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PART 1927 - TITLE CLEARANCE AND LOAN CLOSING

Subpart B - Real Estate Title Clearance and Loan Closing

TABLE OF CONTENTS

Sec.

Page

1927.51 General.

(a) Types of loans covered by this subpart.

(b) Programs not covered by this subpart.

General Counsel (OGC).

(d) Agency forms.

1927.52 Definitions.

Agency.

Approval official.

Approved attorney.

Approved title insurance company.

Borrower.

Certificate of title.

Closed loan.

Closing agent.

Closing protection letter.

Cosigner.

Credit sale.

Deed of trust.

Exceptions.

Fee simple.

FSA.

General warranty deed.

Indemnification agreement.

Issuing agent.

Land purchase contract (contract for deed).

Mortgage.

National Office.

OGC.

Program regulations.

Quitclaim deed.

RHS.

Seller.

Special warranty deed.

State Office.

(04-22-96) SPECIAL PN

RD Instruction 1927-B

Table of Contents

Page 1

RD Instruction 1927-B

Table of Contents

Page 2

Sec. Page

1927.52 (Con.)

Title clearance. 5

Title company. 5

Title defects. 5

Trust deed. 5

Voluntary conveyance. 5

Warranty deed. 5

1927.53 Costs of title clearance and closings of

transactions. 5

1927.54 Requirements for closing agents. 6

(a) Form of title certification. 6

(b) Approval of closing agent. 6

(d) Approval of title companies. 7

(e) Approval of title insurance companies. 8

(f) Responsibility of approval official. 8

(g) Conflict of interest. 9

(h) Debarment or suspension. 9

(i) Special provisions. 9

(j) Rejecting closing agents or title

insurance companies. 9

1927.55 Title clearance services. 10

(a) Responsibilities of closing agents. 10

(b) Initial responsibility of approval

official. 10

(d) Use of title opinion. 10

(e) Use of title insurance. 11

(f) Approval official's responsibilities after

receipt of preliminary title opinion or

title insurance binder. 12

RD Instruction 1927-B

Table of Contents

Page 3

Sec. Page

1927.56 Scheduling loan closing. 13

1927.57 Preparation of closing documents. 13

(a) Preparation of deeds. 13

(b) Preparation of mortgages. 14

(d) Preparation of protective instruments. 18

(e) Correction of errors in recorded

security instruments. 21

1927.58 Closing the transaction. 21

(a) Disbursement of loan funds. 21

(b) Title examination and liens or claims

against borrowers. 21

(d) Affidavit regarding work of improvement. 22

(e) Completion of closing documents. 23

(f) Assignment of future income. 23

(g) Return of loan documents to approval

official after loan closing. 23

(h) Final title opinion or mortgage title policy. 23

(i) Other services of the closing agent. 24

1927.59 Subsequent loans and transfers with assumptions. 25

(a) Loans closed using title insurance or

title opinions. 25

(b) Title services required in connection

with assumptions. 26

1927.60 - 1927.61 [Reserved] 26

1927.62 Voluntary conveyances. 26

1927.63 - 1927.64 [Reserved] 26

1927.65 Additional requirements in connection with

loans to homestead entrymen, contract

purchasers of farm units from the Bureau of

Reclamation, and certain American Indians. 26

1927.66 Cancellation of loan, assumption, or credit sale. 26

1927.67 - 1927.89 [Reserved] 26

1927.90 State Supplements. 27

1927.91 Exception authority. 27

1927.92 - 1927.99 [Reserved] 27

1927.100 OMB control number. 27

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(04-22-96) SPECIAL PN

______________________________________________________________________________

RD Instruction 1927-B

PART 1927 - TITLE CLEARANCE AND LOAN CLOSING

Subpart B - Real Estate Title Clearance and Loan Closing

§1927.51 General.

(a) Types of loans covered by this subpart. This subpart sets forth

the authorities, policies, and procedures for real estate title

clearance and closing of loans, assumptions, voluntary conveyances and

credit sales in connection with the following types of Rural Housing

Service (RHS) and Rural Housing (RH), Farm Labor Housing (LH), Rural

Rental Housing (RRH), Rural Cooperative Housing (RCH), and NonProgram

(NP) loans. This subpart does not apply to guaranteed loans. This

subpart is inapplicable to Farm Service Agency, Farm Loan Programs.

(Revised 01-09-08, PN 417.)

(b) Programs not covered by this subpart. Title clearance and closing

for all other types of agency loans and assumptions will be handled as

provided in the applicable program instructions or as provided in

special authorizations from the National Office.

by applicable program regulations, such as for Multi-Family Housing

(MFH) organizations or other complex cases as determined by the State

Office, the State Office will request OGC to review the docket and issue

closing instructions.

(d) Agency forms. Copies of all agency forms referenced in this

regulation and the agency’s internal administrative procedures for title

clearance and loan closing are available upon request from the agency’s

State Office. Forms and title clearance and loan closing requirements

which are specific for any individual state must be obtained from the

agency State Office for that state.

§1927.52 Definitions.

Agency. The Rural Housing Service (RHS) and Farm Service Agency (FSA)

and their successor agencies.

DISTRIBUTION: WSAL Real Property

Title Clearance and

Loan Closing

(Revision 1)

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§1927.52 (Con.)

Approval official. The agency employee who has been delegated the

authority to approve, close, and service the particular kind of loan

will approve an attorney or title company as closing agent for the

loans. If a loan must be approved at a higher level, the initiating

office may approve the closing agent.

Approved attorney. A duly licensed attorney, approved by the agency,

who provides title opinions directly to the agency and the borrower or

upon whose certification of title an approved title insurance company

issues a policy of title insurance. Approved attorneys also close

loans, assumptions, credit sales, and voluntary conveyances and disburse

funds in connection with agency loans. Approved attorney is further

defined in §1927.54(c).

Approved title insurance company. A title insurance company, approved

by the agency, (including its local representatives, employees, agents,

and attorneys) that issues a policy of title insurance. Depending on

the local practice, an approved title insurance company may also close

loans, assumptions, credit sales, and voluntary conveyances and disburse

funds in connection with agency loans. If the approved title insurance

company does not close the loan itself, the loan closing functions may

be performed by approved attorneys or closing agents authorized by the

approved title insurance company.

Borrower. The party indebted to the agency after the loan, assumption,

or credit sale is closed.

Certificate of title. A certified statement as to land ownership, based

upon examination of record title.

Closed loan. A loan is considered to be closed when the mortgage is

filed for record and the appropriate lien has been obtained.

