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voting stock or equity is owned by the individuals conducting the farming or livestock operation.
(2) More than 50 percent of the value of its assets consist of assets related to the production of agricultural products.
(3) More than 50 percent of its income orginates from its production of agricultural products.
(d) In addition, any loan to a legal entity in which at least 50 percent of ownership or the control is vested in another legal entity that does not meet at least one of the preceding three requirements shall be subject to prior approval of the appropriate bank and submitted to the Farm Credit Administration for post review. Unless it can be found that such owned or controlled legal entity can operate its business as a counterpart to the normal farm businesses eligible to borrow, without jeopardy to such normal farm businesses or the general agricultural economy, approval will not be granted. Submissions shall fully document the ownership structure, the business affiliations of those owning or controlling the applicant, and the compatibility of the applicant's farming business to the normal farm business operating in the area or to the general agricultural economy.
(e) A legal entity engaged in agriculture for the primary purpose of conducting its operation at a loss to absorb taxable income from nonagricultural sources shall not be eligible.
(f) A legal entity which was a borrower otherwise eligible on the effective date of these regulations and does not materially change its entity structure or control and ownership will continue to be eligible for further borrowing. 137 FR 11421, June 7, 1972, as amended at 38 FR 27837, Oct. 9, 1973) § 613.3030 Producers or harvesters of
aquatic products. (a) Definition. A producer or harvester of aquatic products is a person(s) engaged in the production or harvesting of aquatic products for economic gain in open waters under uncontrolled conditions.
(b) Eligibility. To be eligible to borrow from a production credit association as a producer or harvester of aquatic products, an individual shall establish as a part of his application for credit his qualification as a producer or harvester of aquatic products. A legal entity must
meet these same requirements and at least one of the following qualifications:
(1) More than 50 percent of the value or number of shares of its voting stock or equity is owned by the individuals conducting the aquatic operation.
(2) More than 50 percent of the value of its assets consist of assets related to the production or harvesting of aquatic products.
(3) More than 50 percent of the income originates from its production or harvesting of aquatic products.
(c) Scope of financing. Production credit associations are authorized to make loans to producers or harvesters of aquatic products for aquatic needs and other requirements of the borrower. The total credit extended for other requirements shall not exceed the value of assets devoted to the production or harvesting of aquatic products. When the aquatic operation represents less than 50 percent of the borrowers' total business, credit extended for other requirements shall be on a conservative basis scaled down proportionately as the aquatic assets become less significant in the total operation. 137 F.R. 11421, June 7, 1972, as amended st 37 FR 28492, Dec. 27, 1972; 38 FR 22468, Aug. 21, 1973) § 613.3040 Rural residents.
(a) Eligibility of the user. To be eligible to borrow an individual shall establish as part of his application for credit his qualification as a rural resident. However, a borrower shall not have loans on more than one rural residence at any one time and no loan shall be made to an individual to purchase or construct & rural residence for the express purpose of rental or resale.
(b) A rural resident is an owner. occupant of a rural residence located in a rural area.
(c) Rural residence. A rural residence is single-family, moderate-priced dwelling used as a permanent, year. round residence with appropriate appurtenances and an appropriate site sufficiently large to provide a proper surrounding for a residence both in terms of the physical requirements for access, equipment, utilities and services and the community standards for aesthetic suitability. Rural residences may include conventional housing, modular housing or mobile homes. However, a mobile home must be related to a specific real estate site. This shall involve the following.
(1) Its being fixed on a permanent or semipermanent foundation.
(2) The intent of the owners at the time affixed.
(3) Its intended use as permanent housing.
(4) Further, the mobile home shall be connected to a sewage system, water system and other utilities, and the owneroccupant shall own land or hold a suitable long-term lease which is assignable on the land on which it is located.
(d) The bank shall prescribe appropriate procedures subject to the approval of the bank board as to types of housing that may be used as security for loans to rural residents within the district.
(e) Moderate-priced dwelling: A moderate priced dwelling is adequate but not in excess of the living standards of persons in the middle range of income for that area of the Farm Credit district. Due to the wide variations in housing costs, income levels, and area standards for housing, the determination of the ranges of value which constitutes moderate priced housing will vary between localities. A loan shall not be made if the value of the dwelling exceeds the standards defined herein.
