the conference, or without asking for a conference, present any written 

submission to RHS on why you think the debt is not really owed, why the amount is not correct, 

or why you think administrative offset would create an extreme hardship or otherwise be unfair. 

If you want to present a written submission, you must present if within 30 calendar days after 

you receive this notice.

Your Right To Copy Records On Your Loan Or Loans

You also have the right to inspect and copy any records concerning your account with RHS prior 

to your conference with RHS.

How To Request Your Conference And A Copy Your Records

If you want a conference, or if you want to have a copy any of RHS records concerning your 

account, you must make a request. You can do this by contacting the office that sent you these 

notices as soon as you can, by telephone or in writing. You must make your request to copy 

your records within 15 calendar days after you receive this notice, and you must make your 

request for a conference within 30 calendar days after you receive this notice. If you ask to copy 

records and also ask for a conference, the RHS will schedule the conference not less than 10 

working days after the date you inspect the records. You will be advised of the time and date of 

the meeting.

How to Make a Written Submission

If you want to make a written submission, but do not want a conference, you must have your 

written submission to RHS within 30 days after you receive this notice.

Your Appeal Rights

If, at the conference with RHS, you ask that offset not be used in your case, but the RHS 

decision is to use it, you then have the right to an administrative appeal on the issue of whether 

this decision was made in accordance with the laws and regulations applicable to RHS. The 

RHS will advise you on how to ask for this appeal in a letter that will be sent after the 

conference.

If you make a written submission, but do not have a meeting, you will have administrative 

appeal rights after the RHS responds to your written submission. The RHS will advise you on 

how to ask for this appeal in a letter that will be sent to you after considering your submission.
You can decide not to ask for a conference or make a written submission, and instead ask for an 

administrative appeal now. If you want an administrative appeal now, and do not also want a 

meeting or to make a written submission, you must request your administrative appeal now. See 

the attachment for your appeal rights (Attach borrower appeal rights) A request for appeal must 

be sent to the Area Supervisor, National Appeal Staff, (Insert address), postmarked no later than 

(Insert date 30 days from date of letter).

If, after your conference or after your written submission, the RHS decides to go ahead with 

administrative offset, RHS will begin using administrative offset to collect amounts you owe 

even though your administrative appeal process is about to start or is still pending.

If you ask for an administrative appeal now, instead of requesting a conference or making 

written submission, RHS will go ahead with administrative offset during the appeal. But, if you 

should win your appeal, any money collected by administrative offset will be returned to you 

with interest.

Last Notice

This is the last notice on administrative offset that RHS will sent out before it starts using 

administrative offset. If you want to use any of the rights set out in this notice, you must take

action now.

Sincerely,

[ insert name of RHS Official ] 

[ insert title of RHS Official ]

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 106(3550) 

REFERENCE: Servicing and Asset Management Office Handbook Chapter 7

SUBJECT: Request for Administrative Offset

Date: [ insert today's date ]

[ insert Agency name ]

[ insert Agency street/post office address ] 

[ insert city, state, and zip code ]

Dear [ insert Agency Representative ]:

The Rural Housing Service (RHS) requests administrative offset from [ Agency ] program 

payments due or to become due to the below named delinquent debtor. This debt results from 

default on an RHS loan. RHS has exhausted all other resources available to it in an attempt to 

collect this debt.

[ insert debtor(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert debtor(s) street/post office address ]

[ insert city, state, and zip code ] 

[ insert County ]

RHS account number (variable) 

Total amount delinquent ($) 

Principal delinquent ($) 

Interest delinquent ($) 

Delinquency as of (date) 

Interest rate/year (%)

Daily accrual ($)

Date due process letter was sent to debtor: [ Insert date Handbook Letter 105(3550) was sent to 

debtor. Must be at least 30 days before the date of this letter. ]

RHS certifies that the person named in this request owes this debt and that all of the due process 

and other applicable requirements of 31 U.S.C. 3716, 4 CFR Part 102, and its own regulations 

regarding administrative offset have been met. RHS has not been notified of any bankruptcy 

proceedings filed by the debtor.

Make checks payable to the Rural Housing Service and mail offset funds to [ Insert address and 

closing ].

Sincerely,

Servicing and Asset Management Office Servicing Representative

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 107(3550)

REFERENCE: Servicing and Asset Management Office Handbook Chapter 7 SUBJECT:

Request for Salary Offset

Date: [ insert today's date ]

[ insert Agency name ]

[ insert Agency street/post office address ] 

[ insert city, state, and zip code ]

Dear [ insert Agency Representative ]:

The Rural Housing Service requests salary offset from [ Agency Name ]. The employee named 

below has asked us to withhold [ 15 percent of their disposable pay or stated amount ] each pay 

period to offset their [ delinquency, indebtedness ] with the Department of Agriculture.

[ insert debtor(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert debtor(s) street/post office address ]

[ insert city, state, and zip code ] 

[ insert County ]

This salary offset has been taken in accordance with the Debt Collection Act of 1982 and the 

Department of Agriculture’s Salary Offset Regulations. If you have any questions or concerns 

regarding this action, you should contact the Customer Service Department at

.

Sincerely,

[ insert name of RHS Official ] 

[ insert title of RHS Official ]

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 108(3550) 

REFERENCE: Servicing and Asset Management Office Handbook Chapter 7 SUBJECT:

Notification of IRS Offset

Date: [ insert today's date ]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower last name(s) (Mr., Mrs., Ms.) ]:

Refund for Offset

Our records indicate that you are more than 2 months delinquent on a debt to the Rural Housing 

Service (RHS). The Internal Revenue Service (IRS) collects many delinquent payments by 

deducting the amount of the debt from income tax refunds to which delinquent borrowers were 

entitled. RHS plans to collect delinquent amounts through offset, and will refer information 

concerning your account to IRS. All amounts collected will be applied to your loan less 

processing fees.

Legal Notice

Any Federal agency that is owed a past-due, legally enforceable debt will notify the IRS of the 

amount of the debt. A Federal agency, before notifying the IRS, must notify the taxpayer that 

the Agency plans to refer the debt to IRS for offset, determine that the debt is past-due and 

legally enforceable after providing the taxpayer at least 60 days in which to present evidence to 

the contrary, and make reasonable efforts to collect the debt. This letter is to comply with these 

requirements.

Joint Filings with IRS

If your are married, filing a joint tax return, and you incurred this debt separately from your 

spouse who has no legal responsibility for the debt and who has income and withholding and/or 

estimated tax payments, he or she may be entitled to receive his or her portion of the joint 

refund. Such taxpayers filing joint returns should contact the IRS before filing their return 

regarding the steps to take to protect the share of the refund which may be payable to the nonobligated spouse.