Closing agent. The approved attorney or title company selected by the

applicant and approved by the agency to provide closing services for the

proposed loan. Unless a title insurance company also provides loan

closing services, the term "title company" does not include "title

insurance company."

(Revision 1)

RD Instruction 1927-B

§ 1927.52 (Con.)

Closing protection letter. An agreement issued by an approved title

insurance company which is an American Land Title Association (ALTA)

form closing protection letter or which is otherwise acceptable to the

agency and which protects the agency against damage, loss, fraud, theft,

or injury as a result of negligence by the issuing agent, approved

attorney, or title company when title clearance is done by means of a

policy of title insurance. Depending on the area, closing protection

letters may also be known as "Insured Closing Letters," "Indemnification

Agreements," "Insured Closing Service Agreements," or "Statements of

Settlement Service Responsibilities."

Cosigner. A party who joins in the execution of a promissory note or

assumption agreement to guarantee repayment of the debt.

Credit sale. A sale in which the agency provides credit to the

purchasers of agency inventory property. Title clearance and closing of

a credit sale are the same as for an initial loan, except the property

is conveyed by quitclaim deed.

Deed of trust. See trust deed.

Exceptions. Exceptions include, but are not limited to, recorded

covenants; conditions; restrictions; reservations; liens; encumbrances;

easements; taxes and assessments; rights-of-way; leases; mineral, oil,

gas, and geothermal rights (with or without the right of surface entry);

timber and water rights; judgments; pending court proceedings in Federal

and State courts (including bankruptcy); probate proceedings; and

agreements which limit or affect the title to the property.

Fee simple. An estate in land of which the owner has unqualified

ownership and power of disposition.

FSA. The Farm Service Agency, an agency of the United States Department

of Agriculture (and any successor agency). FSA is the successor agency

for farm program loans of the former Farmers Home Administration.

General warranty deed. A deed containing express covenants by the

grantor or seller as to good title and right to possession.

Indemnification agreement. An agreement that protects agency against

damage, loss, fraud, theft, or injury as a result of useful conduct or

negligence on behalf of the issuing agent, approved attorney, or title

company. This agreement may also be entitled closing protection letter,

insured closing letter, insured closing service agreement, statement of

settlement service responsibilities, or letters which provide similar

protection.

(Revision 2)

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§ 1927.52 (Con.)

Issuing agent. An individual or entity who is authorized to issue title

insurance for an approved title insurance company.

Land purchase contract (contract for deed). An agreement between the

buyer and seller of land in which the buyer has the right to possession

and use of the land over a period of time (usually in excess of 1 year)

and makes periodic payments of a portion of the purchase price to the

seller. The seller retains legal title to the property until the final

payment is made, at which time the buyer will receive a deed to the land

vesting fee title in the buyer.

Mortgage. Real estate security instrument which pledges land as

security for the performance of an obligation such as repayment of a

loan. For the purpose of this regulation the term ‘‘mortgage’’ includes

deed of trust and deed to secure debt. Form RD 1927-7 (State), "Real

Estate Mortgage or Deed of Trust for (Rural Housing)," or Form

RD 3550-14, ‘‘Real Estate Mortgage or Deed of Trust for (State),’’will be

used to secure a mortgage to the agency. (Revised 06-21-06,

PN 399.)

National Office. The National Headquarters Office of FSA or RHS

depending on the loan program involved.

OGC. The Office of the General Counsel, United States Department of

Agriculture.

Program regulations. The agency regulations for the particular loan

program involved (e.g., 7 CFR part 3550 for single family housing (SFH)

loans). (Revised 01-23-03, SPECIAL PN.)

Quitclaim deed. A transfer of the seller’s interest in the title,

without warranties or covenants. This type of deed is used by the

agency to convey title to purchasers of inventory property.

RHS. The Rural Housing Service, an agency of the United States

Department of Agriculture, or its successor agency. RHS is the

successor agency to the Rural Housing and Community Development Service

(RHCDS) which was, in turn, the successor agency to the Farmers Home

Administration.

Seller. Individual or other entity which convey ownership in real

property to an applicant for an agency loan or to the agency itself.

(Revision 2)

RD Instruction 1927-B

§ 1927.52 (Con.)

Special warranty deed. A deed containing a covenant whereby the grantor

agrees to protect the grantee against any claims arising during the

grantor's period of ownership.

State Office. For FSA, this term refers to the FSA State Office. For

RHS, this term refers to the Rural Development State Director.

(Revised 01-23-03, SPECIAL PN.)

Title clearance. Examination of a title and its exceptions to assure

the agency that the loan is legally secured and has the required

priority.

Title company. A company that may abstract title, act as an issuing

agent of title insurance for a title insurance company, act as a loan

closing agent, and perform other duties associated with real estate

title clearance and loan closing.

Title defects. Any exception or legal claim of ownership (through deed,

lien, judgment, or other recorded document), on behalf of a third party,

which would prevent the seller from conveying a marketable title to the

entire property.

Trust deed. A three party security instrument conveying title to land

as security for the performance of an obligation, such as the repayment

of a loan. For the purpose of this regulation a trust deed is covered

by the term ‘‘mortgage.’’ A trust deed is the same as a deed of trust.

Voluntary conveyance. A method of liquidation by which title to agency

security is transferred by a borrower to the agency by deed in lieu of

foreclosure.

Warranty deed. A deed in which the grantor warrants that he or she has

the right to convey the property, the title is free from encumbrances,

and the grantor shall take further action necessary to perfect or defend

the title.

§ 1927.53 Costs of title clearance and closing of transactions.

The borrower or the seller, or both, in compliance with the terms of the

sales contract or option will be responsible for payment of all costs of title

clearance and closing of the transaction and will arrange for payment before

the transaction is closed. In voluntary conveyance cases to the agency, these

costs will be paid as provided in 7 CFR part 3550, subpart E.

(Revision 1)

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§ 1927.53 (Con.)

In a case involving the purchase or sale of real estate, the option or sales

contract must state who will pay the title clearance and closing costs. These

costs will include any costs of abstracts of title, land surveys, attorney's

fees, owner's and lender's policies of title insurance, obtaining curative

material, notary fees, documentary stamps, recording costs, tax monitoring

service, and other expenses necessary to complete the transaction. (Revised

01-23-03, SPECIAL PN.)

§ 1927.54 Requirements for closing agents.

