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1.5.7.5 Farm Loan Borrowers

Significant Law Change

On September 13, 2017, the Secretary of Agriculture announced that the USDA will provide “additional flexibility to assist farm loan borrowers.”206 “Financially stressed FSA farm loan borrowers affected by the hurricanes who have received primary loan servicing applications may be eligible for 60 day extensions.” (While the following discussion focuses on this particular announcement, the main farm loan page provides links to additional information applicable for all recent disasters.)207

A USDA notice explains:

“A borrower who has received a PLS (primary loan servicing) application, but has not returned it, or has submitted a partial but incomplete application, and was within the 60 day response timeframe as of August 23, 2017, in the case of Hurricane Harvey, or as of September 4, 2017, for Hurricane Irma, will receive an additional 60 days from the otherwise applicable due date to submit or complete the borrower’s PLS application. All borrowers in affected counties who are notified of PLS availability after these dates, through December 31, 2017, will receive 120 days, rather than 60 days to respond to the notice.208

“A borrower who was sent a response to a PLS request (offer of restructuring, market value buy-out, etc.) and whose response timeframe was still open as of August 23, 2017, for Hurricane Harvey, or September 4, 2017, for Hurricane Irma will be provided an additional 60 days from the otherwise applicable due date to respond to the PLS offer.209

“A borrower with an open PLS offer will be contacted before closing to determine whether the hurricane affected the offer. For example, in the case of a restructuring offer, the disaster may have impacted the borrower’s ability to follow the farm business plan supporting restructuring. If a borrower’s PLS application is denied and is in an affected county, the borrower will be given an additional 60 days from the otherwise applicable due date to request reconsideration, mediation or appeal. All outstanding PLS applications that are contingent on security value (such as current market value buyout or debt writedown) will require FSA to reevaluate the security. If the security value has changed, FSA will make a new PLS determination based upon the updated security value.”210

Disaster Set Aside “response deadlines that were open on August 23, 2017, for Hurricane Harvey, and September 4, 2017, for Hurricane Irma will be extended 60 calendar days from the otherwise applicable due date.”211

Footnotes