(a) The loan must be secured in accordance with requirements established in §§ 764.103 through 764.106.
(b) Loans to purchase chattels will be secured by a first lien on chattels purchased with loan funds. Real estate may be taken as additional security if needed.
(c) Loans of $25,000 of less for real estate purposes will be secured in the following order of priority:
(1) By a lien on chattels determined acceptable by the Agency, and then
(2) By a lien on real estate, if available and necessary. When real estate is taken as security a certification of ownership in real estate is required. Certification of ownership may be in the form of an affidavit that is signed by the applicant, names all of the record owners of the real estate in question and lists the balances due on all known debts against the real estate. Whenever the Agency is uncertain of the record owner or debts against the real estate security, a tile search is required.
(d) Loans greater than $25,000 for real estate purposes will be secured in the following order of priority:
(1) By a lien on real estate, if available, and then
(2) By a lien on chattels, if needed and determined acceptable by the Agency.
(e) For loans greater than $25,000 title clearance is required when real estate is taken as security.
[77 FR 15938, Mar. 19, 2012]