(f) The bank shall prescribe appropriate procedures subject to approval of the bank board as to ranges of value which constitute moderate-priced dwelling with the district.
(g) Rural area. (1) For the purposes of nonfarm home lending only, a rural area is agricultural open country which may include rural subdivisions or any city or village with a population not exceeding 2,500 persons. A rural area does not include subdivisions or villages associated with or adjacent to a larger population center. The intent is to avoid lending in concentrated, high density residential areas or villages which are a part of an urbanizing area surrounding or immediately adjoining an urban area of & larger population center.
(2) Rural areas may include open areas which are undeveloped for housing and still devoted to agricultural use within other political subdivisions including "towns” exceeding 2,500 persons designated by the district board with the approval of the Farm Credit Administration. In making this designation, consideration shall be given to the character of local governmental powers, the availability of municipal type services, and the land ownership and probable resi
dential growth patterns of the community.
(h) Scope of financing: Loans may be made to owner-occupants of rural residences for the purposes of buying, building, remodeling, improvements, and repair of such residence, the cost of participation certificates and closing costs and to refinance existing indebtedness on such residences. The total amount of credit that may be extended for such purposes shall not exceed 85 percent of the appraised value.
(i) The establishment of standards of rural subdivision design shall encourage an orderly development of economically stable communities in a healthful rural living environment. The bank shall prescribe appropriate standards subject to the approval of the district board for eligible subdivisions located in rural areas. Standards for rural subdivisions shall be designed to assure:
(1) Conformation where applicable with general planning policies of the planning agency having jurisdiction;
(2) Compliance with all local regulations, ordinances, and codes;
(3) Adequate and dependable water and waste disposal system;
(4) Adequate, economic, safe and dependable streets, lot layout, utilities, grading and drainage; and
(5) That the location will provide desirable permanent living conditions for the residents so as to insure long-term market demand and acceptability. (37 FR 11421, June 7, 1972, as amended at 38 FR 6376, Mar. 9, 1973; 38 FR 16654, June 25, 1973] $ 613.3050 Farm-related businesses.
(a) Definition. A farm-related business is a person engaged in furnishing to farmers or ranchers custom-type farm-related services, performed on the farm and directly related to their onfarm operating needs.
(b) Eligibility. (1) To be eligible to borrow, a person shall establish as part of his application for credit his qualifications as a farm-related business.
(2) Loans shall not be made to commercial businesses which purchase farm products from or sell inputs to farmers or ranchers unless substantially all of such inputs handled are used incident to the services provided.
(c) Scope of financing. Federal land banks may make loans to farm-related businesses for necessary sites, capital
structures and equipment and initial business or services normally used by working capital for such services, Pro farmers or producers or harvesters of duction credit associations may make aquatic products which contribute to loans to farm-related businesses for any their business operations or are in fur. working capital, equipment and operat therance of the livelihood, welfare or seing needs incident to the operation of curity of such persons. farm-related businesses. Any such loans
8 613.3110 Eligibility. shall be confined to the financing of those assets or business activities directly re
To be eligible to borrow from a bank lated to the custom-type services per
for cooperatives, & cooperative shall meti formed on the farm. Such financing is the following requirements. subject to the provisions of $ 616.6040 of (a) At least 80 percent of the voting this chapter.
control, or such higher percent appiled
uniformly and consistently to all appli. Subpart C-Eligibility of Financial In
cants and borrowers in the district as stitutions To Borrow From the Fed may be established by resolution of the eral Intermediate Credit Bank bank board shall be held by farmers or
ranchers, or producers or harvesters of § 613.3060 Institutions eligible.
aquatic products, who are eligible under The Federal intermediate credit banks $ 613.3020 or $ 613.3030, or by eligible may make loans to and discount agri cooperatives. cultural paper for production credit as (b) It deals in farm products or sociations and other financial institu aquatic products or products therefrom, tions in accordance with provisions in farm or aquatic supplies, or farm busiPart 614 of this chapter.
ness services with or for members in an Subpart D-Eligibility of Cooperatives
amount at least equal in value to the
total amount of such business transacted To Borrow From a Bank for Coop- by it with or for nonmembers, excluderatives
ing from the total of member and non§ 613.3070 Cooperative.
member business transactions with the
United States or any agencies or instruThe term cooperative means any as
mentalities thereof or services or supsociation of farmers, ranchers, producers or harvesters of aquatic products, or any
plies furnished as a public utility.