(a) Form of title certification. State Offices are directed to require

title insurance for all loan closings unless the agency determines that

the use of title insurance is not available or is economically not

feasible for the type of loan involved or the area of the state where

the loan will be closed. If title insurance is used, State Offices are

authorized to require a closing protection letter issued by an approved

title insurance company to cover the closing agent, if available. A

closing protection letter need not be furnished when the closing is

conducted by the title insurance company. When a closing protection

letter is provided, Form RD 1927-20, ‘‘Certification of Title Insurance

Company,’’ is not required. The State Office's determination to require

the use of title insurance will be based on the commercial and

residential loan closing practices of the State and the economic and

legal feasibility of obtaining title insurance. The State Office may

also determine if a title insurance policy survey coverage is an

acceptable substitute for a survey.

(b) Approval of closing agent. An attorney or title company may act as

a closing agent and close agency real estate loans, provide necessary

title clearance, and perform such other duties as required in this

subpart. A closing agent will be responsible for closing agency loans

and disbursing both agency loan funds and funds provided by the borrower

in connection with the agency loan so as to obtain title and security

position as required by the agency. The closing agent must be covered

by a fidelity bond which will protect the agency unless a closing

protection letter is provided to the agency. The borrower will select

the approved closing agent. Agency employees will not recommend the use

of any particular closing agent or title insurance company, although as

provided in paragraph (a) of this section the borrower may be required

by a State Supplement to provide title clearance with either a title

insurance policy or an attorney's opinion. If title clearance is by an

attorney's opinion, the approval official will approve the attorney who

will perform the closing in accordance with paragraph (c) of this

section. The attorney will be approved after submitting Form

RD 1927-19, "Certification of Attorney." If title certification is by

(Revision 1)

RD Instruction 1927-B

§1927.54(b) (Con.)

means of a policy of title insurance, the title company which will issue

the policy must have been approved in accordance with paragraph (d) of

this section. A closing agent’s delay in providing services without

justification, in connection with agency loans, may be a basis for not

approving the closing agent in future cases.

will be providing title clearance where the certificate of title will be

an attorney's opinion, must submit a completed Form RD 1927-19

certifying to professional liability insurance coverage. If the

attorney is also the closing agent, fidelity coverage for the attorney

and any employee having access to the funds must be provided. The State

Office will determine the appropriate level of such insurance. Required

insurance will, as a minimum, cover the amount of the loan to be closed.

The State Office will approve the form stipulating the bond coverage.

The approval official will approve any attorney who is duly licensed to

practice law in the state where the real estate security is located and

who complies with the bonding and insurance requirements in this

section. If the certification of title will be by means of title

insurance, any attorney or closing agent designated as an approved

attorney or closing agent by the approved title insurance company which

will issue the policy of title insurance will be acceptable, and when

covered by a closing protection letter, will not be required to obtain

professional liability insurance or a fidelity bond, if the closing

protection letter is the ALTA form closing protection letter or provides

at least equivalent protection to the agency. Each approved title

insurance company may provide a master list of their approved attorneys

that are covered by its closing protection letters to the State Office

and, in such cases the attorneys are approved for closings for that

insurance company. Delay in providing closing services without

justification may be a basis for not approving the attorney in future

cases.

(d)

Approval of title companies.

A title company acting as a closing

agent, or as an issuing agent for a title insurance company, must be

covered by a title insurance company closing protection letter or submit

Form RD 1927-20, ‘‘Certification of Title Company,’’ certifying to

fidelity coverage to cover all employees having access to the loan

funds. The State Office will determine the appropriate level of such

coverage and will approve the form stipulating the bond coverage. Delay

in providing closing services without justification may be a basis for

not approving the company in future cases. Each approved title

insurance company may provide a master list of their approved title

companies that are covered by its closing protection letter to the State

Office and, in such cases, the title companies on the list are approved

for closings for that title insurance company.

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§1927.54 (Con.)

(e)

Approval of title insurance companies

. State Offices are

encouraged to solicit discounts on title insurance premiums from title

insurance companies due to the high volume of agency loan transactions.

The agency will approve any title insurance company which issues

policies of title insurance in the State where the security property is

located if:

(1) The form of the owner's and lender's policies of title

insurance (including required endorsements) to be used in closing

agency loans are acceptable to the State Office, and will contain

only standard types of exceptions and exclusions approved in advance

by the approval official with the advice of OGC;

(2) The title insurance company is licensed to do business in the

State (if a license is required), and

(3) The title insurance company is regulated by a State Insurance

Commission, or similar regulator, or if not, the title insurance

company submits copies of audited financial statements, or other

approved financial statements satisfactory to the State Office,

which show that the company has the financial ability to cover

losses arising out of its activities as a title insurance company

and under any closing protection letters issued by the title

insurance company. The financial statements must also demonstrate

that the title insurance company has sufficient resources to

reimburse the agency for any losses caused by fraud or dishonesty by

the company and its authorized agents, or failure of the company or

its authorized agents to follow or comply with agency's written

closing instructions.

(4) Delay in providing services without justification may be a

basis for not approving the company.

(5) A title insurance company is not regulated by the State, the

above listed approval process will be repeated at least every 5

years, or more often if adverse information becomes available, to

insure continued compliance by the title insurance company.

(f)

Responsibility of approval official

. In addition to approving

closing agents, the approval official will inform all closing agents

used in connection with agency closing of their duties and

responsibilities under this subpart, applicable State Supplements, and

any changes or additional requirements which may be imposed. A package

containing a copy of this subpart, applicable forms, State Supplements,

and other pertinent material will be provided to the closing agent as

needed.

RD Instruction 1927-B

§1927.54 (Con.)

(g) Conflict of interest. A closing agent who has, or whose spouse,

children, or business associates have, a financial interest in the real

estate which will secure the agency debt shall not be involved in the

title clearance or loan closing process. Financial interest includes

having either an equity, creditor, or debtor interest in any

corporation, trust, or partnership with a financial interest in the real

estate which will secure the agency debt.

(h)

Debarment or suspension

. No attorney, title company, title

insurance company, or closing agent, currently debarred or suspended

from participating in Federal programs, may participate in any aspect of

the agency loan closing and title clearance process, in accordance with

RD Instruction 1940-M.

(i)

Special provisions

. Closing agents are responsible for having

current knowledge of the requirements of State laws in connection with

loan closing and title clearance and should advise the State Office of

any changes in State law which necessitate changes in the agency’s State

mortgage forms and State Supplements.

(j)

Rejecting closing agents or title insurance companies

. If the

approval official (or the State Office for title insurance companies)

cannot approve the closing agent selected by the applicant in accordance

with paragraphs (c) or (d) of this section, the following actions will

be taken:

(1) The attorney or closing agent will be notified within 5

business days of the specific reasons for rejection.