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
60 Days to Provide Information

If you feel you should not be reported for offset, you have 60 days from the date of receipt of this 

letter to provide written information to the Customer Service Department to show that offset 

should not be exercised. For example, you will not be reported if you have brought the account 

current to less than 2 months past due, or if you have agreed to bring the account current and 

RHS has officially agreed to that plan. Also, you will be exempted if the debt has been 

discharged in bankruptcy, you are under the jurisdiction of a bankruptcy court, or it is 

determined that RHS is not legally entitled to collect the debt at this time. The Customer Service 

Department will review the information you provide and notify you of the final decision 

regarding the offsetting of your IRS refund.

We strongly urge you to bring your account current.

Credit Bureau Reporting

If you are reported for IRS offset, your account may be reported to credit bureau agencies. You 

have the same 60 day period form receipt of this letter to file a written request with the Servicing 

Office for a review of the status of your account and any information that is proposed to be 

reported to credit agencies. Once reporting begins it will be continued and updated monthly for 7 

years. The amounts listed on the reverse side of this notice reflect the status of your RHS loan(s) 

based on payments received by RHS Customer Service Department.

ALL CONTACTS WITH RHS ARE TO BE DIRECTED TO THE CUSTOMER SERVICE 

DEPARTMENT WHICH IS SERVICING YOUR LOAN.

Sincerely,

[ insert name of RHS Official ] 

[ insert title of RHS Official ]
Handbook Letter 109(3550) 

REFERENCE: Servicing and Asset Management Office Handbook Chapter 7 SUBJECT:

Confirmation of IRS Offset

Date: [ insert today's date ]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower last name(s) (Mr., Mrs., Ms.) ]:

[ Insert the appropriate response ]

We have reviewed the information you submitted concerning Internal Revenue Service (IRS) 

offset and have requested that your name be removed from IRS offset records. No offset will be 

exercised against your refund.

OR

We have reviewed the information you submitted concerning IRS offset and do not agree with 

you. We believe that your RHS debt is legally enforceable and that you are at least 2 months 

past due in your payments. Your name will remain on IRS records, and offset will be exercised 

against your refunds. In addition, information concerning your account may be reported to a 

credit bureau.

Sincerely,

[ insert name of RHS Official ] 

[ insert title of RHS Official ]

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 110 (3550)

REFERENCE: Servicing and Asset Management Office Handbook Chapter 2 SUBJECT:

Notification That the Agency Will Continue With Loan

Date: [insert today’s date]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower(s) last name(s) (Mr., Mrs., Ms.) ]:

Based on Rural Housing Service’s (RHS) evaluation of your present financial position and a comparison 

of lender requirements, it has been determined that you may experience difficulty obtaining suitable credit 

from other sources to refinance your RHS loan. For this reason, RHS will continue with your loan and 

you will not be asked to pursue refinancing at this time.

However, your loan will remain subject to the refinancing requirement and you may be asked to refinance 

the balance of your RHS indebtedness at a later date.

Sincerely,

[ insert name of Approval Official ] 

[ insert title of Approval Official ]

(05-27-98) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 111 (3550)

REFERENCE: Servicing and Asset Management Office Handbook Chapter 2 SUBJECT:

Request for Borrower to Refinance With Private Credit

Date: [ insert today’s date ]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower(s) last name(s) (Mr., Mrs., Ms.) ]:

Your Security Instrument with Rural Housing Service (RHS) states that you will refinance the unpaid balance of 

your RHS loan when you have progressed to the point you can obtain credit from a private lending institution at 

reasonable rates and terms. After reviewing lender mortgage requirements, it appears that you would qualify for 

refinancing at this time. Within 90 days from the date of this letter, we request that you refinance your housing 

loan in full with a private lender.

Currently, mortgage interest rates are at historic lows. You may be able to reduce the interest rate on your RHS 

loan and get a 25 percent discount on your subsidy recapture by refinancing your RHS loan with a private lender. 

By refinancing your RHS loan you may be able to save thousands of dollars in interest costs and also reduce your 

monthly mortgage payment.

As mentioned, we are offering a 25 percent discount on the recapture if the following conditions are met:

• Recapture is paid along with the final loan payment,

• You remain in the home, and

• You retain title to the property.

When the property’s market value is determined, the Servicing and Asset Management Office (Servicing Office) 

will calculate your payoff and include the amount of discounted subsidy recapture owed. You will be given the 

opportunity to pay off the subsidy recapture in a lump sum or defer repayment. If you choose to defer repayment, 

you will not be eligible for the 25 percent discount.

In order to proceed with obtaining credit with another lender in your area, payoff information specific to your 

account may be obtained by calling the Servicing Office at 1-800-414-1226, 7:00 a.m. to 5:00 p.m., Monday 

through Friday, Central Standard Time.

(05-27-98) SPECIAL PN

Revised (03-31-21) SPECIAL PN
If you are unable to refinance, you will need to provide the Servicing Office (within 90 days) a letter from 

another lender documenting that you made an earnest effort to seek other credit but were unable to be approved 

for refinancing. This letter should include:

• Name of the lender contacted,

• Amount of loan requested and the amount, if any, offered by the lender,

• Rates and terms offered by the lender and specific reasons why credit is not available,

• Information provided to the lender regarding the purpose of the loan requested.

If you need assistance or have questions you may contact the Servicing Office by calling 1-800-414-1226 and 

entering code 1777 when prompted.

Sincerely,

[ insert name of Approval Official ] 

[ insert title of Approval Official ]
Handbook Letter 112 (3550)

REFERENCE: Servicing and Asset Management Office Handbook Chapter 2 SUBJECT:

Reminder Letter

Date: [ insert today’s date ]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower(s) last name(s) (Mr., Mrs., Ms.) ]:

This is a reminder to our previous letter requesting that you refinance your Rural Housing Service (RHS) Loan 

within 90 days from (insert date Request to Refinance letter was sent). You need to take positive steps toward 

refinancing your RHS Loan. Failure to cooperate with this review is a violation of your security instruments. If 

we do not receive the information requested in our previous letter, RHS may recommend legal proceedings 

without further notice.

If you have not yet applied to refinance your home loan with a mortgage lender, you may call the Servicing and 

Asset Management Office (Servicing Office) at 1-800-414-1226 to provide financial information. When you 

call, please be prepared to provide the amount of your monthly gross income and installment debt payments. 

RHS will review your financial information and advise you regarding your ability to refinance. Another 

opportunity to refinance is through a guaranteed lender. Your local Field Office can provide a list of guaranteed 

lenders.

Payoff information may be obtained by calling the Servicing Office at 1-800-414-1226 and entering option 2 

when prompted, or TDD 1-800-438-1832, 7:00 a.m. to 5:00 p.m., Monday through Friday, Central Standard 

Time. With a touch tone telephone, the Voice Response Unit (VRU) can provide automated confidential account 

information, seven days per week, outside of normal business hours. The Servicing Office can also provide 

information on deferring recapture of payment subsidies, possible discounts for paying subsidy recapture, and 

final payments.

