(a) Construction financing plan. Prior to loan approval, applicants must submit to the Agency for its concurrence a plan for the construction financing and securing of the loan.
(b) Interim financing. Interim financing is required by the Agency for any construction, except as noted in paragraph (c) of this section.
(1) The Agency reserves the right to review and approve the interim financing arrangements proposed by the applicant.
(2) When interim financing is used, the Agency will obligate the funds and provide an interim financing letter to the lender that will confirm the procedures and conditions for the construction financing. The take-out loan will be closed and the interim lender paid off when the conditions of the interim financing letter have been met.
(3) The applicable provisions of 7 CFR part 1924, subpart A will be used to monitor the construction.
(4) An environmental review in accordance with 7 CFR part 1970 must be completed prior to issuance of the interim financing letter.
(c) Multiple advances. When interim financing is not available or when it is in the best interest of the Federal Government, the Agency may provide for multiple advances of the funds to cover the cost of construction.
(1) The Agency will review and approve the multiple advances proposed by the borrower.
(2) When multiple advances are used, the Agency will close the loan prior to any advancement of funds and the relevant provisions of 7 CFR part 1924, subpart A will be used to monitor the construction.
(3) The loan check will be handled in accordance with 7 CFR part 1902, subpart A.
[69 FR 69106, Nov. 26, 2004, as amended at 81 FR 11049, Mar. 2, 2016]