(2) The applicant will be notified within 5 business days of the

rejection. It is the applicant's responsibility to decide whether

to continue with the rejected closing agent or attorney, if the

reasons for rejection can be removed before any legal costs are

incurred, or if another closing agent or attorney will be selected.

(3) If a title insurance company has requested approval, the title

insurance company will be notified within 30 days after all relevant

information requested by the State Office in connection with the

approval decision has been received. If the title insurance company

is rejected, it will be notified at that time of the specific

reasons for rejection.

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§1927.55 Title clearance services.

(a) Responsibilities of closing agents. Services to be provided to the

agency and the borrower by a closing agent in connection with the

transaction vary depending on whether a title insurance policy or title

opinion is being furnished. The closing agent is expected to perform

these services without unnecessary delay.

(b) Initial responsibility of approval official. The approval official

will furnish the closing agent with Form RD 1927-4, "Transmittal of

Title Information," all the information and documents called for therein

(including waivers, easements, and agency forms), and any information

not contained in this subpart regarding agency policies and procedures

applicable to the type of transaction involved.

borrower and seller, if applicable, that an attorney or title company

must be employed to examine the title and perform other services in

connection with the closing of the transaction. Application for title

examination or insurance will be made by the borrower to a title company

or attorney. The lender policy will be for at least the amount of the

loan. The United States of America will be named as the insured lender.

RD Guide Letter 1927-B-1 (available in any agency office), may be used

to request attorney title examination, loan closing and related legal

services.

(d) Use of title opinion. If a title opinion will be issued, a title

examination will include searches of all relevant land title and other

records, so as to express an opinion as to the title of the property and

the steps necessary to obtain the appropriate title and security

position to issue a title opinion as required by this subpart. A Form

RD 1927-9, "Preliminary Title Opinion," Form RD 1927-10, "Final Title

Opinion," or a certificate of title will be issued to the approval

official. If either form is not legally sufficient in a particular

State, an OGC approved State form will be used. The closing agent or

approved attorney will determine:

(1) The legal description and all owners of the real property;

(2) Whether there are any exceptions affecting the property and

advise the approval official and borrower of the nature and effect

of outstanding interests or exceptions, prior sales of part of the

property, judgments, or interests to assist in determining which

exceptions must be corrected in order for the borrowers to obtain

good and marketable title of record in accordance with prevailing

title examination standards, and for the agency to obtain a valid

lien of the required priority;

RD Instruction 1927-B

§1927.55(d) (Con.)

(3) Whether there are outstanding Federal, State, or local tax

claims (including taxes which under State law may become a lien

superior to a previously attaching mortgage lien) or homeowner’s

association assessment liens;

(4) Whether outstanding judgments of record, bankruptcy,

insolvency, divorce, or probate proceedings involving any part of

the property, whether already owned by the borrower, or to be

acquired by assumption or with loan funds, or involving the borrower

or the seller exist;

(5) If a water right is to be included in the security for the

loan, and if so, the full legal description of the water right;

(6) In addition to paragraph(d)(2) of this section, if wetlands

easements or other conservation easements have been placed on the

property;

(7) What measures are required for preparing, obtaining, or

approving curative material, conveyances, and security instruments,

and

(8) That sufficient copies of these interests and exceptions are

provided as requested by the approval official.

(e) Use of title insurance. When title insurance is to be obtained,

the approval official will be furnished with a title insurance binder

disclosing any defects in, exceptions to, and encumbrances against, the

title, the conditions to be met to make the title insurable and in the

condition required by the agency, and the curative or other actions to

be taken before closing of the transaction. The binder must include a

commitment to issue a lender policy in an amount at least equal the

amount of the loan, except in instances where there may be an

outstanding owner's policy in favor of the borrower. Not withstanding

the provisions of this section, the instances of an assumption without a

subsequent loan, the existing policy may be continued if the coverage

meets or exceeds the assumption balance and the title company agrees in

writing to extend coverage in full force and effect.

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§1927.55 (Con.)

(f) Approval official's responsibilities after receipt of preliminary

title opinion or title insurance binder. Upon receipt of the

preliminary title opinion or title insurance binder, the approval

official will:

(1) Check the opinion or binder carefully. If any required

information is omitted, or if the standard form of opinion or binder

is amended, return it for completion or correction. If the closing

agent is unable or unwilling to comply, the approval official will

send the opinion or binder with a full explanation to OGC through

the State Office for advice.

(2) Check the legal description of the land, water rights, rights-

of-way, easements, and other security involved, to determine that

the description covers all of the property rights intended to be

taken as security.

(3) Review all exceptions to title shown in the preliminary title

opinion or title insurance binder. The approval official will

determine which exceptions must be modified, eliminated, or waived,

or whether an agreement with prior lienholders is necessary or

advisable to protect the agency's interests. If prior

encumbrance(s) will remain, the approval official should obtain and

review a copy of each to insure that its terms are acceptable to the

agency. If an option or sales contract which lists acceptable

exceptions is involved, the approval official will determine whether

the exceptions in the preliminary title opinion or title insurance

binder are the same as those in the option or sales contract and

inform the applicant of discrepancies. If the approval official has

any doubt as to the acceptability or effect of any exception, the

applicant will be requested to obtain a clarification. The approval

official will consult with the closing agent and/or the State Office

when necessary to determine the acceptability of any exception. If

the approval official determines that any defects cannot be

corrected, or the effect of certain exceptions on the title,

suitability, security value, or successful operation of the property

is not clear, and they cannot be corrected or eliminated without

undue expense, the approval official will forward the preliminary

title opinion or title insurance binder to the State Office together

with comments regarding the objectionable features and copies of the

exceptions when needed.

RD Instruction 1927-B

§ 1927.55(f)(3) (Con.)

(i) If, with the advice of OGC, the State Office determines

that the exceptions will not adversely affect the title to the

property or its suitability, security value, or successful

operation, the State Office will advise the approval official.

The approval official will then arrange for closing.

(ii) If the State Office, with the advice of OGC, finds that

these exceptions will adversely affect the title to the

property, its suitability, security value, or successful

operation, the State Office may waive them conditionally and

instruct the approval official as to how the conditions may be

met, or instruct the approval official that the loan cannot be

closed because of the defect.

§ 1927.56 Scheduling loan closing.