Sincerely,

[ insert name of Approval Official ] 

[ insert title of Approval Official ]

(05-27-98) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 113 (3550)

REFERENCE: Servicing and Asset Management Office Handbook Chapter 2 SUBJECT:

Follow up Request for Borrower to Refinance With Private Credit

Date: [insert today’s date]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower(s) last name(s) (Mr., Mrs., Ms.) ]:

This is a follow up to our letter requesting you to refinance your Rural Housing Service (RHS) loan.

We have reexamined the financial progress you have made since obtaining your loan based upon the 

financial information you recently provided. A determination was made that other credit appears to be 

available to you at rates and terms you can reasonably be expected to afford.

You need to take positive steps to refinance your loan within 90 days from (insert date of Handbook 

Letter 7).

Sincerely,

[ insert name of Approval Official ] 

[ insert title of Approval Official ]

(05-27-98) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Handbook Letter 114 (3550)

REFERENCE: Servicing and Asset Management Office Handbook Chapter 2 SUBJECT:

Unresponsive

Date: [insert today’s date]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

Dear [ insert borrower(s) last name(s) (Mr., Mrs., Ms.) ]:

Since the Servicing Office has not heard from you regarding our refinancing request, it appears that 

you are not taking advantage of historic low mortgage interest rates to refinance your home loan and 

reduce your interest rate.

We continue to encourage you to take advantage of refinancing opportunities. You may refinance your 

RHS loan at any time without penalty. Your loan remains subject to the refinancing requirement.

Sincerely,

[ insert name of Approval Official ] 

[ insert title of Approval Official ]

(05-27-98) SPECIAL PN

Revised (03-31-21) SPECIAL PN
HB-2-3550

Handbook Letter 115(3550)

REFERENCE: Servicing and Asset Management Office Handbook Chapter 6 

SUBJECT: RESPONSE TO REQUEST TO SALE FOR LESS THAN THE DEBT

Date: [insert today’s date]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ]

RE: [ Type of Assistance Requested ] 

[ insert account # ]

[ Residential Real Estate Located at (Popular Street Address of Property) ]

Dear [ insert borrower last name(s) (Mr., Mrs., Ms.) ]:

USDA Rural Development has reviewed your request for consent to allow you to sell the subject 

property for the sale price that you have proposed. USDA Rural Development consents to this 

sale and agrees to release its first mortgage lien upon receipt of net proceeds from the sale in an 

amount not less than $ . By approving this sale, the Agency is agreeing only 

to release its lien; however, you will remain obligated for repayment of any remaining debt. The 

remaining debt can be settled through the debt settlement process. For your convenience a Debt 

Settlement Application is enclosed for you to complete and return to the Servicing and Asset 

Management Office as instructed in the application.

- or -

USDA Rural Development has reviewed your request for consent to allow you to sell the subject 

property for the sale price that you have proposed and does not consent to this sale for the 

following reasons: [ insert specific reasons ]. Please contact the local field office at the above 

location for additional information.

Sincerely,

[ insert name of Rural Development Official ] 

[ insert title of Rural Development Official ] 

(05-27-98) SPECIAL PN

Revised (03-31-21) SPECIAL PN
Sec.

APPENDIX 4

7 CFR PART 11--NATIONAL APPEALS DIVISION RULES OF PROCEDURE

TABLE OF CONTENTS

11.1 Definitions.

11.2 General statement.

11.3 Applicability.

11.4 Inapplicability of other laws and regulations.

11.5 Informal review of adverse decisions.

11.6 Director review of agency determination of appealability and 

right of participants to Division hearing.

11.7 Ex parte communications.

11.8 Division hearings.

11.9 Director review of determinations of Hearing Officers.

11.10 Basis for determinations.

11.11 Reconsideration of Director determinations.

11.12 Effective date and implementation of final determinations of 

the Division.

11.13 Judicial review.

Appendix 4, Page 1 of 19

(12-23-96) SPECIAL PN
11.14 Filing of appeals and computation of time.

Authority: 5 U.S.C. 301; Title II, Subtitle H, Pub. L. 103-354, 108 Stat. 3228 (7 U.S.C. 6991 et 

seq.); Reorganization Plan No. 2 of 1953 (5 U.S.C. App.).

§ 11.1 Definitions.

For purposes of this part:

Adverse decision means an administrative decision made by an officer, employee, or committee 

of an agency that is adverse to a participant. The term includes a denial of equitable relief by an 

agency or the failure of an agency to issue a decision or otherwise act on the request or right of 

the participant within timeframes specified by agency program statutes or regulations or within a 

reasonable time if timeframes are not specified in such statutes or regulations. The term does not 

include a decision over which the Board of Contract Appeals has jurisdiction.

Agency means:

(1) The Agricultural Stabilization and Conservation Service (ASCS);

(2) The Commodity Credit Corporation (CCC);

(3) The Farm Service Agency (FSA);

(4) The Farmers Home Administration (FmHA);

(5) The Federal Crop Insurance Corporation (FCIC);

(6) The Natural Resources Conservation Service (NRCS);

(7) The Rural Business-Cooperative Service (RBS);

(8) The Rural Development Administration (RDA);

(9) The Rural Housing Service (RHS);

(10) The Rural Utilities Service (RUS) (but not for programs authorized by the Rural 

Electrification Act of 1936 and the Rural Telephone Bank Act, 7 U.S.C. 901 et seq.);

Appendix 4, Page 2 of 19
(11) The Soil Conservation Service (SCS);

(12) A State, county, or area committee established under section 8(b)(5) of the Soil 

Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)); and

(13) Any successor agency to the above-named agencies, and any other agency or office 

of the Department which the Secretary may designate.

Agency record means all the materials maintained by an agency related to an adverse decision 

which are submitted to the Division by an agency for consideration in connection with an appeal 

under this part, including all materials prepared or reviewed by the agency during its 

consideration and decision-making process, but shall not include records or information not 

related to the adverse decision at issue. All materials contained in the agency record submitted 

to the Division shall be deemed admitted as evidence for purposes of a hearing or a record 

review under Sec. 11.8.

Agency representative means any person, whether or not an attorney, who is authorized to 

represent the agency in an administrative appeal under this part.

Appeal means a written request by a participant asking for review by the National Appeals 

Division of an adverse decision under this part.

Appellant means any participant who appeals an adverse decision in accordance with this part. 

Unless separately set forth in this part, the term ``appellant'' includes an authorized 

representative.

Authorized representative means any person, whether or not an attorney, who is authorized in 

writing by a participant, consistent with Sec. 11.6(c), to act for the participant in an 

administrative appeal under this part. The authorized representative may act on behalf of the 

participant except when the provisions of this part require action by the participant or appellant 

personally.

Case record means all the materials maintained by the Secretary related to an adverse decision. 

The case record includes both the agency record and the hearing record.