(c) No member of the cooperative federation of such associations, or a com
shall have more than one vote because of bination of such associations and farmers, which is operated on a cooperative
the amount of stock or membership capi. basis, is engaged in processing, preparing
tal he owns therein; or, the cooperative for market, handling or marketing farm
must restrict dividends on stock or memor aquatic products; or purchasing, test
bership capital to 10 percent per year ing, grading, processing, distributing or
or the maximum percentage per year furnishing farm or aquatic supplies; or permitted by the applicable State statfurnishing farm business services or utes, whichever is less. services to eligible cooperatives.
(d) A cooperative or a federated co8 613.3080 Federated cooperative.
operative which was otherwise eligible
and was a borrower on the effective date A federated cooperative is a coopera
of these regulations and which does not tive whose membership includes farmers' cooperative associations and in which at
materially change its entity structure or
ownership and control will continue to least 80 percent of the voting control is
be eligible for further borrowing. vested in farmers and eligible associations.
$ 613.3120 Scope of financing. $ 613.3090 Cooperative basis.
A bank for cooperatives may make Cooperative basis means the conduct
loans to meet any credit need which will of business for the mutual benefit of the
enable a cooperative to perform those members as patrons.
functional powers prescribed in sections
3070 through 3100 which will benefit its § 613.3100 Farm or aquatic supplies and members. A bank may also make loans, farm business services.
to & cooperative otherwise eligible to Farm or aquatic supplies and farm borrow, for purposes not directly rebusiness services are any economic goods, lated to such primary functions or
the provisions of Title VIII of the Civil Rights Act of 1968.ARE
(b) Written advertisements relating to rural housing shall include a facsimile of the following logotype and legend:
powers, so long as a finding is made that the amount to be loaned is reasonabiy modest in relation to the total credit provided and such business purpose(s) wul enhance the well-being of the members and patrons. Subpart -Nondiscrimination in
Lending $ 613.3140 Policy.
The Federal Farm Credit Board, at its February 1969 meeting, adopted the following resolution:
Resolved, that it is confirmed to be the policy of the Federal Farm Credit Board that there shall be no discrimination because of race, color, religion, or national origin by the banks ar associations which operate under the supervision of the Farm Credit Administration, 1.e., Federal land banks and Federal land bank associations, Federal in. termediate credit banks and production credit associations, and banks for cooperatives, either as is now proscribed for the financing of housing by section 805 of the Civil Rights Act of 1968 or with respect to the availability of loans generally from such banks and associations. (37 F.R. 16932, Aug. 23, 1972) $613.3150 Nondiscrimination in lend.
ing and other services. No Farm Credit institution shall, because of the race, color, religion, or national origin of an eligible person deny a loan, whether it is for the purpose of purchasing, constructing, improving, repairing, or maintaining a rural residence or is for other eligible purposes, or refuse to allow, receive, or consider any application, request, or inquiry with respect to a loan, or refuse to perform any other service it customarily makes available to borrowers, applicants, and members, or discriminate in fixing the amount, interest rate, duration, application procedures, collection or enforcement procedures, or other terms or conditions of & loan or other service. (37 F.R. 16932, Aug. 23, 1972) 8613.3160 Nondiscriminatory advertis
ing. (a) A Farm Credit institution that directly or through third parties engages in any form of advertising shall not use Fords, phrases, symbols, directions, forms, or models in such advertising which imply or suggest a policy of discrimination or exclusion in violation of
[37 F.R. 16932, Aug. 23, 1972] $ 613.3170 Equal Housing Lender Posters.
ta (a) Each Farm Credit institution that makes rural residence loans shall post and maintain one or more Equal Housing Lender Posters in the lobby of each of its offices in a prominent place or places readily apparent to all persons seeking such loans.
(b) The poster shall be at least 11 by 14 inches in size, and shall bear the logotype and legend set forth in § 613.3160 (b), and the following text:
We do business in accordance with the Federal “Fair Housing Law".'
