764.402—Loan closing.
(2)
For entity applicants, the promissory note will be executed to evidence the liability of the entity and the individual liability of all members of the entity.
(3)
Despite minority status, a youth executing a promissory note for a Youth loan will incur full personal liability for the debt.
(4)
A cosigner will be required to sign the promissory note if they assist the applicant in meeting the repayment requirements for the loan requested.
(5)
All signatures needed for the Agency to acquire the required security interests will be obtained according to State law.
(b) Payment of fees.
The applicant, or in the case of a real estate purchase, the applicant and seller, must pay all filing, recording, notary, lien search, and any other fees necessary to process and close a loan.
(1)
The Agency will close a chattel loan only when it determines the Agency requirements for the loan have been satisfied;
(2)
A financing statement is required for every loan except when a filed financing statement covering the applicant's property is still effective, covers all types of chattel property that will serve as security for the loan, describes the land on which crops and fixtures are or will be located, and complies with the law of the jurisdiction where filed;
(3)
A new security agreement is required for new loans, as necessary to secure the loan under State law, prior to the disbursement of loan funds.
(d) Real estate-secured loans.
(1)
The Agency will close a real estate loan only when it determines that the Agency requirements for the loan have been satisfied and the closing agent can issue a policy of title insurance or final title opinion as of the date of closing. The title insurance or final title opinion requirement may be waived:
(2)
The title insurance or final title opinion must show title vested as required by the Agency, the lien of the Agency's security instrument in the priority required by the Agency, and title to the security property, subject only to those exceptions approved in writing by the Agency.
(3)
The Agency must approve agents who will close FLP loans. Closing agents must meet all of the following requirements to the Agency's satisfaction:
(v)
Have current knowledge of the requirements of State law in connection with the loan closing and title clearance;
(e) Disbursement of funds.
(1)
Loan funds will be made available to the applicant within 15 days of loan approval, subject to the availability of funding.
(2)
If the loan is not closed within 90 days of loan approval or if the applicant's financial condition changes significantly, the Agency must reconfirm the requirements for loan approval prior to loan closing. The applicant may be required to provide updated information for the Agency to reconfirm approval and proceed with loan closing.
(3)
The Agency or closing agent will be responsible for disbursing loan funds. The electronic funds transfer process, followed by Treasury checks, are the Agency's preferred methods of loan funds disbursement. The Agency will use these processes on behalf of borrowers to disburse loan proceeds directly to creditors being refinanced with loan funds or to sellers of chattel property that is being acquired with loan funds. A supervised bank account will be used according to subpart B of part 761 of this chapter when these processes are not practicable.