7 CFR 770.10 – Servicing
(a) Reamortization—(1) Eligibility. The Agency may consider reamortization of a loan provided:
(i) The borrower submits a completed Agency application form; and
(ii) The account is delinquent due to circumstances beyond the borrower’s control and cannot be brought current within 1 year; or
(iii) The account is current, but due to circumstances beyond the borrower’s control, the borrower will be unable to meet the annual loan payments.
(2) Terms. The term of a loan may not be extended beyond 40 years from the date of the original note.
(i) Reamortization within the remaining term of the loan will be predicated on a projection of the tribe’s operating expenses indicating the ability to meet the new payment schedule; and
(ii) No intervening lien exists on the security for the loan which would jeopardize the Government’s security priority.
(3) Consolidation of notes. If one or more notes are to be reamortized, consolidation of the notes is authorized.
(b) Interest rate reduction. The Agency may consider a reduction of the interest rate for an existing loan to the current interest rate as available from any Agency office provided:
(1) The borrower submits a completed Agency application form;
(2) The loan was made more than 5 years prior to the application for the interest reduction; and
(3) The Department of the Interior and the borrower certify that the borrower meets at least one of the criteria contained in paragraph (e)(2) of this section.
(c) Deferral. The Agency may consider a full or partial deferral for a period not to exceed 5 years provided:
(1) The borrower submits a completed Agency application form;
(2) The borrower presents a plan which demonstrates that due to circumstances beyond their control, they will be unable to meet all financial commitments unless the Agency payment is deferred; and
(3) The borrower will be able to meet all financial commitments, including the Agency payments, after the deferral period has ended.
(d) Land exchanges. In the cases where a borrower proposes to exchange any portion of land securing a loan for other land, title clearance and a new mortgage on the land received by the borrower in exchange, which adequately secures the unpaid principal balance of the loan, will be required unless the Agency determines any remaining land or other loan security is adequate security for the loan.
(e) Debt write-down—(1) Application. The Agency will consider debt write-down under either the land value option or rental value option, as requested by the borrower.
(i) The borrower must submit a completed Agency application form;
(ii) If the borrower applies and is determined eligible for a land value and a rental value write-down, the borrower will receive a write-down based on the write-down option that provides the greatest debt reduction.
(2) Eligibility. To be eligible for debt write-down, the borrower (in the case of a tribal corporation, the Native American tribe of the borrower) must:
(i) Be located in a county which is identified as a persistent poverty county by the United States Department of Agriculture, Economic Research Service pursuant to the most recent data from the Bureau of the Census; and
(ii) Have a socio-economic condition over the immediately preceding 5 year period that meets the following two factors as certified by the Native American tribe and the Department of the Interior:
(A) The Native American tribe has a per capita income for individual enrolled tribal members which is less than 50 percent of the Federally established poverty income rate established by the Department of Health and Human Services;
(B) The tribal unemployment rate exceeds 50 percent;
(3) Land value write-down. The Agency may reduce the unpaid principal and interest balance on any loan made to the current market value of the land that was purchased with loan funds provided:
(i) The market value of such land has declined by at least 25 percent since the land was purchased as established by a current appraisal;
(ii) Land value decrease is not attributed to the depletion of resources contained on or under the land;
(iii) The loan was made more than 5 years prior to the application for land value write-down;
(iv) The loan has not previously been written down under paragraph (e)(4) of this section and has not been written down within the last 5 years under this paragraph, and
(v) The borrower must meet the eligibility requirements of paragraphs (a)(1)(ii) or (iii) of this section.
(4) Rental value write-down. The Agency may reduce the unpaid principal and interest on any loan, so the annual loan payment for the remaining term of each loan equals the average of annual rental value of the land purchased by each such loan for the immediately preceding 5-year period provided:
(i) The loan was made more than 5 years prior to the rental value writedown;
(ii) The description of the land purchased with the loan funds and the rental values used to calculate the 5 year average annual rental value of the land have been certified by the Department of the Interior;
(iii) The borrower provides a record of any actual rents received for the land for the preceding 5 years, which will be used to calculate the average rental value. This record must be certified by the Department of the Interior. For land that has not been leased or has not received any rental income, the borrower must provide a market value rent study report for the preceding 5 years, which identifies the average annual rental value based on the market data. The market value rent study report must be prepared by a certified general appraiser and meet the requirements of USPAP.
(iv) The borrower has not previously received a write-down under this paragraph and has not had a loan written down within the last 5 years under paragraph (e)(3) of this section, and
(v) The borrower must meet the eligibility requirements of paragraph (a)(1)(ii) or (iii) of this section.
(f) Release of reserve. Existing reserve accounts may be released for the purpose of making ITLAP loan payments or to purchase additional lands, subject to the following:
(1) A written request is received providing details of the use of the funds;
(2) The loan is not delinquent;
(3) The loan adequately secured by a general assignment of tribal income.