It is illegal, because of race, color, religion, or national origin, to:
Deny a loan for the purpose of purchasing, constructing, improving, repairing, or maintaining a dwelling, or
Discriminate in fixing the amount, interest rate, duration, application procedures, or other terms or conditions of such a loan.
If you believe you have been discriminated against you may discuss the matter with the management of this institution. You may also send a complaint to: Assistant Secretary for Equal Opportunity,
Department of Housing and Urban Devel
opment, Washington, D.C. 20410. or call your local HUD office. [37 F.R. 16933, Aug. 23, 1972]
PART 614-LOAN POLICIES AND
Subpart l-loan Participations
614.4331 Federal land banks. bec.
614.4332 Federal Intermediate credit banda 614.4000 Basic responsibilities.
614.4333 Production credit associations. 614.4010 Supervision by the Farm Credit 614.4334 Banks for cooperatives.
Administration. 614.4020 Delegation.
Subpart -Loss Sharing Agreements 614.4030 Intent of delegation.
614.4340 General. 6!4.4031 Policies for delegation of authority.
614.4345 Guaranty agreements. 614.4040 Bank guideline responsibilities.
Subpart K-Lending Limits 614.4050 Bank supervision of associations.
614.4350 General. 614,4051 Federal land bank and Federal in
614.4351 Federal land banks. termediate credit bank credit
614.4352 Federal intermediate credit banks. review.
614.4353 Production credit associations. 614.4060 Association responsibilities.
614.4354 Banks for cooperatives. Subpart BChartered Territories
614.4360 Computation of obligation for
lending limit determination. 614.4070 Loans outside the established territory-Federal land banks, Fed
Subpart — Rural Housing Loans eral land bank associations, and 614.4370 General policy.
production credit associations. 614.4380 Lending limitations. 614.4080 Loans outside of bank's territory- 614.4390 Appraisal of security. banks for cooperatives.
614.4400 Security requirements. Subpart - Lending Authorities
614.4410 Loan terms and conditions.
614.4420 Loan closing requirements. 614.4090 Federal land banks.
614.4430 Identification of rural housing 614.4100 Federal intermediate credit banks.
loans. 614.4110 Production credit associations. 614.4120 Banks for cooperatives.
Subpart M—Notice of Action and Appeals 614.4130 Approval.
614.4440 Notice of action on loan appliche Subpart D-General Loan Policies for Banks and
614.4441 Applicant's right to appeal.
614.4442 Records. 814.4140 Sound loan. 614.4150 Credit factors.
Subpart N-Loan Approval Requirements Subpart Application of Credit Standards
614.4450 General requirements.
614.4460 Loan approval responsibility, 614.4160 Lending objective.
614.4470 Loans subject to bank prior ap614.4165 Special credit needs.
proval. 614.4170 Borrower llability.
Subpart Om loan Servicing Requirements Subpart loan Terms and Conditions
614.4510 General. 614.4180 Federal land banks.
614.4511 Federal land bank association com614.4190 Federal intermediate credit banks.
pensation. 614.4200 Production credit associations. 614.4512 Compromise of indebtedness. 614.4210 Banks for cooperatives.
Subpart P-Special Lending Programs
614.4520 General. 614.4220 General.
614.4530 Special loans, production credit 614.4230 Federal land banks.
associations. 614.4240 Federal intermediate credit banks.
Subpart Q-Federal Intermediate Credit Bank 614.4250 Production credit associations. 614.4260 Banks for cooperatives.
Financing of Other Financing Institutions 614.4261 Security and appraisal standards,
614.4540 General. bank for cooperatives.
614.4550 Financing responsibility of the
Federal intermediate credit Subpart H-Interest Rates and Charges
banks regarding other financing 614.4270 Policy.
institutions. 614.4280 Interest rates.
614.4560 Criteria which shall be used to 614.4290 Interest on past due loans.
determine whether a discount 614.4300 Other charges and fees.
relationship should be estab 614.4310 Interest rate limitation for Federal
lished with an applicant other intermediate credit banks.
financing institution. 614.4320 Production credit associations. 614.4570 Utilization of the discount privie 614.4321 Interest rate programs.