CFR > Title 7 - Agriculture > SUBTITLE B—Regulations of the Department of Agriculture > CHAPTER VII—FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE (parts 700 to 799) > SUBCHAPTER D—SPECIAL PROGRAMS (parts 750 to 786) > PART 765—DIRECT LOAN SERVICING—REGULAR > SUBPART I—Transfer of Security and Assumption of Debt (§765.401 to §765.407-765.450) > 765.402—Transfer of security and loan assumption on same rates and terms.

765.402—Transfer of security and loan assumption on same rates and terms.

An eligible applicant may assume an FLP loan on the same rates and terms as the original note if:
(a) The original borrower has died and the spouse, other relative, or joint tenant who is not obligated on the note inherits the security property;
(b) A family member of the borrower or an entity comprised solely of family members of the borrower assumes the debt along with the original borrower;
(c) An individual with an ownership interest in the borrower entity buys the entire ownership interest of the other members and continues to operate the farm in accordance with loan requirements. The new owner must assume personal liability for the loan;
(d) A new entity buys the borrower entity and continues to operate the farm in accordance with loan requirements; or
(e) The original loan is an EM loan for physical or production losses and persons who were directly involved in the farm's operation at the time of the loss will assume the loan. If the original loan was made to:
(1) An individual borrower, the transferee must be a family member of the original borrower or an entity that is comprised solely of family members of the original borrower.
(2) A trust, partnership or joint operation, the transferee must have been a member, partner or joint operator when the Agency made the original loan or remain an entity comprised solely of people who were original members, partners or joint operators when the entity received the original loan.
(3) A corporation, including limited liability company, or cooperative, the transferee must:
(i) Have been a corporate stockholder or a cooperative member when the Agency made the original loan or will be an entity comprised solely of people who were corporate stockholders or cooperative members when the entity received the loan; and
(ii) Assume only the portion of the physical or production loss loan equal to the transferee's percentage of ownership. In the case of entity transferees, the transferee must assume that portion of the loan equal to the combined percentages of ownership of the individual stockholders or members in the transferee.