Days means calendar days unless otherwise specified.

Department means the United States Department of Agriculture (USDA). 

Director means the Director of the Division or a designee of the Director. 

Division means the National Appeals Division established by this part.

(12-23-96) SPECIAL PN

Appendix 4, Page 3 of 19
Equitable relief means relief which is authorized under section 326 of the Food and Agriculture 

Act of 1962 (7 U.S.C. 1339a) and other laws administered by the agency.

Ex parte communication means an oral or written communication to any officer or employee of 

the Division with respect to which reasonable prior notice to all parties is not given, but it shall 

not include requests for status reports, or inquiries on Division procedure, in reference to any 

matter or proceeding connected with the appeal involved.

Hearing, except with respect to Sec. 11.5, means a proceeding before the Division to afford a 

participant the opportunity to present testimony or documentary evidence or both in order to 

have a previous determination reversed and to show why an adverse determination was in error.

Hearing Officer means an individual employed by the Division who conducts the hearing and 

determines appeals of adverse decisions by any agency.

Hearing record means all documents, evidence, and other materials generated in relation to a 

hearing under Sec. 11.8.

Implement means the taking of action by an agency of the Department in order fully and 

promptly to effectuate a final determination of the Division.

Participant means any individual or entity who has applied for, or whose right to participate in or 

receive, a payment, loan, loan guarantee, or other benefit in accordance with any program of an 

agency to which the regulations in this part apply is affected by a decision of such agency. With 

respect to guaranteed loans made by FSA, both the borrower and the lender jointly must appeal 

an adverse decision except that the denial or reduction of a final loss payment to a lender shall be 

appealed by the lender only. The term does not include persons whose claim(s) arise under:

(1) Programs subject to various proceedings provided for in 7 CFR part 1;

(2) Programs governed by Federal contracting laws and regulations (appealable 

under other rules and to other forums, including to the Department's Board of 

Contract Appeals under 7 CFR part 24);

(3) The Freedom of Information Act (appealable under 7 CFR part 1, subpart A);

Appendix 4, Page 4 of 19
(4) Suspension and debarment disputes, including, but not limited to, those falling 

within the scope of 7 CFR parts 1407 and 3017;

(5) Export programs administered by the Commodity Credit Corporation;

(6) Disputes between reinsured companies and the Federal Crop Insurance 

Corporation;

(7) Tenant grievances or appeals prosecutable under the provisions of 7 CFR part 

1944, subpart L, under the multi-family housing program carried out by RHS;

(8) Personnel, equal employment opportunity, and other similar disputes with any 

agency or office of the Department which arise out of the employment 

relationship;

(9) The Federal Tort Claims Act, 28 U.S.C. 2671 et seq., or the Military Personnel 

and Civilian Employees Claims Act of 1964, 31 U.S.C. 3721; or

(10) Discrimination complaints prosecutable under the nondiscrimination 

regulations at 7 CFR parts 15, 15a, 15b, and 15e.

Record review means an appeal considered by the Hearing Officer in which the Hearing 

Officer's determination is based on the agency record and other information submitted by the 

appellant and the agency, including information submitted by affidavit or declaration.

Secretary means the Secretary of Agriculture.

§ 11.2 General statement.

(a) This part sets forth procedures for proceedings before the National Appeals Division within 

the Department. The Division is an organization within the Department, subject to the general 

supervision of and policy direction by the Secretary, which is independent from all other 

agencies and offices of the Department, including Department officials at the state and local 

level. The Director of the Division reports directly to the Secretary of

Appendix 4, Page 5 of 19

(12-23-96) SPECIAL PN
Agriculture. The authority of the Hearing Officers and the Director of the Division, and 

the administrative appeal procedures which must be followed by program participants who 

desire to appeal an adverse decision and by the agency which issued the adverse decision, 

are included in this part.

(b) Pursuant to section 212(e) of the Federal Crop Insurance Reform and Department of 

Agriculture Reorganization Act of 1994, Public Law 103-354 (the Act), 7 U.S.C. 6912(e), 

program participants shall seek review of an adverse decision before a Hearing Officer of 

the Division, and may seek further review by the Director, under the provisions of this part 

prior to seeking judicial review.

§ 11.3 Applicability.

(a) Subject matter. The regulations contained in this part are applicable to adverse 

decisions made by an agency, including, for example, those with respect to:

(1) Denial of participation in, or receipt of benefits under, any program of an 

agency;

(2) Compliance with program requirements;

(3) The making or amount of payments or other program benefits to a participant in 

any program of an agency; and

(4) A determination that a parcel of land is a wetland or highly erodible land.

(b) Limitation. The procedures contained in this part may not be used to seek review of

statutes or USDA regulations issued under Federal law.

§ 11.4 Inapplicability of other laws and regulations.

The provisions of the Administrative Procedure Act generally applicable to agency adjudications 

(5 U.S.C. 554, 555, 556, 557, & 3105) are not applicable to proceedings under this part. The 

Equal Access to Justice Act, as amended, 5 U.S.C. 504, does not apply to these proceedings. The 

Federal Rules of Evidence, 28 U.S.C. App., shall not apply to these proceedings.

Appendix 4, Page 6 of 19
§ 11.5 Informal review of adverse decisions.

(a) Required informal review of FSA adverse decisions. A participant must seek an 

informal review of an adverse decision issued at the field service office level by an officer 

or employee of FSA, or by any employee of a county or area committee established under 

section 8(b)(5) of the Soil Conservation and Domestic Allotment Act, 16 U.S.C. 

590h(b)(5), before NAD will accept an appeal of an FSA adverse decision. Such informal 

review shall be done by the county or area committee with responsibility for the adverse 

decision at issue. The procedures for requesting such an informal review before FSA are 

found in 7 CFR part 780. After receiving a decision upon review by a county or area 

committee, a participant may seek further informal review by the State FSA committee or 

may appeal directly to NAD under Sec. 11.6(b).

(b) Optional informal review. With respect to adverse decisions issued at the State office 

level of FSA and adverse decisions of all other agencies, a participant may request an 

agency informal review of an adverse decision of that agency prior to appealing to NAD.

Procedures for requesting such an informal review are found at 7 CFR part 780 (FSA), 7 

CFR part 614 (NRCS), 7 CFR part 1900, subpart B (RUS), 7 CFR part 1900, subpart B 

(RBS), and 7 CFR part 1900, subpart B (RHS).

(c) Mediation. A participant also shall have the right to utilize any available alternative 

dispute resolution (ADR) or mediation program, including any mediation program 

available under title V of the Agriculture Credit Act of 1987, 7 U.S.C. 5101 et seq., in 

order to attempt to seek resolution of an adverse decision of an agency prior to a NAD 

hearing. If a participant:

(1) Requests mediation or ADR prior to filing an appeal with NAD, the participant 

stops the running of the 30-day period during which a participant may appeal to 

NAD under Sec. 11.6(b)(1), and will have the balance of days remaining in that 

period to appeal to NAD once mediation or ADR has concluded.