The approval official may arrange a closing when he or she determines

that exceptions shown in the preliminary title opinion or title insurance

binder (if any) will not adversely affect the suitability, security value, or

successful operation of the property and all other agency conditions to

closing have been satisfied.

(a) The approval official will make sure that all requirements of Truth

in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA)

Integrated Mortgage Disclosures rule (TRID) have been met before the

loan is closed. (Revised 06-21-18, SPECIAL PN.)

(b) In arranging for loan closing, the approval official will send Form

RD 1927-15, "Loan Closing Instructions and Loan Closing Statement," or

Form RD 3550-25, ‘‘Loan Closing Instructions and Loan Closing Statement’’

to the closing agent. When a title insurance commitment is involved,

the "loan closing instructions" will include any corrections required by

the commitment. Therefore, the title insurance commitment must be

received before the final closing instructions are transmitted. At the

same time, send written notification of loan closing to the applicant.

(Revised 08-18-04, PN 378.)

§ 1927.57 Preparation of closing documents.

(a) Preparation of deeds

. The closing agent, unless prohibited by law,

will prepare, complete, or approve documents, including deeds, necessary

for title clearance and closing of the transaction and provide the

agency with the policy of title insurance or final title opinion

providing the lien priority required by the agency and subject only to

exceptions approved by the agency. Form RD 1927-11, ‘‘Warranty Deed

( )’’ (State), or Form RD 1927-12, ‘‘Warranty Deed’’ (State),

will be used when required by this part.

(Revision 2)

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§ 1927.57(a) (Con.)

(1) Types of estates for married borrowers. If the borrowers are

married, the agency prefers, but will not require, that title to the

real estate will be held in such a way that, upon the death of a

borrower, it will pass to the surviving spouse by law to prevent the

real estate from being tied up in probate proceedings. Title may be

held in any manner that permits obtaining the required mortgage.

(2) Deeds will be prepared as follows. Conveyances of title to

borrowers by parties other than the agency will be by the form of

deed in use in the state where the property is located that the

entity providing title clearance determines will vest in the

borrower a good and marketable title of record. All conveyances by

the agency will be by quitclaim deed.

(b) Preparation of mortgages. The closing agent will insure that all

mortgages are properly prepared, completed, executed, and filed for

record. Where applicable, the mortgages should recite that it is a

purchase money mortgage. The following requirements will be observed in

preparing agency mortgages:

(1) Real estate mortgage forms. Agency mortgage forms will be

used. Form RD 1927-1 (State), "Real Estate Mortgage or Deed of

Trust For ________," will be used for all direct loans except where

Form RD 1927-7 (State), is used for all RH loans. These forms will

be prepared and distributed in accordance with State Supplements.

When a loan is made to a homestead entryman or to a contract

purchaser of a farm unit from the Bureau of Reclamation, a rider to

Form RD 1927-1 (State), will be used per State Supplement.

(2) Number of copies.

(i) The original recorded mortgage is to be retained in the

borrower's case file unless the original mortgage is retained

by the recorder, and a conformed copy will be provided to the

borrower.

(Revision 2)

RD Instruction 1927-B

§ 1927.57(b)(2) (Con.)

(ii) When the original is to be retained by the recorder, an

original and two conformed copies will be prepared. One

conformed copy will be retained in the borrower's case file and

one conformed copy will be provided to the borrower.

(iii) Extra copies of mortgages may be needed in individual

cases in some participation loans, loans on reclamation

projects, when security is taken on trust or restricted

property involving loans to Native American, and other similar

situations.

(iv) The closing agent will distribute copies to appropriate

parties at loan closing or as soon as possible thereafter.

(3) Persons required to execute mortgage. The mortgage will be

executed by all persons and entities the title insurance company or

attorney providing the title opinion determines necessary

(including, for example, any spouse with a right of dower or

curtesy) for the title insurance policy or final title opinion to

provide that the agency has the required lien priority so that, in

the event of default, the mortgage will be enforced by the agency

against all such interests.

(4) Date of execution. The mortgage will be dated and executed on

the date the title insurance company or attorney providing the final

title opinion determines is necessary to provide the agency with a

title insurance policy or final title opinion showing the agency has

required lien priority and is subject to exceptions approved by the

agency.

(5)

Title exceptions

. The mortgage will generally or specifically

describe all exceptions it will be subject to, depending on what is

customary under local practice or required by State law or State

Supplement.

(6) Releasing or retaining existing mortgages in refinancing cases.

When there is an outstanding agency real estate mortgage against the

property and the loan secured by the mortgage is being refinanced

with the current loan, the mortgage for the outstanding loan will be

superseded and will be released at the time of loan closing, unless

it is necessary under State law to keep the existing mortgage in

effect to retain a valid lien of the same priority for the

obligation being refinanced.

(Revision 1)

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§ 1927.57(b) (Con.)

(7) Describing notes in mortgages. In most cases, only the note(s)

for the new loan(s) needs to be described when a subsequent loan is

made and a subsequent mortgage is taken unless the title insurance

company or attorney providing the final title opinion determines it

necessary to describe existing agency notes in the subsequent

mortgage.

(8) Determining due date of final installments. The "Due Date of

Final Installment" as shown in the mortgage, is determined by adding

the number of years over which the loan is payable to the date of

the promissory note: for example, if the note is dated March 30,

1987, and the final payment is due and payable 20 years from that

date, the "Due Date of Final Installment" is March 30, 2007.

(9) Alteration of mortgage form. An agency mortgage form may be

altered pursuant to a State Supplement having prior approval of the

National Office, or in a special case, to comply with the terms of

loan approval prescribed in accordance with program instructions.

No other alterations in the printed mortgage forms will be made

without prior approval of the National Office. Any changes made by

deletion, substitution, or addition (excluding filling in blanks)

will be initialed in the margin by all persons signing the mortgage.

(10) Special requirements imposed by program instructions. Some

program instructions require that the mortgage forms be modified.

In such cases, either OGC or the approval official will modify the

agency mortgage form as specified. The closing agent will make sure

that the modification has been made prior to execution of the

mortgage.

(11) Mortgages on leasehold estates. When the agency’s security

interest is a leasehold estate, unless State law or State Supplement

otherwise provides, the Form RD 1927-1 (State) or Form RD 1927-7

(State), or Form RD 3550-14 will be modified as follows: (Revised

06-21-06, PN 399.)

(i) In the space provided on the mortgage for the description

of the real property security, the leasehold estate and the

land covered by the lease must be described. The following

language must be used unless modified by a State Supplement:

(Revision 1)

RD Instruction 1927-B

§ 1927.57(b)(11)(i) (Con.)

