§ 766.108 Reamortization. ( a ) *Loans eligible for reamortization.* The Agency may reamortize loans made for real estate purposes, including FO, SW, RL, SA, EE, RHF, CL, and EM if: ( 1 ) The borrower meets the loan servicing eligibility requirements in § 766.104;
( 2 ) Reamortization will bring the borrower's account current or prevent the borrower from becoming delinquent;
( 3 ) The Agency determines that reamortization will assist the borrower to repay the loan;
( 4 ) The Agency has not referred the borrower's account to OGC or the U.S. Attorney, and the Agency does not plan to refer the account to either of these two offices in the near future;
( 5 ) The borrower is in compliance with the Highly Erodible Land and Wetland Conservation requirements of 7 CFR part 12, if applicable; and
( 6 ) The loan is not currently deferred, as described in § 766.109, or set-aside, as described in subpart B of this part. The Agency may reamortize loans upon cancellation of the deferral or DSA.
( b ) *Reamortized loan terms.* ( 1 ) Except as provided in paragraph (b)(2), the Agency will reamortize loans within the remaining term of the original loan or assumption agreement unless a feasible plan cannot be developed or debt forgiveness will be required to develop a feasible plan.
( 2 ) If the Agency extends the loan term, the repayment period from the original loan date may not exceed the maximum number of years for the type of loan being reamortized in paragraphs (2)(i) through (iv), or the useful life of the security, whichever is less. ( i ) FO, SW, RL, EE real estate-type, and EM loans made for real estate purposes may not exceed 40 years from the date of the original note or assumption agreement.
( ii ) EE real estate-type loans secured by chattels only may not exceed 20 years from the date of the original note or assumption agreement.
( iii ) RHF loans may not exceed 33 years from the date of the original note or assumption agreement.
( iv ) SA loans may not exceed 25 years from the date of the original Shared Appreciation note.
( v ) CLs may not exceed 20 years from the date of the original note or assumption agreement.
( c ) *Reamortized loan interest rate.* The interest rate will be as follows: ( 1 ) The interest rate for loans made at the regular interest rate will be the lesser of: ( i ) The interest rate for that type of loan on the date a complete servicing application was received;
( ii ) The interest rate for that type of loan on the date of restructure; or
( iii ) The original loan note rate of the note being reamortized.
( 2 ) The interest rate for loans made at the limited resource interest rate will be the lesser of: ( i ) The limited resource interest rate for that type of loan on the date a complete servicing application was received;
( ii ) The limited resource interest rate for that type of loan on the date of restructure; or
( iii ) The original loan note rate of the note being reamortized.
( 3 ) At the time of reamortization, the Agency may reduce the interest rate to a limited resource rate, if available, if: ( i ) The borrower meets the requirements for the limited resource interest rate; and
( ii ) A feasible plan cannot be developed at the regular interest rate and maximum terms permitted in this section.
( 4 ) SA payment agreements will be reamortized at the current SA amortization rate in effect on the date of approval or the rate on the original payment agreement, whichever is less.
( d ) *Capitalizing accrued interest and adding protective advances to the loan principal.* ( 1 ) The Agency capitalizes the amount of outstanding accrued interest on the loan at the time of reamortization.
( 2 ) The Agency adds protective advances for the payment of real estate taxes to the principal balance at the time of reamortization.
( 3 ) The borrower must resolve all other protective advances not capitalized prior to closing the reamortization.
( e ) *Installments.* If there are no deferred installments, the first installment payment under the reamortization will be at least equal to the interest amount which will accrue on the new principal between the date the promissory note is executed and the next installment due date.
[72 FR 63316, Nov. 8, 2007, as amended at 75 FR 54016, Sept. 3, 2010; 87 FR 13124, Mar. 9, 2022]