(2) Requests mediation or ADR after having filed an appeal to NAD under Sec. 

11.6(b), but before the hearing, the participant will be deemed to have waived his 

right to have a hearing within 45 days under Sec. 11.8(c)(1) but shall have the right 

to have a hearing within 45 days after conclusion of mediation or ADR.

Appendix 4, Page 7 of 19

(12-23-96) SPECIAL PN
§ 11.6 Director review of agency determination of appealability and

right of participants to Division hearing.

(a) Director review of agency determination of appealability.

(1) Not later than 30 days after the date on which a participant receives a 

determination from an agency that an agency decision is not appealable, the 

participant must submit a written request to the Director to review the determination 

in order to obtain such review by the Director.

(2) The Director shall determine whether the decision is adverse to the individual 

participant and thus appealable or is a matter of general applicability and thus not 

subject to appeal, and will issue a final determination notice that upholds or reverses 

the determination of the agency. This final determination is not appealable. If the 

Director reverses the determination of the agency, the Director will notify the 

participant and the agency of that decision and inform the participant of his or her 

right to proceed with an appeal.

(3) The Director may delegate his or her authority to conduct a review under this 

subsection to any subordinate official of the Division other than a Hearing Officer. 

In any case in which such review is conducted by such a subordinate official, the 

subordinate official's determination shall be considered to be the determination of 

the Director and shall be final and not appealable.

(b) Appeals of adverse decisions.

(1) To obtain a hearing under Sec. 11.8, a participant personally must request such 

hearing not later than 30 days after the date on which the participant first received 

notice of the adverse decision or after the date on which the participant receives 

notice of the Director's determination that a decision is appealable. In the case of the 

failure of an agency to act on the request or right of a recipient, a participant 

personally must request such hearing not later than 30 days after the participant 

knew or reasonably should have known that the agency had not acted within the 

timeframes specified by agency program regulations, or, where such regulations 

specify no timeframes, not later than 30 days after the participant reasonably should 

have known of the agency's failure to act.

Appendix 4, Page 8 of 19
(2) A request for a hearing shall be in writing and personally signed by the 

participant, and shall include a copy of the adverse decision to be reviewed, if 

available, along with a brief statement of the participant's reasons for believing that 

the decision, or the agency's failure to act, was wrong. The participant also shall

send a copy of the request for a hearing to the agency, and may send a copy of the 

adverse decision to be reviewed to the agency, but failure to do either will not 

constitute grounds for dismissal of the appeal. Instead of a hearing, the participant 

may request a record review.

(c) If a participant is represented by an authorized representative, the authorized 

representative must file a declaration with NAD, executed in accordance with 28 U.S.C. 

1746, stating that the participant has duly authorized the declarant in writing to represent 

the participant for purposes of a specified adverse decision or decisions, and attach a copy 

of the written authorization to the declaration.

§ 11.7 Ex parte communications.

(a) Ex parte communications.

(1) At no time between the filing of an appeal and the issuance of a final 

determination under this part shall any officer or employee of the Division engage in 

ex parte communications regarding the merits of the appeal with any person having 

any interest in the appeal pending before the Division, including any person in an 

advocacy or investigative capacity. This prohibition does not apply to:

(i) Discussions of procedural matters related to an appeal; or

(ii) Discussions of the merits of the appeal where all parties to the appeal have 

been given notice and an opportunity to participate.

(2) In the case of a communication described in paragraph (a)(1)(ii) of this section, a 

memorandum of any such discussion shall be included in the hearing record.

(b) No interested person shall make or knowingly cause to be made to any officer or 

employee of the Division an ex parte communication relevant to the merits of the appeal.

Appendix 4, Page 9 of 19

(12-23-96) SPECIAL PN
(c) If any officer or employee of the Division receives an ex parte communication in 

violation of this section, the one who receives the communication shall place in the 

hearing record:

(1) All such written communications;

(2) Memoranda stating the substance of all such oral communications; and

(3) All written responses to such communications, and memoranda stating the 

substance of any oral responses thereto.

(d) Upon receipt of a communication knowingly made or knowingly caused to be made by 

a party in violation of this section the Hearing Officer or Director may, to the extent 

consistent with the interests of justice and the policy of the underlying program, require 

the party to show cause why such party's claim or interest in the appeal should not be 

dismissed, denied, disregarded, or otherwise adversely affected on account of such 

violation.

§ 11.8 Division hearings.

(a) General rules.

(1) The Director, the Hearing Officer, and the appellant shall have access to the 

agency record of any adverse decision appealed to the Division for a hearing. Upon 

request by the appellant, the agency shall provide the appellant a copy of the agency 

record.

(2) The Director and Hearing Officer shall have the authority to administer oaths 

and affirmations, and to require, by subpoena, the attendance of witnesses and the 

production of evidence. A Hearing Officer shall obtain the concurrence of the 

Director prior to issuing a subpoena.

(i) A subpoena requiring the production of evidence may be requested and 

issued at any time while the case is pending before the Division.

(ii) An appellant or an agency, acting through any appropriate official, may 

request the issuance of a subpoena requiring the attendance of a witness by 

submitting such a request in writing at least 14 days before the scheduled date

of a hearing. The Director or Hearing Officer shall issue a subpoena at least 7 

days prior to the scheduled date of a hearing.

Appendix 4, Page 10 of 19
(iii) A subpoena shall be issued only if the Director or a Hearing Officer 

determines that:

(A) For a subpoena of documents, the appellant or the agency has 

established that production of documentary evidence is necessary and is 

reasonably calculated to lead to information which would affect the 

final determination or is necessary to fully present the case before the 

Division; or

(B) For a subpoena of a witness, the appellant or the agency has 

established that either a representative of the Department or a private 

individual possesses information that is pertinent and necessary for 

disclosure of all relevant facts which could impact the final 

determination, that the information cannot be obtained except through 

testimony of the person, and that the testimony cannot be obtained 

absent issuance of a subpoena.

(iv) The party requesting issuance of a subpoena shall arrange for service. 

Service of a subpoena upon a person named therein may be made by 

registered or certified mail, or in person. Personal service shall be made by 

personal delivery of a copy of the subpoena to the person named therein by 

any person who is not a party and who is not less than 18 years of age. Proof 

of service shall be made by filing with the Hearing Officer or Director who 

issued the subpoena a statement of the date and manner of service and of the 

names of the persons served, certified by the person who made the service in 

person or by return receipts for certified or registered mail.