"All of borrower's right, title, and interest in and to a

leasehold estate for an original term of ___years,

commencing on ________, 19 __, created and established by

and between ____________as lessor and owner and

___________ as lessee, including any extensions and

renewals thereof, a copy of which lease was recorded or

filed in book ____, page ____, as instrument number

______, in the Office of the (e.g., County Clerk), for

the aforesaid county and State and covering the following

real property: ________."

(ii) Immediately preceding the covenant starting with the

words "should default," the following covenant will be added:

"( ) Borrower covenants and agrees to pay when due all

rents and any and all other charges required by said

lease, to comply with all other requirements of said

lease, and not to surrender or relinquish, without the

Government's prior written consent, any of borrower's

right, title, or interest in or to said leasehold estate

or under said lease while this mortgage remains of

record."

(12)

Mortgages on land purchase contract

. When the agency security

interest is on a borrower's interest in a land purchase contract,

OGC will provide language used to modify the Form RD 1927-1 (State)

or Form RD 1927-7 (State), or Form RD 3550-14. (Revised 06-21-06,

PN 399.)

(13)

Legal description

. The legal description on the mortgage

should be taken directly from the title insurance commitment or the

title abstract to insure accuracy of the legal description.

. The closing agent will make

sure that Form RD 1940-16, ‘‘Promissory Note,’’ for agency originated

loans (or assumption agreement) is completed in accordance with the

Forms Manual Insert (FMI) and executed. The approval official will

determine who is to execute the promissory note, including cosigners, if

necessary, in accordance with program instructions and provide the

closing agent with the names of these individuals. If the applicant is

a corporation, partnership, or trust, the approval official will provide

the name(s) and title(s) of the individual(s) executing the promissory

note on behalf of the entity. The closing agent will determine if any

additional signatures are required on the promissory note or assumption

agreement in order for the policy of title insurance or final title

opinion to provide that the agency has the required lien priority

subject only to exceptions approved by the agency.

(Revision 1)

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§1927.57 (Con.)

(d) Preparation of protective instruments. The closing agent will

properly prepare, complete, and approve releases and curative documents

necessary for title clearance and closing, in recordable form and record

them if required.

(1) Prior lienholder's agreement. If any liens (other than agency

liens or tax liens to local governmental authorities) or security

agreements (hereafter called "liens"), with priority over the

agency's mortgage will remain against the real property securing the

loan, the lienholders must execute, in recordable form, agreements

containing all of the following provisions unless prior approval for

different provisions has been obtained from the National Office:

(i) The prior lienholder shall agree not to declare the lien

in default or accelerate the indebtedness secured by the prior

lien for a specific period of time after notice to the agency.

The agreement must:

(A) Provide that the specified period of time will not

commence until the lienholder gives written notice of the

borrower's default and the prior lienholder's intention

to accelerate the indebtedness to the agency office

servicing the loan,

(B) Include the address of the agency servicing office,

default by paying the amount of the borrower's delinquent

payments to the prior lienholder, or pay the obligation

in full and have the lien assigned to the agency, and

(D) Provide that the prior lienholder will not declare

the lien in default for any nonmonetary reason if the

agency commences liquidation proceedings against the

property and thereafter acquires the property.

(Revision 1)

RD Instruction 1927-B

§1927.57(d)(1) (Con.)

(ii) When the prior lien secures future advances, including

the lienholder's costs for borrower liquidation or bankruptcy,

which under State law have priority over the mortgage being

taken (or an agency mortgage already held), the prior

lienholder shall agree not to make advances for purposes other

than taxes, insurance or payments on other prior liens without

written consent of the agency.

(iii) The prior lienholder shall consent to the agency making

(or transferring) the loan and taking (or retaining) the

related mortgage if the prior lien instrument prohibits a loan

or mortgage (or transfer) without the prior lienholder's

consent.

(iv) The prior lienholder shall consent to the agency

transferring the property subject to the prior lien after the

agency has obtained title to the property either by foreclosure

or voluntary conveyance if the prior lien instrument prohibits

such transfer without the prior lienholder's consent.

(2) Notice of foreclosure agreements. These agreements will be

obtained only when required by a State Supplement. As a

precautionary measure, the State Supplement will require notice

agreements when OGC determines that State law permits junior liens

of private parties to be extinguished by foreclosure of a prior lien

without the junior lienholder being made parties or being given

actual notice. The State Supplement will specify the number of days

within which notice of foreclosure is required by the agreement.

(3) Leaseholds. When the agency security interest is on a

leasehold, the approval official must review the lease to make sure

that it meets the security and duration requirements of the program

instructions. If not, it will be necessary for the landlord and

tenant to amend the lease to meet these requirements at closing.

(4) Agreement by holder of seller's interest under land purchase

contract. If the buyer's interest in the security property is that

of a buyer under a land purchase contract, it will be necessary for

the seller to execute, in recordable form, an agreement containing

all of the following provisions:

(i) The seller shall agree not to sell or voluntarily transfer

the seller's interest under the land purchase contract without

the prior written consent of the State Office.

(ii) The seller shall agree not to encumber or cause any liens

to be levied against the property.

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§1927.57(d)(4) (Con.)

(iii) The seller shall agree not to commence or take any

action to accelerate, forfeit, or foreclose the buyer's

interest in the security property until a specified period of

time after notifying the State Office of intent to do so. This

period of time will be 90 days unless a State Supplement

provides otherwise. The agreement shall give the agency the

option to cure any monetary default by paying the amount of the

buyer's delinquent payments to the seller, or paying the seller

in full and having the contract assigned to the agency.

(iv) The seller shall consent to the agency making the loan

and taking a security interest in the borrower's interest under

the land purchase contract as security for the agency loan.

(v) The seller shall agree not to take any actions to

foreclose or forfeit the interest of the buyer under the land

purchase contract because the agency has acquired the buyer's

interest under the land purchase contract by foreclosure or

voluntary conveyance, or because the agency has subsequently

sold or assigned the buyer's interest to a third party who will

assume the buyer's obligations under the land purchase

contract.

(vi) When the agency acquires a buyer's interest under a land

purchase contract by foreclosure or deed in lieu of

foreclosure, the agency will not be deemed to have assumed any

of the buyer's obligations under the contract, provided that

the failure of the agency to perform any such obligations while

it holds the buyer's interest is a ground to commence an action

to terminate the land purchase contract.

