USDA Loan Application, Closing, and Servicing Documents

In this folder goes the executed USDA Application, Lenders Agreement, AD-3030 for any businesses involved in the transaction, List of USDA loans made by lending institution, and Priority Score Sheet. If the bank has an internal application, this could be included here as well.

– RD5001-01: USDA Application

– RD5001-02: Lenders Agreement

– AD 3030

– List of USDA Loans

– Priority Score Sheet (.xlsx)

The lenders credit memo/analysis goes in this folder with their approval and signed commitment letter.

– 1970-1 Environmental Spreadsheet
– Phase I
– Phase II
– Any other environmental reports required.

For all applications of $600,000 or greater, a draft loan agreement for the guaranteed loan that addresses the following:

– Repayment term and amortization provisions of the guaranteed loan;

– Description of real property collateral, list of other collateral and identification of the lender’s lien priority in the collateral;

– A list of persons and entities guaranteeing payment of the guaranteed loan and their percentage of guarantee;

– Type and frequency of borrower and guarantor financial statements to be required for the duration of the guaranteed loan (guarantor statements must be updated at least annually);

– Prohibition against borrower assuming liabilities or obligations of others;

– Limitations on borrower dividend payments and compensation of officers, owners and members of borrower;

– Limitations on the purchase and sale of equipment and other fixed assets;

– Restrictions concerning mergers, consolidations, or other circumstances including significant management changes and a limitation on selling the business, project, or guarantee loan collateral without the concurrence of the lender;

– Maximum debt-to-net worth ratio, when required by the lender or by this part;

– Minimum debt service coverage ratio, when required by the lender or by this part.

– A reserved section for any requirements imposed by the Agency in its conditional commitment;

– A reserved section for any Agency environmental requirements; and

– A provision for the lender and the Agency to have reasonable access to the project and its performance information during the term of the guaranteed loan including the periodic inspection of the project by a representative of the lender or the Agency.

This is simply a memo identifying whether or not the borrower has a known relationship or association with an Agency employee. If there is a known relationship, identify each Agency employee with whom the borrower has a known relationship. An Agency employee is anyone who works for Rural Development. This can me a simple memo on letterhead.

This is nothing more than a simple memo on lender letter head detailing the Loan Classification and risk rating which will be applied at closing. Most lending institutions will apply a Risk Rating of “4” and a Current/Performing classification.

If there is more than one appraisal ordered it is a good policy to credit individual folders for each piece of collateral to hold the appraisal and supporting documents such as the engagement letter and bank review.

Credit reports for any Borrower, co-borrower, and guarantor will go in this folder.

(i) For guaranteed loans greater than $1,000,000.00 to a new business, a feasibility study prepared by an independent qualified consultant acceptable to the Agency is required. The scope of the feasibility study will be determined by the Agency and is dependent on the complexity of the project and the borrower.

(ii) For loans of $1,000,000.00 or less to new and existing businesses, the Agency may require a feasibility study when the lender’s analysis or other borrower information is not sufficient to determine the technical feasibility or economic viability of the project, or if the project will significantly affect the operations of a borrower who is an existing business and its historic cash flow.

(iii) A technical report is required for RES identified in § 5001.307(e) and for projects utilizing other integrated processing equipment and systems. The contents of the technical report must be consistent with the requirements of § 5001.307(e)(1) and must provide sufficient detail to enable the Agency to determine technical merit. The report can be provided in the technical feasibility section of a feasibility study or in a separate technical report.

If this document is not required, a placeholder document can be included that is titled “Not required for this loan package”.

If this report is completed be either the lender or environmental company, those documents will go in this folder.

If this document is not required, a placeholder document can be included that is titled “Not required for this loan package”.

If this document is not required, a placeholder document can be included that is titled “Not required for this loan package”.

This is a REAP requirement and will not pertain to B&I or CF Loans. If this document is not required, a placeholder document can be included that is titled “Not required for this loan package”.

This is a comprehensive document that clearly describes the borrower’s ownership structure and management experience including, if applicable, discussion of a parent company, any subsidiaries and affiliates of the borrower and discussion of how the borrower will operate the proposed project. If a business or industry is in decline or financial distress, the business plan must describe in detail how the project differs from the current industry trends or improves the borrower’s financial position.

NOTE, this document is note required if the purpose of the loan is to refinance debt.

If the application is for five or more residential units, including nursing homes and assisted-living centers, an Affirmative Fair Housing Marketing Plan that is in conformance with 7 CFR 1901.203(c)(3).

The conditional commitment may be issued subject to receipt of an adequate Affirmative Fair Housing Marketing Plan but must be received prior to issuance of the loan note guarantee.

If this is not required, a placeholder document can be included that is titled “Not required for this loan package”.

If the application is for financing of health care facilities, a certificate of need, if required by Federal or State law.

If this is not required, a placeholder document can be included that is titled “Not required for this loan package”.

The Agency is required to submit project information to the United States Department of Labor for their concurrence if the proposed guaranteed loan is in excess of $1,000,000.00 and will increase direct employment by more than 50 employees.

7 CFR 1901.203(c)(3)
935-2A Document
935-2B Document