(v) A party who requests that a subpoena be issued shall be responsible for the 

payment of any reasonable travel and subsistence costs incurred by the 

witness in connection with his or her appearance and any fees of a person who 

serves the subpoena in person. The Department shall pay the costs associated 

with the appearance of a Department employee whose role as a witness arises 

out of his or her performance of official duties, regardless of which party 

requested the subpoena. The failure to make payment of such charges on 

demand may be deemed by the Hearing Officer or Director as sufficient 

ground for striking the testimony of the witness and the evidence the witness 

has produced.

Appendix 4, Page 11 of 19

(12-23-96) SPECIAL PN
(vi) If a person refuses to obey a subpoena, the Director, acting through the 

Office of the General Counsel of the Department and the Department of 

Justice, may apply to the United States District Court in the jurisdiction where 

that person resides to have the subpoena enforced as provided in the Federal 

Rules of Civil Procedure (28 U.S.C. App.).

(3) Testimony required by subpoena pursuant to paragraph (a)(2) of this section 

may, at the discretion of the Director or a Hearing Officer, be presented at the 

hearing either in person or telephonically.

(b) Hearing procedures applicable to both record review and hearings.

(1) Upon the filing of an appeal under this part of an adverse decision by any 

agency, the agency promptly shall provide the Division with a copy of the agency 

record. If requested by the appellant prior to the hearing, a copy of such agency 

record shall be provided to the appellant by the agency within 10 days of receipt of 

the request by the agency.

(2) The Director shall assign the appeal to a Hearing Officer and shall notify the 

appellant and agency of such assignment. The notice also shall advise the appellant 

and the agency of the documents required to be submitted under paragraph (c)(2) of 

this section, and notify the appellant of the option of having a hearing by telephone.

(3) The Hearing Officer will receive evidence into the hearing record without 

regard to whether the evidence was known to the agency officer, employee, or 

committee making the adverse decision at the time the adverse decision was made.

(c) Procedures applicable only to hearings.

(1) Upon a timely request for a hearing under Sec. 11.6(b), an appellant has the right 

to have a hearing by the Division on any adverse decision within 45 days after the 

date of receipt of the request for the hearing by the Division.

(2) The Hearing Officer shall set a reasonable deadline for submission of the 

following documents:

(i) By the appellant:

(A) A short statement of why the decision is wrong;

Appendix 4, Page 12 of 19
(B) A copy of any document not in the agency record that the appellant 

anticipates introducing at the hearing; and

(C) A list of anticipated witnesses and brief descriptions of the evidence 

such witnesses will offer.

(ii) By the agency:

(A) A copy of the adverse decision challenged by the appellant;

(B) A written explanation of the agency's position, including the 

regulatory or statutory basis therefor;

(C) A copy of any document not in the agency record that the agency 

anticipates introducing at the hearing; and

(D) A list of anticipated witnesses and brief descriptions of the evidence 

such witnesses will offer.

(3) Not less than 14 days prior to the hearing, the Division must provide the 

appellant, the authorized representative, and the agency a notice of hearing

specifying the date, time, and place of the hearing. The hearing will be held in the 

State of residence of the appellant, as determined by the Hearing Officer, or at a 

location that is otherwise convenient to the appellant, the agency, and the Division. 

The notice also shall notify all parties of the right to obtain an official record of the 

hearing.

(4) Pre-hearing conference. Whenever appropriate, the Hearing Officer shall hold a 

pre-hearing conference in order to attempt to resolve the dispute or to narrow the 

issues involved. Such pre-hearing conference shall be held by telephone unless the 

Hearing Officer and all parties agree to hold such conference in person.

(5) Conduct of the hearing.

(i) A hearing before a Hearing Officer will be in person unless the appellant 

agrees to a hearing by telephone.

(12-23-96) SPECIAL PN

Appendix 4, Page 13 of 19
(ii) The hearing will be conducted by the Hearing Officer in the manner 

determined by the Division most likely to obtain the facts relevant to the 

matter or matters at issue. The Hearing Officer will allow the presentation of

evidence at the hearing by any party without regard to whether the evidence 

was known to the officer, employee, or committee of the agency making the 

adverse decision at the time the adverse decision was made. The Hearing 

Officer may confine the presentation of facts and evidence to pertinent matters 

and exclude irrelevant, immaterial, or unduly repetitious evidence, 

information, or questions. Any party shall have the opportunity to present oral 

and documentary evidence, oral testimony of witnesses, and arguments in 

support of the party's position; controvert evidence relied on by any other 

party; and question all witnesses. When appropriate, agency witnesses 

requested by the appellant will be made available at the hearing. Any 

evidence may be received by the Hearing Officer without regard to whether 

that evidence could be admitted in judicial proceedings.

(iii) An official record shall be made of the proceedings of every hearing. This 

record will be made by an official tape recording by the Division. In addition, 

either party may request that a verbatim transcript be made of the hearing 

proceedings and that such transcript shall be made the official record of the 

hearing. The party requesting a verbatim transcript shall pay for the 

transcription service, shall provide a certified copy of the transcript to the 

Hearing Officer free of charge, and shall allow any other party desiring to 

purchase a copy of the transcript to order it from the transcription service.

(6) Absence of parties.

(i) If at the time scheduled for the hearing either the appellant or the agency 

representative is absent, and no appearance is made on behalf of such absent 

party, or no arrangements have been made for rescheduling the hearing, the 

Hearing Officer has the option to cancel the hearing unless the absent party 

has good cause for the failure to appear. If the Hearing Officer elects to cancel 

the hearing, the Hearing Officer may:

Appendix 4, Page 14 of 19
(A) Treat the appeal as a record review and issue a determination based 

on the agency record as submitted by the agency and the hearing record 

developed prior to the hearing date;

(B) Accept evidence into the hearing record submitted by any party 

present at the hearing, and then issue a determination; or

(C) Dismiss the appeal.

(ii) When a hearing is cancelled due to the absence of a party, the Hearing 

Officer will add to the hearing record any additional evidence submitted by 

any party present, provide a copy of such evidence to the absent party or 

parties, and allow the absent party or parties 10 days to provide a response to 

such additional evidence for inclusion in the hearing record.

(iii) Where an absent party has demonstrated good cause for the failure to 

appear, the Hearing Officer shall reschedule the hearing unless all parties 

agree to proceed without a hearing.

(7) Post-hearing procedure. The Hearing Officer will leave the hearing record open 

after the hearing for 10 days, or for such other period of time as the Hearing Officer 

shall establish, to allow the submission of information by the appellant or the 

agency, to the extent necessary to respond to new facts, information, arguments, or 

evidence presented or raised at the hearing. Any such new information will be added 

by the Hearing Officer to the hearing record and sent to the other party or parties by 

the submitter of the information. The Hearing Officer, in his or her discretion, may 

permit the other party or parties to respond to this post-hearing submission.

(d) Interlocutory review. Interlocutory review by the Director of rulings of a Hearing 

Officer are not permitted under the procedures of this part.

(e) Burden of proof. The appellant has the burden of proving that the adverse decision of 

the agency was erroneous by a preponderance of the evidence.