(5) Form of agreement. The form of prior lienholder's agreement,

forbearance agreement, notice of foreclosure or assignment, and

agreement by holder of seller's interest under land purchase

contract will be prescribed in a State Supplement with the

concurrence of OGC. When only forbearance agreements are needed,

they will be obtained on Form RD 1927-8, "Agreement with Prior

Lienholder," or, if that form is not legally satisfactory, on a

State form having the same title. When only notice of foreclosure

or assignment are required, a separate form for this purpose will be

used. When both forbearance agreements and notices of foreclosure

or assignment are required, Form RD 1927-8 may be amended in order

to serve both purposes, a substitute State form may be used for both

purposes, or Form RD 1927-8 may be used and the notice agreement

obtained on a separate State form.

RD Instruction 1927-B

§1927.57(d) (Con.)

(6)

Executing, acknowledging, and recording

. When an agreement is

required by paragraph (d)(1), (d)(2), (d)(3), or (d)(4) of this

section, the closing agent will determine at the time of closing

that the agreement is properly completed, executed, sealed,

witnessed, acknowledged, and recorded as required by State law or

State Supplement.

(e)

Correction of errors in recorded security instruments

. A State

Supplement, subject to OGC's review and approval, will be issued to

provide guidance in correcting error(s) in recorded security

instruments.

§1927.58 Closing the transaction.

The closing agent will cooperate with the approval official, borrower,

seller, and other necessary parties to arrange the time and place of closing.

The transaction may be closed when the agency determines the agency

requirements for the loan have been satisfied and the closing agent or

approved attorney can issue or cause to be issued a policy of title insurance

or final title opinion as of the date of closing showing title vested as

required by the agency, the lien of the agency’s mortgage in the priority

required by the agency, and title to the mortgaged property subject only to

those exceptions approved in writing by the agency. The loan will be

considered closed when the mortgage is filed for record and the required lien

is obtained.

(a) Disbursement of loan funds. When the closing agent indicates that

the conditions necessary to close the loan have been met, loan funds

will be forwarded to the closing agent. Loan funds will not be

disbursed prior to filing of the mortgage for record; however, when

necessary, loan funds may be placed in escrow before the mortgage is

filed for record and disbursed after it is filed. No development funds

will be kept in escrow by the closing agent after loan closing, unless

approved by the agency. Loan funds for the payment of a lien may be

disbursed only upon the recording of a discharge, satisfaction, or

release of prior lien interests (or assignment where necessary to

protect the interests of the agency).

(b) Title examination and liens or claims against borrowers. If there

are other exceptions or recorded items which have arisen since the

preliminary title opinion, the transaction will not be closed until

these entries have been cleared of record or approved, by the agency.

The closing agent will advise the approval official of the nature of

such intervening instruments and the effect they may have on obtaining a

valid mortgage of the priority required or the title insurance policy to

be issued.

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§1927.58 (Con.)

taxes and assessments against the property which are due and payable are

paid at or before the time of loan closing. If the seller and the

borrower have agreed to prorate any taxes or assessments which are not

yet due and payable for the year in which the closing of the transaction

takes place, the seller's proportionate share of the taxes and

assessments will be deducted from the proceeds to be paid to seller at

closing and will be added to the amount required to be paid by borrower

at closing. Certificates or receipts should be produced from the taxing

authorities to show that taxes or assessments which are due and payable

have been paid and, if possible, the certificates or receipts, or

copies, will be kept in the borrower's County or District Office case

file. Appropriate prorations as agreed upon between the borrower and

seller may also be made for taxes paid by the seller which are

applicable to a period after the closing date, and for common area

maintenance fees, prepaid rentals, insurance (unless the borrower is to

obtain a new policy of insurance), and growing crops.

(d)

Affidavit regarding work of improvement

(1)

Execution by borrower

. If required by State Supplement, the

closing agent will require that a Form RD 1927-5, "Affidavit

Regarding Work of Improvement," be completed and executed when a

loan is being made to a borrower who already owns the real estate to

be mortgaged. This affidavit will be executed by the borrower at

closing.

(2)

Execution by seller

. If required by State Supplement, the

closing agent will require that Form RD 1927-5 be completed and

executed by the seller when the agency is making a loan to a

borrower to enable the borrower to acquire the property (including

transfers). This affidavit will be executed by the seller at

closing.

(3)

Legal insufficiency of affidavit form

. If Form RD 1927-5 is

not legally sufficient in a particular State, a State form approved

by OGC will be used. A similar form that may be required by a title

insurance company may be substituted for Form RD 1927-5.

(4)

Recording

. The affidavit will not be recorded unless the

closing agent deems it necessary and State law permits.

RD Instruction 1927-B

§ 1927.58(d) (Con.)

(5)

Delay in closing

. The loan will not be closed if, at the loan

closing, the seller (in a sale transaction) or the borrower (in a

nonpurchase money loan situation) indicates that construction,

repair, or remodeling has been commenced or completed on the

property, or related materials or services have been delivered to or

performed on the property within the time limit specified in the

affidavit, unless a State Supplement provides otherwise. The

closing agent will notify the approval official, who will determine

if the work of improvement could result in a lien prior to the

agency lien. The State Office will, with the advice and concurrence

of OGC, provide in a State Supplement the period of time to be used

in completing the affidavit.

(e)

Completion of closing documents

. The closing agent will determine

that deeds, promissory notes, mortgages, releases, and other curative

instruments are completed (sealed and witnessed if required by State

law) and, if necessary, acknowledged and filed for record at the proper

time.

(f)

Assignment of future income

. If Form RD 443-16, "Assignment of

Income from Real Estate Security," is required in a particular case, the

approval official will prepare the form and have it available for

execution by the borrower when the transaction closes. The closing

agent will see that the form is properly completed, executed (sealed and

witnessed if required by State law), and acknowledged by the borrower.

(g)

Return of loan documents to approval official after loan closing

Within 1 day after loan closing, the closing agent will return completed

and executed copies of Forms RD 1927-15 or 3550-25, the executed

original promissory note, and all other documents required for loan

closing (except the mortgage), to the approval official. If the

recorded mortgage is customarily returned to the borrower or closing

agent after recording, then it must be forwarded to the approval

official immediately. (Revised 08-18-04, PN 378.)

(h)

Final title opinion or title insurance policy

. As soon as possible

after the transaction has been closed.

(1) Final title opinion. The attorney will issue a final title

opinion to the agency and the borrower on Form RD 1927-10. If that

form is not legally sufficient in a particular State, a State form

approved by OGC may be used. Issuance of the final title opinion

should not be held up pending the return of recorded instruments.

