RD Instruction 1942-A
§ 1942.7 Loan closing.
Loans will be closed in accordance with the closing instructions issued by the OGC and § 1942.17(o) of this subpart and as soon as possible after receiving the check.
(a) Authority to execute, file, and record legal instruments. Area Office employees are authorized to execute and file or record any legal instruments necessary to obtain or preserve security for loans. This includes, as appropriate, mortgages and other lien instruments, as well as affidavits, acknowledgments, and other certificates.
(Revised 05-18-05, PN 386.)
(b) Preparation of mortgages. Unless otherwise required by State law or unless an exception is approved by the State Director with advice of the OGC, only one mortgage will be taken even though the indebtedness is to be evidenced by more than one instrument.
(c) Source of funds for insured loans. All loans will be made from the Rural Development Insurance Fund (RDIF).
(d) Unused funds. Obligated funds planned for project development, which remain after all authorized costs have been provided for, will be disposed of in accordance with § 1942.17(p)(6) of this subpart. See Subpart B of Part 1951 of this chapter as to the method of returning loan and grant funds.
(e) Loan disbursements. Whenever a loan disbursement is received, lost, or destroyed, the Rural Development Manager will take appropriate actions outlined in RD Instruction 2018-D. (Revised 05-18-05, PN 386.)
(f) Supervised bank accounts. Supervised bank accounts will be handled under Subpart A of Part 1902 of this chapter. (Revised 3-1-88,
§ 1942.8 Actions subsequent to loan closing.
(a) Mortgages. Real estate or chattel mortgages or security instruments will be delivered to the recording office for recordation or filing, as appropriate. A copy of such instruments will be delivered to the borrower. The original instrument, if returnable after recording or filing, will be retained in the borrower's case folder.
(2-6-85) PN 956
RD Instruction 1942-A
§ 1942.8 (Con.)
(b) Notes and bonds. When the debt instrument is a promissory note or single instrument bond fully registered as to principal and interest, a conformed copy will be sent to the Finance Office immediately after loan losing and the original instrument will be stored in the District Office. When other types of bonds are used, the original bond(s) will be forwarded to the Finance Office immediately after loan closing. (Revised 3-1-88, SPECIAL PN.)
(c) Multiple advances -- bond(s). When temporary paper, such as bond anticipation notes or interim receipts, is used to conform with the multiple advance requirement, the original temporary paper will be forwarded to the Finance Office after each advance is made to the borrower. The borrower's case number will be entered in the upper right-hand corner of such paper by the District Office. The permanent debt instrument(s) should be forwarded to the Finance Office as soon as possible after the last advance is made, except that for promissory notes and single instrument bonds fully registered as to principal and interest, the original will be retained in the District Office and a copy will be forwarded to the Finance Office. (Revised 3-1-88,
(d) Bond registration record. Form RD 442-28, "Bond Registration Book," may be used as a guide to assist borrowers in the preparation of a bond registration book in those cases where a registration book is required and a book is not provided in connection with the printing of the bonds.
(e) Disposition of title evidence. All title evidence other than the opinion of title, mortgage title insurance policy, and water stock certificates will be returned to the borrower when the loan has been closed.
(f) Material for State Office. When the loan has been closed, the District Director will submit to the State Director:
(1) The completed docket; and
(2) A statement covering information other than the completion of legal documents showing what was done in carrying out loan closing instructions.
(g) State Office review of loan closing. The State Director will review the District Director's statement concerning loan closing, the security instruments, and other documents used in closing to determine whether the transaction was closed properly. All material submitted by the District Director, including the executed contract documents (if required by OGC) with the certification of the borrower's attorney, along with a statement by the State Director
RD Instruction 1942-A
§ 1942.8(g) (Con.)
that all administrative requirements have been met, will be referred to OGC for post closing review. OGC will review the submitted material to determine whether all legal requirements have been met. OGC's review of Rural Development's standard forms will be only for proper execution thereof, unless the State Director brings specific questions or deviations to the attention of OGC. It is not expected that facility development including construction will be held up pending receipt of the opinion from OGC. When the opinion from OGC is received, the State Director will advise the District Director of any deficiencies that must be corrected and return all material that was submitted for review. (Revised 3-1-88, SPECIAL PN.)
(Added 11-02-94, PN 236)
(2-6-85) PN 956
§ 1942.8 (Con.) RD Instruction 1942-A
(h) Safeguarding bond shipments. Rural Development personnel will follow the procedures for safeguarding mailings and deliveries of bonds and coupons outlined in RD Instruction 2018-E (available in any Rural Development office), whenever they mail or deliver these items.
(i) Water stock certificates. Water stock certificates will be filed in the loan docket in the Area Office. (Revised 09-24-12, PN 458.)
§ 1942.9 Planning, bidding, contracting, and constructing. [See §§ 1942.17(p) and 1942.18]
(a) Review of construction plans and specifications. All plans and specifications will be submitted as soon as available to the State Office for review and comments.
(b) Contract approval. The State Director or designee is responsible for approving all construction contracts using legal advice and guidance of OGC as necessary. The use of a contracting method under §1942.18 (1) of this subpart exceeding $250,000 must be concurred by the National Office. When an applicant requests such concurrence, the State Director will submit the following to the National Office along with Guide 27, Attachment 7: (Revised 09-24-12, PN 458.)
(1) State Director's and Rural Development engineer/architect's comments and recommendations, and if noncompetitive negotiation per 1942.18(k)(4) is accepted by the Agency, submit an evaluation of previous work of the proposed construction firm. (Revised 09-24-12, PN 458.)
(2) Regional attorney's opinion and comments regarding the legal adequacy of the proposed procurement method and proposed contract documents.
(3) Copy of owner's written request and description of the procurement method proposed.
(4) Copy of the proposed contract.
(c) Bid irregularities. Any irregularities in the bids received or other matters pertaining to the contract award having legal implications will be cleared with OGC before the State Director consents to the contract award.
(d) Noncompliance. State Directors, upon receipt of information indicating borrowers or their officers, employees, or agents are not performing in compliance with § 1942.18 (j)(l) of this subpart, may request the Regional Office of the Inspector General (OIG) to investigate the matter and provide a report. The State Director is responsible for resolving the issue.
§ 1942.10 - 1942.11 [Reserved]