(f) Timing of issuance of determination. The Hearing Officer will issue a notice of the 

determination on the appeal to the named appellant, the authorized representative, and the 

agency not later than 30 days after a hearing or the closing

(12-23-96) SPECIAL PN

Appendix 4, Page 15 of 19
date of the hearing record in cases in which the Hearing Officer receives additional 

evidence from the agency or appellant after a hearing. In the case of a record review, the 

Hearing Officer will issue a notice of determination within 45 days of receipt of the 

appellant's request for a record review. Upon the Hearing Officer's request, the Director 

may establish an earlier or later deadline. A notice of determination shall be accompanied 

by a copy of the procedures for filing a request for Director review under Sec. 11.9. If the 

determination is not appealed to the Director for review under Sec. 11.9, the notice 

provided by the Hearing Officer shall be considered to be a notice of a final determination 

under this part.

§ 11.9 Director review of determinations of Hearing Officers.

(a) Requests for Director review.

(1) Not later than 30 days after the date on which an appellant receives the 

determination of a Hearing Officer under Sec. 11.8, the appellant must submit a 

written request, signed personally by the named appellant, to the Director to review 

the determination in order to be entitled to such review by the Director. Such request 

shall include specific reasons why the appellant believes the determination is wrong.

(2) Not later than 15 business days after the date on which an agency receives the 

determination of a Hearing Officer under Sec. 11.8, the head of the agency may 

make a written request that the Director review the determination. Such request shall 

include specific reasons why the agency believes the determination is wrong, 

including citations of statutes or regulations that the agency believes the 

determination violates. Any such request may be made by the head of an agency 

only, or by a person acting in such capacity, but not by any subordinate officer of 

such agency.

(3) A copy of a request for Director review submitted under this paragraph (a) shall 

be provided simultaneously by the submitter to each party to the appeal.

(b) Notification of parties. The Director promptly shall notify all parties of receipt of a 

request for review.

(c) Responses to request for Director review. Other parties to an appeal may submit 

written responses to a request for Director review within 5 business days from the date of 

receipt of a copy of the request for review.

Appendix 4, Page 16 of 19
(d) Determination of Director.

(1) The Director will conduct a review of the determination of the Hearing Officer 

using the agency record, the hearing record, the request for review, any responses 

submitted under paragraph (c) of this section, and such other arguments or 

information as may be accepted by the Director, in order to determine whether the 

decision of the Hearing Officer is supported by substantial evidence. Based on such 

review, the Director will issue a final determination notice that upholds, reverses, or 

modifies the determination of the Hearing Officer. The Director's determination 

upon review of a Hearing Officer's decision shall be considered to be the final 

determination under this part and shall not be appealable. However, if the Director 

determines that the hearing record is inadequate or that new evidence has been 

submitted, the Director may remand all or a portion of the determination to the 

Hearing Officer for further proceedings to complete the hearing record or, at the 

option of the Director, to hold a new hearing.

(2) The Director will complete the review and either issue a final determination or 

remand the determination not later than--

(i) 10 business days after receipt of the request for review, in the case of a 

request by the head of an agency; or

(ii) 30 business days after receipt of the request for review, in the case of a 

request by an appellant.

(3) In any case or any category of cases, the Director may delegate his or her 

authority to conduct a review under this section to any Deputy or Associate 

Directors of the Division. In any case in which such review is conducted by a 

Deputy or Associate Director under authority delegated by the Director, the Deputy 

or Associate Director's determination shall be considered to be the determination of 

the Director under this part and shall be final and not appealable.

(e) Equitable relief. In reaching a decision on an appeal, the Director shall have the 

authority to grant equitable relief under this part in the same manner and to the same 

extent as such authority is provided an agency under applicable laws and regulations.

(12-23-96) SPECIAL PN

Appendix 4, Page 17 of 19
§ 11.10 Basis for determinations.

(a) In making a determination, the Hearing Officers and the Director are not bound by 

previous findings of facts on which the agency's adverse decision was based.

(b) In making a determination on the appeal, Hearing Officers and the Director shall 

ensure that the decision is consistent with the laws and regulations of the agency, and with 

the generally applicable interpretations of such laws and regulations.

(c) All determinations of the Hearing Officers and the Director must be based on 

information from the case record, laws applicable to the matter at issue, and applicable 

regulations published in the Federal Register and in effect on the date of the adverse 

decision or the date on which the acts that gave rise to the adverse decision occurred, 

whichever date is appropriate under the applicable agency program laws and regulations.

§ 11.11 Reconsideration of Director determinations.

(a) Reconsideration of a determination of the Director may be requested by the appellant 

or the agency within 10 days of receipt of the determination. The Director will not 

consider any request for reconsideration that does not contain a detailed statement of a 

material error of fact made in the determination, or a detailed explanation of how the 

determination is contrary to statute or regulation, which would justify reversal or 

modification of the determination.

(b) The Director shall issue a notice to all parties as to whether a request for 

reconsideration meets the criteria in paragraph (a) of this section. If the request for 

reconsideration meets such criteria, the Director shall include a copy of the request for 

reconsideration in the notice to the non-requesting parties to the appeal. The nonrequesting parties shall have 5 days from receipt of such notice from the Director to file a 

response to the request for reconsideration with the Director.

(c) The Director shall issue a decision on the request for reconsideration within 5 days of 

receipt of responses from the non-requesting parties. If the Director's decision upon 

reconsideration reverses or modifies the final determination of the Director rendered under 

Sec. 11.9(d), the Director's decision on reconsideration will become the final 

determination of the Director under Sec. 11.9(d) for purposes of this part.

Appendix 4, Page 18 of 19
§ 11.12 Effective date and implementation of final determinations of the Division.

(a) On the return of a case to an agency pursuant to the final determination of the Division, 

the head of the agency shall implement the final determination not later than 30 days after 

the effective date of the notice of the final determination.

(b) A final determination will be effective as of the date of filing of an application, the date

of the transaction or event in question, or the date of the original adverse decision, 

whichever is applicable under the applicable agency program statutes or regulations.

§ 11.13 Judicial review.

(a) A final determination of the Division shall be reviewable and enforceable by any 

United States District Court of competent jurisdiction in accordance with chapter 7 of title 

5, United States Code.

(b) An appellant may not seek judicial review of any agency adverse decision appealable 

under this part without receiving a final determination from the Division pursuant to the 

procedures of this part.

§ 11.14 Filing of appeals and computation of time.

(a) An appeal, a request for Director review, or any other document will be considered

``filed'' when delivered in writing to the Division, when postmarked, or when a complete 

facsimile copy is received by the Division.

(b) Whenever the final date for any requirement of this part falls on a Saturday, Sunday, 

Federal holiday, or other day on which the Division is not open for the transaction of 

business during normal working hours, the time for filing will be extended to the close of 

business on the next working day.

