Notification of Direct Loan Payment Deferrals for the Community Facilities Direct Loan Program, 22009 [2020-08429]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Housing Service

[Federal Register Volume 85, Number 77 (Tuesday, April 21, 2020)]
[Rules and Regulations]
[Page 22009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08429]



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Rules and Regulations
                                                Federal Register
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having general applicability and legal effect, most of which are keyed 
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under 50 titles pursuant to 44 U.S.C. 1510.

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Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Rules 
and Regulations

[[Page 22009]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 1951

[Docket No. RHS-20-CF-0011]


Notification of Direct Loan Payment Deferrals for the Community 
Facilities Direct Loan Program

AGENCY: Rural Housing Service, USDA.

ACTION: Temporary policy.

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SUMMARY: The Rural Housing Service, hereinafter referred to as the 
Agency, will temporarily allow borrowers with direct loans within the 
Community Facilities (CF) Program to request payment deferrals during 
the period specified in the DATES section of this notification. This 
temporary authorization applies to CF direct loan borrowers who are 
experiencing temporary cash flow issues due to the Coronavirus (COVID-
19) pandemic. The Agency will provide the option of principal and 
interest payment deferrals to borrowers impacted by COVID-19 for up to 
one year due to hardship on a case-by-case basis.

DATES: This policy is effective May 12, 2020 and the temporary 
authorization to request payment deferrals under this notification 
expires on September 30, 2020.

FOR FURTHER INFORMATION CONTACT: Anita Outen, Community Facilities, at 
202-720-1497 or via email at [email protected].

SUPPLEMENTARY INFORMATION: CF has the statutory authority to defer 
principal and interest payments in accordance with 7 U.S.C. 1981a of 
the Consolidated Farm and Rural Development Act, section 331A. 
Beginning immediately and through September 30, 2020, the Community 
Facilities Direct Loan Program may assist borrowers that are 
temporarily unable to continue making payments of principal and 
interest due because of temporary cash flow issues resulting from the 
COVID-19 pandemic, by deferring payments for a period no longer than 
one year from the date the original payment is due. The borrower must 
request any payment deferments from the Agency in writing. The State 
Directors have the authority to approve the payment deferral on loans 
where the aggregate balance of principal and interest on the loan is 
$10 million or less. Any loans over that amount will require Agency 
Administrator approval. Any deferral request for a CF project that has 
both a CF Direct Loan and a CF Guaranteed Loan, where the request will 
modify the parity arrangement that is presently in place or that has a 
different deferral term, will require Agency Administrator review and 
concurrence. The Agency will notify the borrower when payment deferral 
requests do not meet the Agency's requirements. The Agency does not 
consider a loan that is under a deferral agreement to be a delinquent 
loan. After September 30, 2020, borrowers must resume obtaining Agency 
approval in accordance with all applicable program regulations, forms, 
and existing authorities. This guidance applies to all borrowers that 
had a current repayment status as of March 1, 2020. Borrowers that were 
delinquent prior to March 1, 2020 will continue to be serviced under 7 
CFR part 1951, subpart E, and 7 CFR part 1956, subpart C.
    Paperwork Reduction Act: In accordance with the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.), the information collection 
activities associated with this notification are covered under OMB 
Number: 0575-0066. This notification contains no new reporting or 
recordkeeping requirements that would require approval under the 
Paperwork Reduction Act of 1995.
    Submissions: The Agency is requiring the following information from 
the CF direct loan borrowers to be considered for a deferral of 
payments pursuant to this notification:
    1. A brief narrative addressing how the COVID-19 pandemic has 
impacted the operation of the facility and hindered the borrower's cash 
flow indicating that the circumstances were beyond the borrower's 
control. The narrative should also include the borrower's name and 
account information as well as a proposed operations plan that 
addresses scheduled loan repayment at the end the agreement. The 
proposed plan can include reamortization of the remaining payments 
within the original loan term after the deferral period expires. All 
proposals should be in accordance with the CF servicing regulations 
outlined at 7 CFR part 1951, subpart E;
    2. The borrower must provide documentation, such as but not limited 
to: a statement of cashflows or current income and expenses approved by 
an official of the borrower, a statement of temporary closure approved 
by an official of the borrower, or a proclamation or order from a 
government entity requiring temporary closure or significant reduction 
of facility operations. The documentation must substantiate the 
narrative provided under item #1; and
    3. Form RD 1951-10, Community Programs Workout Agreement will be 
signed by both parties prior to executing any payment deferral action.
    The borrower should contact the appropriate State Office by 
telephone to discuss the request for payment deferral prior to 
submitting the required documents. The State Office contact information 
is available at: https://www.rd.usda.gov/contact-us/state-offices. 
Unpaid interest accruing during a deferral agreement is not subject to 
the limitation of the accrued interest under 7 CFR 1951.221(a)(2)(ii).

Bruce W. Lammers,
Administrator, Rural Housing Service.
[FR Doc. 2020-08429 Filed 4-17-20; 4:15 pm]
 BILLING CODE 3410-XY-P