If it is not possible for the final title opinion to show the book

and page of recording of the agency security instrument, the words

(Revision 1)

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§ 1927.58(h)(1) (Con.)

"and is recorded" in paragraph II B of Form RD 1927-10 may be

deleted and the following blank space completed to show the filing

office and the filing instrument number, if available. Attached to

the final title opinion will be required documents then available,

including any which the approval official has furnished to the

attorney which were not previously returned. The attorney will

ensure that all recorded instruments are forwarded or delivered to

the proper parties after recording. The certification of title will

be forwarded for a voluntary conveyance.

(2)

Title insurance policy

. The closing agent will send or deliver

the title insurance policy, with the United States listed as

mortgage holder, to the approval official. The policy will be

subject only to standard exceptions and those outstanding

encumbrances, and exceptions approved by the approval official. If

an owner's policy of title insurance is requested, the closing agent

will send or deliver it to the borrower. The closing agent will

ensure that all recorded instruments are delivered or sent to the

proper parties after recording.

(3)

Responsibilities of the approval official

. The approval

official will check the final title opinion or lender title policy

to make sure that the lien priority required in the loan approval

has been obtained. Forms RD 1927-15 or 3550-25 will be checked to

see that funds were disbursed as authorized. If these conditions

have not been met, the approval official will report it to the State

Office for advice. (Revised 08-18-04, PN 378.)

(i) Other services of the closing agent.

(1) The closing agent will assist the approval official in

preparing, completing, obtaining execution and acknowledgment, and

recording the required documents when necessary. The closing agent

will keep the approval official advised as to the progress of title

clearance and preparation of material for closing the transaction.

(2) The closing agent will provide services for deeds in lieu of

foreclosure as set forth in § 1927.62 of this subpart, and § 1955.10

of subpart A of part 1955 of this chapter.

(Revision 1)

RD Instruction 1927-B

§ 1927.59 Subsequent loans and transfers with assumptions.

Title services and closing for subsequent loans to an existing borrower

will be done in accordance with previous instructions in this subpart, except

that:

(a) Loans closed using title insurance or title opinions.

(1) Title insurance or title opinions will be obtained unless:

(i) The cost of title services is excessive in relationship to

the size of the loan;

(ii) The agency currently has a first mortgage security

interest;

(iii) The applicant has sufficient income to service the

additional loan;

(iv) The borrower is current on the existing agency loan; and

(v) The best mortgage obtainable adequately protects agency

security interests.

(2) Title insurance or a title opinion will not be obtained if a

subsequent Section 504 loan is being made where the previous Section

504 loan was unsecured or secured for less than $7,500 and the

outstanding debt amount plus the new loan is less than $7,500.

(3) Loans closed using a new title insurance policy:

(i) Will cover the entire real property which is to secure the

loan, including the real property already owned and any

additional real property being acquired by the borrower with

the loan proceeds.

(ii) Will cover the entire amount of any subsequent loan plus

the amount of any existing loan being refinanced (if the

existing loan is not being refinanced, the new lender policy

will insure only the amount of the subsequent loan).

(Revision 1)

(04-22-96) SPECIAL PN

RD Instruction 1927-B

§ 1927.59 (Con.)

(b) Title services required in connection with assumptions. These

requirements are contained in part 1965, subpart A, B, and C, of this

chapter and 7 CFR part 3550 as appropriate for the loan type. (Revised

01-23-03, SPECIAL PN.)

§§ 1927.60 - 1927.61 [Reserved]

§ 1927.62 Voluntary conveyances.

When a borrower offers to convey security, the approval official will

process and close the transaction according to § 1955.10 of subpart A of part

1955 of this chapter. The closing agent will issue or cause to be issued a

final title opinion or policy of title insurance indicating that title is

vested in the United States of America subject only to the agency liens or

prior liens previously approved by the agency in accordance with § 1955.10 of

subpart A of part 1955 of this chapter.

§§ 1927.63 - 1927.64 [Reserved]

§ 1927.65 Additional requirements in connection with loans to homestead

entrymen, contract purchasers of farm units from the Bureau of Reclamation,

and certain American Indians.

Whenever loans or assumptions are subject to agreements with other

agencies (e.g., loans to or assumptions by homestead entrymen, American

Indians, or contract purchasers from the Bureau of Reclamation), the title

clearance and closing of the transaction will be handled in accordance with

special instructions issued by the agency and/or other parties involved

applicable to the type of transaction, as well as those of this subpart. The

special instructions may be in the form of a Memorandum of Understanding with

the advice and approval of OGC.

§ 1927.66 Cancellation of loan, assumption, or credit sale.

If it is determined that the transaction will not be closed, the approval

official will promptly notify the borrower and the following parties who are

involved in the case at the time the determination is made: the seller,

attorney(s), OGC, and the title company.

§§ 1927.67 - 1927.89 [Reserved]

(Revision 1)

RD Instruction 1927-B

§1927.90 State Supplements.

The State Supplement issued pursuant to this subpart will have prior

National Office approval and will be the minimum necessary to comply with

state laws. The State Supplement will cover loan closings, where the agency

is obtaining the best lien obtainable and there will be no title clearance for

such loan provided by a title insurance company or attorney.

§1927.91 Exception authority.

The Administrator may, in individual cases, make an exception to any

requirement or provision of this subpart which is not inconsistent with

applicable law or opinion of the Comptroller General. The Administrator may

exercise this authority upon written request from the State Office or Deputy

Administrator, provided the Administrator determines that application of the

requirement or provision would adversely affect the Government's interest.

Request for exception must be supported with documentation to explain adverse

effect on the Government's interest, proposed alternative courses of actions,

and show how the adverse effect will be eliminated or minimized if the

exception is granted.

§§1927.92 - 1927.99 [Reserved]

§1927.100 OMB control number.

The reporting requirements contained in this regulation have been

approved by the Office of Management and Budget and have been assigned OMB

control number 0575-0147. Public reporting burden for this collection of

information is estimated to vary from 5 minutes to 1.5 hours per response,

with an average of .38 hours per response, including time for

reviewing instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the collection of

information. Send comments regarding this burden estimate or any other aspect

of this collection of information, including suggestions for reducing this

burden, to Department of Agriculture, Clearance Officer, OIRM, Ag Box 7630,

Washington, D.C. 20250; and to the Office of Management and Budget, Paperwork

Reduction Project (OMB# 0575-0147), Washington, D.C. 20503.

o0o

(04-22-96) SPECIAL PN