(c) The time for filing an appeal, a request for Director review, or any other document 

expires at 5:00 p.m. local time at the office of the Division to which the filing is submitted 

on the last day on which such filing may be made.

(12-23-96) SPECIAL PN

Appendix 4, Page 19 of 19
HB-2-3550

APPENDIX 5

APPRAISAL GUIDELINES [7 CFR 3550.62]

A. SERVICING ACTIONS REQUIRING APPRAISALS

The Servicing Office may need to establish a property’s market value in order to take 

several special servicing actions. In most cases the value of the property is determined through 

an appraisal.

When an appraisal is required, the Servicing Office will request assistance from the Field 

Staff. The Servicing Office may need to have an appraisal conducted when:

• The property’s value is needed to determine the amount of subsidy subject to 

recapture.

• The borrower requests that a portion of the security property be released and the 

Agency needs to determine if the remainder has adequate value to secure the 

Agency’s debt.

• The borrower offers a deed-in-lieu of foreclosure and the Agency must know the 

property’s value to determine whether to accept the deed or pursue judicial 

foreclosure.

• The Agency needs to determine whether its lien has value.

• The Agency pursues foreclosure and it must know the property’s value in order to 

establish the bid price.

• The Agency is considering making a protective advance and the Agency needs to 

determine if the property’s value will support the advance.

B. APPRAISAL BASICS

Real estate appraisers make their judgments about a property’s value based on many 

factors. These factors include: location, market conditions, construction quality, and amenities. 

Appraisers use two appraisal methods to arrive at a final estimate of value: the sales comparison

approach and the cost approach. A third method of estimating value, a broker’s price opinion 

(BPO), may be used under certain servicing action.

• Sales comparison approach. Using the recent sales price of properties that are very 

close in location and characteristics to the property to be appraised, the appraiser 

estimates a market value for the property, after correcting for differences such as 

location, physical characteristics, and market conditions.

Appendix 5, Page 1 of 4

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
HB-2-3550

• Cost approach. Under this method the appraiser uses standard estimates of the cost 

to construct the subject dwelling and an estimate of the site value to derive an 

estimate of value.

• BPO. A BPO is a statement by a licensed real estate broker as to the market value of 

a piece of property. A BPO may

be authorized for use in limited 

circumstances.

The procedures appraisers must follow 

are found at the end of this Appendix.

Depending on the purpose of the proposed 

loan, an appraiser will either give the estimated 

value of the property in its current condition 

(called the “as is” value ), or, based on 

construction plans and specifications, give the 

estimated value of the property after 

development (called the “as developed/ 

improved” value). The “as is” value will be 

used for most Servicing Office actions.

C. APPRAISAL ORDERS

The Servicing Office may use one of 

the following methods to order an appraisal: 

(1) it may request one from Field Staff; or (2) 

it may use local appraisers located throughout 

the country who are under contract with the 

Servicing Office.

Field Staff should order appraisals within 7 days of receiving the work queue from 

the Servicing Office. In-house appraisals are to be completed within 30 days of the appraisal 

order. Contract appraisals are to be completed within the time specified on the contract; this 

should generally not exceed 30 days.

D. DUE DILIGENCE

The appropriate level of due diligence must be performed in conjunction with the 

appraisal for all servicing activities that require a determination of market value. Due diligence 

is the process of inquiring into the environmental condition of real estate in the context of a real 

estate

Appendix 5, Page 2 of 4

Appraisals in Remote Rural Areas 

or Tribal Lands

In remote rural areas and on Tribal lands, a lack 

of comparables can make it difficult to appraise 

a new construction property. In these areas, the 

sales comparison approach is not required.

Instead, Form 1007, Marshall and Swift Square 

Foot Appraisal must be used. These appraisals 

must be conducted by Agency staff with 

appraisal authority; they cannot be done by 

contract appraisers.

Remote rural areas are defined as areas with all 

of the following characteristics:

Scattered population;

Low density of residences;

Lack of basic shopping facilities;

Lack of community and public services and 

facilities; and

Lack of comparable sales data.
HB-2-3550

transaction to determine the presence of contamination from hazardous substances, hazardous 

wastes, or petroleum products. Due diligence also requires the determination of what impact 

such contamination may have on the market value of the property. Due diligence must be 

initiated by completing the Transaction Screen Questionnaire, ASTM Standard E-1528 (TSQ), 

the initial level of inquiry in the due diligence process. If the completed TSQ raises any 

concerns, it must be sent to the appropriate Environmental Coordinator for further evaluation and 

guidance.

E. REVIEWING APPRAISALS

The Servicing Office should review each contract appraisal after it is received to 

determine the property’s value. (Field Staff will conduct these reviews before sending the 

appraisals to the Servicing Office; therefore these reviews are unnecessary for Field-generated 

appraisals.) Appraisals will be reviewed for accuracy through a combination of administrative 

reviews and random spot- checks. If an appraisal is found to be unacceptable by any review, a 

new appraisal should be ordered and acceptably completed before the servicing action can

continue.

1. Administrative Review

Administrative reviews are the least detailed of the reviews. They are to be performed on 

all contract or fee appraisals. This review determines whether the appraisal is complete, the 

mathematics are correct, there is a proper number of current comparables, and that both the cost 

and the comparable sales approaches were used to establish market value. The review should be 

completed as soon as possible, but must be completed within 7 days of the receipt of the 

appraisal.

A completed administrative review is necessary to authorize payment of a contract 

appraiser. The invoice cannot be paid until the appraisal review is complete.

2. Technical Review

A technical review is performed to determine whether the appraisal made by the 

appraiser was complete, with clear reasoning and adequate support for the conclusion of value. 

Technical reviews will be completed for the first appraisal conducted by any contract or fee 

appraiser. Additional technical reviews may be ordered if there were problems encountered on 

the first technical review. In addition to the initial review, technical reviews will be done in a 

random, spot-check method for both contract and in-house appraisals.

A technical review may also be conducted when problems are detected by the 

administrative review. These problems must be significant and result in an appraisal that does 

not support the concluded value. The Servicing Office will determine whether a technical 

review is merited prior to recommending payment of the appraiser and approval of the loan.

Appendix 5, Page 3 of 4

(12-23-96) SPECIAL PN

Revised (03-31-21) SPECIAL PN
HB-2-3550

3. Entering the Appraisal Results

After the review, if the appraisal is found to be acceptable, the Servicing Office should enter 

the property’s appraised value into MortgageServ. If the appraisal is acceptable, the Servicing 

Office should use the property’s appraised value to make its decision regarding the servicing 

action being contemplated.

F. PAYING FOR APPRAISALS [7 CFR 3550.62(b)]

The Agency will charge borrowers a fee for each servicing action that requires an 

appraisal. The charge to the applicant will be $280, and the fee will be charged to the borrower’s 

account.

Appendix 5, Page 4 of 4